Hong Kong industry members believe the Year of the Monkey should herald better prospects for business travel. Travel management is headed for more professionalism, and companies that are not equipped for this will lose. PRUDENCE LUI reports.

Like every other destination in Asia, Hong Kong saw a savage drop in the corporate travel and meetings market during the SARS outbreak. But the Hong Kong Tourism Board (HKTB) and the industry in general say the market is on the rebound.

Suddenly, the mood is upbeat. American International Travel strategic advisor, Mr Jonathan Kao declared: “It’s going to be a great year. In fact, it could be the best we’ve seen in the past few years.”

His enthusiasm is echoed by many in the travel industry, although some give a cautious glance over their shoulders at the ominous prospect of a return of SARS. That, and terrorism, are the only two threats to a booming 2004.

“The Year of the Monkey will see travellers full of energy and curiosity for new things. I think overall business travel volume will increase by about 25 per cent. Average air fares will go up about three to five per cent. So we are looking to increase capacity in anticipation of the upturn in business volume. 2004 will be full of innovations and implementations of improved travel management tools,” Mr Kao said.

He foresees companies will be looking at ways to reduce travel expenses, and more corporates will also realise their relationship with travel management companies is changing. As pressure from head offices overseas and demand for reporting increase, TMCs will be viewed as the one-stop shop for travel management and someone to implement their travel policy/programme.

As a result, travel companies will become more professional in handling client requests, Mr Kao believes. Those incapable of competing in service will go out of business. Competition will remain keen and there will be pricing pressures on all fronts.

Mr Kao said: “Airlines will continue to sell direct to clients. Internationally we will see traditional technology companies stepping into the travel market. Business travel will be made more easy and comforting with new wireless and mobile technologies. It will no longer be a luxury but a more common task. And business travellers will increasingly be in economy class seats as more junior employees will be required to travel, especially to China.”

The Closer Economic Partnership Agreement (CEPA) between Hong Kong and China will see the starting up of more companies and more foreign markets buying their way into Asia, using Hong Kong as a springboard. “This represents more travel activities out of Hong Kong to China and other regional destinations,” Mr Kao said.

Lotus Tours general manager/customer services, Mr Ken Ng, expects a “good harvest” this year. “Real estate values are rising, the stock market is booming and economists expect a five to seven per cent GDP growth.”

MV Destination Management general manager, Mr Clemson Lo, said corporate travel, including conferences and exhibitions, was definitely booming. On the effect of this on rates, he said: “I don’t see a big change in hotel rates. There may not be much occupancy growth for hotels but it will be better than last year; we’ve got 20 per cent more advance bookings on the books compared with the same time last year.

“But I don’t think this is the time for gimmicks or new ideas. Business travellers are not looking for this; they want value.”

Mandarin Oriental Hotel Group sales and marketing director, Mr Michael Hobson, said 2004 had taken off to a positive start.

“Traditional seasonality peaks and troughs in Hong Kong seem to be smoothing out, largely due to the influx of visitor arrivals from the mainland,” he noted. “All hotels seem to be benefiting from this, purely from a supply versus demand perspective.”

Mr Hobson said China was fuelling growth with travellers from overseas continuing to pass through Hong Kong for business and meetings in China.

“The dramatic growth in visitor arrivals from the mainland is just the base of business that the territory needs. We’re reasonably optimistic that 2004 will be a year of stability and even growth, provided of course that we don’t see the return of our 2003 woes or any other worldwide disasters that might impact travel,” Mr Hobson said.

“In the Hong Kong CBD a lot depends on the financial services industries and the amount of new share placements which can be directly correlated to overseas visitor arrivals. Fingers crossed, the year should strengthen as we go forward.”

But Mr Hobson warned there was nothing to be taken for granted. “The industry needs to continue to work together to promote Hong Kong as a value-added, must-visit destination.”

Hong Kong Tourism Board executive director, Ms Clara Chong, said China’s accession to the World Trade Organization and advantages through CEPA should help Hong Kong develop its role as a conduit and meeting point for doing international business with the mainland.

“Forward bookings for conventions and exhibitions between now and 2010 are very encouraging,” she added. “The new Asia-World Expo at the Hong Kong International Airport will help expand this market. The opening of new attractions such as Disneyland will strengthen Hong Kong’s attractiveness as a meetings and incentive destination, especially within the Asia region.”

While she remains confident on long-term trends, Ms Chong is “cautiously optimistic” about 2004. “While the speed of post-SARS recovery has been encouraging so far, there are still a lot of uncertainties out there,” she pointed out.

These include the weakness of the US dollar and other concerns that could affect corporate travel.

Cathay Pacific saw a good final quarter growth in 2003 and general manager for sales for China and Hong Kong, Mr Dane Cheng, said there was hope for some growth in passenger numbers in first quarter 2004 as long as the current optimism about the economy continued.

Mr Cheng said: “Forward bookings are a little tricky to gauge right now. The trend that emerged last year, whereby more passengers are waiting until the last minute to make bookings, has stuck. This makes forecasting demand more difficult than normal. Yet, overall, as long as the economy remains upbeat we can be confident about the coming year.”