Interview with Liu Zinan, director of sales and account management, Hogg Robinson China

China Special: By EyeforTravel.com Correspondent in Beijing

The advanced technogical platforms of business travel management overseas cannot be used in China because of the restrictions.

“There are restrictions in the area of GDS, in particular issuing of air-tickets. It is every player’s wish that TravelSky, the key ticket-booking system in China, will be improved quickly to follow with the Chinese market development and growth,” says Liu Zinan, director of sales and account management, Hogg Robinson China.

Zinan shared information about corporate travel management in China, how is the company  differentiating its services and much more. Excerpts from an interview with EyeforTravel.com’s Ritesh Gupta.

What have been major developments for Hogg Robinson in China?

One of the major developments was Hogg Robinson announcing its rebranding to HRG (Hogg Robinson Group) throughout its network. With the new brand, HRG has positioned itself as an international corporate services company.

In China’s corporate travel management segment, there are huge differences in approach. Some TMCs are concentrating on low cost transaction whilst HRG firmly believe that we need be value-focused. We add value by offering a complete range of services from low-cost transaction processing (if appropriate to client) through to consulting and expense management. These offerings are designed to maximised overall value to corporate clients through their travel and related expenditure.

Another major development has been the size of business. Over the last two years, HRG China has acquired over 120 China-based multinational companies. In association with this development there have been the growth of service capability, market presence, supplier relations and human resource.   
 
How have you differentiated your offerings in China? How are you in a position to meet the unique demands of this market?

HRG differentiates itself from both international TMC and domestic travel agencies. Our global capability, the HRG worldwide network, technological platforms and strong managerial team enables us to compete effectively with local players in the market. Compared to international TMC, we are the only foreign majority-owned company in the China travel industry and travel management remains our core business and our strength. In terms of service offering, we are strong at account management.

To further differentiate ourselves by providing high-value and personalised services, HRG China set up the Concierge Service Center for foreigners living in China. Like a private travel consultant, the center serve the needs of the increasing expatriate population in China, catering to their special needs from foreign language capability to trip route planning within China, Asia and other parts of the world.

How quickly is travel and expense management growing in China?

Traditionally, China’s government bodies and local businesses are used to relying on in-house administration personnel to handle their business travel arrangements. However, as projected by industry players, corporate travel management services will be well-received by these Chinese organisations, within the next two to three years.

Based on collated figures, the expenditure for business travel takes the second place after human resources expenditure, in the area of achieving savings for companies through effective management. However, the corporate travel management industry remains generally undeveloped in China. Statistics have also shown that the China’s corporate travel management market is worth up to a value of RMB 33 billions in 2005. The value is expected to increase in the following years.

The awareness of travel expense management, however, is growing concept among China-based multinational companies. More and more international companies are  moving their regional headquarters to China. So far, there are around 104 multinational corporations region headquarters based in Shanghai.

Online booking does not create immediate cost savings in China as the cost of manual bookings is still rather low.

Is China still considered to be a challenge for TMCs from a resourcing perspective as many local travel consultants have not had much exposure to servicing foreign clients or international travel needs?

Was true and will continue to be true. There is a shortage of travel consultants and even more so for quality TMCs. It takes a long time to train and cultivate qualified travel consultants in this growing market vying for the best resources. Take for example a qualified consultant handling international air-ticketing procedures, we need someone with at least a two-year working experience, good foreign language capability and communication skills. So, it is not easy for us to have good talents whose service can reach international standard.

What other regulatory restrictions do you think still stop companies like yours to tap the full potential of business travel segment? What would you recommend for improvement?
 
There are restrictions in the area of GDS, in particular issuing of air-tickets. The advanced technogical platforms of business travel management overseas cannot be used in China because of the restrictions here. It is every player’s wish that TravelSky, the key ticket-booking system in China, will be improved quickly to follow with the Chinese market development and growth. 

It is being felt that many companies, particularly in the SME segment do not understand the value proposition and are reluctant to pay transaction or management fees for this service. Has this changed?

We would not expect SME to understand value proposition as much as the major international corporations. However, we do come across cases in China where an SME is likely willing to pay more for the services while major corporations continue to negotiate to lower the margins of TMCs. Multinational companies can leverage on their volume and increase their bargaining power. 

How do you think suppliers’ outlook is changing towards business travel segment in China?

Suppliers such as airlines and hotels are very supportive of our efforts in servicing common clients. Our local partner Jin Jiang also enables us to get preferred rates for their supplier network.

What are Hogg Robinson’s future plans in China?

We are looking forward to raising the quality of our service and growing a profitable market share in China.