Tokyo in 2011 again was the most expensive Asia/Pacific
business travel destination and, for a third consecutive year, the third-most
expensive non-U.S. business travel city in the world, according to the BTN 2012 Corporate Travel Index. The
average cost of a hotel room, three meals and miscellaneous expenses was
US$542, 5.3 percent higher than the previous year.
This occurred despite the fact that international inbound
arrivals to Japan last April fell by 62 percent after a major earthquake and
tsunami and subsequent nuclear reactor issues, according to the Japan Tourism
Agency and World Travel & Tourism Council. "Domestic demand rebounded
more quickly than anticipated, and had fully recovered by the second half of
2011," WTTC reported.
[Please click here to view the digital edition of the 2012 Corporate Travel Index, featuring all per
diem listings, downloadable as a pdf.]
Japan last year hosted 30 percent fewer international
visitors than in 2010, due to the disaster and high value of the yen, according
to tourism officials speaking during a briefing this month. "We hope we
will get record-high foreign visitors this year to 8.6 million," up from
6.2 million in 2011, said Japan Tourism Agency international tourism promotion
director Shuichi Kameyama.
Corporate travel—some due to recovery efforts—has been
strong and is "95 percent back," according to Malcolm Thompson,
general manager of The Peninsula Tokyo hotel. But occupancy for luxury hotels
through February 2012 remained at "just over 50 percent," instead of
the upper 60s of prior years.
Among 21 cities in the Asia/Pacific region, including India,
listed in this year's CTI, six ranked among the 20 most expensive non-U.S.
cities based on total per diems in U.S. dollars. Tokyo was followed by Hong
Kong (with a daily cost of $504), Sydney ($497), Singapore and Osaka-Kobe (both
$458) and Melbourne ($442).
Nine of the region's cities had per diems that ranked among
the 25 least expensive non-U.S. destinations. Kuala Lumpur had the lowest in
the Asia/Pacific region at $250, followed by Hanoi ($256), Bangalore ($265),
Guangzhou ($278), Mumbai ($293), Manila ($295), Bangkok ($304), Shenzhen ($306)
and New Delhi ($308).
The average Asia/Pacific per diem was $359, a 5.3 percent
year-over-year increase, with average hotel and miscellaneous costs of $216 and
an average cost for three meals of $142. Per diems rose by 5 percent or more in
12 cities and fell in eight, including a 12 percent decline in New Delhi and
5.3 percent in Shenzhen.
WTTC in a March report wrote that "South and Northeast
Asia will be the fastest-growing regions in 2012 [in tourism contributions to
GDP], growing by 6.7 percent, driven by countries such as India and China where
rising incomes will generate an increase in domestic tourism spend and a sharp
upturn in capital investment, and recovery in Japan."
STR Global noted that "despite the impact of natural
disaster, Asia/Pacific reported the highest revenue per available room (US$94)
and highest average room rate (US$140) in 2011 for the last seven years."
Egencia Asia Pacific said it tracked an average 8 percent
year-over-year cost increase for daily hotel rates in 13 of the region's
business travel cities—Bangkok, Beijing, Delhi, Hong Kong, Jakarta, Manila,
Melbourne, Mumbai, Seoul, Shanghai, Sydney, Taipei and Tokyo. Buyers shouldn't
expect any relief in 2012, according to Egencia, which projected a 7 percent
increase this year in Asia/Pacific ADR.
In this year's Corporate Travel Index, Singapore had the
most significant cost increase in the region as the 2011 daily cost for hotel
plus miscellaneous items surged 67 percent from a year earlier to $266. Hotel
costs there rose 76 percent to a nightly average of $250.
Egencia said it found a 2011 ADR increase of about 16
percent in Singapore. "Costs are definitely on the increase for Singapore
with increasing traffic to the region and limited hotel supply," said
managing director Cecilia Routledge. "Occupancy rates are sitting at just
under 90 percent. Corporate rates for hotel should be around S$280 for a
five-star property, which often includes breakfast but not necessarily
The second-largest Asia/Pacific cost increase recorded in
this year's CTI was in Seoul, where the average daily hotel rate rose nearly 47
percent to $229. Egencia predicted a 3 percent increase in this year's ADR for
"Seoul is seeing increased demand from overseas
travelers, in particular those originating from China, while hotel supply
remains stagnant," Routledge said. "The Korean government plans to
establish more hotels in Seoul so it is predicted that hotel costs would start
to decrease in the next three to five years as these projects are completed."
Meanwhile, CTI per diem costs escalated nearly 10 percent in
Beijing, Jakarta and Manila. Egencia forecasted a 6 percent decline in Manila's
average daily rate for 2012, though actual bookings in 2011 rose 9 percent year
over year. "High hotel taxes tacked onto rates is one of the contributing
factors," Routledge said. "Competitive domestic airfares from
low-cost carriers contributed to increased demand on the limited supply in
Manila, forcing up hotel costs."
Costs Down In India
Average hotel rates and occupancies declined from a year ago
in New Delhi, where the average per diem dropped 12.4 percent from 2010.
Bangalore and Mumbai also experienced lower average per diems, down 2.2 percent
and 0.5 percent, respectively. Egencia forecasted a 1 percent drop in average
hotel rates for New Delhi and Mumbai, and expected "occupancy rates to
continue to decline in Mumbai," but "return to normal in Delhi after
an increased demand spike during the 2010 Commonwealth Games."
Routledge noted the domestic business travel market in India
has taken advantage of "increased automation of reservations and web
distribution for independent hotel chains," along with guest houses and
Nearly 1,500 hotels, totaling more than 350,000 rooms, are
in the Asia/Pacific development pipeline, according to STR Global. China has
the most new rooms in the queue (more than 141,000), followed by India (nearly
29,000). Hong Kong plans 9,000 new rooms by 2016, but none this year, according
to the report.
originally appeared in the March 19, 2012, edition of Business Travel News.