No letup seen for business travel
Updated: 2015-02-19 12:21
By Paul Welitzkin in New York(China Daily USA)
A group of Chinese tourists visit the Louvre Museum in Paris in this September 2014, file photo. Jiang Dong / China Daily
Despite slowing economic growth, China is still expected to surpass the United States as the No 1 business travel market in the world, analysts said.
"Besides the basic factor of economic growth, the spending on business travel is increasing due to a rapid increase in wages and benefits of employees and executives especially in the private sector which has also brought improvement to travel arrangements," said Vincent Lui, a partner at Boston Consulting Group in Hong Kong.
"China has massive potential due to its population of about 1.3 billion as opposed to about 310 million in the US," Joe Bates, vice-president of research at the Global Business Travel Association, said in an interview with China Daily. "Even if China's economic growth is slowing to about 7 percent that is still far more than most other countries."
According to the industry trade group, Chinese business-travel spending jumped nearly 16 percent in 2014, more than twice the country's overall economic growth rate. Spending on airlines, hotels and other business-travel essentials is expected to grow by 18 percent this year, pushing total Chinese business-travel spending above the $262 billion in 2014. And when the trade group releases updated figures next month, Bates said it will probably still show the Chinese poised to overtake the US in business travel.
"We know this is going to happen. We are still looking at late 2016 when it does occur," he said.
China's push to expand its business reach and investments is also spurring business travel growth. The globalization of Chinese enterprises like Haier and Huawei plus overseas acquisitions by Chinese companies like Shuanghui's 2013 purchase of Smithfield Foods in the USand the recent purchase of the Waldorf Astoria Hotel in New York by insurer Anbang represent a testament to the rising prospects for premium overseas travel by the Chinese, said Boston Consulting's Lui in an e-mail.
Are the businesses that provide the products and services to travelers ready to reap the benefits from this growth? "I would say yes. I think the business world is prepared and ready to engage the traveler," said Bates. "Just about every major travel and tourism related company has established a presence in the Chinese market by now."
Cathay Pacific Airlines is one of Asia's largest carriers and Tom Owen, senior vice-president for the Americas, said his company is already reacting to China's growth pattern.
"Business traffic has seen strong growth on the back of China's impressive overall economic growth and even with a leveling off of growth we haven't noticed a significant reduction so we are adjusting our service offerings," he said in an interview.
Owen said business travelers have different needs than leisure travelers. "Business travelers are more concerned with schedule and frequency. That's why instead of adding larger planes we are increasing the number of flights to and from China," he said.
That's why Cathay has added additional flights in Los Angeles and Newark (New Jersey) and later this year will establish service from Boston to Hong Kong, said Owen.