Business travel recovery under way in Asia Pacific … but it’s complicated 

Busi­ness travel in Asia Pacific — and glob­ally — is recov­er­ing strongly post-COV­ID, along with the tour­ism industry more generally. 

How­ever, the rebound is com­plic­ated by linger­ing con­cerns about health and safety (the duty of care employ­ers and travel man­agers should have to busi­ness trav­el­lers), as well as ESG (envir­on­ment­al, social, and gov­ernance) worries.

Del­eg­ates heard about this on the first day of the PATA – GBTA APAC Travel Sum­mit 2022.

Themed “Get­ting Back to Busi­ness Travel, Tour­ism, and MICE”, the event is tak­ing place Decem­ber 8 – 9, 2022 at the newly-rebuilt Queen Sirikit Nation­al Con­ven­tion Centre in Bangkok, Thailand.

[Dis­claim­er: This post is a ‘hot take’ from the first day, Decem­ber 8, pub­lished the morn­ing after. Your cor­res­pond­ent jot­ted down the gist of what he heard dur­ing the ses­sions, and may have mistyped, mis­un­der­stood, or simply missed something.]

Topics

• Stat­ist­ics and trends
• On BCorp, sus­tain­ab­ilty, and Travelyst
• Tech won’t sup­plant the face-to-face meet­ing, but remains important
• Eight trends shap­ing travel man­age­ment to 2030
• Travel is a bene­fi­ciary of the most inter­est­ing time in human history
• Incent­ives to change for the better
• Avi­ation needs bet­ter tools and tech­no­lo­gies for cli­mate change mitigation
• Read oth­er “GT” cov­er­age of events

Statistics and trends

At the top of the pro­gram, Pacific Asia Travel Asso­ci­ation (PATA) Pres­id­ent & CEO Liz Ortiguera said that every week she was hear­ing more and more good news for Asia Pacific travel & tourism.

Glob­al Busi­ness Travel Asso­ci­ation (GBTA) CEO Suz­anne Nue­fang backed that optim­ism, cit­ing stat­ist­ics show­ing that glob­al busi­ness travel will end 2022 at 60% of 2019 (pre-COV­ID) levels, with 2023 levels pre­dicted to reach 80% of 2019. 

In 2022, Asia Pacific leads the world in cor­por­ate travel with a plur­al­ity of 44% of the total. The region is lead­ing the recov­ery too; trav­el­ling for busi­ness at 66% of pre-COV­ID levels in 2022.

Accord­ing to Ms Ortiguera, there are six mega­trends driv­ing travel & tourism:

1. The con­scious trav­el­ler (87% of respond­ents of a sur­vey think a social and envir­on­ment­al con­scious­ness is import­ant; 81% of respond­ents want the money they spend to bene­fit loc­als in the destination.);
2. Con­scious communities/destinations (a des­tin­a­tion mar­ket­ing and man­age­ment organ­isa­tion mind­set; dis­per­sion strategies; com­munity-centred tour­ism; high-value trav­el­lers; work visas and digit­al nomadism; improved staff engagement);
3. An event-led recov­ery for Asia Pacific;
4. Well­ness travel;
5. Authen­ti­city and a sense of place; and
6. Multi-pur­pose and longer trips (includ­ing ‘bleis­ure’, com­bin­ing busi­ness with leisure)

Ms Nue­fang poin­ted out that while Asia Pacific leads the world in busi­ness travel, the big nations, such as China, dom­in­ate busi­ness travel spend in Asia Pacific. (Yet due its zero-COV­ID policies, China has barely con­trib­uted to the recovery.)

At the oth­er end of the scale, many of the smal­ler Asia Pacific nations, such as Malay­sia, Phil­ip­pines, and Singa­pore. which togeth­er account for a tiny frac­tion of region­al busi­ness travel, have seen huge recov­ery rates off low bases. For example, Singapore’s busi­ness travel is set to triple in 2022 over 2021.

It seems that after a couple of years of COVID lock­down-induced tele­con­fer­en­cing, there is a hun­ger for face-to-face meetings.

Ms Nue­fang presen­ted five trends related to busi­ness travel:

1. New oppor­tun­it­ies (digit­al nomadism; cor­por­ate travel man­agers at the cor­por­ate strategy table);
2. A people-first approach;
3. Self-ser­vi­cing (per­haps due to staff shortages);
4. Digit­al­isa­tion; and
5. Sus­tain­ab­il­ity (ini­ti­ate or self-reg­u­late what poli­cy­makers might even­tu­ally impose).

