< PrevNext > Asia/Pacific Per Diems Rise Despite Hotel Declines By Donna M. Airoldi / March 11, 2020 / Contact Reporter Share BTN crunched the numbers for this year's Corporate Travel Index before the coronavirus outbreak hit China and found that per-diem prices on a year-over-year fourth-quarter basis were up in 16 of the 22 cities, with Seoul clocking the biggest increase. All but five cities registered a decline in hotel prices, however, those savings were offset by the increasing cost of meals in all markets and higher taxi prices to/from the airport in 13 cities. Because the virus outbreak has caused travel to, from and within China to be curtailed, plus some meetings have moved or been canceled, prices likely will level off or even fall back this year. While there will be an impact, especially in the first quarter, it's too early to tell what lasting effects will be felt in the second half of the year."What we can be sure of is that the region will recover, and that recovery will drive demand," said American Express Global Business Travel regional director for EMEA and APAC Philip Haxne. "APAC has been long regarded as a growth opportunity for multiple industries, and this is unlikely to change in the medium term."JapanTokyo once again had the highest per diem business travel cost, both for full-year 2019 at $592, and for Q4 at $636, a 6.4 percent year-over-year increase for the quarter. This year it also claimed the global top spot, whereas last year it lagged only New York. Its high-priced taxi ride between the airport and the city center, at more than $200, assures it will remain near the top. In addition, hotel rates were strong. "Over the last three years, Tokyo saw a shortage in available rooms, as many hotels were closed for refurbishment in preparation for the 2020 [Summer] Olympics," said CWT Solutions Group Asia Pacific director Elis Kodra. "Furthermore, the increased demand from the 2019 Rugby World Cup also pushed rates up last year." CWT expects a modest increase in hotel prices this year, despite more than 80,000 new hotel rooms becoming available in anticipation of the Olympics. BTN's indexed Q4 hotel rate, however, dipped nearly 7.5 percent year over year to $231.Hong Kong and SingaporeHong Kong protests that began in June 2019 have continued into 2020, causing disruptions in travel to the city. "We have seen a significant drop in inbound travel to Hong Kong over the past seven months," Haxne said. Despite a strong start to 2020, by December arrivals were down 51.5 percent for the month and 14.2 percent for the year, according to the Hong Kong Tourism Board. The city came in at No. 2 in the region for per diem costs at $386 for the year and $419 for Q4, a 4 percent increase, despite hotel rates for the quarter down 18 percent.Several meetings and events were moved from Hong Kong to Singapore, giving the latter's hotel rates a boost, particularly toward the end of the year, Kodra said. However, "the Covid-19 situation may result in downward pressure in 2020 as China is one of Singapore's top sources of visitor arrivals."ChinaPrior to Covid-19, Chinese cities were seeing continued cost growth. CTI's year-over-year comparison of Q4 per diems showed Beijing up 16 percent, Guangzhou up 4 percent, Shenzhen up 2 percent, and Tianjin, which was the third least-expensive city in the region, up 4.7 percent. Only Shanghai saw its cost decrease, by 3.8 percent. But with the outbreak, "many organizations are revisiting their travel policies and planned meetings and events schedules in real time to keep pace with travel advisories and restrictions," Haxne said. As demand drops, it will "almost certainly result in downward pressure on hotel rates," Kodra said. India"India's strong economic growth is expected to fuel greater demand for business travel with international travel prices expected to increase in 2020," Haxne said. This index demonstrated that, with increases for all three measured cities: Bangalore (4.5 percent), Mumbai (2.6 percent) and New Delhi (15 percent). Still, prices in Indian cities remain in the lower third of the index for the region.Risk RatingsAs duty of care becomes ever more important to travel managers, it's noteworthy that all 22 cities saw their risk factors rise during 2019, according to GeoSure, with 15 clocking double-digit increases. The scores took into account the virus outbreak that began in December, which resulted in elevated health scores for all APAC markets. All indexed Chinese cities had health scores in the 90s, or "very risky." Cities with the highest overall scores included all three Indian cities, plus Jakarta and Manila. All but Bangalore had health risks in the high 80s or 90s. Bangalore and Mumbai also had high political risk, while the latter along with Jakarta are risky for LGBTQ+ travelers. The safest cities were Singapore, Auckland, and Tokyo and Osaka-Kobe—all rated "very safe."