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If consolidating travel management in Asia-Pacific is on your horizon, start researching now and "remember the diversity," Carlson Wagonlit Travel vice president of global sales for Asia-Pacific Mike Bezer advised travel managers here last month at a briefing on regional trends. "What works in the United States may not work in the five subregions and 20 countries that make us the world's new growth engine," Bezer said. Beyond the many countries, economies and cultures, 20 different languages challenge those trying to understand the region.
Emphasizing that the benefits of global travel consolidation outweigh the challenges, CWT in briefings held last month in New York, Chicago and Houston detailed the nuances and cultural diversity that corporations could face in consolidating travel management in the Asia-Pacific region.
Online self-booking, for example, doesn't always produce savings there, CWT officials warned. While some companies are selecting just one global online booking tool, said CWT Asia-Pacific COO Berthold Trenkel, doing so might actually cost more money than booking offline. Unlike in the U.S. market, "not all fare classes and discount codes are available in all booking tools," he said. Some tools are simply "not suited for a market."
In Australia, for example, global distribution systems only read the first fare class, and price a ticket based on that. "GetThere can't mix fare structures and airlines," explained CWT corporate sales director for Australia Vanessa Moore. A remedy was supposed to be ready last year, but GetThere has said it won't be ready until September, she added. Some CWT clients use another online tool produced by Arnold Travel Technology that calculates two fares and structures on one screen today.
On average in the region, CWT currently finds that fares booked online are about 7 percent lower than those found offline, Trenkel said. Last year, the average savings was 10 percent, so the gap is closing. "About 40 percent of our clients save more than 15 percent, but 36 percent pay about 4 percent more online than offline," Trenkel warned.
As for online booking tool adoption, "Australia is well on its way to follow" the U.S. adoption levels that CWT pegs at 40 percent. CWT estimates adoption in Australia is between 20 and 30 percent today, but "some really good [programs] are at 80 percent adoption," Trenkel noted. Adoption on domestic travel in Japan is less than 25 percent, and it is even lower in China, Singapore, Hong Kong, Japan for international travel and India. "The question is when, not if, others will follow," Trenkel said. "Most countries are expected to ramp up in the next 12 to 18 months."
"One market not ready for online booking is India," Trenkel continued. "Yes, it's a big domestic market, but not all content is in one system, not all tickets are e-tickets and India is not far behind Japan on the white-glove service expectations. We do 250 inplants because people want inplants onsite."
In his book on travel management in Asia-Pacific, travel industry veteran Bicky Carlra noted that "multiple GDSs, language barriers, low corporate card adoption and the low cost of human resources in some countries in Asia have slowed the use of online booking tools by companies." In Asia, "at least 14 GDSs are actively used," Carlra stated. Major systems include Amadeus, Abacus, Galileo and Sabre Pacific--with TravelSky in China, and Axess and Infini in Japan.
Looking at business travel trends, CWT's Trenkel said that both national carriers and new low-cost entrants are expanding the air market. Such new entrants as Kingfisher Airlines, SpiceJet, IndiGo, JetStarAsia, VirginBlue, Tiger Airways, AirAsia, Skymark, Starflyer and Hansung Air have garnered about 12 percent of traffic within Asia-Pacific, Trenkel noted, and they are still growing. The international market remains primarily untapped by new entrants, but is served by such carriers as Oasis HK, AirAsia and others.
Trenkel said the new entrants' "attractiveness has decreased as full-service carriers were forced to cut prices, but still allow 20 to 30 percent savings on average." He recommended that travel managers include them in their strategies for Australia and India, and "cherry pick" those in Southeast Asia, as there's more hype than savings. Savings from using long-haul new entrants remains unproven, he added.
In 2004, Asia-Pacific generated about 22 percent of the $260 billion global air travel market while Europe accounted for roughly 38 percent and North America about 31 percent, according to CWT analysis of published air data. By 2020, Asia-Pacific is expected to surpass the other two regions. CWT sized the Asia-Pacific travel market at about $181 billion in 2005. Of that, corporate travel represented about 32 percent. By category, air represented 35 percent, hotel 34 percent, rail 28 percent and car rental just 3 percent.
The key to success in global consolidation is to "define tangible benefits at the country and global level," said CWT director of global accounts for Asia-Pacific Sharon Stanley. "Mandates don't work, they just alienate. Instead, share what you're trying to do and listen to [local] concerns. Buy-in is critical. Ensure an adequately staffed travel management team and ask questions--lots of them. Also, focus on what's really important to success and be prepared to concede on the less critical issues."
Among the most basic elements to keep in mind, Bezer reminded attendees, is the breadth of the region. "Some time-based travel policies don't work in Asia" because so many flights between major destinations are so long," he said. A flight from Beijing to Singapore is 12 hours, for example, while a flight from Delhi to Shanghai is 7 hours and 30 minutes, and from Hong Kong to Auckland is 11 hours and 30 minutes.
Demand also is outpacing supply. "People will waitlist on six to seven flights just to get on one," Bezer added.
Travel managers looking to bring Asia-Pacific into their global travel management programs will need to consider the "white-glove, high-tech culture" of Japan where people "expected us to print and deliver the e-ticket," said Trenkel. Managers also need to consider payment issues. For example, China is "very much a cash-based society," Trenkel noted. "Since airlines won't absorb the merchant fees" for agencies, and agencies can't afford to absorb the 3 percent to 4 percent fee, there "is low penetration of credit cards."
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