Travel slowdown: Airlines and hotels suffer
AT A PLUSH Hong Kong airport hotel, the only sign of activity comes from the dining-room where a queue of locals fill up their plates at a dinner buffet offered at a promotional rate to Hong Kong residents.
Before the slowdown, the hotel lobby would have been filled with business travellers working on laptops or having a drink at the bar. These days, the empty lobby bears testament to the effects of the global slump on Hong Kong’s $20.4bn (£14bn) tourism sector.
To get through the slump, the airport hotel has had to resort to promotional buffets and cheap spa packages for locals.
As dwindling earnings prompt companies globally to slash travel budgets, Asia has been hard hit with hotel room rates falling for the first time in five years and airlines suffering.
“Companies are now looking at what business travel is revenue generating and are cutting non-revenue producing travel,” said Susan Gurley, executive director of the US-based Association of Corporate Travel Executives.
It’s not just hotels that are feeling the pinch, long-haul business travel has declined along with business activity.
Asia-Pacific carriers are among the worst affected airlines from the global economic turmoil, according to the International Air Transport Association. They stand to lose $1.7bn (£1.16bn) this year, it said.
Singapore Airlines has cut some of its business-class only flights to the US, and demand for Japan Airlines’ premium cabins has fallen by 20 per cent on long-haul routes.
Besides business trips, which many companies are allowing on an exception-only basis, travel for regional in-house meetings and company retreats has been slashed.
Such non-essential travel constitutes up to 40 per cent of an average corporation’s travel budget, said Gurley.
Cutbacks on first and business class travel and rooms at top hotels also reflect an unwillingness by managers to be seen enjoying luxury fringe benefits at company expense when employees are losing their jobs, analysts say.
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