China’s two most well-known cities are going from strength to strength, PRUDENCE LUI reports.

Shanghai and Beijing are still the top destinations for domestic and international business travellers in China, according to Beijing Municipal Bureau of Tourism MICE marketing and promotion department deputy director, Ms Lily Li.

The market continues to boom with determined promotion by municipal governments in both major centres.

Beijing in particular is pushing this lucrative segment.

Ms Li said a local destination management company which she would not identify, had done a survey on the spending power of MICE visitors. This showed they on average spent between US$2,000 and US$3,000 per trip. She added the capital and Shanghai were playing complementary roles in terms of business destinations rather than being competitors.

While Beijing is the political and cultural capital and as such a must-do stop for executives talking to government officials, the modern bustling industrial turbine of Shanghai is home base in China for 319 of the Fortune 500 companies which have investments in the country.

Ms Li said there was a growing trend for secondary cities to seek to target the convention and meetings business. Destinations such as Xiamen, Dalian, Hangzhou and Qingdao are leading this drive. And tourism sightseeing and resort destinations such as the beaches of Hainan and the sacred mountain of Huangshan are targeting smaller meetings and incentive groups.

China International Travel Services in Shenzhen business travel manager, Ms Cao Hong-mei, said her department was set up in 2000 in order to tap growing domestic business travel.

This is a hugely profitable sector. Officials and executives travelling within China no longer stay at inexpensive guesthouses. They tend to book into the same sort of four-star and five-star properties as their foreign counterparts, especially hotels which fly the banners of international chains.

Beijing
Beijing and Shanghai were the most common destinations for Shenzhen business travellers, Ms Cao said. Then come cities such as Hangzhou and Chengdu.

“Our clients today are demanding quality arrangements more and more,” Ms Cao said. “For instance, some corporate sales executives stress they want us to book four-star hotels or above. Trips usually last three or four days, so it is good business.”

Shangri-La's Kerry Centre Hotel Beijing general manager, Mr Darren Gearing, said although arrivals statistics were not accurately broken down by purpose of visit, for the most part, hotels in the Central Business District such The Kerry expected at least 85 per cent of their guests to be business travellers. This includes individual corporate travellers and delegates attending a meeting or conference held in the hotel.

Depending upon the time of year, for Beijing the main feeder markets by guest residence are Hong Kong, the US, other provinces of China especially provinces around Shanghai and Guandong, then Japan and Europe.

Mr Gearing said the future looked good. “In the absence of another SARS-like catastrophe, we believe demand from corporate travellers will just get stronger and stronger. The meeting and conference business in Beijing will continue to grow. The destination is definitely in high demand overseas as illustrated in the interest and request for proposals for large groups from our overseas sales offices, especially in London, New York and Los Angeles.”

The new Beijing International Airport terminal to be completed in the next few years and the addition of another airport expressway to service this new terminal will definitely be a plus.

Mr Gearing sees accessibility to downtown Beijing and availability of international flights, which will increase with the new terminal, as being the keys to service this increased demand.

“At The Kerry we still receive more than 50 per cent of our reservations locally, usually generated via local offices based in Beijing which will also arrange ground details for their travellers. “Local travel management companies such as Trip and E-Long are getting stronger, but in this category of hotel overseas GDS bookings and consortia bookings are still very strong.

“Of our bookings from GDS, 90 per cent are generated by TMCs such as Amex and Carlson Wagonlit, those which mainly concentrate on corporate business.”

Shanghai
In 2002, Shanghai Municipal Tourism Administrative Commission recorded more than 1.8 million overseas travellers, more than 60 per cent of them for business purposes.

Meanwhile, the robust city has been experiencing double-digit GDP growth over the past 10 years, a trend expected to continue.

Novotel Atlantis Shanghai enjoys 98 per cent business from individual and group corporates clients. General manager, Mr Robert Rippon, said: “They come from everywhere. With the booming economy of China in general and the fantastic exhibition centre in Pudong, well, you name the country and they’re coming to Shanghai for business.”

Mr Rippon added the local government is running as fast as it can to make sure infrastructure and reliable services, facilities and incentives are in place to cope and attract more business travellers. “There are few problems here for the business traveller,” he added.

“Most are experienced. The way communications and technology there is today negates a lot of the problems encountered just a few years ago.” Shanghai now has 24 five-star, 63 four-star and 100 three-star hotels.

The international properties enjoyed 72.8 per cent in the year until April. They mostly booked direct through their Shanghai office/representative on corporate rates. Only a small number of reservations come from the Internet. Others came from corporate travel agents.

Sofitel Hyland Shanghai welcomed guests who were 75 per cent there for corporate meetings or other business purposes. They came from France, the UK, Germany, Switzerland, Hong Kong, Japan, Malaysia and China. General manager, Mr Raetus Balzer, said most business travellers were there to establish joint ventures or set up Asian offices for their companies or to attend conferences and exhibitions.

“Most stay at internationally managed four- and five-star hotels with the average length of stay around three nights at rates from US$90 to US$180,” he said.

Most bookings were made within 10 days of arrival and through their local offices.

“We are seeing TMCs used for meetings and convention arrangements,” he added. “What they like are hotels in good locations that offer reward programmes. They also do prefer up-to-date facilities such as wireless broadband and a modern health club/fitness centre.

“Average spend would be from US$250 to US$400 a day with accommodation being the highest component.”

Marriott International area director of sales in Greater China, Malaysia, the Philippines and Vietnam, Mr Daniel Lai, believes the growth will continue.

“Foreign direct investment will continue to grow with the progressive China compliance of World Trade Organization requirements and ongoing major infrastructure projects such as the 2008 Olympics in Beijing and World Expo 2010 in Shanghai,” he said.

“Indeed, over 80 per cent of clients in these two top destinations are either corporate transients or corporate groups, depending on the city location of its property. Domestic China, US and Japan are primarily the three major feeder markets for Marriott our properties.”