Corporate Travel Practices for Companies with Operations in China

American Express Business Travel today announced the results of its second Survey of Corporate Travel Management Practices covering China in conjunction with the first American Express China Business Travel Forum (CBTF). Findings from the report were presented at the CBTF and provided research information that assists organizations in conducting a critical review of their Travel & Entertainment (T&E) management practices with a view to achieving more cost-effective solutions. The first American Express Business Travel survey for this market was conducted in 2003. 

Chinese market highlights from this year’s Barometer included:

• Meals and entertainment remained the largest expense category accounting for 39% of total T&E expenditure
• Organizations in the large market segment reported a 25% increase in average T&E expenditure over 2003 results
• 42% of organizations surveyed expect their T&E expenses to increase in the coming year, with an average expected increase of 17%
• Of the employees in the organizations surveyed, 36% travel on business trips (both domestic and overseas) versus 25% last year 
• According to the survey, the air travel expenditure break down is 65% economy, 25% business class, 10% first class
• According to the surveyed companies, the finance, insurance, real estate and business services expenses are almost three times larger than wholesale, retail trade and distribution sectors

Travel management practices highlights from this year’s Barometer included:

• Large companies’ travel management practices are becoming more structured
• Travel policies, when they exist, are being reviewed in a more formal manner than before
• 55% of organizations surveyed declare that they follow a formal written T&E policy 
• T&E policies are increasingly communicated through new technologies
• 23% of organizations expected to be using interactive online booking tools within 12 months
• Use of cash for payment of T&E expenses remains predominant

“The American Express Business Travel Barometer is the first of its kind and analyzes the various aspects of T&E practices,” said Charles Petruccelli, President of American Express Global Travel Services. “Our barometer delivers us the knowledge we need to understand and therefore, grow successfully in the given market. Through our survey, we have learned that Chinese organizations which are structuring their T&E expenses are looking primarily for four major services from their travel management partners: Access to negotiated rates and quality of delivery; one single travel management company across China; Ability to collect data on travel spend and ability to help promote control and compliance.”

The Barometer survey was conducted by Jones Donald Strategy Partners and the results are based on the responses of 150 participants from organizations with 50 and more employees, representing five key industry sectors. The sample was designed and responses analyzed to ensure they reflected the distribution of organizations by industry sector and organization size across Shanghai, Beijing and Guangzhou. The sample included organizations representing four major size categories, from organizations with 50-99 employees to organizations with 500 and more employees.

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