Corporates are confident of sending out road warriors, but bottom lines are being scrutinised

The dark clouds have lifted on business travel this year, with overall spend expected to pick up in the coming months.

A round-up of corporate travel executives, their associations and TMCs found that they are generally optimistic about growth, albeit careful given the fluidity of political and economic events.

According to the GBTA BTI Outlook – Annual Global Report & Forecast published in August, 2012 was a tough year for business travel, with the European Union on the verge of collapsing, a sluggish US recovery and China’s economy downshifting. However, this year has brought more certainty, with global conditions described as “diminishing clouds with the sun beginning to break through”.

HRG’s figures paint a similar picture. Corporate travel transaction volumes recovered in the final quarter of 2012, showing five per cent year-on-year growth, and continued into the first quarter of 2013, when volumes rose by 3.2 per cent.

GBTA expects global GDP to advance by 2.8 per cent in 2013 – a slight improvement from 2012’s 2.6 per cent – further expanding by 3.1 per cent in 2014 and 4.1 per cent in 2015.

Asia-Pacific is predicted to do even better as it is still one of the most significant growth markets around the world, pointed out Greg Treasure, managing director, HRG Asia-Pacific, and president, HRG North America.

An April edition of the APEC Economic Trends Analysis showed that the GDPs of APEC economies are forecast to rise 4.2 per cent this year and 4.7 per cent next year, up from 4.1 per cent in 2011.

However, industry players urged caution in reading these numbers.

Referring to the Syrian conflict’s impact on oil prices and weakening currencies in India and Australia, Welf J Ebeling, vice president, operations – Asia, GBTA, said: “Taking a long-term view I am still positive that business travel volume will stay more or less on course, but we certainly have to accept that there might be a short-term slowdown particularly in export-depending economies.”

Mike Orchard, senior director, CWT Solutions Group, Asia-Pacific, added that while data do not suggest a “much brighter” outlook, the continued recovery in the Eurozone and US has helped to push demand for corporate travel, while Asia-Pacific’s economies are still generating business travel growth.

Companies tighten their belts

Even with the rosier macro environment, “CFOs are giving pressure to travel departments”, said Benson Tang, regional director, Asia, Association of Corporate Travel Executives (ACTE). “There are some signs of a higher number of companies implementing more stringent travel policies, such as tightening the time window for which business class travel is allowed, selecting lowest logical fares and using less prestigious hotel properties,” he noted, although the extent of these changes is not as severe as in 2009.

This was confirmed by travel managers at CTW Asia-Pacific 2013.

Kok Siok Mei, assistant to CEO, Continental Automotive Components Malaysia, said her company is keeping a tight rein on the number of employees travelling and allowing only the “bare minimum”. LCCs are also used for short flights.

Over in India, Usman E Gani, deputy manager – facilities (travel), Tavant Technologies, has been encouraging middle management travelling on lengthy trips to opt for serviced apartments instead of four-star hotels.

Gani said: “The winning pitch for employees is usually the cooking facilities at serviced residences. Although top management still stay at five-star hotels, that does not matter much in terms of savings, as they do not travel as frequently as middle management, their length of stay is shorter and not many of them take trips.”

CWT’s Orchard explained that companies are now looking at adaptive travel policies, where the flexibility given to employees varies based on a number of criteria such as staff seniority and whether the trip is client billable and longhaul or shorthaul. There is increasing attention on second-tier spend like ancillary fees with air, hotel or car suppliers and dining receipts, while reducing meetings and events costs is also a priority.

He said: “Today, most companies don’t make short-term decisions around major travel cutbacks, restrictions or policy changes. Having a strong focus on travel and continuously driving savings while supporting the business’ need to deliver growth is the new norm within travel management.”

For 2013, the CWT Travel Management Priorities study showed that travel buyers were focused most on improving compliance, driving air and ground transportation savings, and optimising hotel spend.

Likewise, HRG’s Treasure added: “The uncertainty of the world’s economy has led many MNCs to take a cautious outlook by tightening global travel policies and applying more control over approval processes and budget.”

He observed that data consolidation continues to be a major trend in the region as more companies start to comprehend its benefits. At the same time, LCCs, premium economy and economy seats are being utilised for short trips.

Mobility gets more emphasis

Going forward, both TMCs highlighted the growing importance of mobile in serving corporates (see pages 17 and 19).

