Rising travel costs hinder Asia-Pacific corporate travel, Visa reports
Rising travel costs and economic uncertainties are impacting business travel across the Asia-Pacific region, according to Visa. Companies are increasingly investing in digitalisation to manage their travel budgets more effectively.
Chavi Jafa, Head of Commercial and Money Movement Solutions for Asia-Pacific at Visa, noted that while business travel may increase in the coming years, current high travel costs and economic challenges are affecting corporate sentiment.
A January study by the Global Business Travel Association revealed that 73% of company managers in Asia-Pacific identified travel costs as a significant strain on their budgets. Additionally, 54% of managers were concerned about economic factors, and 15% were worried about geopolitical issues.
In Australia, there are ongoing discussions about a potential recession, highlighting the broader economic concerns affecting business travel decisions, Jafa mentioned.
“When sluggish trends emerge, business travellers worldwide are the first segment to feel the impact, even before leisure travellers.”
The pressure on travel budgets is driving higher demand for digitalisation and automation in budget management, areas where many Asian countries still have room for development.
Jafa pointed out a growing trend in the use of virtual cards, which allow company managers to allocate specific budgets for particular purposes and locations, helping to manage expenses more efficiently and prevent misuse.
Contactless payments have also surged post-pandemic, further reflecting the shift towards digital solutions in corporate travel management.
In adapting to a hybrid environment, many companies are now blending virtual and face-to-face meetings. Visa observed a shift in corporate spending, with companies reallocating travel budgets towards digital advertisements and other areas instead of solely funding trips.
Assuming no extreme incidents like the Covid-19 pandemic occur, Jafa expects business travel to continue its annual growth in line with the economic improvements of each country.
Regarding Thailand, Jafa noted that the country has been welcoming foreign business travellers using Visa cards from the US, the UK, Japan, and India. Most of these travellers’ expenditures are on airfares and hotel accommodations, reported Bangkok Post.
Outbound business travellers from Thailand generally prefer destinations within Southeast Asia, as well as the US and the UK.
