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Distances are a challenge, pace can be slower and "relationships are everything" for multinational businesses managing travel in Asia, according to Intel global sourcing manager Megan Stowe, speaking here at last week's Association of Corporate Travel Executives conference.
Despite the difficulties, travel management in the region is on the rise, according to Stowe and her co-panelist, Bicky Carlra, a BCD Travel managing director and senior vice president. Asia-Pacific's global share of corporate travel dollars is expected to grow to 30 percent in six years, up from about 18 percent now, the panelists said. Three-quarters of that spend will remain in six key locations: Australia, China, India, Hong Kong, Japan and Singapore. Other projections indicate that Asia-Pacific, as the world's fastest-growing travel region, will generate one-third of the worldwide travel market by 2015.
The panelists said they offered the same presentation a year ago, but half as many hands were raised when they asked how many in the crowd were responsible for travel programs in the region. For the majority of transnational corporations, which are headquartered in Europe or North America, the Asia-Pacific business travel market remains an undeveloped one.
"It's really a new, dynamic and growing market, especially with China and India being so interesting," said Stowe. Still, she said, Western business travelers and managers need to get used to different travel processes in the region, including the low penetration of electronic tickets and limited Internet access in hotel rooms.
According to Carlra, travel services companies and suppliers in Asia-Pacific are handling different issues than their counterparts in Europe or North America, which can be jarring. For example, all major global distribution systems have a presence in China, but only Travelsky can issue tickets.
Although he expects them to go away by 2008, Carlra noted that some airlines still are paying base bookings commissions. Travel management companies are "pretty much" on transaction fees, he said, and although e-ticket use will eventually become the norm, they now account for fewer than 5 percent of tickets issued in the region. [Some airports require travelers to show their paper ticket for entry.] This is one of a few reasons why online self-booking has not taken off in Asia-Pacific. Another is the low cost of labor.
"In countries like India, China and Indonesia ... we can find people cheaper than making bookings online, so both culturally and economically it's cheaper to have someone make bookings," he said. "We do see more and more use of online request tools, [which] send a message off to the TMC and to the superior for approval, and there's a tracking system in the back."
Depending on the market, such labor-intensive services as passport and visa applications or the loading into the GDSs of airline net rates are a bigger part of the TMC value proposition than they are in other parts of the world.
Long known for its emphasis on high-touch service, Japan is witnessing what the panel called a "cultural change swinging through the country on how multinational corporations handle their travel." Japan's is the largest economy in the region.
The general political complexity of the region also is a powerful factor in travel management and international travel. Roughly 25 nations with significant business travel volumes, each with its own currency, speak more than 150 languages. By contrast, the 29 key business nations of Europe, the Middle East and Africa have 17 currencies and speak 30 languages; in North America, the same numbers are two, two and two, said the panelists.
Other structural challenges include wide-ranging time zones and some cities with tight and highly expensive hotel markets, but for Stowe, some of the greatest challenges are cultural. She stressed the importance of patience, relationship cultivation and comfort with change.
"In Japan, people are very polite and business is done more slowly," said Stowe. "No disrespect to people in Asia, but many will say yes when they mean no. Doing business in some countries can be very slow, but in Australia, it's done overnight."
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