Secrets of China’s corporate travel revealed

BANGKOK – Amadeus, and PhoCusWright have unveiled a report that sheds light for the first time on corporate travel in the world’s fastest growing economy.

Entitled Corporate Travel Management and Practices in China, the report, which is based on interviews with 112 corporate executives in China, paints a picture of the huge opportunities available for the travel and tourism industry in the market.

At the same time, it highlights the significant challenges facing companies operating in the country, whether they be multinational corporations with a presence in China, private domestic companies or state owned enterprises.

David Brett, president of Amadeus Asia Pacific, said, “The research findings clearly reveal both the size of the opportunity and the scale of the challenge facing the travel management industry in China.”

A lack of IT penetration is a key challenge for those companies working in China. The report reveals that use of automated IT systems remains limited, with more than 80 percent of companies interviewed continuing to use paper forms to some extent within their travel management processes.

The slow rate of IT adoption is in part created by government requirements for companies to retain all travel vouchers for 15 years, which generates a significant number of manual tracking devices and a great deal of paper work.

Corporate credit cards are not widely used and cash remains the dominant form of payment; more than 90 percent of respondents give employees cash advances to cover travel expenses.

A key issue facing any corporation operating in China today is the role of the state.

The study reveals that travel management is highly complex and defined by the government, translating to the need for corporations to have a detailed understanding of the domestic regulatory environment.

Indeed, a strong working relationship with Travelsky, China’s sole government approved computer reservation system (CRS) provider, is a prerequisite for all travel management companies in the country.

Localised processes, operations and technology capabilities are all also indispensable. Due to the insular nature of much of the national industry, it has been necessary for travel management companies to create bespoke systems in order to interface with domestic technology.

Such systems are rarely compatible with existing global technologies and are subject to complex licensing processes. All systems must also be built to interface in double byte Chinese characters.

In addition to these findings, the report suggests that change is forthcoming.

It points out that domestic corporate travel market has expanded significantly over the last two decades and will continue to increase exponentially.

IT penetration is also expected to proliferate, driven by the growth of credit card adoption and the spread of broadband infrastructure into the regions.

The rapid enlargement of the technologically savvy under-35 generation is expected to further increase use of technology.

Ram Badrinathan, general manager of PhoCusWright Asia Pacific commented, “This report makes clear that a detailed understanding of the market is an absolute pre-requisite for any company that is either operating in China or is planning to do so in the future.

“It shows the unique conditions that they must navigate and confirms that those businesses which simply attempt to translate their global systems across are destined to be unsuccessful.

“Policies and programmes which have been tailored to the local environment are essential.”

To see the full report, go to: http://www.amadeus.com/corporations/chinareport