Significant growth forecast for China’s business travel

China’s business travel spending is expected to increase by a whopping 17 per cent to US$202 billion in 2012 and even potentially eclipsing that of the US by 2013 after growing by another 21 per cent to US$245 billion, according to a report released by industry body Global Business Travel Association (GBTA) earlier this week. The prediction is based on results from its inaugural research project GBTA BTI (Business Travel Index) Outlook – China. Between 2000 and 2011, business travel averaged more than 16 per cent as a component of overall travel spend, the report says. The forecast expects China’s international outbound travel spending to increase by 27 per cent in 2013, contributing to a predicted GDP growth rate of 8 to 9 per cent in the next few years. “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 expansion,” said Michael W. McCormick, executive director and chief operation officer of GBTA. However, progress might be hampered if quick action is not taken to root out and prevent any threats to growth, both externally or internally. As Tony Tyler, director general and chief executive of International Air Transport Association (IATA), said earlier this week (see story here), investment in infrastructure will be the key for a country, especially one as populated as China, to keep up with the incessant rise in demand. China’s four largest airports have doubled in size in the past 10 years, with another 100 new airports in the pipeline to hopefully relieve the pressure from increasing incoming international traffic. Reaching an agreement with the military in how to manage shared airspace is also an important task at hand for the general aviation industry. “Business travel drives the economy and China is no exception. From this report we can see just how explosive this growth is going to be over the next few years,” remarked Welf J Ebeling, the regional director of GBTA remarked. “The Chinese recognize how important business travel is and the investments that are being made in vital infrastructure expansion demonstrate that.” A huge obstacle also lies in the Eurozone debt crisis, which directly affects approximately 50 per cent of China’s exports to Europe and the United States – although the GBTA report expects the economy’s diversification away from exports would quickly reduce any future impact. Picking up on the huge potential, hotels around the world are coming up with strategies to lure the growing number of Chinese business travellers. Hilton Worldwide launched the Hilton Huanying programme last year (see story here) while Starwood rolled out a similar "Personalised Travel" programme (see story here). Both these programmes offer specific services to make the Chinese traveller feel "at home," such as serving congee at breakfast and offering Chinese TV channels. Then, earlier this year, Intercontinental Hotels Group came up with an entirely new luxury hotel brand - Hualuxe - tailored for the Chinese (see story here). Western nations are also trying to tap into the lucrative outbound market of China by reforming visa policies. The UK announced it would ease its difficult visa procedures for Chinese nationals (see story here) and the US Ambassador to China, Gary Locke, announced plans to offer Chinese passport holders with five-year visas (see story here). Visit www.gbta.org for more in-depth details on the study. Randall Sim