The CITS American Express Global Business Travel 2017 China Business Travel Survey (the Barometer) has revealed that 31 percent of Chinese companies expect travel budgets to rise over the next twelve months. The figure reflects increasing business confidence, as only 17 percent of respondents predicted budget increases when asked the same question last year.
Forty percent of organizations have reported plans to expand budgets because of opportunities presented by the Belt and Road initiative. These results were released during the thirteenth annual China Business Travel Forum (CBTF), held in Shanghai today.
Last year, China became the country with the largest business travel expenditure in the world, overtaking the United States. Despite 75 percent of China’s business travel spend being domesti, its increasingly outward looking approach to global commerce is likely to create opportunities for international business travel in future. China’s Belt and Road Initiative is one such example of a major investment project that could benefit Chinese organizations with an international travel program (43 percent of companies), as well as those with a regional program (21 percent of companies).
“The results of this year’s China Business Travel Barometer are hugely positive, and a strong indication of the opportunities Chinese organizations are recognizing both domestically but also in the global economy,” said Kevin Tan, vice president of CITS American Express Global Business Travel.
“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 organizations that have reported plans to reduce spend on internal meetings. It is apparent that businesses continue to acknowledge the importance of client-facing travel.”
Financial returns from business travel are clear and measurable
This year’s Barometer highlighted the importance of business travel as a key driver of revenue for many Chinese organizations, with 90 percent reporting that increased client-facing travel would likely increase revenue. Additionally, more than half of the respondents (53 percent) believe an increase in client-related travel would improve overall revenue by 10-20 percent. Developing new business relationships, and maintaining existing clients were also listed as the top two reasons for business travel.
Beyond simply acknowledging the value of business travel to overall company bottom line, most of Chinese organizations also reported having systems in place to measure the return on investment (ROI) of business travel. Forty one percent of organizations currently track the level of business travel expenditure required to sign a new business deal on a monthly basis. More than half of companies also claimed to measure business travel ROI by linking business travel spend to company revenue, reviewing T&E programs with C-level management, regularly aligning travel program with business strategy, and linking business travel spend to converting prospects or maintaining client relationships.
Interestingly, almost half of the respondents (46 percent) in this year’s Barometer say their company could save 10-20 percent of their total travel budget from better budget management. Twenty percent of larger companies also stated they are likely to replace close to half of all internal meetings with video or teleconferencing within the next year.