Business travel accelerates on global growth
CORPORATE travel and entertainment expenses are being driven up by thriving regional and global trade.
American Express and Survey Research yesterday announced the findings of a business travel survey of 367 companies conducted from April to mid-May this year.
The respondents were from medium to large-sized corporations in various industries.
The survey found that the average travel and entertainment expense for Hong Kong firms was $1.1 million last fiscal year, with overseas expenses accounting for 58 per cent and local expenses for the other 42 per cent.
About 64 per cent of the 376 surveyed companies forecast the travel and entertainment expenses would increase this year, with only 26 per cent saying the figure would remain the same as last year.
Of the 64 per cent of companies that said the expenses would increase, 27 per cent predicted it would increase by 10 to 19 points this fiscal year, while seven per cent estimated the expense would rise by 20 per cent to 29 per cent, and 25 per cent said the increase would be less than 10 points.
Only 31 per cent of the interviewed companies had a formal travel policy and almost half did not have a formal policy to control travel and entertainment expenses.
Ian Stewart, vice-president of travel and travel management services at American Express, said the absence of a practical travel policy would affect a company's profit and competitiveness.
Mr Stewart said most companies in Hong Kong did not have a travel policy because they regarded travel as a bonus for employees and hesitated about issuing strict controls.
'With effective management and control, a company can save up to 30 per cent of the total travel and entertainment expense,' Mr Stewart said.
Effective control included how to devise the best routing, negotiating the best rates for air tickets, hotel accommodation and the highest discounts for group or incentive trips, he said.
Peter Ellis, senior vice-president of travel and travel management services for American Express, estimated that the Hong Kong business travel market last year was worth US$8 billion.
He predicted the figure would continue to grow by 10 per cent to 15 per cent this year.