Corporate travel management and travel practices in China

29th Sep 2009
Corporate travel management and travel practices in China

The report with the same title published earlier this year by PhoCusWright and Amadeus IT Group is based on extensive research with over one hundred corporate executives responsible for travel procurement decisions in their companies and paints a picture of a corporate travel market with a significantly different behavior pattern from the rest of the world when it comes to planning, purchasing and accounting for travel services. The reasons for these differences are mainly cultural and will not be changed overnight.

To a large extent Chinese companies do not take advantage of technology to automate processes and cut costs in this expense category but rely on manual systems and paper. There is a lack of awareness of the benefits the adoption of technology could bring and this presents key obstacles to overcome, but at the same time a significant potential for technology solutions providers. These are the five trends in China’s travel management landscape:

  • Use of IT systems for travel management is limited
  • Centralized travel management is in its infancy
  • Cash is the dominant form of payment fulfillment
  • Airline commissions are the primary income source for intermediaries, although recent regulatory changes are likely to increase the use of company-paid service fees
  • Companies of different types and sizes, display different patterns of travel management and different priorities

Like so many other areas of industry, a strict regulatory environment prevails in travel and tourism and managed corporate travel can only be understood in that context. This quote underlines the different situation:

In a culture where paper documents are required for tax purposes, a paradigm shift in the current paperwork culture is not likely to occur in the near future unless it is mandated by the government.

Despite these circumstance, the success of Ctrip Inc. - China’s largest online travel agency, although 80% of its bookings come from its call center - provides a valuable lesson for travel management companies (TMCs) planning to enter the market. After building significant scale in the highly fragmented leisure travel market, Ctrip then built its own corporate travel management system and now serves several major multi-national corporations.


here remain, however, other issues that need to be dealt with, among them entrenched expectation for extremely high level of service at equally low prices, combined with a lack of conviction among corporations that using TMCs will result in cost savings but rather that the added value will negate those savings.

Signs of change are visible on the horizon based on the commitment made by the Chinese government to the World Tourism Organization (UNWTO) gradually eliminating some restrictions on the entry of foreign travel companies to the market. Another key factor is that the under age 35 population has grown up in a completely different environment resulting in them being more technologically savvy, ambitious and driven. The rapid growth of this population, working in urban environments will drive technology development and adoption both inside and outside the workplace. While a host of obstacles remain, the business travel market is poised for rapid expansion and over time, adoption of technology tools.

This detailed report supported by a number of valuable statistics, charts, graphs and key insights from our Asia based analyst is available here as a free download.


Recommended for you

Follow Breaking Travel News

Travel Events Calendar

Media Partnerships

Global Restaurant Investment ForumThe Hospitality & Tourism SummitCATHIC
ITB AsiaChina Outbound Travel & Tourism MarketThe Travel Marketing Store
Serviced Apartment SummitWorld Travel MarketIMEX
AHICWTTCRoutes Online
UBM Aviation