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China's business travel bounces back

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Chinese airlines, including Air China Ltd, at the Hong Kong International Airport. Chinese business travel expenditure grew from $18 billion in 2000 to $62 billion in 2010, according to a statement from the World Travel and Tourism Council. [Photo/China Daily]

China's economic growth fuels transportation demand recovery

The volume of Chinese business travelers rebounded in 2010 after a slump during the financial crisis, but travel managers are feeling more pressure from soaring inflation, a report said.

The rapid expansion of China's economy, which saw a GDP increase of 10.3 percent in 2010, has fueled the growth of business travel, following a decline caused by the economic contraction in many foreign countries, said a report released by AirPlus International Inc, a Germany-based global provider of solutions for business travel payment and analysis.

But growing inflationary pressure - fueled by soaring oil and food prices as well as wages - has raised prices of hotels and transportation, shifting travel managers' attention toward cost control, according to the report.

Chinese business travel expenditure grew from $18 billion in 2000 to $62 billion in 2010, according to a statement from the World Travel and Tourism Council.

The council also predicted that the travel expenditure of Chinese companies could reach about $277 billion in 2020, and that the country is likely to become the second-largest business travel market, after the United States, by the end of that year.

In the first quarter of this year, the number of business trips worldwide rose by 9 percent, the AirPlus report said.

"Worldwide business travel started to climb demonstrably in the second quarter of 2010. The flight ticket spending of our international customers in 2010 was 12 percent higher than in the previous year," said Patrick Diemer, chief executive officer of AirPlus, a subsidiary of Deutsche Lufthansa AG.

As travel service providers charge higher prices, more travel managers in Chinese companies are reconsidering their budgets and seeking professional cost-control services to better withstand the inflationary pressure, Diemer said.

The AirPlus report was based on a survey of 1,705 travel managers around the world. Forty-four percent of the Chinese travel managers surveyed said they felt increased cost pressure from the recession that came after the global financial crisis.

In 2010, AirPlus' sales revenue increased by 315 percent in China, higher than the average level of the Asia-Pacific region, according to Diemer. The company's service for travel arrangements in China - a cooperative venture with Air China Ltd and China Merchants Bank Co Ltd - saw its revenue increase by about $125 million to $160 million last year.

"AirPlus aims to double its revenue in China this year, compared with last year, because China's business travel market is expanding at a faster pace," said Lucy Wang, general manager of AirPlus International China.

The company plans to strengthen its strategic cooperation with Air China and China Merchants Bank, to accelerate the expansion of its travel cost-control business in the world's second-largest economy, Wang said.

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