Corporate Travel in China Means Managing Complexity

As China’s economy grows and trade flourishes (aside from the current tariff tensions), more Western organizations find themselves having to manage corporate travel for remote operations in the Asian powerhouse.

The most common option, especially for those businesses with a global corporate travel contract, is to use a Western travel management company’s Chinese presence.

This requires deep-rooted experience in China and systems and processes suited to the market nuances. Corporations also need to ensure the local travel management company understands how to balance local needs with the global requirements of the multinational.

As more secondary cities become business travel powerhouses, local expertise has become vital for travel programs sending employees into China.

“For many companies with a global travel program, Asia can be the biggest pain point. China can offer even more complications,” said Jamie Pherous, founder and CEO of Australian-based Corporate Travel Management. “It can be a complex business landscape. The laws can change and there are a lot of variables, so it is important to be there on the ground with local expertise and a good understanding of how things are done.”

Carl Jones, head of travel for Asia-Pacific and Greater China at SAP Concur and a seasoned China observer, sees many multinationals choosing a global agency for their Chinese operations. “Global TMCs provide clear best practice reporting, ability to manage and consolidate travel both domestically and overseas, generally good technology for booking purposes and obviously an understanding of the best practices that organizations should follow with regard to policy, compliance, and processes,” he said.

The corporate travel management market in China is something of an alphabet soup of joint-ventures, yet companies with longstanding operations within the country are at an advantage.

Bertrand Saillet, managing director of Asia for Flight Centre, cited the lack of access to global distribution content as a challenge for western companies in China. Travel management companies like FCm (Flight Centre’s corporate travel division) shield their clients from these difficulties.

“The complexity is all ours,” he said. “We need to operate on different systems – but it is purely an internal issue. The experience for the customer is the same and we pride ourselves on providing a very consistent offering across all our markets – and that includes China.”

A Unique Market

Other market peculiarities include difficult-to-understand local regulations, compliance, and the risk of fraud and misuse.

“Given the uniqueness and complexities of the Chinese market, the need for local expertise can’t be underestimated and we’re proud to have a highly knowledgeable and dedicated local team with decades of professional experience in corporate travel management,” said Albert Zhong, general manager of China for Carlson Wagonlit Travel.

While there are many local travel agents, the real value of global travel management lies in the requirements “beyond simply making travel bookings”, said Marco Pellizzer, vice president and general manager of CITS American Express Global Business Travel, Hong Kong & China, the longest-running joint venture between a western travel management company and a Chinese travel provider.

“A good TMC will provide data, insight, advice, benchmarking information, excellent service and the right technology to support these elements,” he told Skift.

Most China experts stress the importance of technology. SAP Concur’s Jones said online booking rates above 80 percent are common, while WeChat Pay and cashless app payments are much higher than in the west.

CWT China is piloting bookings on WeChat, China’s multi-purpose messaging and social media app, and exploring mobile payment opportunities through platforms like WeChat Pay and mobile payment platform Alipay, according to Zhong.

CWT was also an early advocate of self-booking and its TravelSky-powered booking tool has been around for a dozen years. A 2012 update opened the tool for international bookings and a year later, a smartphone app version was offered.

“We have achieved market-leading adoption rates with over 90 percent of our eligible bookings in China being made using online and mobile booking platforms,” said Zhong.

CITS American Express’s technology arsenal includes a bespoke online booking tool with access to TravelSky and a mobile solution added in 2015. More recently, the travel management company launched China’s first travel AI chat robot to enhance the traveler experience.

Technology is also a differentiator for Corporate Travel Management, according to CEO Pherous, who said clients don’t understand the limitations on some global software that can be imposed in China. “It is for this reason (that) we have a major advantage developing software in the region that works and integrates to provide a full range of content and access to content that typically is very difficult to provide.”

Perhaps the biggest advantage of working with a global travel management company is that it brings consistency to the way a travel program is run — something that’s of great value to multinational companies.