Hong Kong is the most expensive location in the Asia Pacific region for business travel, while Kuala Lumpur is the cheapest, according to research by ECA International.
“Costs commonly incurred during the course of business trips include accommodation, transport, meals and day-to-day necessities,” advised Lee Quane, Regional Director – Asia for ECA International. “With this in mind, we have seen that the total costs incurred by a business traveller in the region are highest in Hong Kong.”
Hong Kong’s regional rival, Singapore, has secured 5th position in this year’s rankings. While the cost of a typical meal out and incidental expenditure is more expensive in Singapore, higher costs associated with hotel accommodation in the SAR contribute to its ranking as the most expensive location in Asia pacific to undertake a business trip.
“Room rates in Hong Kong are amongst the highest of the locations we survey in the region,” said Quane. “Looking at 4-star hotel accommodation, rates are only higher in Dhaka, where a shortage of suitable accommodation contributes to the high rates charged for hotel rooms there. Nevertheless, accommodation costs are approximately 20% higher than comparable accommodation in locations such as Seoul, Singapore and Tokyo."
The cheapest location in Asia for business travel is Kuala Lumpur. Bangkok, Phnom Penh and Bandar Seri Begawan are the only other capital cities which are ranked within the top 10 cheapest locations for business travel in Asia.
“As major business travel and tourist destinations, it is surprising to see KL and Bangkok within the top 10 cheapest locations in the region,” said Quane. “A combination of generally low living costs, relatively cheap accommodation options for business travellers and currency weakness versus the USD have contributed to these locations being where they are in our rankings.”
When hotel costs are excluded, the most expensive locations in Asia that are visited by employees are slightly different. Hong Kong falls to 8th in the regional ranking when excluding hotel costs.
“In terms of the total costs to be borne by the company, which are associated with business travel, Hong Kong is more expensive than anywhere else in Asia,” said Quane.
However, as hotel costs are regularly paid directly by the company, employees are often not aware of these costs and will focus on costs associated with meals, transport, laundry and other incidental costs which they will often consume.
"More often than not, they will be reimbursed for these costs or will receive an allowance from the company to meet such expenditure. Relatively cheap public transport costs and costs associated with incidental expenditure contribute to a lower ranking once hotel costs are stripped out," notes Quane.
Seoul is the most expensive location in Asia for business travellers once hotel costs are excluded, followed by Tokyo, Sydney, Singapore and Shanghai.
“Seoul and Tokyo’s high rankings are reflecting the general high cost of goods and services in these two cities, combined with the fact that language issues may limit business travellers in terms of their choices for meals out,” added Quane.
Beijing is ranked 6th in the region, Macau 14th and Taipei 34th based on non-hotel business travel costs.
The cheapest locations in the region for business travellers, once hotel costs are excluded, are Karachi, Islamabad, Kathmandu and Ulaanbaatar, with costs in Karachi approximately one third of those incurred by business travellers in Seoul.
“Companies have many ways to ensure that the costs incurred by an employee in the course of a business trip are covered, whether that be via reimbursement or the provision of a daily allowance to meet such expenditure,” advised Quane. “However, what the variation in costs within the region suggests is that it is important for companies to ensure that the allowances they pay are relative to each location that they send an employee to. These should also be reviewed on a regular basis in order to account for the annual changes.”