ITE HCMC 2014

ITE HCMC 2014

Saturday, 2 June 2012

Chinese Business Travel Spending Growing

Michael McCormick
China will surpass the United States as the world's top market for business travel by 2015, according to a study by the Global Business Travel Association, an international organization that manages business travel and meeting expenditures.

Chinese GDP is expected to grow by 8.2% this year and by 8.9% in 2013, and the GBTA reckons spending on business travel will rise even faster—by 17% (to $202 billion) this year, and by 21% (to $245 billion) in 2013. With business-travel spending growing more slowing in the US, the American market could be overtaken by the Chinese in the next few years.

Michael McCormick, the chief operating officer of the GBTA, confirmed the reason for the rise: “We forecast significant increases in business travel by Chinese citizens over the next two years with at least two-thirds of the growth being real increases in trips and spending as opposed to rising travel prices. China's phenomenal economic growth over the last decade has been mirrored in business travel, which is now a key contributor to, and benefactor from, the country's explanation."

McMormick said at least two-thirds of the growth in China's corporate travel market will be real increases in trips and spending as opposed to rising travel prices. China's expected annual growth of around 8%-9% in GDP over the next couple of years will be another key factor, he added.

New Guangzhou Baiyun Airport
The study found that increases in business travel spending will be largely driven by an increase in meetings, incentives, conferences and exhibition business trips.

The Chinese government certainly seems to be doing its bit to encourage business travel. Under the terms of its 2011-2015 five-year plan China will spend in the region of 1.5 trillion yuan ($237 billion) on airports, with plans to expand 91 of its 175 current facilities and to build another 56. Combine that with the 8,000 km of new high-speed rail track due to be laid by 2015 and you have a country where the needs of the business traveller are being met.

China has been expanding airports and building hotels to meet the rising demand, reported Reuters. Projects include building up to 100 new airports over the next decade and doubling the size of the country's four largest airports — Beijing, Shanghai-Pudong, Shanghai Hongqiao and Guangzhou. Many lower-tier airports are will also be given upgrades to increase capacity.

New Airport Express Train
InterContinental Hotels Group, the parent company of hotel chain Holiday Inn, said domestic travel in China is expected to reach 3.3 billion trips annually by 2015, with the hotel market set to grow by 5%-8% per year by 2030. Reuters said the group is planning to operate in at least 100 Chinese cities in the next 15 to 20 years.

Spending on business travel in 2011, $bn
1) United States 250. 2) China 182. 3) Japan 65. 4) United Kingdom 38. 5) Germany 35. 6) France 34. 7) Italy 33. 8) South Korea 30. 9) Brazil 28. 10) Canada 22.

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