BUSINESS TRAVEL IN CHINA | Budget Uganda X-mas tours

Business Travel in China Continues to Grow, Albeit at Slower Rates ...

Decelerating economic growth and the increased cost of compliance in China both have contributed to lower than expected travel and expense (T&E) spending in 2014. Though business leaders had predicted 4.3% growth this year, business travel spending actually grew by 1.6% this year-to-date. Although mindful of the challenges ahead, business leaders and travel managers remain optimistic and still expect to grow their T&E budgets in 2015 by 3.5% on average.

These findings were reported today within the American Express Business Travel 2014 China Business Travel Survey (the Barometer) during the tenth annual China Business Travel Forum (CBTF), held inShanghai. The Barometer is an annual report detailing the current status of, as well as forecasts for, theChina business travel market. The 2014 Barometer surveyed executives from 230 companies with more than 100 employees each. The organizations are located in major economic areas inChina, such as Shanghai, Beijing, Guangzhou, Shenzhen andWuhan. Eighty two percent of these organizations were Chinese owned, and the rest were joint ventures or wholly owned foreign enterprises.

The number of employees within organizations who are travelling for business appears to be increasing. According to the Barometer, 38% of the employees of an average organization have traveled on business this year, versus 33% in 2013 and 28% in 2012. Not only are more employees travelling, but the Barometer results show that the number of travelers who take either purely international trips or mixed domestic and international trips has increased by 3% to 36% in 2014.

“The decrease of air spending relative to other travel categories has been observed for several years and is similar to the trends reported inEurope. This year companies have been more focused on mandating the use of ‘lowest logical fares’, and have marginally increased usage of economy over premium class fares for certain sectors and routes.

Perhaps in recognition of the fact that spending on hotel accommodation is increasing proportionately, there is a growing trend for organizations to have negotiated rates in place for hotel properties or chains (83% of organizations in 2014 versus 78% of organizations in 2012) to try to reduce costs.

Travel managers have actually focused on driving adoption of corporate negotiated fares across all categories this year, in a further effort to drive costs down. When asked about the most important levers used to optimize their travel budget, ‘increased use of preferred suppliers’ ranked number one, which was a significant increase from last year when it ranked fifth. ‘Best buy’, ‘usage of fares with less flexibility’, and ‘advanced booking’ also continue to be among the top optimization levers.

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