“A new generation of business travellers is emerging and their entire trips would have almost no human interaction, from planning and booking to checking in at the airport,” said Treasure, adding that HRG recently launched a BlueSky-enabled mobile solution in China. CWT has also developed apps such as CWT Online China and CWT To Go.

“More firms are receptive to OBTs. Due to IT advancements, all major GDSs can also allow travel itineraries or air tickets to be displayed on iPhones or Android phones. TMCs can hence provide a more robust and automated service to clients,” said ACTE’s Tang. – Additional reporting by Lee Pei Qi and S Puvaneswary 

VIEWPOINTS

How will business travel look like for your company over the next six months?

“There will be a 15 per cent increase over last year as our company has budgeted small, focused events for top clients. There will also be new projects rolled out next year, which will involve travel within Europe as well as domestically.

We hope Europe’s economy will improve as this means increased opportunities for getting new businesses.

Our company policy has always been to stretch the travel budget. That means we travel only when necessary and compare hotel rates. If it is cheaper to stay in a local branded hotel, we will do so. For long trips, we will also compare rates between hotels and serviced residences to see which can offer better savings.”

Eva Klejmova
Director, J&T Concierge Czech Republic

“We anticipate business trips to Asia will increase as our company wants to expand its client base outside of Australia, and Asia is a priority market.

We are in the process of collecting data on travel expenses of all employees so that we can develop a business travel strategy.

Clients will be billed on time spent travelling. Thus our travel policy is to fly with the airline that can provide efficient connections and reduce time spent waiting at airports.”

Stephani McKay
Travel team leader administration
Corrs Chambers Westgarth Australia

“We forecast 10 to 15 per cent growth in business travel to the US, South Korea and Singapore due to the expansion of projects we have in these countries.

The value of the rupee against major currencies such as the US dollar is a concern, as this will make travel more expensive.

We are also developing a new software to track travel expenses and show savings made. Our company policy is to use technology wherever possible to communicate and to travel only when absolutely necessary. Video- and teleconferencing are popular means of communicating with our clients and business partners overseas.”

Usman E Gani
Deputy manager – facilities (travel),Tavant Technologies India

Gone are the days when budget hotels are sniffed at by both developers and tourists. Economy has never been sexier – as these latest products show

Zest Hotel, Indonesia
Brand DNA A new, unique and straightforward hotel product aimed at budget-conscious business and leisure travellers in both the national and international markets. Hotels under the Zest brand will be of international standard, affordable, modern and minimalist. Its principle is offering convenience, comfort, cleanliness and safety to clients.
Average rate Targeting Rp350,000 (US$31) to Rp450,000
Current network The first Zest Hotel is targeted to open in the first quarter of 2014 in Cengkareng, Jakarta.
Expansion plans Thus far, Zest Hotels International has signed 15 projects in 12 cities in Indonesia: Jakarta, Bogor, Bandung, Cirebon, Jogjakarta, Surabaya, Lampung, Batam, Bali (Kuta and Legian), Balikpapan, Manado and Ambon. The company is targeting more properties in Indonesia in locations such as the outer areas of Jakarta, Semarang, Makassar and other regions.
Distribution strategy Direct channels – website with booking engine, call centre manned 24/7 and mobile – and indirect channels via OTAs.

The BnB, Indonesia

Brand DNA A new urban budget hotel whose concept is offering the best deal in a good location with fresh design and practical services. It aims to respond to the demand of today’s urban explorers for simplicity and practical facilities.
The hotel’s unique selling points are Sleep Well (comfortable bed, separate walk-in shower, practical amenities), Urban Service (one-stop guest service contact, in-room safe, free Wi-Fi), Good Location (business district, shopping, food and entertainment options) and Pay Less.
Average rate Rp399,000 (US$36)
Current network The BnB Jakarta Kelapa Gading is the first property in operation so far.
Expansion plans Four more hotels are in the pipeline in Bandung and Bali. Construction is expected to start soon.
Distribution strategy Through offline and online distribution channels supported by dynamic pricing and viral communications.

J Hotel, Indonesia
Brand DNA ‘Budget hotel plus’ offering One Brand, Three Concepts: Leisure, Business and Industrial, i.e. the property can be located in leisure destinations catering for families, in the strategic area of a city targeting corporate travellers and in industrial areas catering for businessmen on site visits.
Average rate Rp395,000 rupiah (US$34) to Rp550,000, depending on location
Current network Three projects are to start construction soon in Semarang, Cikarang and Cengkareng and are targeted to open in 3Q2014.
Expansion plans 50 hotels within 10 years, including outside Indonesia in countries such as Singapore and Bangkok, destinations Indonesians like to travel to.
Distribution strategy Ninety per cent direct and the rest commissionable to travel agencies.

