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| Airports and Hotels in Emerging Markets Outpace the West | Airports and Hotels in Emerging Markets Outpace the West |
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| FROM Asia to Africa to the Middle East and the Americas, the business of business travel is booming in emerging countries. And it shows. | FROM Asia to Africa to the Middle East and the Americas, the business of business travel is booming in emerging countries. And it shows. |
| Dubai, an emirate with global ambitions to diversify, expanded its airport recently with a new terminal paved with white marble, devoted to its growing fleet of Airbus A380s double-deckers. Similarly, Beijing greets foreign travelers with a gleaming and spacious new international terminal. | |
| Istanbul, ancient capital of empires, is successfully refashioning itself as a modern transportation hub with better connections to Asia than rivals in the United States or Europe. And Brazil, a rising oil power, is pouring billions into infrastructure as it prepares to host the soccer World Cup next year and the Olympic Games in 2016. | Istanbul, ancient capital of empires, is successfully refashioning itself as a modern transportation hub with better connections to Asia than rivals in the United States or Europe. And Brazil, a rising oil power, is pouring billions into infrastructure as it prepares to host the soccer World Cup next year and the Olympic Games in 2016. |
| Business travelers are expected to spend about $1.16 trillion on airfare, accommodations and other travel this year, according to the Global Business Travel Association, up from $1.07 trillion last year. Much of that growth is coming from developing nations, prompting a boom in new construction in emerging markets while business travel in the United States recovers at a slow pace and Europe, mired in the euro crisis, remains stagnant. | Business travelers are expected to spend about $1.16 trillion on airfare, accommodations and other travel this year, according to the Global Business Travel Association, up from $1.07 trillion last year. Much of that growth is coming from developing nations, prompting a boom in new construction in emerging markets while business travel in the United States recovers at a slow pace and Europe, mired in the euro crisis, remains stagnant. |
| “What we’ve seen in terms of infrastructure in recent years recalls the old baseball adage — if you build it, they will come,” said Tony Davis, a partner at Irelandia Aviation, an investor in low-cost airlines like VivaAerobus in Mexico and Tiger Airways in Singapore. | “What we’ve seen in terms of infrastructure in recent years recalls the old baseball adage — if you build it, they will come,” said Tony Davis, a partner at Irelandia Aviation, an investor in low-cost airlines like VivaAerobus in Mexico and Tiger Airways in Singapore. |
| The growth in passenger travel tells the story. Global traffic rose 4 percent last year, according to the Airports Council International, a trade group that represents more than 1,700 airports in 170 countries. In North America and Europe, airports had only modest gains. But air transportation in emerging economies has been buoyant — a testament to their dynamism and growth prospects in time of low interest rates, and their opportunities in raw materials, commodities and trade. | The growth in passenger travel tells the story. Global traffic rose 4 percent last year, according to the Airports Council International, a trade group that represents more than 1,700 airports in 170 countries. In North America and Europe, airports had only modest gains. But air transportation in emerging economies has been buoyant — a testament to their dynamism and growth prospects in time of low interest rates, and their opportunities in raw materials, commodities and trade. |
| Traffic last year grew by 7.5 percent in Asia, 7.3 percent in Latin America, 6.4 percent in Africa and 13 percent in the Middle East, according to the airport trade group, outpacing Western airports by a wide margin. Five airports in emerging markets, each with more than 40 million annual passengers, reported double-digit growth — Istanbul, Dubai, Jakarta, Bangkok and Singapore — according to a report released last month by the airport group. | Traffic last year grew by 7.5 percent in Asia, 7.3 percent in Latin America, 6.4 percent in Africa and 13 percent in the Middle East, according to the airport trade group, outpacing Western airports by a wide margin. Five airports in emerging markets, each with more than 40 million annual passengers, reported double-digit growth — Istanbul, Dubai, Jakarta, Bangkok and Singapore — according to a report released last month by the airport group. |
| Atlanta, currently home to the world’s busiest airport, grew 3.3 percent. Chicago O’Hare International Airport, the second-busiest in the United States, actually shrank slightly, according to the report. | Atlanta, currently home to the world’s busiest airport, grew 3.3 percent. Chicago O’Hare International Airport, the second-busiest in the United States, actually shrank slightly, according to the report. |
