Foreign and Chinese-owned corporations doing business in mainland China are managing travel similarly as expenditures increase and policy compliance is on the rise, according to a survey of 230 travel buyers that American Express Business Travel released last week at its China Business Travel Forum in Shanghai.
The 2007 Business Travel Barometer saw a sharp increase in the number of corporations gaining strong compliance levels. Nearly half of respondents reported that their employees comply with T&E policy more than 50 percent of the time. "In many markets, this maturity has grown much slower than in China over the years. In Europe, most markets took over 10 years to get real control of their situation," said president of American Express global travel services Charles Petruccelli. "What is interesting in [Japan, Asia/Pacific and Australia] is the acceleration that is happening, which is similar to the acceleration of the economy."
Similar to the U.S. domestic market, 69 percent of surveyed corporations said the majority of their travel expenditure was in mainland China, but Petruccelli expects regional travel patterns to shift. "Most of the business travel business resides in China," he said. "What is going to change in the next few years is the expansion outside of China within JAPA and beyond JAPA. That has not yet started."
Unlike the U.S. market, in which air and hotel costs count for the bulk of the travel bill, expenditure on meals and entertainment grabbed top billing for buyer respondents at more than 40 percent of total expenditures. Air travel accounted for about one-quarter and lodging accounted for 12 percent of total T&E costs in China.
While Amex said China's GDP grew at its fastest rate in 11 years at 10.7 percent in 2006, more than half of respondents did not increase T&E spending in a 12-month span beginning in August 2006.
The survey also showed more companies raising T&E expenses. Nearly half of respondents said their T&E budgets have increased, up from 28 percent in the same period last year. More than half expect their T&E expenditures to increase during the next 12 months.
Amex sought survey respondents from organizations with at least 100 employees from six industry sectors across Shanghai, Beijing and Guangzhou. Most were from Chinese-owned companies. One-third worked for foreign-based multinationals. Only 12 percent of respondents were American Express clients.
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