Le Apple Boutique Hotel, Malaysia
Brand DNA A property with 53 non-smoking rooms located in Bukit Bintang, the shopping and business district.  Zen-inspired design, clean rooms, free high-speed Wi-Fi and satellite TV. The hotel targets business and leisure travellers looking for affordable and clean accommodation.
Average rate From RM200 (US$63)
Current network Owned by Apple Vacations & Conventions which has two other properties in the city, the 55-room Cube Boutique Hotel and the 11-room Yard Boutique Hotel.
Expansion plans Apple has bought four shophouses in Kuala Lumpur built in the 1930s and plans to convert these into hotels, each under 50 rooms. Also under construction is a 250-room hotel in Malacca, scheduled to open in 2015.
Distribution strategy Online channels and Apple Vacations & Conventions’ online booking engine, known as iAppleFlexi.com, account for 60 per cent of hotel bookings. Twenty per cent are walk-ins and the rest are corporate bookings and from travel agencies. The trade is sold rooms at net pricing and are free to mark-up.

Premier Inn, UK
Brand DNA Quality accommodation with no-frills public areas at affordable prices. Standard rooms are 21.5m2. Facilities include an all-day dining restaurant and bar serving breakfast, lunch, dinner, snacks and refreshments, limited meeting rooms and either a swimming pool or small gym.
Targeted at leisure travellers, families and business travellers. The only hotel chain to offer a Good Night Guarantee, i.e. a 100 per cent money-back guarantee if clients are not happy with their stay.
Average rate US$150 to US$170 in Singapore, US$50 to US$75 elsewhere in South-east Asia
Current network Whitbread owns and operates 650 hotels and 52,000 rooms in the UK, Middle East and South Asia, and is targeting 75,000 rooms by 2018.
Expansion plans Hotel openings are planned from 2014 across South-east Asia, with the initial focus being on Indonesia, Malaysia, Thailand and Singapore.
Distribution strategy Seventy-five per cent of sales through its own proprietary sales channels, including website and mobile channels.

Aqueen Hotel, Singapore
Brand DNA Aqueen Hotels are located within heritage neighbourhoods in Singapore. Each location offers unique sights and sounds to explore. Targeted at value-conscious business travellers and holiday-makers, the mark of each Aqueen Hotel is to deliver comfort and genuine quality to its guests. Each room offers contemporary style and quality finishes with modern-day conveniences such as selected business news channels and Wi-Fi in-room and around the hotel’s premises.
Average rate From S$110 (US$88)
Current network Aqueen Balestier Hotel with 45 rooms and Aqueen Lavender Hotel with 104 rooms.
Expansion plans Four new hotels at Paya Lebar, Jalan Besar, Joo Chiat and Little India are under development. The 75-key hotel in Jalan Besar will open by year-end and the 162-key hotel in Paya Lebar will open in 1Q2014.
Distribution strategy NA

Hop Inn, Thailand
Brand DNA Launched by The Erawan Group, which owns 16 hotels operating under the Hyatt, Marriott, Accor, InterContinental Hotels Group and Starwood brands in Thailand, Hop Inn was conceived to meet the increasing demand for quality budget hotels in the country. Hop Inn will target the domestic leisure and business stay segments such as sales executives travelling around the provinces in Thailand, while its subsequent expansion overseas will target both Thai and local travellers.
Average rate 600 baht (US$19)
Current network The first nine hotels will be in Thailand along the East-West Economic Corridor, including Ubon Ratchathani, Mukdahan, Nong Khai, Udon Thani, Nakhon Ratchasima, Sa Kaeo, Kanchanaburi, Mae Sot and Lampang, with construction already started for the first five locations. All nine hotels are due to open by the end of 2014.
Expansion plans The Erawan Group plans to open 25 Hop Inn hotels in Thailand and five more in South-east Asia within 2015. However, the group declined to reveal details of regional destinations targeted.
Distribution strategy NA

