Bringing Asia’s business travel back – one nudge at a time

INSIGHTS

Bringing Asia’s business travel back – one nudge at a time

All travel took a big hit during the pandemic. On a corporate level, virtual sessions quickly and seamlessly replaced on-site visits and face-to-face client meetings. But now that borders are gradually reopening after two years of effort to prevent the spread of COVID-19, business travel appears to be taking root again.

At FCM’s Th!nk Singapore in April 2022, two months into the lifting of border restrictions for most Asian markets, FCM’s Managing Director for Asia Bertrand Saillet shared his outlook on the state of regional travel. He sees an industry conscientiously striving to make up for lost time, through pivots and adaptations.

Some prominent highlights that Bertrand notes:

Air travel is back, quicker than ever

Air travel has surprisingly picked up much faster than anticipated, to the delight of the travel industry. The move, however, does not come without frustrations. For one, capacity has not been able to keep pace with the spurt in demand.

“If you want to book a fare right now from Australia to Europe or the United States (US), you might have to spend at least AUD4,000 for just an economy class ticket. As for business class tickets, you’re very lucky if you could get your hands on one, as they are overly booked on almost every airline in Australia.”

Restrictions are easing, travel is calling

Within Southeast Asia, Singapore has been leading the charge in easing travel curbs. The country is gunning to restore passenger volumes to at least 50% of pre-COVID levels in 2022. Thailand, Vietnam, and Cambodia, too, are taking similar steps to loosen border controls.

North Asia tells a different story, with Saillet citing Hong Kong, China, and Japan to be still “very depressed markets” in the last two months. China has always had the largest domestic travel market in North Asia. Prior to the recent Covid wave in China, the volume of domestic business travel in the last year was treading at close to 80% of pre-covid levels. Although domestic volume is now less than 30%, there is optimism that the bounce back will be accelerated once the situation stabilises.  

In a market like Singapore, most of the trips we have are long-haul bookings to destinations like Europe, the US, and Australia. Regional travel demand is still very low. I don’t expect travel in Asia to revert to pre-COVID level before 2023 or 2024, depending on the situation in China.”

The rise of meaningful travel

Before COVID-19, the average length of a business trip from Singapore was five days. Now, each stay is 10-12 days – twice as long. The long-haul effect appears to be in play here, where people say, ‘If I’ll be flying for so many hours, I might as well extend the trip for pleasure.”

While blending leisure and business has become a big thing, sustainability also has an increasingly important role in travel these days.

What all this points to is that more thought is going into each trip, with more elements being considered. Even in Europe and the US, domestic trips are longer than before the pandemic. Multiple components are the norm; no longer is it common for people to travel for just one meeting or a day trip.

We now have to define the meaning of eligible travel: What is the reason and what do we expect out of it? And the fact that people go on longer journeys is basically a reflection of such thought.”

 

 

 

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