| Nowhere has the growth in business travel been more robust and prolonged than in China. Passengers at Beijing Capital International Airport tripled in the last decade, and most travel experts expect that it will jump ahead of Atlanta’s Hartsfield-Jackson International Airport as the world’s top airport by passenger traffic next year. | Nowhere has the growth in business travel been more robust and prolonged than in China. Passengers at Beijing Capital International Airport tripled in the last decade, and most travel experts expect that it will jump ahead of Atlanta’s Hartsfield-Jackson International Airport as the world’s top airport by passenger traffic next year. |
| China’s business travel spending has grown an average of 15.5 percent each year from 2000 to 2013 and is set to reach $226 billion this year, according to the Global Business Travel Association. Remarkably, that figure is growing even as China’s export-led economy begins to slow and make the transition to a consumer-oriented one. | China’s business travel spending has grown an average of 15.5 percent each year from 2000 to 2013 and is set to reach $226 billion this year, according to the Global Business Travel Association. Remarkably, that figure is growing even as China’s export-led economy begins to slow and make the transition to a consumer-oriented one. |
| Chinese business travel is forecast to increase nearly 17 percent next year, and China is set to overtake the United States as the world’s top business travel market by then. | Chinese business travel is forecast to increase nearly 17 percent next year, and China is set to overtake the United States as the world’s top business travel market by then. |
| Shanghai built a new terminal at the Hongqiao International Airport as part of a $9 billion investment program that also included a transportation hub linking the airport to city buses, subways and a new high-speed rail network. The airport, which opened three years ago and can handle 300,000 flights a year, has high-end shops like Armani and chains like Starbucks. | Shanghai built a new terminal at the Hongqiao International Airport as part of a $9 billion investment program that also included a transportation hub linking the airport to city buses, subways and a new high-speed rail network. The airport, which opened three years ago and can handle 300,000 flights a year, has high-end shops like Armani and chains like Starbucks. |
| To cater to China’s rising middle class and fulfill the leadership’s desire to reduce the economy’s reliance on exports, businesses will need a better travel infrastructure across the vast Chinese interior. To that end, the Chinese government has outlined plans to build another 100 airports throughout the country over the next couple of years. | To cater to China’s rising middle class and fulfill the leadership’s desire to reduce the economy’s reliance on exports, businesses will need a better travel infrastructure across the vast Chinese interior. To that end, the Chinese government has outlined plans to build another 100 airports throughout the country over the next couple of years. |
| “You really have a changing landscape throughout the developing economies,” said Michael W. McCormick, the executive director of the Global Business Traveler Association, a group whose members include corporate travel managers. “The infrastructure is clearly racing to catch up with demand.” | “You really have a changing landscape throughout the developing economies,” said Michael W. McCormick, the executive director of the Global Business Traveler Association, a group whose members include corporate travel managers. “The infrastructure is clearly racing to catch up with demand.” |
| Of course, travel off the beaten path holds its share of perils and inconveniences. Hotel infrastructure is often inadequate. Roads can be hazardous. Sometimes vaccines and antimalarial medication may be necessary. | Of course, travel off the beaten path holds its share of perils and inconveniences. Hotel infrastructure is often inadequate. Roads can be hazardous. Sometimes vaccines and antimalarial medication may be necessary. |
| Climate is another challenge. Summer temperatures in Qatar, which won its bid to host the 2022 Soccer World Cup, exceed 100 degrees Fahrenheit on average from May through September and can reach highs of 120 degrees. (Rest assured, there are plans for high-end cooling technology at match venues or, alternatively, to hold the tournament in the winter.) | Climate is another challenge. Summer temperatures in Qatar, which won its bid to host the 2022 Soccer World Cup, exceed 100 degrees Fahrenheit on average from May through September and can reach highs of 120 degrees. (Rest assured, there are plans for high-end cooling technology at match venues or, alternatively, to hold the tournament in the winter.) |
