Business tourism boom to Asia forecast
LONDON – Asia is expected to benefit from a boom in business travel as destinations in the region benefits from US sub-prime woes.
Business tourism to Asian destinations is expected to grow strongly, with a forecast compound annual growth rate of nine per cent over 2007-2012.
This means that Asia is expected to welcome 80 million business visitors by 2012.
The prediction comes from Euromonitor International in the World Travel Market Global Trends Report 2008.
The shift in business tourism to Asia is expected to further increase demand for business-class seats on flights between Asia and US/European business hubs.
Major established airlines, such as British Airways, are considering introducing long-haul business-class only flights to tap into the burgeoning market for corporate travellers between Asia and US/European cities, according to the report.
“If such flights prove popular enough, airports that service business class only could be set up in key Asian cities, reducing the time required for business travellers to clear immigration and customs,†says the report.
“Singapore Airlines business-class only flights between Singapore and major US cities are a sign of things to come.
“Overwhelming demand for its business class only seats caused airlines such as Virgin Atlantic, which recently scrapped their plans for business-class only transatlantic flight, to possibly reconsider their strategy.
“In the past, some financial institutions only allowed business class level flights for trips over 2.5 hours but have recently extended this to 4 hours.â€
The report says the ongoing US sub-prime crisis has hurt many investment banks and financial institutions badly, notably Citigroup and UBS, forcing these companies and others to look towards Asia for growth.
“Asia accounted for an estimated 80% of global growth in key financial institutions in the first quarter of 2008, and offers an alternative source of revenue as liquidity and investor confidence dries up,†according to the report.
“As a result, key financial executives are undertaking more frequent business trips to major Asian destinations, especially business hubs such as Hong Kong, Singapore, Tokyo, Shanghai and Mumbai.
“During these trips, business travellers attempt to build upon and court investment from the cash-rich region, which has taken on a more critical role in the face of financial turmoil across the globe.
As executives and management from Western Europe and North America travel to Asia in greater numbers, opportunities to cater to this group of top-end business travellers and meetings and incentive travel activities will increase, the report predicts.
by Phil Davies
Ian Jarrett
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