Amex sees business tourism picking up speed

If comparisons are to be drawn between Shanghai and Mumbai, then its safe to say that where Shanghai lacks in heart, it makes up in infrastructure.

The Chinese government has cleverly positioned Shanghai as the city of international business travel and convention tourism with foreign tourists exceeding 4.91 million in 2004.

In many ways, Shanghai is a similar destination market as Mumbai, since it receives a larger percentage of business travellers compared to leisure travellers.

Where the business travel market in India is estimated at US $ 1.7 billion growing at 15-20 per cent, the market in China is estimated to be US $ 6.8 billion growing at 25 per cent rate.

Taking advantage of this trend, American Express chose Shanghai as the destination to hold the third American Express Business Travel forum.

"With the Chinese economy's dynamic growth and the country's ascension into the World Trade Organisation, the need for business travel services is rapidly growing," said Charles Petruccelli, president of American Express Global Travel Services.

But it's not only China that is seeing rapid growth in the Asia-Pacific region. Amex expects India to follow similar growth trends in the business travel market as well.

Both China and India have seen the highest amount of year on year sales growth at 211 per cent and 84 per cent respectively.

That is why Amex is pumping in 20 per cent of total investments in the region.

"There are challenges to overcome in corporate travel in India like the lack of skilled resources, the pervasiveness of e-ticketing but the growth opportunities are huge as well because the base is small," said Peirric Beckert, senior vice president, global corporate services - Japan, Asia Pacific and Australia, American Express corporate services.

In the corporate card segment, as per Amex's estimates, both China and India fall under the low-penetration and low levels of sophistication part of the matrix, compared to the US, Australia and New Zealand, which are high-penetration and highly sophisticated customer markets.

(The correspondent's trip was sponsored by American Express)