| There are other hazards presented by a rise in global travel, notably a greater risk of rapid disease transmission and pandemics. The latest threat emerged in China, where a previously unknown influenza virus infected dozens and killed at least 17 people recently. Another virus, similar to the one that caused severe acute respiratory syndrome, or SARS, was also recently identified in the Middle East. | There are other hazards presented by a rise in global travel, notably a greater risk of rapid disease transmission and pandemics. The latest threat emerged in China, where a previously unknown influenza virus infected dozens and killed at least 17 people recently. Another virus, similar to the one that caused severe acute respiratory syndrome, or SARS, was also recently identified in the Middle East. |
| Security issues are another consideration. In some places, the risk of kidnapping cannot be ruled out. Business travel suffered throughout the Middle East in recent years during the Arab uprisings, though they have also created new opportunities in the region. The Libyan economy had one of the world’s fastest growth rates last year, according to the International Monetary Fund, reflecting a strong recovery after its collapse during the uprising that toppled Col. Muammar el-Qaddafi. | Security issues are another consideration. In some places, the risk of kidnapping cannot be ruled out. Business travel suffered throughout the Middle East in recent years during the Arab uprisings, though they have also created new opportunities in the region. The Libyan economy had one of the world’s fastest growth rates last year, according to the International Monetary Fund, reflecting a strong recovery after its collapse during the uprising that toppled Col. Muammar el-Qaddafi. |
| While air travel is going through its safest period in its history — the United States recently had an exceptional four-year stretch without a fatal crash — flying in some parts of the world remains perilous. With just 3 percent of global traffic, airlines in Africa accounted for 17 percent of airline crashes last year, according to the International Air Transport Association, a group that represents most of the world’s airlines. | While air travel is going through its safest period in its history — the United States recently had an exceptional four-year stretch without a fatal crash — flying in some parts of the world remains perilous. With just 3 percent of global traffic, airlines in Africa accounted for 17 percent of airline crashes last year, according to the International Air Transport Association, a group that represents most of the world’s airlines. |
| Africa has the worst record. Airlines, globally, averaged one accident for every five million flights last year. Africa lost one commercial plane every 270,000 flights. That figure has actually improved in recent years. In 2009, the rate was one accident for every 100,000 flights. | Africa has the worst record. Airlines, globally, averaged one accident for every five million flights last year. Africa lost one commercial plane every 270,000 flights. That figure has actually improved in recent years. In 2009, the rate was one accident for every 100,000 flights. |
| That poor safety record is hurting the region’s economic potential, according to Tony Tyler, I.A.T.A.’s director general. Of the 12 airlines in Central West Africa, for instance, only three have committed themselves to international safety standards — Cabo Verde Airlines, Air Burkina and Trans Air Cargo. | That poor safety record is hurting the region’s economic potential, according to Tony Tyler, I.A.T.A.’s director general. Of the 12 airlines in Central West Africa, for instance, only three have committed themselves to international safety standards — Cabo Verde Airlines, Air Burkina and Trans Air Cargo. |
| “With a few kilometers of tarmac, the most remote region can be connected to the global community,” Mr. Tyler said in a speech in Addis Ababa, the Ethiopian capital, last month. “And that could mean access to vital sources of health care and emergency assistance; jobs selling products in global markets or welcoming tourists; or opportunities for education, exploring the world or creating business.” | “With a few kilometers of tarmac, the most remote region can be connected to the global community,” Mr. Tyler said in a speech in Addis Ababa, the Ethiopian capital, last month. “And that could mean access to vital sources of health care and emergency assistance; jobs selling products in global markets or welcoming tourists; or opportunities for education, exploring the world or creating business.” |
| But, he said, “the biggest challenge for air transport in Africa is safety.” | But, he said, “the biggest challenge for air transport in Africa is safety.” |
| Obviously Africa is not the only place with safety concerns. In April, a new Boeing 737 operated by Lion Air crashed into the sea as it tried to land at the Bali airport in Indonesia, though all the passengers survived. | Obviously Africa is not the only place with safety concerns. In April, a new Boeing 737 operated by Lion Air crashed into the sea as it tried to land at the Bali airport in Indonesia, though all the passengers survived. |
