WHILE almost one third of senior finance executives at some of the largest companies within Asia-Pacific expect to spend more on business travel this year, just five per cent anticipate spending at least 10 per cent more, according to the 2012 American Express/CFO Research Global Business and Spending Monitor.
Fifty-one per cent of senior finance executives polled in Singapore said they expect to spend the same or more on business travel over the next year compared to last year.
Dr Carl Jones, head of American Express Advisory Services for the Asia-Pacific region, explained that several factors were driving these trends, including continued economic instability in Europe, slowing growth rates in specific Asian markets, a slight uplift in the US economy, and tempered growth of airfares.
Even though demand for business travel within Asia remains strong, slowing growth rates and the introduction of low-cost carriers in some markets has increased domestic fares by just one per cent in the last quarter. Intra-Asia fares have performed similarly, and as supply responds to increasing demand for intra-Asia travel, fares have remained flat compared to the last quarter.
As a result, Asia-Pacific businesses are looking to maximise the sales opportunities provided by business travel, with 89 per cent of senior finance executives polled indicating their intention to spend more or the same on business travel in order to meet with current and prospective customers. Among Singapore finance executives, 94 per cent say the same.
‚ÄúCompanies in Asia-Pacific are still shying away from doing business in Europe, so airfares to this region continue to fall. As key markets in the region experience the slowing down of growth rates, domestic and intra-Asia airfares are likely to see moderate growth throughout 2012. As a result, companies are continuing to look at smarter ways to manage their travel investment,‚ÄĚ said Jones.
‚ÄúCompanies are still aggressively managing travel policy, and this is being reflected in the overall demand that we see in the marketplace. Ongoing uncertainty with the sovereign debt crisis in Europe continues to erode confidence, and reduce airfare growth from the previous highs seen in Asia,‚ÄĚ he added.
‚ÄúHigh fuel prices will likely stay, and as travel continues to be a priority for Singaporean businesses, fares are likely to remain at these levels, albeit with a slower increase.‚ÄĚ