Braving the booming business travel markets
An airplane on its approach to Heathrow Airport. (BBC)
As corporate road warriors from ailing economies in Europe and North America face pressure to do business with the booming developing world, they’re facing a tough predicament, where their tightened travel budgets do not make it easy to do business in destinations with sky high flight and hotel prices.
Specifically, business travellers are flocking to Brazil, Russia, India, China and South Africa (BRICS), where the economic growth is raising prices to and forcing costs within these destinations to rise. For example, in Hong Kong, the gateway to mainland China, average room rates have risen nearly 30% since August 2010, according to HVS, a global hospitality consultancy.
“Companies from Australia, Singapore, Hong Kong and the Middle East are all travelling into India and China. We’re also seeing travel volume into Latin America from companies based in the UK and US,” explained Felicity Burke, a global director at FCm Travel Solutions, a travel management company.
For those with budgets stretched to their maximum, flexibility is now the buzzword. In most cases, savings can be found by booking as far in advance as possible (four or more weeks ahead, rather than one week) and negotiating corporate discounts on routes you use frequently throughout the year.
Here are some other pieces of advice:
Booking agents once held the upper hand in finding lower priced hotel rooms, but now going straight to the property is a lot easier, especially in emerging markets.
“In general the ‘newer’ the destination for business travellers, the more they tend to lean towards the familiarity of big names,” said Maurice Veronique, CEO of Travel By Appointment, a corporate travel provider. But seeking out local or regional hotel brands could save you money, whether it’s the Rotana in the Middle East or the Shangri-La in Asia.
Smart bookers can also look at well-known brands that have branched into more economic offerings, like India’s luxury Taj and Oberoi hotel groups, which developed the affordable Gateway and Trident brands respectively.
In the booming BRIC markets, hotels are also popping up like mushrooms, and many offer discounts when they first open. Ask your business travel agent or travel management company to keep tabs on the local hotel market. Keep an especially close eye on hotels that are located outside the central business districts but offer shuttle buses into town -- think Saadiyat Island in Abu Dhabi or Tsim Sha Tsui in Hong Kong.
Emerging markets have taken to the no-frills model of air travel like ducks to water, from Air Asia in Southeast Asia to Indigo and SpiceJet in India. “There is a growing sense that local carriers can offer real value for money without compromising service,” Veronique said.
So when booking flights, don’t immediately choose the legacy carriers that you’re familiar with back home. Go for the hub and spoke model, where you fly first to a city that acts as a hub for a major global or rising regional airline, and then from there you can fly to your final destination. Be inventive, for example many Middle East carriers – Emirates, Qatar and Etihad -- offer very attractive fares from Europe and North America to developing markets in Asia and Africa.
Direct flights, booked last minute in business class can also be painfully expensive. New global air connections crop up all the time, making non-direct, non-traditional routes attractive for the business traveller on a budget -- Finnair via Helsinki can be a good way for Europeans to get to China, for example, but only if you have got more time than money.
Sitting in a chain hotel lounge, restaurant or bar and racking up an exorbitant bill isn’t the only way to impress your emerging market clients. You could be just as successful taking your Pakistani business partners out for a local Chinese meal in Islamabad or your Russian dealmakers out for tapas in Moscow.
The best advice is to do your homework before you travel. Ask your local offices for suggestions, survey your social networks to see if anyone has been to your destination before, and read restaurant reviews and blogs online. You will surprise your clients and your business travel budget.