Rising costs hitting Asia-Pacific business travel

Economic concerns affecting sentiment

Rising travel costs as well as economic and geopolitical concerns have been affecting business travel from Asia-Pacific, while companies are investing more in digitalisation to help manage their travel budget, according to Visa.

Chavi Jafa, head of commercial and money movement solutions for Asia-Pacific at Visa, said companies might increase business travel over the coming years, but high travel costs and economic concerns continue to affect their sentiment.

Ms Jafa said a study by the Global Business Travel Association in January found 73% of company managers in Asia-Pacific said travel costs were affecting their budget. Some 54% and 15% were concerned about economic factors and geopolitical factors, respectively.

For instance, in Australia there are ongoing discussions about whether the nation is heading into a recession, she said.

When sluggish trends emerge, business travellers worldwide are the first segment to feel the impact, even before leisure travellers, said Ms Jafa.

The tighter restrictions on travel budgets should trigger higher demand for digitalisation and automation for budget and expenditure management, which many Asian countries have yet to develop, she said.

Ms Jafa said another trend showed that demand for virtual cards was picking up, as company managers are able to issue them with a specific budget, and for specific purposes in terms of the spending and the location in which they can be used.

This allows companies to manage budgets more efficiently and ensure the cards are not being used inappropriately.

Contactless payments with credit cards have also become more prevalent post-pandemic.

Moving towards a more hybrid environment, Ms Jafa said companies are combining both virtual and face-to-face meetings.

She said Visa also saw many companies allocating their travel budget to other areas, such as digital advertisements, rather than spending the whole budget solely on trips.

However, assuming there are no extreme incidents like Covid-19, business travel would continue to grow every year in line with the improving economy of each country, Ms Jafa said.

When it comes to Thailand, she said the country welcomed foreign business travellers using Visa cards from their home countries such as the US, the UK, Japan and India, with most of the spending going on airfares and hotel rooms.

Meanwhile, outbound business travellers from Thailand tended to travel within Southeast Asia as well as to the US and the UK.

Ms Jafa said that demand for virtual cards was picking up.