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On BCorp, sustainabilty, and Travelyst

Ms Neu­fang then sat down with Intrep­id Travel Cofounder and Travelyst Chair­man Dar­rell Wade for a “fireside chat”. (There was no fire.)

They talked about BCorp cer­ti­fic­a­tion, which Mr Wade described as a leg­al struc­ture that com­pan­ies can adopt to respond to and be account­able to oth­er stake­hold­ers bey­ond share­hold­ers. Mr Wade and his part­ners at Intrep­id wanted to “embed a leg­acy”; to ensure that their wider stake­hold­er respons­ib­il­it­ies con­tin­ued in perpetuity.

On sus­tain­ab­il­ity, Mr Wade wrote it off as “just talk until 12 – 18 months ago”. That’s when sus­tain­ab­il­ity’s meth­od­o­lo­gies and pro­cesses became much more ser­i­ous dis­cus­sion top­ics. The num­ber one top­ic at the recent World Travel & Tour­ism Coun­cil (WTTC) event was sus­tain­ab­il­ity, he said. Mr Wade described last year’s COP 26 in Glas­gow as “a penny-drop moment for our industry” in terms of its rela­tion­ship to cli­mate change. 

Sus­tain­ab­il­ity is “real now, not just talk”, and it has to start with measurement.

The smart rationale behind Travelyst, for which Mr Wade cred­its Harry Wind­sor, is to give cus­tom­ers what they want: A simple, veri­fied, and author­it­at­ive means to make bet­ter travel choices.

The dev­il is in the detail and there is a lot of detail. 

Travelyst’s six found­ing mul­tina­tion­al cor­por­a­tions either have huge cus­tom­er bases or sig­ni­fic­ant sup­ply chains. Accord­ing to Mr Wade, the cor­por­ates under­stood that regard­less of their mar­ket­place com­pet­it­ive­ness, they are all impacted by the two big issues of cli­mate change and biod­iversity loss. 

So the com­pet­it­ors-turned-col­lab­or­at­ors agreed on rules that would mani­fest as an algorithm that gives con­sumers the con­fid­ence to pick and choose travel on more tra­di­tion­al factors (theirs tastes, budget, the exper­i­ences they seek) know­ing that whatever they choose will tick all the right sus­tain­ab­il­ity boxes. 

The Travelyst algorithm is not pub­licly avail­able (to pre­vent it being gamed) but the cri­ter­ia that feed into the algorithm are avail­able, he said.

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Tech won’t supplant the face-to-face meeting, but remains important

Xpdite Cap­it­al Part­ners Founder & CEO Bart Bellers reas­sured the audi­ence that digit­al meet­ings tech­no­logy won’t replace face-to-face busi­ness travel. (Such tech­no­logy has been avail­able for 30 years e.g. CU See Me.) 

How­ever, the way one travels mat­ters, as do, pre­sum­ably, the digit­al tech­no­lo­gies that enable that. With ‘bleis­ure’ and remote work trend­ing, the tech­no­logy that sup­ports that to the sat­is­fac­tion of employ­ers and employ­ees will be import­ant too. 

Cyber­se­cur­ity tech­no­lo­gies are essen­tial for coun­ter­ing espi­on­age attempts, deny­ing deni­al of ser­vice attacks, and pro­tect­ing cus­tom­er data.

Auto­ma­tion tech­no­lo­gies are becom­ing more import­ant for jobs no-one wants to do, includ­ing in hospitality.

Ben Wed­lock, Seni­or VP of Glob­al Sales APAC for BCD Travel, dis­cussed areas that employ­ers should work on to bet­ter attract and retain talent:

1. Image (is there under­ly­ing repu­ta­tion­al damage?);
2. DEI (expand recruit­ment chan­nels; reduce bar­ri­ers to entry)
3. Trav­el­ler well­being (soli­cit input; offer perks that resonate)
4. Tech­no­logy (digit­al work­place and touchpoints)

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Eight trends shaping travel management to 2030

In this break­out ses­sion (your cor­res­pond­ent could only attend one), the mod­er­at­ors Paul Tilstone and Mike Orch­ard, both of FESTIVE ROAD, laid out some macro changes affect­ing cor­por­ate travel man­age­ment to 2030:

