By Sze Toh Yuin Munn
Corporate travel management is still a relatively new concept in China with global MNCs in the country forming the bulk of clientele for international TMCs.
But local companies are starting to see the benefits of managed corporate travel and the market valued at about US$5 billion each year is expected to enjoy double-digit growth annually in the next five years, TMCs say.
Carlson Wagonlit Travel (CWT) general manager for Hong Kong and Greater China, Mr Greg Treasure, said: "The focus has been on foreign MNCs in China, however, we are now seeing a growing interest from Chinese national companies.
"As they increasingly expand their products and services to markets beyond China...it will become even more important to have a managed travel programme to control expenses, reduce travel costs and collect meaningful data to negotiate with suppliers."
The pressure to cut operating business costs is also leading companies to TMCs, TQ3 Travel Solutions managing director and senior vice-president, Asia-Pacific, Mr Bicky Carlra said.
"Travel ranks among the top three controllable expenses for most global corporations and this is no different to those established in China."
"Globalisation makes companies more sensitive to travel costs, hence, companies tend to consolidate their purchasing resources, thereby turning to a TMC to help manage their travel costs."
But there are still many challenges a TMC faces in operating in the Chinese corporate market.
"Licensing restrictions, lack of experienced staff, a complicated domestic fare structure, operating restrictions on card payment and a highly price sensitive market" are just some, BTI (Business Travel International) Jin Jiang China general manager, Mr James Stevenson, said.
They also either have to deal with "operating a two or three GDS policy (all domestic bookings and tickets issued have to be done through a local GDS)" or deal with the fact that a "large proportion of Chinese hotels are non GDS bookable - dramaticlly increasing the workload."
On the other hand with the companies, there are no travel policies in place, no local experience in managing travel and their "multiple relationships with multiple agents" make it difficult to control travel expenditure, he said.
"We also face the challenge of operating in other geographical locations because of government regulations and have overcome this by developing our national partnership network where we have leveraged BTI's global partnership experience together with utilising Jin Jiang's local network."
Having a local partner is essential.
BTI Jin Jiang is a partnership with Jin Jiang International, one of the leading players in the Chinese travel industry and the number one Chinese hotelier.
Carlson Wagonlit Travel partners with China Air Service and TQ3 Travel Solutions works with Shanghai Jebsen Air Service.
All three TMCs agree there is no question demand for professional travel management will boom in line with the expected growth in China's economy.
"Along with India, China is envisioned to be a critical market with 80 per cent of the Fortune 500 companies having already established business in the country," TQ3's Mr Carlra said.
"The Chinese business travel market is rapidly changing...the service delivery will soon be at the level of what MNCs expect from mature markets."
