Hong Kong has been named the most expensive location in Asia for business travelers — for the second year in a row, according to a new report.
ECA International's latest Daily Rates research ranked countries based on costs for short trip expenses: four-star hotel rooms, meals, laundry, alcoholic and soft drinks, journeys by taxi and incidental costs.
The research aims to help organizations anticipate the cost of business trips and short-term assignments, the data company said.
A business trip now costs an average of $520 a day in Hong Kong, which is also ranked the 16th most expensive location for business travel in the world.
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MOST EXPENSIVE LOCATIONS FOR BUSINESS TRAVEL IN ASIA
|SEOUL, SOUTH KOREA||$380|
That's despite low demand from business travelers, as Hong Kong closely followed mainland China's tough zero-Covid policy. It was only in late 2022 that it began to relax some of its restrictions.
"Hotel costs continue to make up a majority of the overall cost of business travel, and in spite of lower occupancy levels in 2022, advertised room rates [in Hong Kong] did not fall significantly," Lee Quane, ECA International's regional director for Asia, told CNBC.
"This may have been due to demand from local residents, while hotel properties may also have needed to maintain their room rates to cover additional costs associated with maintaining services during the Covid-19 pandemic."
The report is based on information collected in 2022, from 457 locations in over 190 countries, said ECA International.
Singapore beats Tokyo
Singapore moved up one spot in ECA International's rankings, overtaking Tokyo to become the second-most expensive city in Asia to visit for business.
It's also ranked 19th globally.
A business trip to Singapore now costs an average of $515 per day — $34 more expensive than the year before, said ECA International.
It attributed rising costs in Singapore to its "early removal of travel restrictions" compared with other locations in Asia, which sparked a rise in demand for travel to the city.
"The resulting increase in demand contributed to rises in hotel accommodation costs, while costs associated with other daily essentials ... also increased at a faster rate than other locations in the region," Quane said.
Tokyo, which dropped from second- to third-most expensive city in Asia, also experienced a 5% rise in daily costs for business travelers in local currency terms.
"[However,] they were offset by the yen's depreciation against the US dollar, leading to the decline of several cities across Japan in this year's rankings," Quane said.
"With average daily costs of $424 per day [in Tokyo], business travel to the city is now almost 20% cheaper than first-placed Hong Kong."
Inflation and currency depreciation
Inflation in many locations across Asia has contributed to significant increases in business travel costs in local currency terms, said ECA International.
Sri Lanka, Laos and Pakistan saw the largest increase in expenses for travelers, the report found.
For example, business travel expenses in Colombo, Sri Lanka were 75% higher in local currency terms than a year before, according to the report.
"This primarily stemmed from high inflation and currency depreciation, since some costs associated with business travel … are typically incurred in US dollars by foreign business travelers here."
But not all Asian destinations experienced the same surge in travel costs.
Popular tourist destinations, for example, saw "relatively little change" in travel expenses last year, said ECA International.
"Cities like Pattaya and Chiang Mai in Thailand, alongside Denpasar in Indonesia, all witnessed small rates of growth in local currency terms in 2022, ranging between 1% and 3%," Quane said.
That's because lower demand in those destinations — compared with pre-pandemic levels — have suppressed hotel rates.
"Even a tourist hub like Bangkok, which typically receives many business travelers, only saw a moderate 4% increase in business travel costs," Quane added.
Singapore, in contrast, saw a 10% rise in daily costs of business travel in local currency terms.
World's most expensive place
For yet 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 in New York is now $796, according to the report.
MOST EXPENSIVE LOCATIONS FOR BUSINESS TRAVEL GLOBALLY
|NEW YORK, U.S.||$796|
|WASHINGTON DC, U.S.||$658|
|SAN FRANCISCO, U.S.||$609|
|TEL AVIV, ISRAEL||$595|
|LOS ANGELES, U.S.||$584|
Travel costs have "rebounded strongly" in New York over the past year, thanks to a "post-pandemic surge" in demand for business travel and tourism, said Quane.
Along with "inflation-driven price hikes on goods" commonly consumed by business travelers, travel costs grew by a stark 8%, he added.
Other cities in the U.S. also dominated the global top 10 list, such as Washington D.C., 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.