Hong Kong is the second-most expensive location in the Asia Pacific region for business travel. This was one of the findings of the latest Daily Rates research published by ECA International. Hong Kong has fallen from last year’s regional top spot to second place this year.
“Over the last year, the cost of four-star hotel accommodation in Hong Kong has fallen by around six per cent,” said Lee Quane, Regional Director – Asia for ECA International. “Declines in tourism and business travel to the city, factors associated with the current regional economic malaise, are the main drivers behind this fall. They are producing lower occupancy rates, forcing hoteliers in the city to reduce prices from the previous year.”
Updated annually, ECA’s Daily Rates reports provide average costs for hotel accommodation, which makes up the bulk of any daily allowance, as well as meals, drinks, laundry, taxi transport and daily essentials. This information is used by companies to determine daily expense allowances for staff who undertake business travel.
The total cost of a typical business trip to Hong Kong, excluding travel to and from the city, is US$508 per day on average.
“Costs commonly incurred during business trips include accommodation, transport, meals and day-to-day necessities,” advised Quane. “Looking at four-star hotel accommodation, Tokyo is the only location with higher rates than Hong Kong. The appreciation of the Japanese yen, in which all business travel costs in Tokyo are incurred, relative to the USD, has led to Tokyo taking first place in the region this year.”
Hong Kong’s regional rival, Singapore, is in fourth position in this year’s regional rankings. While the cost of a typical meal out and incidental expenditure are more expensive in Singapore, higher costs associated with hotel accommodation in Hong Kong (13 per cent higher) contribute to its ranking as the second-most expensive location in Asia Pacific to undertake a business trip.
Shanghai has fallen in this year’s regional rankings to 15th position. The Chinese yuan has depreciated against the US dollar over the past year contributing to Shanghai’s cheaper rates in USD terms.
Beijing follows in 25th position with rates seven per cent lower than Shanghai, largely due to average four-star hotel rates in Shanghai being significantly higher than in Beijing. However, hotel rates in Shanghai are still 32 per cent cheaper than Hong Kong’s.
The cheapest location in the Asia Pacific region for business travel is Johor Bahru. Kuala Lumpur is the only capital city ranked within the top-ten cheapest locations for business travel in Asia.
“Hotel accommodation rates have been depressed in the past 12 months owing to the impact of the fall in oil and gas prices on the Malaysian economy and subsequent reduction in business travel to and within the country,” said Quane. “This has been further accentuated by the continued depreciation of MYR versus USD to leave business-travel costs in Malaysia low in comparison to elsewhere in the region.”
Business travel – excluding hotel costs
When hotel costs are excluded, the most expensive locations in Asia for business travelers are slightly different. Hong Kong falls to fifth in the regional ranking.
“When it comes to a business traveller’s daily expenditure on incidental costs such as transport, meals and beverages, Hong Kong ranks a reasonable fifth place in the region,” adds Quane. “It is cheaper than Tokyo, Seoul, Sydney and Yokohama.”
Shanghai is ranked 16th in the region, Macau 20th, Beijing 21st and Taipei 28th based on non-hotel business-travel costs.
The cheapest locations in the region for business travelers, once hotel costs are excluded, are Bishkek, Johor Bahru and Ulaanbaatar.
“Companies have different ways to ensure costs incurred by employees during business trips are covered, whether by reimbursement or provision of daily allowances to meet such expenditure,” advised Quane.
“As we have seen over the past 12 months, with Tokyo overtaking Hong Kong as the most expensive location, it’s important companies review allowances or reimbursement rates for traveling employees regularly to make sure they are neither under- nor over-compensating for business trips.”