12 MAY 2014

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Article from BTNews 12 MAY 2014

ON THE SOAPBOX - Shannon Hyland, President and CEO of Radius Travel

Shannon Hyland is the President and CEO of Radius Travel, the global travel management company that operates through a network of best-in-market agencies across 80 countries, managing more than £13.7bn in annual corporate travel spend.  Shannon previously served as CFO of Radius Travel and prior to that held CFO positions with Groople, Mark Travel Corporation and Cendant’s Galileo Americas.



What Asia Pacific Growth Means

With corporate travel spend growing 8% year-over-year and projections showing that China will surpass the US as the top corporate travel market by 2016, the boom in the Asia Pacific (APAC) region is impressive. Beneath the big numbers, what regional trends should corporate travel buyers and suppliers monitor closely to position themselves for success in APAC?   

First, let’s consider business travel patterns in China, which accounts for nearly 60% of the APAC travel market.  Today, 95% of the China’s travel spend is domestic.  While the remaining 5% of international outbound travel spend already amounts to about £7.7bn, we can expect this number will explode over the next decade.  China will become a massive driver of regional and global corporate travel, and any supplier hoping to support and benefit from this growth must do the work today to build strong relationships and a deep understanding of the market’s business culture and corporate travel needs.    

Travel buyers from outside the region will find that growth in APAC is changing the rules – and roles – for how decisions are made when designing and deploying global travel programmes. Ten or 12 years ago, when many corporations began to globalize their travel management programmes, executives at UK- or US-based headquarters typically dictated policies and expected other markets to fall in line.  In many cases, the programme never gained local traction and therefore was never truly global.  That’s changing.  Given travel volumes in APAC, decision makers at HQ must take into account local market personnel, preferences, practices, and capabilities when developing solutions and service requirements.  The best global travel managers see each market as an opportunity not simply to generate additional economies of scale but to work with what makes that market unique and to borrow what that market may offer to others in the programme.  And the best suppliers partnering with those travel managers will help them accomplish exactly that.

APAC growth also increases the significance of a travel content landscape that is very different than that found in most of Europe and North America.  In Western markets, most content is available on Global Distribution Systems, but in APAC, content sources are much more fragmented and localized.  With so much air, hotel, and ground transport content available only off-GDS, buyers who do not tap local content sources will find only about 30% to 40% of the supply they should.  Suppliers may be of little use to these buyers unless they too are local and in a position to fully understand and participate in this content ecosystem.  In our case at Radius Travel, we assist our multinational clients in China through our network member Ctrip.  Ctrip has the strong relationships and proprietary technology to aggregate critical content for business travellers.

Now, a brief interruption, followed by an equally brief conclusion:  I expect many readers may shake their heads at the title of my post thinking, “here’s another guy attempting to summarize APAC in 800 words.”  Point taken.  If space allowed, I would quickly pass the regional generalizations and get down into the specifics of each market, of a company’s requirements in each market, of our network’s presence and capabilities in that market, and how to marry what makes sense locally and globally into an optimized travel programme.  That’s what my company does every day with our clients who run successful regional and global travel programmes involving APAC markets.

The value of the big APAC numbers, as well as the nuances that lie beneath them that I’ve chosen to highlight here, is that they remind us all that there is no shortage of opportunity for those of us in the corporate travel ecosystem – but also no shortcuts.  It is those that do the work to understand and serve each market from the inside out, from the bottom up, on its own terms, valuing relationships and creating value, will benefit from the exciting opportunity the region represents. www.radiustravel.com

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