FCM Asia's Calvin Xie on 'Corporate Travel after Crisis: A Reset for 2022'

Summary

In this presentation, Kelvin discusses the evolution of corporate travel in China post-pandemic, highlighting the recovery of domestic air travel, the rise of hybrid work models, and the shift towards land travel due to safety concerns. He outlines the key pillars driving transformation: technology, personalized service models, and payment solutions. With an emphasis on flexibility, AI-driven reporting, and traveler well-being, Kelvin explores how the industry can adapt to new customer behaviors and ensure operational stability through innovative digital solutions. He concludes by stressing the need for travel management companies to embrace these changes to thrive in the post-COVID world.

Takeaways

• 😀 Domestic air travel in China has recovered to 95% of pre-COVID levels, but international travel remains at only 5%.
• 😀 Land transportation and hotel services have fully recovered or even exceeded pre-pandemic levels, both in price and volume.
• 😀 Strict QR codes and vaccination record requirements help maintain health and safety, enabling smooth domestic travel within China.
• 😀 Hybrid work models are increasingly common, with many companies combining in-person meetings for key participants and remote participation for others.
• 😀 Video conferencing is sufficient for most internal work, but in-person meetings are still preferred for complex activities like sales pitches and training.
• 😀 There is a growing trend of using domestic land (rail and car) transportation due to safety concerns about flights, especially for short-distance travel.
• 😀 Corporate travel policies have evolved to include stricter approval processes, focusing on essential, external meetings and clearer quarantine policies.
• 😀 Technology plays a central role in transforming corporate travel with AI-powered reporting, mobile-first platforms, and real-time notifications for traveler safety.
• 😀 A personalized service model with experienced travel consultants is gaining importance over traditional call center models, especially for complex itineraries.
• 😀 Financial stability is crucial for travel management companies (TMCs), and payment solutions like UATP prepaid cards and online payment portals are key to easing cash flow pressures.
• 😀 Sustainability is becoming a key concern, with travel companies integrating carbon emission tracking and offering more eco-friendly travel options.

Q & A

What was the state of domestic air travel in China after the pandemic?

Domestic air travel volume in China recovered to 95% of pre-COVID levels by 2020, reflecting a significant rebound in the travel industry following the pandemic.

How has international air travel in China recovered post-pandemic?

International air travel in China has remained significantly lower, with only about 5% of pre-pandemic travel volumes, and international flight fares are still much higher compared to pre-COVID times.

What are the main factors contributing to the recovery of land transportation and hotels in China?

Land transportation and hotels in China have fully recovered or even surpassed pre-pandemic levels due to people returning to work in offices and a steady increase in domestic travel demand.

How have customer behaviors in corporate travel changed since the pandemic?

Customer behaviors have shifted significantly, with 70% of companies finding that video conferencing meets most of their needs, and 60% identifying specific cases (such as client meetings) where in-person interactions are still required.

What is the trend in corporate travel policies post-pandemic?

Corporate travel policies have become stricter, with more layers of approval and clearer criteria for allowing travel, especially for essential and external meetings. There is also increased focus on traveler safety and sustainability.

What role does technology play in the future of corporate travel in China?

Technology is crucial in transforming the corporate travel industry by providing flexible, agile solutions, mobile-first experiences, and AI-powered tools for reporting and cost savings. It also helps in ensuring traveler safety and sustainability efforts, such as carbon emission tracking.

Why is flexibility and extensibility important in TMC systems?

Flexibility and extensibility are essential for TMC systems as they need to integrate seamlessly with clients' existing systems (like expense management or OA systems) to create a unified, efficient travel ecosystem.

How does the hybrid work model impact corporate travel?

The hybrid work model has led to more domestic travel via land transport (driving or rail) and remote participation in meetings, especially when air travel is perceived as less safe due to ongoing health concerns.

What is the significance of personalized service models in corporate travel?

Personalized service models are increasingly preferred over traditional call center approaches, as travelers seek dedicated consultants who can offer tailored advice and handle complex itineraries seamlessly, improving the overall travel experience.

What is the role of payment solutions in the transformation of corporate travel?

Payment solutions such as UATP prepaid cards and omni-channel payment portals help streamline corporate travel programs by improving cash flow management, providing real-time data for reconciliation, and alleviating the pressure on TMCs' working capital.