| Differences across countries and regions make it impossible to draw broad conclusions for business travelers, said Henry Harteveldt, a travel analyst at Hudson Crossing, a consulting firm in San Francisco. In many cases, the situation will vary greatly by country or by city. “It is very inconsistent,” he said. | Differences across countries and regions make it impossible to draw broad conclusions for business travelers, said Henry Harteveldt, a travel analyst at Hudson Crossing, a consulting firm in San Francisco. In many cases, the situation will vary greatly by country or by city. “It is very inconsistent,” he said. |
| The growth in emerging-market passenger demand has attracted the attention of big hotel chains, who are making large strategic bets throughout Asia, Latin America and the Middle East to cater to foreign business travelers and a growing number of domestic travelers. | The growth in emerging-market passenger demand has attracted the attention of big hotel chains, who are making large strategic bets throughout Asia, Latin America and the Middle East to cater to foreign business travelers and a growing number of domestic travelers. |
| Starwood Hotels, which owns the Sheraton and W Hotels chains, plans 100 new hotels in China over the next few years, many designed for the Chinese domestic audience and local tastes. | Starwood Hotels, which owns the Sheraton and W Hotels chains, plans 100 new hotels in China over the next few years, many designed for the Chinese domestic audience and local tastes. |
| Last year, Marriott outlined a $2 billion, three-year plan to open new hotels around the world with an emphasis on emerging nations. A third of those will be in Asia. It plans to more than double its 54 hotels in China, with midprice hotels aimed at China’s middle class along with luxury five-star hotels. | Last year, Marriott outlined a $2 billion, three-year plan to open new hotels around the world with an emphasis on emerging nations. A third of those will be in Asia. It plans to more than double its 54 hotels in China, with midprice hotels aimed at China’s middle class along with luxury five-star hotels. |
| As they cope with all this growth, global hotel chains are also bringing more consistent travel standards to emerging markets, said Christie Hicks, who runs Starwood’s sales operations and its business-to-business relations. Business travelers increasingly expect to find the same sort of amenities anywhere they travel, including high-speed Internet connections and Wi-Fi, fitness centers and healthy food options. | As they cope with all this growth, global hotel chains are also bringing more consistent travel standards to emerging markets, said Christie Hicks, who runs Starwood’s sales operations and its business-to-business relations. Business travelers increasingly expect to find the same sort of amenities anywhere they travel, including high-speed Internet connections and Wi-Fi, fitness centers and healthy food options. |
| “They want a brand they recognize,” Ms. Hicks said. “They want all the things they need to feel at home when they are abroad.” | “They want a brand they recognize,” Ms. Hicks said. “They want all the things they need to feel at home when they are abroad.” |
| Yet travel experts still warn of room shortages and high hotel rates as the supply of accommodations fails to keep up with rising demand. | Yet travel experts still warn of room shortages and high hotel rates as the supply of accommodations fails to keep up with rising demand. |
| Largely because of a persistent shortage of hotel rooms, Moscow was the most expensive city for business travelers for the ninth consecutive year in 2012, according to the Hogg Robinson Group, a corporate services company based in Britain. Lagos, Nigeria, came second, despite a rise in new hotel construction for big-name brands like Sheraton, Ibis, Radisson Blu and InterContinental. Reflecting the room shortage, the Radisson Hotel in the city’s Victoria Island neighborhood advertises a standard room at about $410 a night. | Largely because of a persistent shortage of hotel rooms, Moscow was the most expensive city for business travelers for the ninth consecutive year in 2012, according to the Hogg Robinson Group, a corporate services company based in Britain. Lagos, Nigeria, came second, despite a rise in new hotel construction for big-name brands like Sheraton, Ibis, Radisson Blu and InterContinental. Reflecting the room shortage, the Radisson Hotel in the city’s Victoria Island neighborhood advertises a standard room at about $410 a night. |
