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October 28, 2009

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Firms not cutting back travel

THE 2009 China Business Travel Survey conducted by American Express showed most Chinese companies didn't cut travel and entertainment expenditure this year despite the global economic downturn.

The survey results were based on the responses from 180 businesses with 100 or more employees - 117 Chinese-owned and 63 foreign-owned - in Shanghai, Beijing and Guangzhou.

Nearly 30 percent of the companies said they increased T&E expenditure in the past 12 months, compared to 43 percent last year. And 55 percent of organizations indicated their T&E spending remained flat.

"For a significant number of Chinese companies, the need to travel has remained crucial during these turbulent times," said Gregor Lochtie, vice president and general manager of American Express Business Travel Greater China.

Rainy Hu, from multinational Leggett & Platt Automotive Group Asia Pacific, said the economic crisis will inevitably have an impact on the company's business in North America and Europe, but in Asia, the automobile industry and its components business keep growing.

"Our budget for business travel in North America and Europe has been reduced, but this is not the case in Asia," she said.

The survey, however, also showed that Chinese companies have tightened their monitoring and control of travel expenditure because of the recession.

For example, almost 80 percent of organizations surveyed have formal policies on T&E expenses, up from 70 percent last year.

Companies also encouraged employees to choose lower-class flights and accommodation - 71 percent of companies chose economy flights while 62 percent chose hotels of two to three stars.

Meanwhile, companies expect a bigger business travel market next year as the global economy has shown signs of improvement.

Altogether 31 percent of the organizations expect their T&E expenditure to increase over the next year.


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