China's corporate travel management industry growing despite low profit
The growth in China's CTM industry is slowing, from 17.2% y-o-y in 2014 to 15.6% this year, with profits at only 4%-6%.
The growth in turnover of China's corporate travel management industry is slowing, from 17.2% y-o-y in 2014 to 15.6% this year, with marginal profits of 4%-6%.
Data consultants iResearch recently released China Corporate Management IndustryTrends Report",the first in-depth study on China's corporate travel management industry conducted by an independent organization.
Mobile booking is becoming the top bookng method as younger executives increase
The scale of growth of China's corporate travel management industry portrayed in the report matches market expectations. Turnover broke through the RMB100 billion mark in 2014 but the growth momentum is waning in 2015 due to the economic slowdown. It is expected to pick up again when the economy stablizes in 2016 and continues sustained growth over the short term thereafter.
Turnover in the industry in 2014 comprised 75.4% airticket transactions, 19.5% on hotels and 5.1% on others. The heavy component of airticket transactions in China's corporate travel management market is said to have slowed profit growth.
The key to boost income lies in increasing the ratio of diversified and added value services such as car rental, shuttle service and visa service. Using more online booking would also effectively lower the indutry's personnel costs.
The top four travel companies in China only take up 18% of China's corporate travel management industry, with Ctrip holding the largest share at 7.4% and Omega Travel Group holding 5%. The key driving force of the market are the hordes of general tourism businesses such as tour operators and ticket agents.
The report also showed corporate cutomes use multiple booking methods - 60% by PC, 55% by app and 50% phone.
Online booking is used increasingly for convenience, as the portablility of mobile devices suits corporate customers' need to make changes in bookings on the go. As younger executives become mainstream corporate travelers, mobile booking will become even more important and self-service rescheduling and and booking will become a main choice for corporate travelers.(Translation by David)