CHINESE hoteliers and travel consultants appear sanguine about the prospects of business travel to Shanghai despite the current H7N9 scare.

Jin Jiang Hotel senior sales manager, Lucy Yan, said: “It’s still business as usual for us and we haven’t seen any major impact. There hasn’t been any cancellations or postponement of events.

“In fact, we have been operating at close to full occupancy during this period.”

Another Shanghai-based hotelier, who did not wish to be named, said any impact had not been significant thus far.

“Some foreign companies would not fully guarantee their bookings until closer to the date for the Shanghai Auto Show. But other than that, there have been no event cancellations. I think the situation is generally calm, as people are more experienced after SARS.”

Carlson Wagonlit Travel director, sales & marketing, Frank Yan, agreed: “We haven’t received any cancellations or deferrals of travel plans yet. Since neither the Chinese government nor the WTO has issued any travel advisory, we have advised our employees and clients not to be overly alarmed as there haven’t been any human-to-human transmissions.

“Of course, necessary precautions like avoiding poultry farms and the consumption of chicken still need to be taken,” he added.

However, some of China CYTS Business Travel’s domestic clients have cancelled their travel plans to Shanghai, noted the firm’s Shanghai division account manager, Duelo Du, although she remarked that foreign business travel to the city still remained unaffected.

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INTERNATIONAL and domestic corporate travel in China is on the rise, as companies’ travel budgets are buoyed by strong business takings.

Jiqin Fang, vice president and CEO of TMC Ctrip Computer Technology (Shanghai), said year-on-year budgets have increased by 10 to 15 per cent for both MNCs and local firms as corporate travel policies improve in tandem with business expansion.

Robin Han Bin, director of sales – Greater China, Radius Global Travel Solutions, saw stronger year-on-year growth in travel budgets from domestic companies ranging from 10-15 per cent compared with MNCs at between seven and 10 per cent.

He said: “Face-to-face contact is very important for business in China. Clients need to see your eyes and that you are smiling. First-time meetings are very important in building relationships.”

The World Travel & Tourism Council’s 2013 business travel forecast for the Asia-Pacific region suggested likewise: in China, sales conversion with in-person meetings was 57 per cent. The share of sales dependent on business travel was 38 per cent, as compared to 21 per cent in the US and 28 per cent in the UK.

US-based Ingredion’s global procurement travel and fleet, Bhart Sarin, noted that outbound business travel from China was mostly to Asian countries.

According to Sarin, business travel spend had grown 10 per cent year-on-year, correlated with the increase in volume of meetings and number of staff attending the meetings.

Companies are also willing to hold their events at affordable destinations beyond China like Thailand and Malaysia. Shangri-La Hotels and Resorts’ Shanghai-based regional account director, Sita Zhang, said she had received enquiries about Shangri-La’s rates for these destinations over first-tier Chinese cities.

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TRAVEL management companies (TMCs) are witnessing changes in the way business travel is being bought in China, as clients no longer go for price alone.

Jiqin Fang, vice-president and CEO of TMC Ctrip Computer Technology (Shanghai), said local Chinese companies were slowly beginning to change from making travel purchases based on lowest airfares and room rates, to buying a more comfortable experience.

“Many local companies are using our services because of our huge procurement strength,” said Fang.

Bhart Sarin, a buyer with Ingredion US, concurred, noting that more Chinese companies were making travel bookings through a single TMC, choosing to leverage the negotiation strength of the company rather than making their own bookings online or going through a number of travel agencies.

He said that while companies were willing to implement best practices in travel management and enforce it, flexibility was even more important. “As they are starved for time, (frequent travellers) are willing to pay more for a private car service rather than a taxi; for pricier flights that fit their schedules; or for larger hotel rooms to conduct meetings in.

“Companies are willing to be flexible as these employees are an asset to them.

“Large companies in China are beginning to realise that having travel policies in place is the first step in managing travel spend. They are picking airlines and hotels that fit the culture of the company and are developing policies to match that.”

Radius general manager Asia-Pacific, Roger Pfund, said TMCs were starting to adopt booking engines and other online technologies to make the booking process a more seamless one. Large travel companies were also developing call centre models, he added.

TRADE players are stressing the need for Shanghai’s MICE sector to adopt standards and norms that will support the burgeoning business events industry.

The Shanghai Municipal Tourism Administration had sought to address the issue of service standards last October with the launch of the Management & Service Standards of the Conference Industry, Part 1: Conference Organizers, a set of standards jointly developed by the tourism bureau and the Shanghai Municipal Bureau of Quality and Technical Supervision.

The document details the basic requirements for conference organisers as well as for conference services, conference management, continuous service improvement and compliance assessment.

