Further growth predicted in Chinese business travel
Wednesday, October 17, 2012
China is set to outpace the U.S. as the country with the highest rates of business travel in the world, according to Travel Agent Central.
At the present rate of growth, China will surpass the U.S. in terms of business travel by 2014. Analysts at the Global Business Travel Association (GBTA) initially forecasted that China would achieve this milestone by 2015, but experts reassessed their projections following a prolonged period of sustained growth in the Chinese business travel market.
Further growth is expected to continue for the next 18 months, despite sluggish global economic growth in Europe and the Americas. Business travel in China is projected to be worth more than $195 billion by the end of 2012, with growth of 12.5 percent predicted based on current trends. Next year, business travel in China is expected to rise by an additional 14.6 percent.
While domestic business travel in China is predicted to increase steadily, international inbound visits to China will grow at a slower pace, according to GBTA data. Inbound business travel throughout China is expected to increase by 5.5 percent by the end of this year, considerably less than the 12 percent reported in 2011. Analysts at the GBTA believe that decreasing demand for Chinese exports, particularly in the U.S. and Europe, are responsible for the decrease in inbound business travel.
According to The Los Angeles Times, although business travel spending in the U.S. is also expected to increase, much of the forecasted growth is likely due to higher travel costs associated with air travel and accommodation. The news source reports that business travel spending in the U.S. is expected to increase by 2.6 percent in 2012, equivalent to $257 billion. This means that demand for serviced apartments and corporate housing could rise as companies investing in business travel look for new ways to reduce the cost of international travel for business purposes.
The news source reports that approximately 438 million business trips will be made in and to the U.S. this year. This represents a slight decrease of 1.6 percent from the 445 million reported during 2011.
As corporations consider their options carefully in terms of business travel spending, it is possible that the need for serviced apartments will rise as companies seek to maximize the efficiency and productivity of business travelers and ensure a return on investment.