Egencia hopes to spur online growth in China. Friday, 13th March 2009 Source : China TravelDaily Exclusive

The opening of a Shanghai office by Egencia follows a trend of international expansion among US–based Internet travel management providers.

But what is unusual about Egencia’s move is its entrance into a market with such a low adoption rate for corporate travel management technology.

Chinese companies still have a strong preference for paper-based travel management, according to a recent PhoCusWright report, “Corporate Travel management and Travel Practices in China,” which cites the limited use of IT systems management as the top current corporate travel trend in China. More than three in four companies interviewed for the study still use paper forms and a manual process for travel expense reporting.

Enter Egencia, the corporate travel arm of Expedia, which has served companies in the United States and Europe with online travel management services since 2002. Egencia hopes to lead the trend toward adoption of online travel management in China, but it is starting out by offering the offline services that Chinese companies are more comfortable with.

“We cannot copy our U.S. and Europe business model in China,” says Nathalie Duchene Guenard, customer service director for Egencia in Shanghai. “The business here has a greater focus on direct services than in the United States and Europe.”

Egencia opened its China office in November 2007, and received its license to operate as a travel manager in April of 2008.It does not have a ticketing license from the China Air Transport Association, but uses sister company Elong’s booking capabilities and travel industry relationships to serve clients here. The relationship with Elong gives Egencia access to 6,600 hotels in 400 cities, and flight options between 70 Chinese cities.

Egencia’s current client roster consists mostly of multinationals that it services in other locations. But as Egencia grows the list of local companies it works with, it will take a different approach here, where corporate travel involves more paperwork and less automation than it does in the United States and Europe.

In his foreword to PhoCusWright study, David Brett, president of Amadeus Asia Pacific addresses the topic of adoption. “To a large extent, Chinese companies do not take advantage of technology to automate processes and cut costs, but continue to rely on manual systems and paper processes,” he writes. “This is due to a lack of awareness of the tangible benefits that new technologies can bring to their business.”

 Duchene says that Egencia is nudging clients toward using online booking tools, while listening to those clients about what they want from automated booking.

“Chinese companies’ adoption of technology is continuing to gain traction,” Duchene says. “We feel a dual approach of investing in technology and strong proactive service and account management is key.”

The PhoCusWright report supports Duchene’s positive outlook for online travel management in China. Survey respondents had generally positive attitudes--80 percent of companies believed that IT travel management services had the potential to help them increase efficiency, save money and exert more control over travel practices.

In the current economic climate, cutting costs is a priority for companies everywhere. Duchene projects that this could help Egencia move a little more quickly in its effort to transition companies here onto automated travel management systems.

“With the economic situation, account management is more in demand than ever,” she says. “We are constantly having discussions with customers to understand trends and habits, while helping them understand and how their travel booking behavior can impact their budget.”

The senior executive from Egencia China will speak on the upcoming China Travel Innovation Summit which will take place in Beijing from May 12 to 13, 2009. For more information about this event, please visit http://www.traveldaily.cn/aclick/117.html

Reprinted with permission