Hong Kong remains the most expensive business destination in Asia

Hong Kong has been named Asia’s most expensive location for business travelers – for the second year in a row, according to a new report.

ECA International’s latest Daily Rates research ranks countries based on costs for short-term travel expenses: four-star hotel rooms, meals, laundry, alcoholic and soft drinks, flights via taxi and incidental expenses.

The research aims to help organizations anticipate the cost of business trips and short-term assignments, the data company said.

Business travel now costs an average of $520 per day in Hong Kong, which also ranks as the 16th most expensive location for business travel in the world.

That’s despite low demand from business travelers, as Hong Kong strictly adheres to mainland China’s strict zero-Covid policy. It is only in late 2022 that it begins to relax some of its restrictions.

“Hotel costs continue to make up the majority of the total cost of business travel, and despite the low level of occupancy in 2022, advertised room rates. [in Hong Kong] didn’t drop much,” Lee Quane, ECA International’s regional director for Asia, told CNBC.

“This may be due to demand from local residents, while hotel properties may also need to maintain their room rates to cover the additional costs associated with maintaining services during the pandemic. Covid-19.”

The report is based on information collected in 2022, from 457 locations in more than 190 countries, said ECA International.

Singapore has moved up one place in the ECA International rankings, overtaking Tokyo to become the second most expensive city in Asia to visit for business.

It is also ranked 19th globally.

Business travel to Singapore now costs an average of $515 per day — $34 more expensive than last year, says ECA International.

It attributed the rise in costs in Singapore to the “early lifting of travel restrictions” compared to other Asian locations, which has fueled an increase in demand for travel to the city.

“The resulting increase in demand contributed to the increase in hotel accommodation costs, while costs related to other daily necessities … also increased at a faster rate than in other locations in region,” said Quane.

Tokyo, which dropped from the second to the third most expensive city in Asia, also experienced a 5% increase in daily costs for business travelers in local currency terms.

“[However,] they were offset by the depreciation of the yen against the US dollar, which led to the decline of some cities across Japan in this year’s rankings,” said Quane.

“With an average daily cost of $424 per day [in Tokyo]business travel in the city is now almost 20% cheaper than in the first place in Hong Kong.”

Inflation in many locations across Asia has contributed to significant increases in the cost of business travel in local currency terms, ECA International said.

Sri Lanka, Laos and Pakistan saw the biggest increases in costs for travelers, the report found.

For example, business travel costs in Colombo, Sri Lanka are 75% higher in local currency terms than a year ago, according to the report.

“This is mainly from high inflation and devaluation of the currency, because some expenses related to business travel … are usually made in US dollars by foreigners who travel on business here. ”

But not all Asian destinations are experiencing the same increase in travel costs.

Popular tourist destinations, for example, saw “relatively little change” in travel costs last year, said ECA International.

“Cities such as Pattaya and Chiang Mai in Thailand, along with Denpasar in Indonesia, all witness low growth rates in local currency terms in 2022, ranging from 1% and 3%,” Quane said.

That’s because lower demand in destinations – compared to pre-pandemic levels – has kept hotel rates down.

“Even a tourist hub like Bangkok, which typically receives a lot of business travelers, only saw a modest 4% increase in business travel spending,” Quane added.

Singapore, by contrast, saw a 10% increase in daily business travel costs in local currency terms.

For another year, New York received the dubious honor of being the most expensive place in the world for business travelers.

The average daily cost of a business trip to New York is now $796, according to the report.

Travel costs “rebounded strongly” in New York last year, thanks to a “post-pandemic surge” in demand for business travel and tourism, Quane said.

With “inflation-driven increases in the price of goods” often used by business travelers, the cost of travel grew by a whopping 8%, he added.

Other US cities also dominated the global top 10 list, such as Washington DC, San Francisco and Los Angeles.

Three European destinations made the list, with Switzerland remaining home to the region’s two most expensive cities for business travel.