| In Latin America too, room rates have soared as capacity has failed to keep up with demand. Business travel spending in Brazil has tripled since 2000 and is expected to reach $34.5 billion this year, according to the Global Business Travel Association. At that pace, the country is set to overtake France, Britain and Italy in travel spending in the next two years. | In Latin America too, room rates have soared as capacity has failed to keep up with demand. Business travel spending in Brazil has tripled since 2000 and is expected to reach $34.5 billion this year, according to the Global Business Travel Association. At that pace, the country is set to overtake France, Britain and Italy in travel spending in the next two years. |
| But even though Brazil is pumping billions of dollars into airports as it prepares for the World Cup and Olympics, work on hotels is still lagging, travel experts said. The last luxury chain to open a hotel in São Paulo did so 10 years ago, according to Hogg Robinson. Rio de Janeiro and São Paulo registered the biggest room rate increases, rising as much as 19 percent last year. | But even though Brazil is pumping billions of dollars into airports as it prepares for the World Cup and Olympics, work on hotels is still lagging, travel experts said. The last luxury chain to open a hotel in São Paulo did so 10 years ago, according to Hogg Robinson. Rio de Janeiro and São Paulo registered the biggest room rate increases, rising as much as 19 percent last year. |
| “The development is challenging in Brazil,” Ms. Hicks said. “There are not enough hotel rooms for either the Olympics or the World Cup. Everybody could use a lot more hotels in Brazil. Like anything — it does not happen fast enough.” | “The development is challenging in Brazil,” Ms. Hicks said. “There are not enough hotel rooms for either the Olympics or the World Cup. Everybody could use a lot more hotels in Brazil. Like anything — it does not happen fast enough.” |
| The airlines, at least, hope they are moving fast enough. They plan more flights with more direct routes from the United States, and they are investing in more comfortable seats on their international flights along with tastier meals for business passengers. | The airlines, at least, hope they are moving fast enough. They plan more flights with more direct routes from the United States, and they are investing in more comfortable seats on their international flights along with tastier meals for business passengers. |
| United Airlines has unveiled a new service between Houston to Lagos, as well as between Washington and Guatemala City this year. Delta Air Lines will start daily nonstop flights between Seattle and Shanghai in June. Its partner in Europe, Air France, just introduced a new service between Paris and Kuala Lumpur. And Lufthansa will soon fly Airbus A380s between Frankfurt and Shanghai five times a week. | United Airlines has unveiled a new service between Houston to Lagos, as well as between Washington and Guatemala City this year. Delta Air Lines will start daily nonstop flights between Seattle and Shanghai in June. Its partner in Europe, Air France, just introduced a new service between Paris and Kuala Lumpur. And Lufthansa will soon fly Airbus A380s between Frankfurt and Shanghai five times a week. |
| American Airlines is starting a new route this summer between Miami and Manaus, Brazil. It is also increasing the number of weekly flights between Dallas-Fort Worth and São Paulo, as well as increasing frequency of service to Brasilia and Belo Horizonte. The airline bought new Boeing 777s, which can fly long-range routes, and outfitted them with its newest lie-flat seats. Those planes, which will become the flagship of its fleet, will serve both London and São Paulo from New York. | American Airlines is starting a new route this summer between Miami and Manaus, Brazil. It is also increasing the number of weekly flights between Dallas-Fort Worth and São Paulo, as well as increasing frequency of service to Brasilia and Belo Horizonte. The airline bought new Boeing 777s, which can fly long-range routes, and outfitted them with its newest lie-flat seats. Those planes, which will become the flagship of its fleet, will serve both London and São Paulo from New York. |
| Airlines are also expanding their international alliances to offer travelers seamless connections and more destinations than they could on their own. | Airlines are also expanding their international alliances to offer travelers seamless connections and more destinations than they could on their own. |
| Star Alliance, the largest of the three major global alliances, added Shenzhen Airlines, Avianca of Columbia and Eva Air of Taiwan. Separately, China’s Xiamen Airlines, Aerolinas Argentinas, Saudi Airlines and Lebanon’s Middle East Airlines all joined SkyTeam last year. | Star Alliance, the largest of the three major global alliances, added Shenzhen Airlines, Avianca of Columbia and Eva Air of Taiwan. Separately, China’s Xiamen Airlines, Aerolinas Argentinas, Saudi Airlines and Lebanon’s Middle East Airlines all joined SkyTeam last year. |