COSI Hotel, Thailand
Brand DNA Conceptualised and managed by Centara Hotels & Resorts, COSI is an acronym for comfortable, open, sensible and individual. The economy brand will offer facilities such as free Wi-Fi throughout the hotel, ‘grab-n-go’ restaurants, seminar rooms for corporate guests and an entertainment corner in the lobby area for movies and live sports. Standard rooms will offer both twin and king-sized beds; rooms specially designed for families will also be available.
Average rate 1,000 baht (US$32) to 1,250 baht per night, depending on location
Current network The first hotel set to open in 2015.
Expansion plans 30 COSI Hotels by 2020, initially in significant destinations in Thailand, then South-east Asia, China, Australia and New Zealand.
Distribution strategy The brand targets cost-conscious travellers who usually do their own bookings online, including youths who are just starting their career, seniors aged 50 and above, families seeking value-for-money accommodation and corporates looking for limited-service accommodation and friendlier prices.

Hotel J, Sri Lanka
Brand DNA Provides what every traveller – business or leisure – wants: a peaceful night’s sleep. Every room has top-quality bedding, a separate bathroom, a versatile and powerful shower, air conditioning, a flat-screen TV, a safe and free Wi-Fi. The restaurant features local/Continental breakfast and a daily changing set lunch and dinner menu.
Average rate US$50 to US$70
Current network Just one Hotel J in Negombo, 30km north of Colombo, which opened in June. It has 35 rooms, 17 with superb sea views and the rest with partial sea views.
Expansion plans Expansion plans are in the pipeline. Locations being considered include main and secondary cities as it caters to tourists and  locals. Foreign families with young children have unexpectedly been attracted to the product, meeting their requirements for affordable pricing. A new market is that of elderly couples from Europe frequently travelling to Sri Lanka for leisure.
Distribution strategy Twenty per cent walk-ins, 30 per cent online and the rest via contracted travel agencies. Ultimately the strategy is to be online as much as possible via Hotel J’s new website and major OTAs.

Additional reporting from S Puvaneswary, Lee Pei Qi, Xinyi Liang-Pholsena and Feizal Samath

Apps are perceived to be important, but their implementation is not widespread

With deepening smartphone penetration and the Millennial generation joining the workforce in greater numbers, technological adoption is becoming more common than ever in the corporate travel landscape. However, the integration of mobile solutions into travel programmes is still in its infancy.

According to the 2013 Abacus Corporate Travel Practices Survey published earlier this month, mobile applications remain a largely untapped opportunity within the travel industry in Asia-Pacific, despite soaring adoption rates of smartphones and tablets in the region.

The survey also reveals a clear disconnect between the perceived importance and actual provision of smartphone and tablet applications in the industry: over 83 per cent of TMCs felt that mobile technology would have a moderate to significant impact on their business in the next 12-24 months, but only 33 per cent of the respondents had implemented any mobile web or native applications.

Speaking to TTG Asia on the sidelines of his keynote address at CTW Asia-Pacific 2013, Rohit Talwar, CEO of Fast Future Research, pointed to the accelerating rate of technological adoption: “We’ve got to understand the speed at which technology is evolving…think how we are gearing up for that world where people grow up being used to that stuff and not be held back.”

Talwar also highlighted that travel apps the likes of Hipmunk, Hotel Tonight, Room 77 and SeatGuru have provided insider information to help travellers with their decision-making.

“Apps that provide flight and airport terminal updates have helped corporate travellers on the road, especially among a new generation of travellers who prefer mobile (phones),” said Amarnath Lal Das,  travel manager of a Bengaluru-based technology company. “We’re looking to launch our own mobile app to make information available at one’s fingertips.”

Likewise, Ikea has adopted some mobile solutions, such as Concur, which has been “quite useful” for corporate travellers to track their expenses on the road by taking pictures of their receipts, according to Asia-Pacific regional meeting and travel manager, Victor Lim.

At the same time, Lim acknowledged that the furniture giant has not totally embraced the full potential of mobile in its corporate travel policy. “There have been requests from different segments of our travel community to be able to approve things through the mobile, and we will like to look at things mid-trip and be able to send out alerts to people about the weather, location or safety information when they land (in a destination).

“The challenge is how to integrate (mobile) solutions into our corporate travel programme, which exist in different pockets today, so we have not been able to manage it centrally in a good-enough way. As much as possible, we would like to tap on our partners’ existing solutions and not spend too much time and money on developing apps,” added Lim, who also urged technology providers to roll out customised solutions for the corporate travel community.