1. Future of work: dis­persed but not for­got­ten (‘the great resig­na­tion’ an oppor­tun­ity to drive ‘the great attraction’);
2. ESG at the pur­pose­ful core (includ­ing, espe­cially, ‘S’ for sustainability);
3. It was always about the meet­ing (the integ­ra­tion of travel and meet­ings that few com­pan­ies have coordin­ated well);
4. The whole trip exper­i­ence (trav­el­ler at the core; duty of care; trav­el­lers adhere to policy and pre­ferred sup­pli­ers as the right fit; autonomy and protection);
5. Dynam­ic con­tent, the true king (deep and rich con­tent aggreg­a­tion from mul­tiple sources; align trav­el­ler and com­pany objectives);
6. API explo­sion brings buy­er empower­ment (knit togeth­er niche ser­vices for cus­tom­ised programs);
7. Hail to the storytellers (data every­where; key­strokes and clicks; chal­lenge to con­sol­id­ate; bring oth­er data — health, CRM — to cre­ate and meas­ure new forms of KPI; tell stor­ies to enhance stake­hold­er value); and
8. Take the lead or be dir­ec­ted (value of travel looked at dif­fer­ently; must be integ­rated into over­all strategy, prefer­ably led by travel managers).

The audi­ence voted for trend 4) “Whole trip exper­i­ence” as most important.

Tan­ya Pira­pokin, Exec­ut­ive Dir­ect­or of FCM Thai­l­and, sug­ges­ted that there was more focus on the whole trip exper­i­ence since COVID; offer­ing more value than just book­ings. She also thought there was much great­er integ­ra­tion of busi­ness travel man­age­ment in the human resource man­ag­ment func­tions of organisations.

Kenji Soh, Dir­ect­or, APAC Travel for Bain & Com­pany, described an aspir­a­tion for effect­ive travel man­age­ment: The abil­ity to facil­it­ate a great­er focus on what the busi­ness trav­el­ler­’s employ­er hired them to do.

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Travel is a beneficiary of the most interesting time in human history

“You are prob­ably liv­ing in the most inter­est­ing time ever in human his­tory,” announced Kis­hor Mah­bubani, Dis­tin­guished Fel­low at the Asia Research Insti­tute, Nation­al Uni­ver­sity of Singa­pore, as he key­noted a ses­sion about geopolitics.

There is great­er change in 30 years than the past 3,000 years, he reck­ons, which is “enorm­ously rel­ev­ant” to travel & tour­ism. The tid­al wave of eco­nom­ic devel­op­ment across Asia has picked up and is car­ry­ing the industry.

The return of Asia as eco­nom­ic power­house is “per­fectly nat­ur­al”, a return to the norm of his­tory. And Asi­ans have bor­rowed and learned from the best prac­tices of the West such as free mar­ket eco­nom­ics and the free trade agree­ment, and have imple­men­ted those with enthusiasm. 

In the year 2000, the US eco­nomy was eight times lar­ger than China’s; it’s only 1.5 times now. And now the greatest geo­pol­it­ic­al con­test in his­tory is between US and China. The con­test will only intensify.

For ASEAN, the poten­tial night­mare is if they will be forced to pick a side. Thus far, ASEAN has played a mod­er­at­ing role. Indeed the “hid­den mir­acle” in Asia is ASEAN, which, des­pite its polit­ic­al and reli­gious diversity, has seen no war for years. By remain­ing peace­ful, ASEAN exports its cul­ture of peace to the rest of Asia.

With sta­bil­ity, travel has boomed and will con­tin­ue do very well. 

The middle classes around the world, espe­cially in Asia, are explod­ing in num­ber. China, India, and ASEAN togeth­er com­prise 3.4 bil­lion people. In the year 2000, 75 mil­lion of them were middle class; in 2020 1.1 bil­lion; in 2030 there will be over 2 bil­lion … all lin­ing up to buy tick­ets, book rooms, attend MICE events.

Pro­fess­or Mah­bubani reck­ons travel has a para­dox­ic­al effect on the envir­on­ment. Its energy require­ments and res­ult­ant emis­sions have adverse effects. Yet people want to travel to see nature, and such travel helps pre­serve sig­ni­fic­ant parts of it.

On devel­op­ing coun­tries seek­ing sup­port for cli­mate change mit­ig­a­tion and adapt­a­tion, Prof Mah­bubani poin­ted out that developed nation have made prom­ises they haven’t kept, such as the USD100 bil­lion prom­ise in Par­is. How­ever, developed soci­et­ies are facing chal­lenges they haven’t faced before. Their gov­ern­ments fear being over­thrown by pop­u­list move­ments. They are afraid to be too gen­er­ous abroad when there are mul­tiple prob­lems at home. 

