A look ahead: Corporate travel in APAC

By Claire Ollivier, Senior Director, APAC, Advito

In Asia-Pacific, this year may be challenging for corporate travel managers: strong demand and capacity discipline will drive regional airfares up across the board. We’re seeing less pressure on intercontinental fares, which will remain flat or slightly decrease this year. On the hotel side, demand is also very strong and outpaces supply in most markets so rates will increase, particularly in Sydney and Melbourne (Australia), Auckland and Wellington (New Zealand), most of India (mainly for higher-tier, branded hotels), and Shenzhen and Guangzhou (China).

Back in November, I had the opportunity to present Advito’s 2018 Industry Forecast at various events organized across the region in six different locations. If you haven’t had the opportunity to read it – or if you want to refresh your memory – the full version is available to download for free on our website.

During these presentations, a few topics generated very engaging conversations. Here’s a brief recap:

  • One of the most relevant questions we had is what can/should travel managers do with all of the information in their hands? It is crucial to understand the general industry situation and the market-specific situations as they provide an understanding of supplier expectations in these markets, based on the demand-supply equilibrium. Just as you would like your suppliers to understand your objectives, your understanding of their objectives helps drive fruitful conversations and serves as the basis for a strong partnership. It also helps to forecast spend variations and to balance your budget throughout the year. In addition, each of the Industry Forecast sections ends with “Our recommendations” for tips on how to best resist the market forces.
  • Ancillary fees from airlines, specifically in-flight Wi-Fi: As airlines look for additional revenue streams and corporate travelers aim to make the most out of their travel time, there are high expectations around availability – and quality – of Wi-Fi. Nowadays, it is slow and expensive whenever it’s available. While I’ve heard some airlines say they invest millions of dollars to create truly high-speed Wi-Fi for passengers, others say it should never be complimentary (and unlimited) for every passenger. Too many users on the broadband network reduce the experience for those who really need it (corporate travelers). Even with the added technical challenge of bringing this offering to a jet, it just seems like this is what hotels were saying 10 years ago…
  • Is rail travel a viable alternative to flying? Comfortable, reliable and punctual, rail is definitely a credible option for business travelers where the network exists, which is primarily China and Japan. India is beginning to build high-speed rail lines but the Mumbai-Ahmedabad bullet train service is not scheduled for completion before 2023. The Singapore-Kuala Lumpur line is planned for opening in 2020.
  • What changes in corporate travel will automation, artificial intelligence, and machine learning bring to travel? New technologies, applications, and services are regularly launched to provide assistance for planning and during trips. They apply to rate/fare selection and the best time of booking or potential flight disruption, to en route assistance or supplier selection based on preference. It is important to understand the value these products and services will bring to your travel program and how easily they can be integrated into the end-to-end travel process.
  • As hotel rates increase in almost every market, what hotel sourcing strategies can Advito recommend? Yes, the rates are going up and there is little room for mature programs to squeeze out additional savings by negotiating their static LRA rates. At Advito, we believe in diversified sourcing that includes all possible types of agreements, based on a thorough analysis of your hotel spend to market by market. But even better results come from focusing efforts in the real-time brand and property performance management rather than the annual RFP process. Tracking your KPIs and objectives with real-time analytics, understanding that availability of your negotiated rates and adjusting your program on an ongoing basis is the new approach to realizing savings in hotel spend. Here at Advito, we call this approach Dynamic Performance Management™. For more information about eliminating hotel RFPs and this new approach to managing your hotel category, join me for an upcoming webinar on Tuesday, January 30, “Dynamic Performance Management: The missing and most valuable piece in Hotel Sourcing”. Or, email us at advice@advito.com.

I wish you all the best in 2018, with great successes and exciting travels!