The introduction of standards in the MICE industry would have a positive branding effect, akin to how international branded hotels were expected to have similar standards at different properties, noted Gui Wenhua, operation director of SEMI China, an international industry association with a membership of more than 2,000 semiconductor and material companies.

Maria Zheng, general manager, Shanghai China Travel International, said: “MICE service standards and levels vary across the sector. The authorities must hence promote industrial standards – a certain certification is also needed, like the AAA-rated tourist attractions in China.

“This way, overseas event owners will be able to discern and recognise professional MICE players in Shanghai, which will in turn spur more trade members to adopt such standards too.”

Zheng added that China’s fast-growing MICE industry, particularly in Shanghai and Beijing, was still teeming with challenges.

She said: “Although Shanghai is rising in popularity as a MICE destination, it is at the same time not receiving a lot of high-quality meetings yet, especially those of international associations. This could be partly due to China’s visa issues and infrastructure.

“China’s meetings industry is also facing software issues, such as a lack of professional manpower.”

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THE intense government crackdown against extravagant functions, lengthy meetings and unnecessary overseas travel in the public sector that began late last year has dampened MICE business, say the trade.

In his welcome remarks at the China (Shanghai) International Meetings & Conferences Forum 2013, Dao Shuming, chairman of Shanghai Municipal Tourism Administration, said: “Austerity measures have brought new challenges and issues…Hence, there’s a need for the industry to re-evaluate their business models in order to move forward.”

Julia Zhu, global sales manager, Jin Jiang International Hotel Management Company, told TTG Asia e-Daily that the new rules had resulted in cancellations of several government events during the January-February peak period.

However, Liu Ping, CEO of Beijing-based China Star, said: “The austerity drive hasn’t had a big impact on us as the majority of our business is focused on international meetings and associations.”

Liu recognised that there had been an impact, as many trade players were now strategising on how to deal with the measures, but observed that it was mostly hotels and suppliers on the government’s procurement list that had been especially affected.

Likewise, Michael Hong, deputy general manager, Shanghai Airlines Event Management, said his company was “not so much affected” as it draws more corporate than government business.

“In the near future, we plan to woo corporate business more aggressively, as well as pursue new opportunities in association meetings,” Hong said.

Jean Qian, director of sales & marketing, Radisson Blu Plaza Xing Guo Hotel Shanghai, said her hotel’s balanced mix of international and national-level meetings had helped to minimise any negative impact from the government’s austerity campaign.

Zhu added: “Even without F&B business (from the government), we have been doing well in attracting people to come to our hotels for meetings, trainings and seminars.”

On a positive note, Liu remarked: “As an industry player, I am certainly concerned about the economic fallout of this policy. However, I support the government’s anti-corruption drive.”

SINCE its release in December 2012, the unexpected Chinese biggest box-office hit, Lost in Thailand, has sent a ripple across the entire tourism industry in Thailand.

The number of Chinese visitors to Thailand posted a dramatic 93.5 per cent year-on-year increase in the first quarter of 2013, or 1,122,691 Chinese footfalls between January and March this year, according to statistics from the Ministry of Tourism and Sports, Thailand.

Meanwhile, trade members are now bracing for the impact on the MICE segment.

Vichaya Soonthornsaratoon, director of meetings industry department, Thailand Convention and Exhibition Bureau (TCEB), said: “The movie has currently created more impact on the leisure market rather than MICE. However, it has also made Chiang Mai an emerging destination that (Chinese) MICE planners have to look into.”

Grace Chen Ren, manager, China market, Asian Trails Thailand, said: “We have been receiving more Chinese MICE enquiries for Chiang Mai since early this year, as well as some teambuilding requests in the (capital) city. Some Chinese groups that come to Bangkok for meetings or conferences also include an inspection or sightseeing trip to Chiang Mai now.”

Although Bangkok-based CCT MICE has not received any bookings from China to Chiang Mai this year, MICE director Davidstone Sek expects “interest to pick up later this year as Chinese MICE movement to Thailand is usually at the start of the year or year-end”.

Hotels are already seeing the effect on Chinese FITs. Furama Chiang Mai’s hotel manager, Wirachart Watthaphanich, has witnessed “a big jump in the number of leisure tourists from China since end-2012” and is optimistic that Chinese MICE business will grow.

He said: “Both Lost In Thailand and the new (Chiang Mai International Convention and Exhibition Centre) will (boost) Chinese MICE business to our hotel – I’m expecting a softer growth of 10-15 per cent this year and perhaps 20 per cent or more for 2014. But we need a strong marketing push from the authorities, especially in the meeting and conference sector.”

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