Chinese business travellers cite need for efficiency despite robust growth

Chinese business travellers are known to be tech savvy with 79% of them embracing mobile payments. Yet the CITS American Express Global Business Travel 2017 China Business Travel Survey (the Barometer) shows that bureaucracy may still hinder efficiency in business travel.

The poll finds that 41% of the firms were still using traditional procedures for approval and reimbursement; while 37% of the respondents said the pre-trip validation process was too complicated.

Among the executives surveyed from 150 companies in China, 62% said a better travel policy that takes compliance, safety and cost into account will lead to cost savings. "The research tells us Chinese companies believe there are savings to be identified within their current travel budgets, and that many intend to put measures in place to realise some of these savings in the next year,” said Kevin Tan, vice president of CITS American Express Global Business Travel. “When we consider the belief among many organisations that client-facing business travel drives revenue growth, it will be interesting to see whether companies look to strategically reallocate their business travel savings to other areas of the travel program.”

The survey has, however, identified several cost-saving measures including new technology and tools (58%), streamlining costs through negotiations with suppliers (60%) and improving communication about travel policies. Smaller companies (70%) were especially keen on using the negotiation approach with suppliers to cut cost compared to their larger counterparts (43%).

In terms of cost-saving measures, Tan warns about the danger of ‘false savings’ through an inflexible travel policy while he believes that the benefit of face-to-face meetings far surpasses videoconferencing. “Companies that balance traveller concerns with appropriate cost saving measures are the most likely to see a significant financial benefit,” Tan stresses.

Overall, China overtook the US last year as the country with the largest travel expenditure in the world even though 75% of the spendings were on domestic travels.  The Chinese business travel scene is expected to remain robust over the next 12 months. Thirty-one percent of the companies surveyed said they expected a rise in travel budgets compared to just 17% of the respondents when posed the same question last year. The Belt and Road initiative was cited as one of the factors for the expanded budget for 40% of the companies with such plans. Among the spendings associated with the B&R initiative are related to international travels for 43% of the companies surveyed.

"While our research indicates an intent to increase business travel budgets over the next year, when we look deeper we find that the intention to increase spending also comes with some strategic reallocation of expenditure. This is particularly noticeable when considering the number of organisations that have reported plans to reduce spend on internal meetings,” said Tan.