ACTE Forum in Shanghai Defines Strategies To Beat Accommodations Shortage

The most elusive real estate in the world may be a hotel room in China (at any price), and there are no immediate solutions in sight. Yet two highly effective planning strategies are successfully getting accommodations for members of the Association of Corporate Travel Executives. The issue was the primary focus of the ACTE's first forum in China, and drew over 50 participants representing corporate interests, industry suppliers, and the travel agency community to the 20 May 2004 event.

China's runaway economy has created a unique bottleneck in hotel accommodation for companies looking to expand their business interests in the city of Shanghai. The result is that primary hotel space is at a premium, with close to zero room availability at various times during the year. And according to Peter Hildebrand, Director of Marketing of the Grand Hyatt Shanghai, things are going to get tougher before they get easier. Thirty-one million room nights are expected to be in demand in 2005, and that number is expected to double (more than 70 million) in 2010.

Relief from long-term solutions -- the construction of more hotels or expansion by the current properties -- is still far in the future. According to speaker Brenda Song, Director of Business Development and Customer Relationships, Honeywell (China) Co. Limited, there are intermediate answers that can get the job done without appearing as second-best compromises. These include allowing major hotels to utilize "appropriately serviced" apartments and local hotel chains (that meet service requirements) in a kind of code share agreement. Corporations are advised to acquire more room options by adding a provision for accepting alternate accommodations into their contracts. Also advisable is negotiating shorter minimum stay requirements with serviced apartments.

Also discussed at the Shanghai Forum was the value travel management companies can bring to the business process in China. Chief among the questions raised was whether TMCs could land the right talent in a field that is new to this market? Some participants challenged the level of understanding that TMCs have of local customs that guide business practices, complicated by the regulated conditions in the GDS area and the lack of the IT infrastructure. Making reference to a recent presentation that covered aspects of doing business in China, Mr. Michael T. Molloy, Director, Regional Head, Asia Pacific of Credit Suisse First Boston reminded attendees that specific challenges had still to be addressed such as the deficiencies in the number of GDSs, domestic airline contracting and usage of credit cards. Perhaps the most probing question came from an attendee who enquired about the readiness of TMCs to serve Chinese private and public companies with enormous travel volumes that are predominantly domestic in nature for the time being.

ACTE -- the leading international source of best business travel management practices, case studies, and industry statistics -- broke attendance records with its Asia Training Workshop last year. The event was essentially an international travel conference with Asia serving as its hub.ACTE's Asia-Pacific Training Workshop for 2004 will be held in Singapore, August 18-19.

For more information, contact:
Kenneth Phua
Director Asia-Pacific
Tel: 65-6465 6337
Email: [email protected]