Deloitte highlights the transformation of India’s $10.6B corporate travel sector, with tech innovations and new work models driving efficiency.
India’s corporate travel sector, valued at over US$10.6 billion, is entering a transformative phase, betting on new ways of working and technological disruption. Deloitte’s latest report highlights corporate travel innovation, which is essential for employee experience management and cost efficiency.
The corporate travel sector market is projected to grow at 10.1 per cent CAGR and double to US$20.8 billion by FY2030. Meanwhile, the overall travel market in India is set to reach US$97 billion at ~9 per cent CAGR.
As businesses recalibrate their travel strategies with hybrid work models after the pandemic, India’s corporate travel sector underlines the critical role of Travel Management Companies (TMCs) in steering the industry into a new era of innovation, cost efficiency and sustainability.
The incorporation of cutting-edge technology is at the heart of this shift. TMCs have revamped their strategies to meet the needs of new-age travellers. These travellers need to engage deeper and faster using AI-powered chatbots, voice-assisted booking systems and real-time data analytics. These technologies can be tailored for corporate travel programs to customers’ needs while simplifying the experience for business travellers.
Survey insights on corporate travel show traveller’s demand value proposition
• Operating cost efficiency: Travel expenses represent a considerable portion of an organisation’s operating budget. On average, 35–40 per cent of employees travel at least once annually. Almost 88 per cent of corporate employees travel for < 4 days for domestic travel whereas ~28% travel for > 1 week when travelling internationally for their business purposes and almost 34% of surveyed respondents mention they travel once or twice a quarter for domestic purposes. However, only 33 per cent travel once or more a year for international business purposes.
• For small and midsize organisations (up to 250 employees), travel expenditure can reach INR 1 crore per year. In contrast, large organisations (250–5,000 employees) allocate ~INR10 crore annually towards travel expenses. For large organisations (5,000+ employees), travel expenses are directly proportional to the employee count. An analysis of the top 100 listed firms reveals that a leading IT major, with some of the highest travel spends, incurred travel expenses of more than INR2,600 crore in FY23.
• There is a rising demand for auxiliary services, with 72 per cent of respondents requesting taxi services and 63 per cent seeking visa assistance on travel platforms, emphasizing the need for comprehensive travel solutions.
• Technological advancements are enhancing personalized customer experiences through tools like AR/VR, AI-powered chatbots, and more. Feature-rich platforms from OTAs and TMCs are offering integrated services, automated reporting, and streamlined approval workflows, all aimed at improving user experience. Additionally, there’s a growing trend of loyalty programs introduced by hospitality brands to further elevate customer satisfaction.
The new-age corporate traveller demands much more
Anand Ramanathan, Partner and Consumer Industry Leader, Consulting, Deloitte India, said “The new age corporate traveller demands much more than just a ticket and a hotel room. India’s growing economy has evolved consumer demands, with consumers seeking a seamless, personalised experience that aligns with their professional and personal values.
“In addition, a hybrid work culture solidifies its place in the modern business landscape, where in-person meetings remain indispensable for fostering strong professional relationships. As the economy grows, the MICE (Meetings, Incentives, Conventions and Exhibitions) sector will also drive the demand for corporate travel.
“Our latest report highlights how TMCs are rising to this challenge by integrating technology and AI-led solutions, ensuring every journey is tailored to individual needs. Furthermore, the growing emphasis on sustainability is reshaping corporate travel, with nearly 50 per cent of travellers prioritising eco-friendly practices.
“Additionally, tech innovation is especially crucial in catering to the evolving demands of India’s growing SME segment, which constitutes 30 per cent of the corporate travel market, clearly contributing to the travel sector’s growth and evolution soon.”
Additional trends in corporate travel
• The global tourism sector is projected to contribute US$15.5 trillion to the GDP by 2033, representing 11.6 per cent of the global economy.
This underscores the long-term growth potential of the travel industry, particularly in the context of corporate travel. Since the end of the pandemic, the global travel and tourism sector has rebounded significantly to reach its pre-pandemic highs, driven by pent-up travel demand, government support measures and innovative strategies.
• Out of India’s US$ 52.7 billion travel market, Airlines (43%) and Hotels (30%) represent the largest segments, accounting for the majority of travel market expenditure.
Railways play a significant role, covering 15%, while Intercity buses and cabs contribute another 13%, emphasizing the importance of various travel modes in shaping the overall market.
• The report identifies the top industries driving corporate travel expenditures, including IT services, BFSI, engineering, aviation, oil and gas, pharma, FMCG and automobiles.
These sectors account for 86 per cent of the travel spend among India’s top 100 listed firms.
While Mumbai, Delhi NCR and Bengaluru remain the most popular business travel destinations, cities such as Ahmedabad, Vadodara, Bhubaneswar and Lucknow are emerging as new corporate hubs.
Voice of Corporate employees
• Sports and business events, such as the G20 summits, are driving a rise in MICE travel to India, which currently holds less than 1% of the global MICE market but aims for a future target exceeding 2%.
The growing demand for business travel is helping the market recover to pre-pandemic levels, with increasing interest from the SME segment. Additionally, the expanding presence of travel management companies, offering advanced solutions, is facilitating the handling of complex travel needs.
• The B-leisure trend is gaining momentum, with 37 per cent of respondents extending their business trips for leisure. Among these, 81 per cent add 1–2 extra days, while the rest extend their trips by 3–4 days, showcasing the evolving work culture and personal preferences.
Despite the positive trends, challenges such as inadequate infrastructure, rising costs and complex tax structures remain significant barriers to growth. The government’s role in addressing these challenges will be crucial for the sector’s future.
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