Managing T&E Indirect Contracts in Asia Pacific. Issa Isaac Director, Global Service, Asia Pacific

Transcription

1 Managing T&E Indirect Contracts in Asia Pacific Issa Isaac Director, Global Service, Asia Pacific

2 Asia Pacific

3 East vs. West

4 Opinion A A B B

5 Contacts

6 Traveling

7 Handling of Problems

8 The Boss

9 Pakistan China Korea Japan India Taiwan Bangladesh Hong Kong Thailand Vietnam Philippines Malaysia Sri Lanka Singapore Indonesia Australia New Zealand 9

10 25+ countries & currencies 100+ languages 8 time zones 10

11 Oceania Greater China North Asia South East Asia South Asia 11

12 Guanxi Relationship Personal touch Commitment & Long Term partnership Business Etiquette Respect for authority Avoid loss of face scenarios Communications Bring a local representative to the meetings Some senior people are still not comfortable speaking in English Negotiations Expect it, part of the culture Initial meetings are just for introductions and presentations Food Business Importance & depth of the relationship judged by the food offered 12 12

13 Looking ahead

14 $61 $54 $41 $35 $31 $31 $30 $24 $22 $22 $20 $18 $17 $225 $274 Top 15 business travel markets (US$billions, 2013) Source: GBTA BTI Outlook: Annual Global Report & Forecast

15 Travel Spend by Region (US$billions, 2013) $302B 27% $262B 24% $76B 7% $415B 38% $51B 4% Source: GBTA BTI Outlook: Annual Global Report & Forecast

16 Annual Percentage Change Global GDP Growth Source: International Monetary Fund, HIS Global Insight, Rockport Analytics

17 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Australia Brazil Canada Business Travel Spend Growth and current level of spend (bubble size) France China India Germany Indonesia Italy Russia S. Korea Netherlands Japan Country (Arranged Alphabetically) Spain UK US Source: GBTA Foundation, Rockport Analytics

18 Travel Spend Growth (%) Total Travel Annual Growth ( ) Business Travel Annual Growth ( ) Business Travel % to Total Travel (2013) China 7.7 % 6.8 % 23.7 % India 7.0 % 6.5 % 21.1 % Indonesia 5.7 % 2.9 % 20.8 % Australia 3.1 % 3.6 % 16.9 % Singapore 3.4 % 3.0 % 48.6 % Hong Kong 2.9 % 4.1 % 19.7 % Japan 1.0 % 1.2 % 34.2 % S. Korea 2.6 % 4.5 % 20.3 % Thailand 6.4 % 5.4 % 11.4 % Vietnam 6.0 % 6.0 % 11.0 % APAC 5.6 % 5.0 % 23.8 % WORLD 4.2 % 3.7 % 24.4 % Source: World Travel & Tourism Council (WTTC), 2014

19 China

20 India

21 Indonesia

22 Australia

23 Singapore

24 Hong Kong

25 Japan

26 South Korea

27 Thailand

28 Vietnam

29 Managing T&E

30 Global Policy compliance Air savings Online adoption Hotel savings Online booking Consolidation

31 Asia Pacific Policy compliance Air savings Hotel savings Travel Policy Online Adoption Savings

32 Budget Expense Policy Payment Suppliers Process

33 Sales conversion with in-person meeting USA 49% UK 45% Germany 50% China 57% Brazil 49% Source: World Travel & Tourism Council; Oxford Economics

34 Sales rely on business travel USA 21% UK 28% Germany 24% China 38% Brazil 32% Source: World Travel & Tourism Council; Oxford Economics

35 What to Expect Asia Pacific s large companies expect to spend more on business travel in 2015 and beyond. China, India, Indonesia being the biggest contributors in next 10 years Domestically generated (referred as 2nd wave rapid growth, compared to the 1 st wave which was the previous growth trend based on travel within Asia and rest of the world) Additional demand from businesses around the world sending employees to APAC to capitalize on economic expansion Corporations will continue to partner with Travel Management Companies (TMC) for optimization.

36 Meetings, Incentives, Conferences, Exhibitions (M.I.C.E.)

37 Travel Event Mgmt Venue Others 12% 4% 43% 41%

38 What to Expect Tremendous growth to continue (Industry expanded by 133% since 2009 compared to global growth of 19.9%) About 70% to 75% of meetings are being held domestically Top 5 APAC MICE destinations:: Singapore, Shanghai, Sydney, Beijing, Bangkok Corporations are recognizing the importance of strategic MICE management [ 38 ]

39 Key Insights Even for corporations with travel management programs, MICE often represent a fragmented and uncontrolled spend category. MICE spend is one of the least transparent spend categories, with indirect contracts and without SLAs. As much as 35% of travel spend is dedicated to MICE. Unlike business travel, which usually utilizes TMC best practices, MICE utilize multiple tools. Current challenges:» Find the synergies between business travel and MICE for further cost savings and better management controls» Overcome fragmentation, indirect contracts and decentralized data sources» Consolidate data to improve negotiation with suppliers (e.g. air, hotel, car) [ 39 ]

40 Path Forward Consolidating Business Travel and MICE Management is a MUST! By consolidation, all sourcing and contracting activities in aligning business travel and MICE are geared towards optimization and strategic spend management

41 Travel Consolidation

42 Travel is emotional

43 Degree Of Globalization Is your travel program aligned with your company s globalization? Global Multinational International Export Domestic Time

44 Global Travel Program consolidated travel expenditure through one agency to leverage in negotiating substantial discounts from suppliers and drive program compliance and savings

45 Considerations Client travel culture Countries organization and culture Travel spend distribution 45 45

46 Barriers in APAC Multiple and proprietary GDS Language Corporate card adoption Low cost of human resources Outdated tools (LCCs entry) Capabilities vs what s available 46

47 Benefits Tracked spending Cost control Policy compliance Traveler flexibility Support of corporate objectives

48 Thank you Issa Isaac, Director, Global Service, Asia Pacific