The health of the Chinese economy is causing major concerns within the Chinese government and among Chinese consumers, but that hasn’t dampened Chinese companies’ confidence. According to the “2018 China Business Travel Survey (the Barometer),” 45 percent of Chinese companies expect to spend more on business travel in the next 12 months, an indicator that corporate China is still very optimistic about the health of the Chinese economy.
This increased spend on business travel gives China more clout in the global travel market: the industry’s major travel players will need to cater to China if they want a slice of the growing pie and in order to service multinational accounts.
Economic growth in lower-tier Chinese cities is providing new business opportunities for companies, and, in turn, spurring corporate travel growth
CITS American Express Global Business Travel published the survey and it was a joint venture between American Express Global Business Travel and China International Travel Service (CITS). One interesting change it noted was in the priorities for Chinese businesses when organizing travel. Safety and security are no longer the top concerns as they were in 2017. Rather, it was “cost savings” (62 percent) and “compliance” (57 percent) that were the top priorities for companies. For the business travelers themselves, the top concerns were “the travel reimbursement processes being too complex” (49 percent), “pre-trip validation processes being too complex” (37 percent), and “travel conditions too strict in general” (37 percent).
The survey also noted an increase in outbound direct investments (investments by Chinese parties in foreign economies). This follows two rocky years of Chinese authorities clamping down on large Chinese firms making big-ticket investments abroad. The most notable example is HNA Group, owner of Hainan Airlines. The company’s debt woes have become so serious that at one point it was unable to pay for a Boeing aircraft order valued at around $1 billion.
In 2018, businesses became less concerned with safety and security, instead prioritizing compliance and cost savings
While the domestic market may provide bountiful prospects, major travel management companies need to service China if they want to win and retain global multinational accounts.
For both companies and business travelers, it seems the top priorities are well-aligned. If Chinese companies can provide more transparency when arranging and reimbursing travel for employees, compliance with company policies should improve and unnecessary expenditures should decrease.
For travel industry players like hotels and travel operators, ensuring that they can process and serve business travelers in ways that allow their guests to comply with company policies is key. This could be as simple as having Chinese-speaking employees on hand, relevant information available in Chinese online and on location, and having online or phone customer support that can communicate in Chinese. These relatively simple fixes might help assuage companies’ fears—and travelers’ worries.