Amex: China is fourth-largest biz travel market, and growing

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China is now the world's fourth-largest business-travel source market, with spending of $7.4 billion on air travel alone in 2005. That number is expected to continue growing, largely driven by business travel within China's own borders.

Those are among the findings of the American Express Business Travel's China Business Travel Survey, known as the Barometer. Released last week at the second American Express China Business Travel Forum in Shanghai, the Barometer reported that 28% of surveyed companies had increased T&E expenditures this year and that 87% of that hike had occurred in China and Hong Kong.

China's business travel market ranked fourth after the U.S., Japan and Germany.

The report also provided insights into evolving purchasing practices within China.

Buyers are increasing efforts to manage travel spending, as evidenced by the growing number of negotiated rates with suppliers, up 20% from 2004. In addition, 70% of survey respondents reported having a T&E policy, up 15% from 2005.

However, compliance is low. The Barometer reported that only 28% of organizations comply with more half of their T&E policies, and more than half of respondents had no controls in place.

Only a third of respondents used a travel agency, while 37% used the Internet for booking and more than half said they were not planning to implement an online tool.

For 73% of travelers, reimbursement of cash receipts was still the main method of expense payment.

About a third of organizations said their T&E spending would rise in the next 12 months. The domestic market will continue to be the prime driver, due to continued rapid business development in China.

This is the third business travel survey conducted by American Express in China. Between May and September this year, interviews were conducted with 200 Chinese- and foreign-owned organizations in Beijing, Guangzhou and Shanghai with 100 or more employees.

The China Business Travel Forum was hosted by American Express Business Travel and the Shanghai International Conference Management Organization.

To contact the reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].

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