Asia Pacific Region Business Travel & MICE Trends


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The first two quarters of 2012 have been challenging and concern remains about rapidly rising oil prices. What insights can we glean from the state of the business travel industry, which is widely acknowledged as a key performance indicator of the global economy?

In this presentation,"2013 Business Travel Forecast for the Asia Pacific Region", originally developed for the 2012 ACTE Asia Education Conference, Issa Isaac, Global Account Management Director, APAC, RADIUS, reveals her business travel predictions for 2013.

>> Which APAC markets are key for business travel
>> Why business travel in APAC matters
>> What to expect in 2013

To learn more about RADIUS, visit

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Asia Pacific Region Business Travel & MICE Trends

  1. 2013 Business Travel & MICE Forecast for the Asia Pacific Region // Roger Pfund // General Manager, Asia Pacific // Radius Travel // Issa Isaac // Director, Global Sales & Service, Asia Pacific // Radius Travel
  2. Originally Presented During
  3. Table of Contents • Key APAC markets for business travel and MICE • Why business travel and MICE in APAC matters • What to expect in 2013 and beyond • Path forward
  4. Growth of Business Travel in Top 15 Markets Source: GBTA Foundation, Rockport Analytics, 2012
  5. Infrastructure Development (Airports) CHINA • Constructing new airport in Beijing capable of handling 120M to 200M passengers/year by 2015 • Plans for 100 new additional airports in the next 10 years INDONESIA • Introduced 3rd terminal at Jakarta’s Soekarno-Hatta Airport to boost capacity to 62M passengers/year MALAYSIA • Adding new terminal at KLIA by 2013 capable of handling 45M passengers/year SINGAPORE • Adding 4th terminal to boost total capacity at Changi to 82M passengers/year by 2017 THAILAND • Redeveloping Bangkok’s Don Mueang Airport FACT: According to Boeing, APAC will take delivery of 1 2,030 aircraft by 2030 – more than 35% of the global market.
  6. Key Market Updates Additional passenger traffic in 2011 • CHINA with 19 million • BRAZIL with 12 million • INDIA with 8 million • RUSSIA with 6 million • INDONESIA with 5 million • One of the fastest growing countries in passenger demand • 11% growth over 2010
  7. APAC Key Markets: Travel Spending Long Term Growth, 2012 - 2022 China, India, Indonesia are the APAC countries in top 10 world ranking. Country % Growth PA CHINA 9.2 INDIA 7.8 INDONESIA 6.9 WORLD AVERAGE 4.1 UNITED STATES 3.1 Source: World Travel & Tourism Council
  8. APAC Key Markets: Business Travel % Share in Total Travel Country % Business Travel CHINA 27.8 % INDIA 26.2 % INDONESIA 20.6 % APAC 25.5% Source: World Travel & Tourism Council
  9. APAC Key Markets: Business Travel 2012 – 2022 Growth Forecast Country 2012 % Growth Estimate 2012-2022 Forecast CHINA 7.6 7.7 INDIA 4.1 7.6 INDONESIA 8.1 5.9 APAC 5.0 5.8 WORLDWIDE 2.5 4.0 Source: World Travel & Tourism Council
  10. China • Business travel spending projected at USD202B in 2012 and USD245B in 2013, an increase of 17% and 21% respectively • Plans for approximately 100 new airports in the next 10 years • Increasing manufacturing output, trade growth, job gains, business formations, infrastructure investment • Predictions of significant increases in business travel by Chinese citizens in the next 2 years with at least 60% - 70% of the growth coming from real increases in trips and spending as compared to rising travel costs • Largely driven by MICE together with an increase in the amount of real spend-per-trip • Based on trends, about 90%-95% of the spend for 2013 would be on domestic business travel
  11. India • A third of the aircraft orders during the Paris Air Show (July 2012) worth USD40B from Indian airlines (IndiGo ordered 180 jets, GoAir ordered 72 jets, Jet Airways, Air India and SpiceJet have over USD12B worth of orders) • Despite challenges in airport infrastructure and connectivity, airlines are growing their fleets as demand booms due to increasing business travel and a growing middle class long accustomed to rail travel not opting for air. • Indian carriers are cutting fares to compete with railways • Currently, India only has about 300 large jets for 1.2 billion people (compared to China at 1,400 for 1.3 billion people); lowest propensity for air travel among the BRIC countries at less than 0.1 trips per capital • Increasing business travel due to the booming IT and outsourcing industries • Both Airbus and Boeing expect domestic travel to grow an average of 9% annually in the next 2 decades
  12. Indonesia • Raising of Indonesian sovereign credit rating has enabled Indonesia over the next 2 years to join the exclusive club of 15 countries with annual GDP above US$ 1 Trillion • Expected to grow GDP by 6% annually over the next decade • Total international arrivals in 2011 grew by 9% to reach 7.7 million international tourists • Domestic travellers generated 120 million trips in 2011 • Large domestic market is key to growth
  13. Business Travel as a Sales Generator 49% 57% 50% 45% 49% Brazil China Germany UK USA Sales conversion WITH in-person meeting Source: World Travel & Tourism Council / Oxford Economics
  14. Sales Rely on Business Travel Source: World Travel & Tourism Council / Oxford Economics 32% 38% 24% 28% 21% Brazil China Germany UK USA Share of Sales Dependent on Business Travel
  15. ROI of Business Travel in APAC Region / Selected Markets Average Estimated ROI Range of Possible ROI Values N.E. Asia 8.9 +/- 2.8 S.E. Asia 13.6 +/- 4.0 S. Asia 12.2 +/- 3.6 Oceania 7.8 +/- 1.8 ASIA PACIFIC 9.4 +/- 2.9 China 13.8 +/- 4.1 Hong Kong 9.9 +/- 5.4 India 12.2 +/- 3.6 Indonesia 12.5 +/- 3.1 Singapore 15.7 +/- 4.9 Source: WTTC / Oxford Economics
