Business travel booming in Asia-Pacific

Business travel booming in Asia-Pacific

By Prapti Widinugraheni

SINGAPORE (JP): Business travel, according to a recent survey
by the American Express' Travel Management Services, is becoming
an increasingly important sub-sector of the world's travel and
tourism market.

With the world's economy booming, particularly in certain
regions such as the Asia-Pacific, and with mankind's constant
need for personal contacts, observers are convinced that business
travel is bound to continue flourishing.

Kim Lewis, from the American Express' travel management
consulting services, said during a media conference here on "Asia
Business Travel" earlier this month that worldwide business
travel presently represents about 12 percent, or US$400 billion,
of travel and tourism expenditures.

She said this amount represents over 75 million business trips
all over the world and includes everything from airline tickets,
hotel rooms, business lunches to rental cars.

"It is an expense that is incurred as employees do their jobs.
It is a cost of doing business," she said.

For the economically-booming Asia-Pacific, the trend is even
clearer. According to Lewis, the region currently accounts for
between 20 percent and 25 percent of the world's total business
travel spending of $400 billion and the figure will keep growing.

Tracey Bowra, director of travel management services for
American Express-Australia, predicted that the Asian airline and
hotel industries would -- like the economies of their countries
-- also be running in the fast lane.

Until the year 2010, she said, Vietnam is expected to
experience a 17.3 percent annual increase in the number of its
international air passengers. The figure for China is estimated
at 12.6 percent, Indonesia at nine percent, Taiwan at 8.8 percent
and Thailand at 8.6 percent.

In comparison, North American, Latin American and European
countries are expected to grow only by four percent to six
percent.

Strong growth in the region is also expected in the hotel
sector, although only 12 percent of the world's 12 million hotel
rooms are located in East Asia and the Pacific, the average
occupancy rate of hotels in the Asia-Pacific is 70 percent -- as
compared to 62 percent in Europe and 69 percent in the United
States.

Another important part of business travel is the entertainment
side. While entertainment spending in New Zealand accounts for
only 14 percent of a company's travel budget, they can reach 22
percent in Malaysia and a high of 48 percent in Japan.

Management

What do all these figures account for?

For individual companies, Lewis said, business travel is the
third controllable expense behind data processing and salaries.

"In order to manage and control business travel, companies
need to know and use the tools of travel policy, travel
arrangements, payment methods and expense processing," she said.

Costs can be cut back or managed better if a company
establishes sound travel policies for its employees.

American Express' survey discovered that not all companies
develop travel policies. In Hong Kong, for example, only 31
percent of companies have a written travel policy. The figure for
New Zealand was 38 percent and for Australia 47 percent.

Another opportunity to control expenses, Lewis said, is at the
point when travel arrangements are made, or when the actual
prices for airline tickets, hotel rooms and car rentals, for
example, are determined.

"One of the key steps is to designate a single travel agency
that employees must use to make travel arrangements," Lewis
said.

This allows a company to receive complete information about
its travel patterns and expenditures, which can be used to
evaluate policy compliance, analyze traveler needs and negotiate
corporate rates.

The third opportunity to control business travel expenses,
Lewis said, is at the point of payment. "When it comes to paying
for business expenses, companies should try to balance the needs
of their travelers with the objectives of the company," she said.

A company can take control of payment methods by reducing cash
advances, eliminating central billing and limited-use cards as
well as issuing multi-purpose corporate cards.

Cash advances, Lewis said, represent a negative float because
cash is dispersed before expenses are incurred.

"Central billing", which is an arrangement where a company
receives a single invoice from a vendor -- such as an airline or
travel agency -- for all corporate activities should also be
eliminated to cut back a company's administrative burden.

Similarly, limited-use cards, which also add to the company's
paperwork, should also be eliminated and replaced by multi-
purpose corporate cards, which allow employees to charge all
types of travel purchases.

The final opportunity to control business travel is by
improving the company's efficiency in reporting, processing and
recording travel expenses.

"Many companies are turning their attention to the costs
associated with expense processing... Many firms are automating
some of these processes," Lewis said.

She pointed out that effective business travel can, in the
end, have a significant impact on a company's overall
performance, "and there's a lot more to it than just getting a
cheap airline ticket to a meeting".