What the Belt and Road Initiative Means for Corporate Travel in the Coming Years
By Claire Ollivier, Senior Director, APAC
What is the BRI?
The Belt and Road Initiative (BRI), previously known as the One Belt One Road initiative, is a giant development strategy launched by Chinese President Xi Jinping in late 2013. Some view it as the largest infrastructure and investment project the world has ever seen. It is the conjunction of two parallel development projects: “The Silk Road Economic Belt focuses on bringing together China, Central Asia, Russia and Europe (the Baltic); linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean. The 21st Century Maritime Silk Road is designed to go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific in the other.” 1
Today, the BRI regroups almost 70 countries and covers more than two-thirds of the world’s population, 30 percent of the global GDP as well as over a third of the total global merchandise trade amount. Some of the most dynamic countries in terms of economic or population growth, including half of the top 20 of the world’s fastest growing economies according to the IMF, are participating in the initiative, which further develops its potential.
Countries along the land belt and the maritime road have complementary economies and the objective is to develop trade between them at a faster pace, thanks to co-operation agreements, the extension of trade and the creation of free-trade zones. The BRI also aims to promote multimodal transportation with a high level of integration and connectivity between the roads, the highways and the ports that will be developed. With that, all countries along the belt and road will be in a better place to do business not only with China, but also with each other.
Finally, the BRI aims to create more efficient and less expensive delivery routes. An example is the CR Express that provides a “one-stop declaration, inspection and release” facility. It is said to allow the freight of goods from Germany to China, across eastern Europe, Central Asia and Russia in a quarter of the time required for sea freight and at a fifth of the cost of air freight.2
So, what does it mean for corporate travel?
Tourism exchanges have already started and will continue to increase thanks to cooperation between the participating countries. Li Jinzao, head of the China National Tourism Administration, expects that individuals from countries in the BRI will take over 85 million trips to China from 2016 to 2020, spending about USD$110 billion. And in 2016 alone, the number of trips booked from China to participating countries made via Ctrip, the largest online booking agency, have increased by 72.5%.3
The development of such large infrastructure will not only drive economic growth, but will also require companies to send staff back and forth to these new locations. Once ready, the new infrastructure will continue to drive demand for travel in countries or regions that are relatively new to business travel routes and these huge projects.
Developing new infrastructure comes with policy coordination. A number of participating countries grant visa-free access or visa-on-arrival to citizens from other participating countries. As an example, China has concluded agreements on mutual visa exemption with 55 countries along the route. In exchange, 22 countries unilaterally exempt visas or offer visas-on-arrival to Chinese citizens. The free circulation of corporate travelers, or the softening of the visa application process, will support the flow of travelers along the belt and road. 4
But the development of corporate tourism in new markets will not come without challenges. For travel professionals all along the value chain, they need to be ready to serve an increasingly international clientele and to ensure staff is fully prepared to meet new needs. Training, talent development and upgrading service excellence will be crucial.
Simultaneously, travel managers and travel buyers will face new challenges. Amongst them, several safety and security issues will arise (and are arising), such as political stability, geopolitical tensions and natural events, to name a few. These difficulties are not new but may increase rapidly, particularly for companies involved in the early phases of the development program.
Similarly, these companies will have to find safe and satisfying travel, lodging and transportation options for their employees, while the infrastructure is not (yet) ready and/or under development. All this in a context where duty of care and employee satisfaction are at the top of travel managers’ priorities. And of course, as the globalization of travel programs continues, organizations will need to rethink their travel processes, operations and potentially policies to address the needs of their travelers in new areas where they conduct business.
In conclusion, even if the BRI primarily impacts transportation, construction and shipping industries, it will certainly change the face of corporate travel. New infrastructure will take time to take shape but it will impact the corporate industry and the change has already started.
2 Hong Kong Trade Development Council