  16. Why Business Travel in Asia Matters • Despite challenges, in view of widespread commercial pressures from major players (especially the airlines) and the unresolved concerns over the outlook for the global economy, Asian companies are continuing to maximize benefits of business travel for growth opportunities and strengthening long-term strategic relationships. • Sales, customer retention, strategic partnerships, and innovation all benefit from investments in business travel. • Among world regions, Asian companies and economies generate the highest ROI per dollar invested in business travel. • Business travel in APAC yields a return of investment of more than 9:1 – that is, one unit of incremental business travel spending produces sales of more than nine units. • As emerging markets in APAC evolve and grow, they require more travel to be productive. Source: WTTC / Oxford Economics
  17. What to Expect in APAC Business Travel Demand for business travel is expected to continue to rise • Asia’s largest companies expect to spend more on business travel in 2013 • China, India, Indonesia being the biggest contributors in next 10 years • Domestically generated (referred as “2nd wave” rapid growth, compared to the “1st wave” which was the previous growth trend based on travel within Asia and rest of the world) • Additional demand from businesses around the world sending employees to APAC to capitalize on economic expansion
  18. What to Expect in APAC Business Travel Corporate travel management practices will respond accordingly • A retreat from top-down central travel management and the embracing of market-based practices is expected (especially for foreign MNCs operating in APAC) • Low level of travel policy compliance for APAC-based regional or domestic companies • Asian businesses less concerned over travel costs when it comes to setting business travel policies • Most are relatively new to corporate travel management • Few have centralized travel policy
  19. What to Expect in APAC Business Travel Corporations are recognizing and considering evolving trends in technologies and product offerings • Full-service airlines vs. Hybrid/ LCC/ multi-brand airlines • Singapore Airlines’ Scoot, Thai Airways’ Thai Smiles, Asiana’s Air Busan, Korean Air’s Jin Air • Jetstar, JetBlue, Virgin Australia • In China, Civil Aviation Administration of China (CAAC) is strongly supporting LCC growth • Online travel agencies (OTA) • Mobile solutions for business travellers
  20. What to Expect in APAC MICE Corporations are recognizing the importance of strategic MICE management • Forecasted increase in MICE spending of 6% to 8% for 2013 (Industry had 6.7% CAGR since 2003) • Advance bookings for 2013 had increased by 5% to 6% • Cost per attendee per day projected to increase by 5% to 8% • About 70% to 75% of meetings are being held domestically
  21. Top 5 APAC MICE destinations • Singapore • Shanghai • Sydney • Beijing • Bangkok
  22. Key Insights • Even for corporations with travel management programs, MICE often represent a fragmented and uncontrolled spend category. • MICE spend is one of the least transparent spend categories. • As much as 35% of travel spend is dedicated to MICE. • Unlike business travel, which usually utilizes TMC best practices, MICE utilize multiple tools. • Current challenges: • Find the synergies between business travel and MICE for further cost savings and better management controls • Overcome fragmentation and decentralized data sources • Consolidate data to improve negotiation with suppliers (e.g. air, hotel, car, etc.)
  23. Global Program Management Multinational client travel management expectations • Travel program expectations vary according to client size, program maturity and geographic complexity • Typically global programs focus on the following top 5 priorities: 1. Policy compliance 2. Air savings 3. Online adoption 4. Hotel savings 5. Consolidation
  24. Asia Pacific Program Management Asian travel management expectations vary • While there are similarities to global programs, focus areas are prioritized differently • Typical regional program top 5 priorities: 1. Policy compliance 2. Air savings 3. Hotel savings 4. Travel policy 5. Online adoption
  25. Emerging Priorities Procurement and duty of care important • Key focus areas are emerging up the rank: • Traveler safety and company duty of care • MICE is a consolidation and spend management opportunity • Service excellence is still key
  26. Asia Pacific Travel Program Trends 1. Retreat from top-down central travel management 2. Embracing of market-based practices is expected, especially for foreign MNCs operating in the region 3. Lower level of travel policy compliance for APAC-based companies • Most are relatively new to corporate program management • Few have a centralized or managed travel policy
  27. Asia Pacific Travel Program Trends 4. Rapid adoption of online booking, especially China 5. Increasing use of mobile technology 6. Diversification of carriers chosen • Low cost carriers • Hybrid carriers (Virgin Australia)
  28. Path Forward Consolidating Business Travel and MICE Management is a MUST! By consolidation, all sourcing and contracting activities in aligning business travel and MICE are geared towards optimization and strategic spend management
  29. Radius Travel is a global travel management company that designs and delivers programs unique to each multinational company through a worldwide network of best-in-market agencies. Our mission at Radius is to make global work. We bring to this mission: > travel industry expertise > international relationships > an ability to bridge cultures > skill in managing complex environments To learn more about how Radius can help you with your regional or global corporate travel program, visit