Five Major Trends in Corporate Travel Practices in Asia Pacific
Five Major Trends in Corporate Travel Practices
in Asia Pacific
Home to some of the world’s fastest growing corporate travel markets, Asia Pacific offers vast untapped potential to
operators recognising and acting on regional trends. Defining them, Abacus has collated the views of many
of its most influential travel management companies (TMCs) and corporate travel agencies (CTAs) in the ‘2013
Abacus Corporate Travel Practices Survey’.
Powerful brands in the travel industry, eight in ten report annual revenues in excess of $30 million, with the majority
dedicated to corporate travel management.
Many trends were identified, but those they see as having the greatest impact on the businesses over the next
two to three years are ranked in an essential top five.
Trend #1: Corporate Policy Tightens Across Organisations
The generous, full-fledged privileges previously enjoyed by corporate travellers during the boom years in Asia
may be consigned to the past, given that an overwhelming 97% of respondents have received instructions to further
tighten corporate travel policies. There is no relaxation of the rules in sight, despite the more favourable economic
outlook acknowledged by all.
The levers are frequency and class of travel.
Trends observed from corporate travel clients
Companies are increasing policy
enforcement (e.g., preferred
suppliers, Lowest Logical Airfare)
Companies are decreasing
the number of business trips
Companies have implemented
policies that have forced travellers
to take lower star level lodging
Companies are using alternatives
to travel such as web and video
Companies have implemented policies
that have forced travellers to fly economy
verses business class
Policies governing the use of LCCs
LCC fees associated with cancellation/trip modification
Fees associated with baggage and ancillary services
Almost three-quarters of respondents (73%) reported corporate clients implementing policies to decrease the number
of business trips. Six in ten clients are extending economy class thresholds to reduce business class travel.
For almost half (47%), travellers are also now encouraged to opt for lower-star accommodation.
But, the savings are marginalized in many cases, by the perceived increase in average daily rates at the major
brand hotels: 67% say they are higher than normal. Higher occupancy rates in the major cities (50%) and the influx
of new stock with the number of hotel openings (43%) have also encouraged clients to look at different products and
categories for additional savings.
“Travel companies need the widest choice of accommodation options and price points to meet their clients’ heightened
expectations. It’s prompted many to adopt hotel content aggregators, such as Abacus RoomDeal, to demonstrate they
have the range to optimize the contract,” explained Chief Executive Officer – Abacus International, Robert Bailey.
The belt-tightening trend was also reflected in the way that respondents viewed themselves with four in ten (43%)
feeling that their role had recently shifted more in favour of corporate procurement.
Trend #2: Increasing Preference for LCCs
Hotel/lodgings trends observed
Average daily rates of major hotel
brands are higher than normal
Companies have implemented policies that have
forced travllers to take lower star level lodging
Occupancy rates are higher
than normal in major cities
There are more
choices due to
stays than normal
is a frequent
Almost three-quarters (73%) of respondents are seeing clients adopt budget airlines for more of their corporate travel,
mostly as a result of policies governing the choice of lowest fare (77%), but also for the alternative flight times (40%)
and data capture (40%).
Agencies are supporting the move, but note difficulty in making LCC bookings where poor access to content limits
their options for travellers.
With a third of their clients applying conditions to the use of LCCs, in relation to the cancellation or modification of
the booking, to baggage charges and other ancillary services, it is understandable that the intermediaries want to be
clear on what they are buying.
Ancillaries are viewed as making pricing and therefore price comparison harder for six in ten.
These technological challenges are, however, being addressed as the more progressive LCCs in the region increase
their focus on building corporate channels, accessible through the trade.
Bailey explained, “the low cost market in Asia is not as a mature as Europe’s or the US and is yet to fully embrace
corporate travel distribution, but there are some budget carriers now clearing a path to the corporate accounts,
recognizing the scale of the opportunity with trade partners. They are very motivated to build share, particularly on
routes where low cost competition is beginning to crowd out.”
Trend #3: Corporate Booking Tool Adoption
While the 2013 Abacus Corporate Travel Practices Survey showed widespread (73%) implementation of corporate
booking tools (CBTs) such as Abacus TripPlan, adoption rates reflect a polarizing of clients into two groups: those
benefitting from the cost savings of self-booking and those preferring to delegate travel management to colleagues
or outsource it entirely to the agency.
Yes 73% of corporate travel companies have implemented
a Corporate Booking Tool (”CBT”)
Our corporate customers have increased their use of Low Cost Carriers
Our corporate accounts are booking Low Cost Carriers directly on the airline’s website
Booking Low Cost Carriers presents challenges for our TMC/travel agency
Impact of Low Cost Carriers on
corporate travel business
Low Cost Carriers have had little or no impact on our business
64% of respondents agreed that a good portion of travellers preferred dealing with travel management companies
and agencies, with 55% perceiving business travel itineraries to be too complex a task to undertake themselves. They
pass travel planning to personal assistants where they can, or call the agent rather than attempt to book in-house. A
lack of senior management support for the corporate booking system is frequently blamed.