| After months of speculation, Latam Airlines, which is the result of the merger between Lan Airlines of Chile and Tam Airlines of Brazil, said it would join the Oneworld alliance. The decision means that Tam will withdraw from the Star Alliance next year. | After months of speculation, Latam Airlines, which is the result of the merger between Lan Airlines of Chile and Tam Airlines of Brazil, said it would join the Oneworld alliance. The decision means that Tam will withdraw from the Star Alliance next year. |
| The megacarriers from the Persian Gulf, long reluctant to join in the alliance game, have also entered the fray lately. Qatar Airlines joined Oneworld last year. Etihad Airways has taken equity stakes in several airlines, including Air Berlin, Air Seychelles and Virgin Australia. | The megacarriers from the Persian Gulf, long reluctant to join in the alliance game, have also entered the fray lately. Qatar Airlines joined Oneworld last year. Etihad Airways has taken equity stakes in several airlines, including Air Berlin, Air Seychelles and Virgin Australia. |
| Even Emirates, which is based in Dubai and is the largest and most successful of the three gulf carriers, has entered into a partnership with Qantas Airlines, the Australian carrier. | Even Emirates, which is based in Dubai and is the largest and most successful of the three gulf carriers, has entered into a partnership with Qantas Airlines, the Australian carrier. |
| The airports of Doha, Abu Dhabi, and Dubai, where the three carriers are based, now serve about 15 percent of all passenger traffic going from Asia to Europe, and from Europe to the South West Pacific region, including Australia, according to Amadeus, an air travel technology developer. | The airports of Doha, Abu Dhabi, and Dubai, where the three carriers are based, now serve about 15 percent of all passenger traffic going from Asia to Europe, and from Europe to the South West Pacific region, including Australia, according to Amadeus, an air travel technology developer. |
| And while Paris, Frankfurt or London find it difficult to expand their airports to accommodate higher traffic, and often run at full capacity, Dubai has outlined plans for an entirely new airport to eventually replace the current one. | And while Paris, Frankfurt or London find it difficult to expand their airports to accommodate higher traffic, and often run at full capacity, Dubai has outlined plans for an entirely new airport to eventually replace the current one. |
| All this activity augurs well for business travelers. A recent survey of global routes by Amadeus found that the global industry had become more competitive over the last three years, with a higher percentage of air routes served by three or more airlines. The survey said the Asian market had the most competition among airlines, with 75 percent of air passenger volume served by three or more airlines. | All this activity augurs well for business travelers. A recent survey of global routes by Amadeus found that the global industry had become more competitive over the last three years, with a higher percentage of air routes served by three or more airlines. The survey said the Asian market had the most competition among airlines, with 75 percent of air passenger volume served by three or more airlines. |
| “I am absolutely sure the future growth of our business is in Asia,” said Dr. Jurgen Weber, the chairman of Lufthansa. “Living standards are going up and it turns out that the Chinese like to travel even more than the Japanese do.” | “I am absolutely sure the future growth of our business is in Asia,” said Dr. Jurgen Weber, the chairman of Lufthansa. “Living standards are going up and it turns out that the Chinese like to travel even more than the Japanese do.” |
| And finally there is India, one of the world’s most populous nations with a vibrant economy, but a country that is still hobbled by poor investments and a cumbersome bureaucracy. | And finally there is India, one of the world’s most populous nations with a vibrant economy, but a country that is still hobbled by poor investments and a cumbersome bureaucracy. |
| Ian Carter, the president for international development at Hilton, said that in most regions of the world, good infrastructure — airports, roads and highways — generally comes before the hotels. | Ian Carter, the president for international development at Hilton, said that in most regions of the world, good infrastructure — airports, roads and highways — generally comes before the hotels. |
| “It is rarely the other way round, the exception being India,’ he said. “Generally speaking there are beautiful hotels there but getting there is like navigating an obstacle course.” | “It is rarely the other way round, the exception being India,’ he said. “Generally speaking there are beautiful hotels there but getting there is like navigating an obstacle course.” |
This article has been revised to reflect the following correction: | |
| Correction: May 2, 2013 | |
An earlier version of this article referred incorrectly to Shanghai’s new terminal. It is for domestic passengers, not international ones. | |