Devel­op­ing coun­tries need to be real­ist­ic and self-suf­fi­cient. And they can lever­age mul­ti­lat­er­al set­tings to build peer pressure. 

The most import­ant rela­tion­ship in terms of cli­mate change is between US and China. The rela­tion­ship was strained when Nancy Pelosi vis­ited Taiwan. How­ever, dis­cus­sions between the two powers resumed at COP 27 in Egypt when all eyes were on them.

Glob­al reg­u­la­tions are blunt instru­ments. Those devised by rich nations, for instance, may not take into con­sid­er­a­tion the situ­ation of poorer coun­tries. Prof Mah­bubani related a story of a Bel­gian NGO that ‘res­cued’ chil­dren from child labour in Bangladesh. A year later they were in worse situ­ations, some even in prostitution. 

Be care­ful of unin­ten­ded consequences.

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Incentives to change for the better

Beh Siew Kim of Cap­it­a­Land Invest­ment and The Ascott Lim­ited dis­cussed ‘return on sus­tain­ab­il­ity’; the triple bot­tom line ver­sion of ‘return on invest­ment’, or a more rig­or­ous approach to deliv­er­ing returns for people and plan­et as well as profit.

Hap­pily, those who can demon­strate the non-fin­an­cial returns on top of the fin­an­cial returns, are receiv­ing addi­tion­al fin­an­cial priv­ileges and rewards (or at least avoid­ing the fin­an­cial head­winds of their less sus­tain­able competitors):

• Investor sen­ti­ment sur­veys indic­ate that com­pan­ies fail­ing to meet ESG expect­a­tions risk los­ing access to cap­it­al markets; 
• A PWC sur­vey indic­ates that ESG and fin­an­cial per­form­ance go hand-in-hand;
• Morn­ing­star US sus­tain­ab­il­ity index shows that sus­tain­able com­pan­ies per­form best; and
• ABN AMRO reck­ons ESG per­formers are less risky, bet­ter posi­tioned for the long term.

There is a ‘greeni­um’ premi­um on offer; cheap­er loans are avail­able for ESG per­formers. In real estate, for example, green office build­ings enjoy a 5 – 10% high­er occu­pancy, which trans­lates into high­er yields and prop­erty valu­ations, and easi­er access to finance.

Eric Ricaurte, Founder & CEO, Green­view reck­ons net zero is the sum of its parts, i.e. there are numer­ous entit­ies involved in cre­at­ing a net-zero hotel stay or MICE product.

So how can cor­por­ate travel cre­ate the biggest impact? 

With their tend­ency to buy in bulk, cor­por­ate travel man­agers can make demands, such as requir­ing accom­mod­a­tions that are 100% renew­able energy, or ven­ues that offer veget­ari­an, vegan, and plant-based foods.

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Aviation needs better tools and technologies for climate change mitigation

Star Alli­ance CEO Jef­frey Goh ended the edu­ca­tion­al por­tion of the day talk­ing up the glob­al capa­city of air travel, which had recovered to 84% of pre-COV­ID levels as at Novem­ber 2022 (exclud­ing China). With­in that, Asia Pacific air travel capa­city had recovered to 67% of pre-COV­ID levels (exclud­ing China).

How­ever, there are chal­lenges, includ­ing cyber­se­cur­ity threats; loss of tal­ent; and loud calls for envir­on­ment­al sus­tain­ab­il­ity, includ­ing cli­mate change mitigation. 

What avi­ation needs, he thinks, are bet­ter tools to meas­ure emis­sions and effect­ive tech­no­lo­gies to reduce them.

Sus­tain­able avi­ation fuel (SAF) is like gold dust, he said. All air­lines want it, but pro­duc­tion is very lim­ited at ~1% of total fuel required by the sector.

Yet Mr Goh is excited by the tech­no­lo­gies in the pipeline, includ­ing much more SAF, plus hydro­gen and elec­tric driv­etrains (for feed­er routes to hubs, at least), and car­bon cap­ture technologies. 

The politi­cisa­tion of the issue is coun­ter­pro­duct­ive, he said, before assert­ing that avi­ation is a “force for good”. 

Per­haps inten­tion­al, per­haps not, he ended with the iron­ic meta­phor: “The train of sus­tain­ab­il­ity has left the station.”

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Fea­tured image (top of post): Busi­ness travel: It’s com­plic­ated. Base image by Rob Wilson (CC0) via Unsplash.