Corporate Travel Market in India to Reach USD 20.8 Billion by FY30

Mumbai, Sep 24 (PTI) India's over USD 10.6 billion corporate travel sector is estimated to grow at 10.1 per cent CAGR to USD 20.8 billion by FY30, driven by tech-enabled, personalised and sustainable solutions, according to a report.

Deloitte's report - Exploring India's Corporate Travel Market: Understanding Market Dynamics, TMCs, and User Preferences - is based on interviews of over 45 travel managers and a survey of over 160 corporate travellers from diverse industries and organisations of varying sizes.

Entering a transformative phase, betting on new ways of working and technological disruption, India's corporate travel sector is valued at over USD 10.6 billion and is projected to grow at 10.1 per cent CAGR and double to USD 20.8 billion by FY30, the report said.

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, it added.

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, who need to engage deeper and faster using AI-powered chatbots, voice-assisted booking systems and real-time data analytics, it said.

These technologies can be tailored to customers' needs while simplifying the experience for business travellers, the report added.

For small and mid-size organisations (up to 250 employees), travel expenditure can reach Rs 1 crore per year, while large organisations (250-5,000 employees) allocate Rs 10 crore annually towards travel expenses.

For large organisations (over 5,000 employees), travel expenses are directly proportional to the employee count. An analysis of the top 100 listed firms revealed that a leading IT major, with some of the highest travel spends, incurred travel expenses of more than Rs 2,600 crore in FY23, the report said.

Meanwhile, it also found that 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, emphasising the need for comprehensive travel solutions.

The report identified IT services, BFSI, engineering, aviation, oil and gas, pharma, FMCG and automobiles, among others, as the top industries driving corporate travel expenditures.

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 like Ahmedabad, Vadodara, Bhubaneswar and Lucknow are emerging as new corporate hubs.

"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," Deloitte India Partner and Consumer Industry Leader, Consulting, Anand Ramanathan said.

As the economy grows, the MICE (Meetings, Incentives, Conventions and Exhibitions) sector will also drive the demand for corporate travel, he noted.

"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 in the near future," Ramanathan added.

Despite the positive trends, challenges like inadequate infrastructure, rising costs and complex tax structures remain significant barriers to growth, the report said.

The government policies will play a pivotal role in fostering the growth of the sector with a multifaceted approach aimed at propelling the industry forward, it added.