Quarantine-free travel between Singapore and Hong Kong will soon become a reality with the opening of Asia’s first “travel bubble” on 22 November. Just don’t expect to see many banking professionals on these flights.
“It will just be tourists,” says a Hong Kong-based trader. “Most banks have a near-zero travel policy and that’s unlikely to change for a while,” he adds. A senior banker in Singapore says banks would only approve trips under the new scheme if they were “absolutely needed”. He expects business travel in Asia to pick up “very slowly”.
“At the end of the day, it doesn’t really make logical sense for bankers to travel unless it’s absolutely necessary, because their clients are definitely understanding during this Covid-19 period – they aren’t asking for face-to-face meetings,” says a Singapore-based wealth manager.
Bankers face practical issues too. There is a quota of just 200 daily passengers under the bubble, rising to 400 on 7 December, and demand from leisure travellers has already been strong, with some initial flights sold out. Even if a critical business trip were approved internally, securing a booking for the right dates could be tricky. “With such a limited number of passengers allowed per day, the thought of not being able to get tickets easily is a huge discouragement,” says the wealth manager.
Some Singaporean finance professionals are still concerned about going to Hong Kong in case that city experiences another wave of Covid or political unrest, he adds. All travellers to either destination will need to take and pay for two to three Covid-19 tests, depending on the duration of their stay.
Taking a cautious approach to the travel bubble will also help the continued drive to cut costs during the pandemic. “Many financial institutions are restructuring and reducing overheads. Business trips generally move in tandem with the macro Asian/global economy,” says a buy-side professional in Singapore. “For trips to be a more frequent sight, there’ll have to be a period of sustained international trade, which is still looking unlikely in the near term until a vaccine is deployed,” he adds.
The senior Singapore banker expects that travel in the Asian finance sector will only return to about a third of its 2019 levels in the immediate period after the Covid crisis is brought under control globally. “A lot of people will want to travel more next year to catch up with clients and to see staff they manage overseas, but this will be balanced against the high costs involved,” he says.
The Asian banking industry is at a “crossroads” on employee travel and will go through a “transformational shift” over the coming years, says former Merrill Lynch banker Rahul Sen, now global head of private wealth management at search firm The Mulsanne Partnership. “Everything will be relooked at from a revenue perspective. If a banker puts in a travel request, the bank will want to see how much business/revenue can be generated from it. They’ll also always ask if the meeting can be done via video conferencing,” he adds.
Sen says in a post-Covid world, initial meetings with new clients overseas will still largely be done in person, but he thinks a higher proportion of subsequent meetings will be held via video as clients have now become used to it. There will be exceptions, especially for private bankers serving ultra-high net worth clients. “Unless it’s purely transactional, the mega wealthy like face-to-face meetings. The stakes are much higher when dealing with these people,” says Sen.
In the meantime, finance professionals in Singapore and Hong Kong don’t seem too bothered about missing out on bubble travel. “Senior people are more concerned about their own jobs now than business trips,” says the Singapore buy-side employee. “Most of us are only missing personal, not professional, travel,” says the Hong Kong trader.
Photo by Isaac Struna on Unsplash
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