In 2016, China overtook the United States to become the world’s largest corporate travel market, worth about $318 billion, up 9.2 percent from the previous year, according to Ctrip’s recently published 2017 China Corporate Travel Market Analysis Report. The data, supplied by the Global Business Travel Association, showed that the Chinese market now accounts for nearly a quarter of all business travel worldwide and is expected to reach $434 billion by 2020.
Yet this massive growth doesn’t come without challenges, the biggest challenges being the rapidly changing demographics and behaviors of the workforce. As more Chinese millennials are traveling for work, corporate travel providers are having to transform their business operations to stay in line with millennials’ habits. Described as educated, open-minded and tech-savvy, and at approximately 415 million people, millennials make up 31 percent of China’s total population.
The effects of millennials’ travel behavior and social media
In fact, millennials’ travel behavior and the effect of social media on the corporate travel industry are two of the trends travel managers are most concerned about, according to the 2017 China Business Travel Survey from Carlson Wagonlit Travel (CWT) and TTG Events.
In the survey, travel managers were presented with a list of nine factors impacting business travel, and asked to mark all the trends that they expect will have a significant impact on their corporate travel programs over the next year. 49 percent of those surveyed chose millennials’ travel behavior and 54 percent chose social media.
When improving their services, travel managers will have to tackle both trends as they are deeply interconnected.
For example, in recent years, with the popularity of smartphones and mobile devices, people have moved from offline to online channels to book flights and hotel rooms. Last year, about 65 percent of the Chinese small and medium-sized enterprises made flight and hotel reservations on mobile devices, and reservations made via smartphone apps took up 60 percent of the total orders.
This increase in online bookings is directly correlated to the increase in Chinese millennial business travelers. Chinese millennials are digital natives, having grown up with smartphones and other mobile devices. Their lives revolve around their smartphones. In 2017, adults in China spent an average of 1 hour and 38 minutes on their smartphones every day, an amount that is predicted to increase to over 2 hours by 2019.
When it comes to business travel, millennials not only use social media channels and mobile apps to book flights and accommodation but also to read hotel reviews, check their flight status, gather information about the weather, among other things. What’s more, they are much more likely to use sharing economy services such as Didi for transportation and Airbnb or Tujia for accommodation during business travel than their older counterparts might.
While these behaviors might not appear to cause any problems with the current systems that are in place, the increased use of social media and sharing services make it difficult for travel managers to ensure bookings are in line with their companies’ travel policies. In order to keep up with the pace of change, it will be extremely important for travel managers to take time to understand how travelers are using these online tools and create new systems and practices that reflect these habits.
Increase in bleisure
Another notable trend in corporate travel is the increased acceptance of bleisure (trips combining business and leisure that might include family) among Chinese employers. While this trend is already commonplace in Western countries, it has historically been frowned upon in China where traveling for work was frequently perceived as a privilege not to be “taken advantage” of by employees.
However, with the increase of white-collar jobs in recent years, travel has become a regular part of many positions in China and does not hold the same level of status as it used to. That, combined with the fact that people can now use the internet to work from nearly anywhere, has caused attitudes toward bleisure to soften.
The 2017 China Business Travel Survey found that 57 percent of Chinese businesses are fine with bleisure and that the main concern from companies about bleisure was how to maintain clarity on expenses.
This increase in bleisure will have a positive impact on the leisure tourism industry. Ctrip’s recent report found that, internationally, Tokyo, Seoul, and Singapore were the top three most popular destinations for Chinese business travelers, followed by Paris and Frankfurt at fourth and fifth. The most popular North American city on the list was San Francisco in 11th place.
No clear industry leader
Despite the massive size of the market, the Ctrip report revealed that, as of 2017, there was still no clear leader in the Chinese corporate travel industry. Over the past three years, the top five industry leaders comprised only 17.5 percent of the total market share, while the same figure stands at over 50 percent in mature business travel markets.
It appears the market is full of opportunity for forward-thinking travel management companies who can adapt to the swiftly changing preferences of Chinese business travelers.