SMEs an important opportunity for agents in APAC region

There is no single model that applies to small to medium-sized companies (SMEs) across the Asia-Pacific region, with country-to-country differences in spending patterns, priority of travel agent services and attitudes to online travel all driving the need for a tailored approach, says findings of new study shared by Cendant TDS.

“The small to medium-sized corporation represents an important opportunity for agents in the Asia-Pacific region,” said Anthony Venus, executive director, Hong Kong-based research firm MarketShare.

Cendant TDS commissioned MarketShare to conduct telephone interviews with 100 travel buyers from small to medium-sized companies in Hong Kong, Singapore and Australia in late 2005. The research, titled “Corporate Travel: The Next Frontier”, explores the Asia-Pacific SME corporate market.

For Asia-Pacific SMEs, the research reveals that the majority of travel buying is decentralised with the function often sitting with a senior executive’s personal assistant or sometimes in the human resources department. There are few full-time travel managers in SME’s, unlike the larger corporations.

According to Cendant TDS, Other research results reveal that:

·          In the SME category, the typical spend on corporate travel is up to US$ 500,000 for small businesses (Hong Kong and Singapore) and up to US$5 million for medium-sized business (Australia).
·          Across all markets, SMEs still heavily rely on their travel agents for flights (Australia 89 percent; Singapore 60 percent; Hong Kong 56 percent) and to a lesser degree, hotels (Australia 27 percent; Singapore 33 percent; Hong Kong 30 percent).
·          In terms of how travel is managed, there was greater consistency in all three markets. The majority of travel was controlled from a national head office location (Australia 65 percent; Singapore 90 percent; Hong Kong 70 percent).
·          There is no clear trend across Asia-Pacific on price competitiveness of corporate travel agents with Hong Kong and Singapore comparatively similar in that 33 percent and 36 percent of companies respectively believe they get cheaper prices from their corporate travel agent than other sources. This is also the case in Australia, where 26 percent of companies believe they get the same pricing; however 58 percent believe they get cheaper prices from a corporate travel agent.
·          In terms of cheaper alternative pricing, the Internet emerges as the clear leader across all three markets.

Personal service, fast supply of air tickets and flexibility rank as the most important elements of service.

The company added that it is evident there is a lack of understanding in how online tools might benefit the travel buyer. A clear opportunity exists for the travel agent to communicate to the buyers that online applications can provide improved productivity and more flexibility.

George Harb, marketing director, Asia, Cendant TDS says, “Contrary to the perception among the buying community that an online application may create additional work for employees and management alike, online tools actually do the research for the buyer and work within the parameters of the corporate policy.”

Harb added, “Online tools also allow business travelers more control over their bookings and online tools always find the right lowest price, rather than the lowest price which may not fit the traveler’s needs. This is a fundamental difference that needs to be communicated to travel buyers, whose existing knowledge of online tools believes it merely replicates the leisure travel experience, which is focused on price, self-searching for the right deal and little flexibility.”

Based on the survey results, the positive news for travel agents is that the corporations do not consider travel expense a significant issue nor do they believe that their IT systems are a barrier.

“There are some clear benefits in online tools in both companies and agencies and these tools represent a significant opportunity for the agency. In educating the corporate SME about the benefits of online booking tools, the travel agent is able to add increased value to their customers at the same time as driving greater efficiencies,” said Harb.