“The degree to which agents have implemented policy-compliant systems at client sites is creditable. It’s a component
in securing the client-agency relationship long term. But, agencies may in some cases want to re-position corporate
booking tools as serving more the personal assistants, with the mobile apps appealing to the travellers. Adoption is
never uniform,” Bailey added.
The mobile theme for travellers also correlated with the findings as they relate to mobile technology.
Major obstacles to adoption of the CBT
Lack of senior
too complex for
to talk to agents
to make travel
arrangements 77% No major
Adoption level achieved for CBT
Trend #4: Increasing Use of Smartphones and Tablets
Smartphones are transformational devices that have a direct correlation with travel, the survey found. Over 83%
of travel management companies and agencies felt that smartphones would have a moderate to significant impact
on their business, while just under half (47%) see pervasive wireless technology as the ‘major’ trend in travel.
Aligning with it should therefore be a priority, but only a third (33%) of those surveyed had implemented any mobile
web or native applications for these devices, leading with a simple mobile itinerary tool.
Only four in ten enable flight and hotel bookings and one in ten changes to existing arrangements. For tablet users,
just one in seven had created a specific app.
This is at a point when adoption rates of smartphones and tablets are soaring amongst the region’s consumers,
including business travellers. Penetration, currently at 21% in Asia Pacific has a compound annual growth rate of
20%. Usage is climbing too. Non-PC digital traffic in South East Asia has been steadily increasing to over 20%
in March this year, according to comScore.
mobile devices Don’t know
Impact of smartphone technology over the next 12-24 months
33% of corporate travel companies have created a mobile web or native mobile app
for smartphones for corporate bookings
86% have not created specific apps for tablets (either iPad, Android or other)
Bailey explained: “Customers now want to plan their travel anywhere and at any time. They expect to be able to
continue their content journey from their PC and laptop, to their tablet and mobile. TMCs and corporate travel
agencies must integrate themselves into the new wireless environment.”
“We see the technology strengthening the client-agency relationship and reaching out to travellers. It’s just a question
of visualizing how it is applied.”
The solutions available are already very flexible, such as the Abacus Mobility scalable across multiple platforms.
Trend #5: Secondary Expenses for competitive
Secondary expenses such as meals, ground transportation, mobile data roaming are a rising concern for most
companies. In the Advito 2013 Industry Forecast, secondary expenses account for 18% of the travel budget in the
US. The figure is slightly lower in Asia Pacific at 10 to 14%, but is still very significant.
Tracking and managing secondary expenses is therefore a growing focus with corporate travel managers looking
for the means to support their clients with value-add initiatives. According to the survey, 30% of agencies now
offer electronic expense management systems to their corporate clients to capture payments.
More recognize the importance of capturing and managing secondary expenses to extend their service offering,
as a point of competitive differentiation. Over half (53%) expressed a desire to jump in on the trend soon, seeking
Running into hundreds of thousands of dollars in receipts and countless man-hours of manual reconciliation,
automated systems present a fresh opportunity for agents to support their clients. User-friendly tools are also seen
to have huge appeal for frequent travellers.
Percentage of travel and entertainment budget that accounts for secondary expenses
(e.g., beyond air, lodging and car rental, for example meals, ground transportation,
Less than 5%
In contributing to the survey, travel management companies and corporate travel agencies have explored the
issues that serve to advance or inhibit their ability to grow in the highly competitive travel space.
The key to securing existing clients and attracting new is their delivery of a complete and fully-integrated service.
To this end the most progressive are seeding technology in various forms into their clients’ operations and their
Better placed to capitalise on the trends they see influencing their businesses over the next 2-3 years, they can
readily tighten policy, integrate budget travel, implement corporate bookings systems and their mobile extensions
and even introduce ‘wish-list’ extras like expense management applications. The essential technology is already
available and customised for clients in many different commercial settings.
The trends are therefore not without their challenges, but are universally positive for the Asia Pacific industry.
About the Survey
Abacus International commissioned Travel Tech Consulting in April 2013 to survey a representative cross-section of
corporate travel organisations from across Asia Pacific on their business practices. Covering a broad range of themes,
the survey explored the power and influence of the prevailing corporate travel trends seen in the industry. These were
then ranked according to their perceived impact on clients and revenues over the next 2-3 years. Directional rather
than projectable, the results have been distilled into an essential top five for the industry in the ‘2013 Abacus Corporate
Travel Practices Survey’.
For more information, contact firstname.lastname@example.org.
Percentage working with clients to capture and manage secondary expenses
but planning to
launch an effort
No and no plans to
About Abacus International
Singapore-based Abacus International is the Asia-Pacific’s leading provider of travel solutions and services with more than 20,000 travel
agency locations in 31 markets. With over 25 years of experience in fusing international best practices and local expertise with global and local
partnerships, Abacus provides travel information and reservations specifically tailored to the Asia-Pacific region.
Abacus International is owned by Sabre and a consortium of Asia's leading airlines including All Nippon Airways, Cathay Pacific,
China Airlines, EVA Airways, Garuda Indonesia, Dragonair, Philippine Airlines, Malaysia Airlines, Royal Brunei Airlines, SilkAir and
Singapore Airlines. Sabre is the global leader in the electronic distribution of travel and travel related services.
More information on Abacus can be found at www.abacus.com.sg