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In-Depth Look at Chinese Corporate Travel Revealed in Study

A recent report conducted by Amadeus, a global technology and distribution partner to the travel industry, and travel research authorityPhoCusWright sheds light for the first time on corporate travel in the world's fastest growing economy. Entitled Corporate Travel Management and Practices in China, the report, which is based on interviews with 112 corporate executives in China, paints a picture of the huge opportunities available for the travel and tourism industry in the market. At the same time, it highlights the significant challenges facing companies operating in the country, whether they be multinational corporations with a presence in China, private domestic companies or state owned enterprises.

The key findings of the report include the following.

Use of IT remains limited
A lack of IT penetration is a key challenge for those companies working in China. The report reveals that use of automated IT systems remains limited, with more than 80% of companies interviewed continuing to use paper forms to some extent within their travel management processes. Similarly corporate credit cards are not widely used and cash remains the dominant form of payment, more than 90% of respondents give employees cash advances to cover travel expenses.

Travel defined by government
A key issue facing any corporation operating in China today is the role of the State. The study reveals that travel management is highly complex and defined by the government, translating to the need for corporations to have a detailed understanding of the domestic regulatory environment. Indeed, a strong working relationship with Travelsky, China's sole Government approved computer reservation system (CRS) provider, is a prerequisite for all travel management companies in the country.

Localized processes are a must
Localized processes, operations and technology capabilities are all also indispensable. Due to the insular nature of much of the national industry, it has been necessary for travel management companies to create bespoke systems in order to interface with domestic technology. Such systems are rarely compatible with existing global technologies and are subject to complex licensing processes. All systems must also be built to interface in double byte Chinese characters.

In addition to these findings, the report suggests that change is forthcoming. It points out that domestic corporate travel market has expanded significantly over the last two decades and will continue to increase exponentially. IT penetration is also expected to proliferate, driven by the growth of credit card adoption and the spread of broadband infrastructure into the regions. The rapid enlargement of the technologically savvy under-35 generation is expected to further increase use of technology.

"This report makes clear that a detailed understanding of the market is an absolute pre-requisite for any company that is either operating in China or is planning to do so in the future. It shows the unique conditions that they must navigate and confirms that those businesses which simply attempt to translate their global systems across are destined to be unsuccessful. Policies and programs which have been tailored to the local environment are essential," says Ram Badrinathan, General Manager of PhoCusWright Asia Pacific.

To see the full report, click here.
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