India's fast-moving business travel market

India's fast-moving business travel market
Phone:+45 4363 2266

A lot has happened in India in the last 15 years. The country now has one of the largest economies in the world and it is the third largest by purchasing power. Its business travel industry has also, rather unsurprisingly, gone from strength to strength.

According to figures from the Global Business Travel Association (GBTA), India has moved from being the 24th largest business travel market in the world back in 2000, to the 10th largest today. And it is expected to rise even higher in the global rankings in the years ahead.

Growth forecasts

This year's estimates by the GBTA are for business travel spending in India to rise by 2.1 per cent to $24.9 billion (€18.3 billion), which is pretty modest growth, but which is nonetheless notable given the country's recent economic slump.

India's GDP has expanded by less than five per cent for the last two years, which is around half of its pre-crisis rate, while inflation has been running at an unacceptably high level and job creation has been declining.

Still, there are hopes that the country's new government can fix the economic problems and get growth, investment and employment levels back on track. Narendra Modi was sworn in as prime minister of India on May 26th and he has already promised an economic revival.

Because of this renewed optimism, the GBTA believes business travel spending will pick up again in 2015, this time rising by a more impressive 7.6 per cent to $28.8 billion. If this forecast proves to be correct, and if India's business travel market continues to grow, it could overtake Italy to be the 9th largest within the next five years.

Domestic business travel dominates

The GBTA figures show that domestic travel accounts for 90 per cent of total business travel spending in India, which makes sense considering how large the country is, how fast the middle class is growing and how quickly new business centres are popping up across India.

Spending on domestic business travel is expected to grow only marginally higher than overall business travel expenditure this year at 2.2 per cent, but it is expected to pick up next year, registering 7.7 per cent growth.

Although international business travel will continue to make up only a small proportion of the market, it too will see a "major improvement" in 2015 with a spending rise of seven per cent thanks to the growing strength of India's major trading partners. This will, however, follow sluggish growth of just 1.1 per cent this year.

Challenges ahead

The kind of growth forecast by the GBTA can only be realised in the future if India is able to make improvements to its infrastructure, both in terms of transport and ports of entry, and in the form of better roads, water supplies, electricity networks and telecommunications.

Narendra Modi's government is reportedly planning to make multi-billion dollar investments into infrastructure improvements, paving the way for fast business travel growth in the years to come.

But there is also a shortage of high quality hotel rooms, which are popular among those travelling for work purposes. Development is taking place across the country, but it could be some time before supply is able to keep up with demand among luxury-loving business travellers.

Challenges for TMCs

The opportunities for travel management companies (TMCS) in India are huge, but there are a number of challenges that businesses could face if they do expand into this fast-growing market.

Firstly, there is the issue of compliance. A report published last year by online travel agency Expedia and its corporate travel division Egencia revealed that Indian business travellers are more likely to indulge during their work-related trips than their counterparts in other countries.

Indeed, some 48 per cent said they spend money on hotel room upgrades, while 55 per cent purchase high-end meals and 41 per cent order room service. The survey also showed that three quarters of Indians extend their business trips into leisure trips, making compliance with company travel policies a key consideration for business travel buyers in India, and subsequently for TMCs.

Then there is the growing use of mobile technology, with Indian business travellers increasingly booking flights and reserving hotel rooms via their smartphones and tablet computers.

The Expedia/Egencia report showed that 86 per cent of corporate travellers in India who use mobile devices use them for travel purposes, with 66 per cent planning their itineraries on smartphones and tablets and 58 per cent actually using them to make bookings.  

Overcome these challenges with the right travel technology

To be competitive in a business travel market that is evolving as fast as India's, TMCs need to be able to respond quickly to the changing needs of their clients. The best way to do this is by investing in a fully integrated mid-back office solution that can automate manual workloads and free up valuable time, which can be dedicated to providing the best customer service possible.

ProCon Solution's ProTAS platform allows content to be loaded from a variety of different sources, which means travel managers have the flexibility they need to meet the Indian business traveller's desire for modern technology. It could also help to increase compliance with company travel policies if employees are able to use their mobile devices in the way that they wish.

And speaking of compliance, ProTAS also offers comprehensive reporting solutions, which enable TMCs to provide their clients with maximum visibility and a clear insight into traveller behaviour, helping to identify instances of non-compliance.

Furthermore, because ProTAS supports multiple languages and currencies and can consolidate data across national borders, it can support a travel management company's international expansion plans. The solution can easily be expanded to another local office without the need for new technology infrastructure.

Finally, because of the huge increase in domestic airlines in India over recent years, business travellers have more choice than ever, so it's important that TMCs are able to reflect this in the online booking options available to their clients.

With ProTAS, GDS affiliation need not be an issue, as the system automates all bookings independently of the source, providing TMCs with excellent flexibility and giving them a major competitive advantage.

ProCon Solution A/S
Herstedøstervej 27-29
DK-2620 Albertslund
Phone: +45 4363 2266