Business travel sectors in emerging markets to expand this year
Thursday, February 14, 2013
Many companies in the West are keen to diversify their business into emerging markets such as Asia. The economies of countries like Russia have proven relatively resilient in comparison to the struggles observed in North America and Europe, and some organizations believe that Russia and the rest of Asia represent significant growth opportunities. According to The Moscow Times, the business travel sector in Russia is set to grow at an unforeseen rate in the coming years.
According to a recent survey released by global financial consultancy Ernst & Young, Russia's $7 billion business travel sector is likely to see unprecedented growth in the coming years due in part to international expansion plans of global companies. Researchers polled chief executive officers and financial directors at Russian companies with operational revenues exceeding $1 billion, and concluded that 87 percent of executives saw business travel as a vital means of sustaining long-term growth strategies.
In addition, 74 percent of respondents said they had taken significantly more business trips during the past five years, and more than half said they expected business travel to increase in the coming years.
"The results of the survey indicate the trend of growing expenses on business trips over the next few years, and optimizing costs in this field and building an effective cost control system will allow companies to improve their competitiveness," said Galina Maloshenko, a partner and head of the risk advisory service at Ernst & Young, as quoted by the news source.
Open for business
Russia is not the only part of the world that is expecting a boom in the business travel industry. According to the Saudi Gazette, the Middle East is on track to exceed initial forecasts for growth in the sector during the next 12 months.
Abu Dhabi, Oman and Turkey all expect to see a rise in the number of international arrivals due to heightened interest in these countries as destinations for major meetings and conferences. The construction of new airports, transportation infrastructure and hospitality properties has also been seen as a key driver of economic growth throughout the Middle East.
As increasing numbers of executives choose to travel to emerging markets in pursuit of new opportunities, the need for cost-effective accommodation will be crucial, especially for Western companies seeking to maximize their return on investment from business travel expenditure. As such, alternatives to corporate suites in chain hotels, such as serviced apartments and corporate housing, could become increasingly attractive options for budget-conscious executives.