Article

Asia's hotels gear up for the business travel boom

Across Asia strategically located hotels are springing up near business hubs to specifically cater for the region's growing numbers of business travelers.

October 20, 2016

For the millions of business travelers visiting Shanghai, their focus is less on getting a room with a view of the Pudong district’s futuristic skyline and more on ensuring easy access to that all–important early morning meeting.

It’s a similar story across Asia’s big cities, where new strategically located hotels are springing up near business and financial hubs to specifically cater for the region’s growing numbers of business travelers.

Asia is now the world’s largest business travel region, holding 38 percent of the $1 trillion global business travel market spend. In coming years, this market will gain another five percent growth, at the expense of the more established North American markets, according to a recent McKinsey report.

Meeting the needs of business travelers

Andrew Langston, Executive Vice President, JLL IndoChina, says that most of the growth in business travel in Asia is fuelled from within the Asian region. And that’s driving decision-making for both local and international hotel chains keen to cater for this fast-growing sector.

“Investors and operators are astutely aware of the cultural differences and requirements of the savvy Asian traveler, with the growth primarily coming from China,” he says.

“The old adage – that one hat fits all – does not apply anymore. Facilities, product and experiences have to be tailor made to the geographic and demographic guests you are targeting.”

Millennial business travelers for example, tend to be more tech savvy and have a different pattern of booking to the baby boomer set such as using mobile apps.

However, there are some common traits: unsurprisingly, all business travelers prioritise convenience, selecting hotels that were close to their work destination, and expecting work-friendly facilities, according to McKinsey.

Tasos Kousloglou, Executive Vice President, Strategic Advisory & Asset Management, JLL Asia, says: “What today’s business guests value most in the hotel are simple things such as fast and reliable wi-fi, enough power points in the room, a smart desk to work, an iron to press their clothes or a quick turnaround laundry before an important meeting, black-out curtains so they can get some sleep after a long flight, options for quick healthy bite and work-outs.

“Equally, a smooth, simple online booking process, a mobile optimized website and flexible check-in and check-out times are becoming deciding factors to their choice of hotel,” he adds.

Micro-hotel chain Yotel has explored ideas such as robotic check-in and services, bringing technology to the front-of-house areas – something Langston thinks would have huge appeal to Asia’s business travel class: “The business traveler is looking for speed, connectivity and clean comfortable rooms.” In contrast, room size is not such a driving factor.

Language skills among hotel staff, however, are fast becoming a key consideration. “Most properties will now have their services promoted in several languages and provide employees with language capabilities, this is particularly important for China and Taiwan and for the second – third tier areas of growth,” Langston says.

Opening up new opportunities

Global brands are keen to build their presence in the growing business travel market. Earlier this year, Marriott International signed with China’s fast-growing Eastern Crown Hotels Group, aiming to bring 140 “FairfieldSM by Marriott” brand hotels, to mainland China in the next five years. The Fairfield brand targets business travelers – and China’s rising middle-class is seen as a key market.

Meanwhile Yotel will launch its first two Asian properties in the next two years in Singapore, both aimed squarely at the fast-growing business travel market.

“Most business travelers are after a no-fuss approach that breaks down the traditional barriers of products like ‘fine dining’ or ‘concierge’ to more of a ‘leave me alone, I will call you if I need you’ approach,” Langston says.

However, flexibility is also key with the rise of “b-leisure” – where business travelers tack on a couple of days of holiday at the end of a trip – and their requirements as guests shift as they have more time to enjoy the hotel facilities.

An evolving market

The next hot-spots for business travel growth will emerge as tech-savvy Millennials come online, Langston says – and across Asia, growth will cater for domestic, short-haul and international travelers.

Countries such as India, Vietnam, Laos and Cambodia are already seeing higher numbers of business travelers with Myanmar also attracting attention – and developers are keen to capture a slice of the lucrative business travel market.

“This in turn is increasing hotel and hospitality investment within the region, as cost to build and service is still favourable with relatively low wages compared to the mature markets of Europe and the U.S,” says Langston.

With traveler numbers rising, supply of high quality business accommodation is playing catch-up with demand.