A better outlook for global economy coupled with fast changing innovative technologies, rise of the sharing economy and the growing importance of millennials in business travel are driving the growth of corporate travel globally, including India. The economic parameters prevailing in the country is helping India to emerge as a big market for corporate travel and players in the segment have geared up to realise the potential this sector offers. Also, with passing time, corporate’s focus on safe and smooth travel for their executives, increasing demand from corporate travellers and consistent change in travel technology amongst others has further pushed this segment to become more evolved.
According to American Express Global Business Travel Forecast for 2018, India’s burgeoning middle class and solid economic growth will cause demand for travel to surge throughout the year. This is consistent with the latest report from the Global Business Travel Association (GBTA) which revealed India’s annual growth in business travel spend is at 11.4 per cent, the largest rise among the top 15 business travel markets globally. Moreover, the Indian airline industry is growing at an even faster rate as favourable government policies, growing affluence, increased trade, and an aging transportation infrastructure are driving demand. International departures for business purposes are expected to increase by about 5.4 per cent from over 157million in 2017 to about 166 million in 2018. Studies suggest that corporate travel market in India presently stands at 10th position across the world, with probably the highest growth rate. In the last decade, this segment has grown from 20th position to 10th position.
According to a report by consultancy firm KPMG, India is now a US$ 30 billion business travel market and is expected to more than triple to US$ 93 billion by 2030. “In 2015, India saw a 15 per cent increase in business travel spending, which will grow with a CAGR of 12 per cent through 2020 to six per cent by 2030. This increase in all possibility will be greater than the increases in business travel growth in the next three largest countries combined, including South Korea, Italy and Brazil. Twelve years from now (by 2030), India will likely be amongst the top five in business travel spending,” the report stated.
Policy Compliances
Citing its own survey, Ashish Kishore, Managing Director, American Express Global Business Travel, India says Indian business travelers were identified as being the most aware of company travel policies of the six countries surveyed. “Despite this, 66 per cent of Indian business travelers reported not booking within policy all of the time. Workers can often believe they are making sensible decisions which save their company money when they book outside of travel policy; however these can result in false savings. When employee’s book outside of company policy, this travel is not tracked, and can affect the overall negotiating power of the company during their next contract review,” Kishore adds.
Sandeep Dwivedi, Chief Operating Officer, InterGlobe Technology Quotient, says that business travel is mostly the second biggest expense for any company, besides payroll. “Business travel happens so that these companies can expand their domain and move across geographies. However, on the very basic level, executives fail to adhere to company travel policies, initiating compliance challenges, thereby increasing their expenditure. As most Indian organizations are moving towards creating customised technology suited to their business travel, it is necessary that they include the company travel policy compliances in the booking flow to minimise complexities,” he opines.
Ranjeet Oak, Chief business officer – Corporate, MakeMyTrip also echoes the similar opinion. “For most organisations, business travel spending is the second largest expense, and includes a tedious process allowing a certain amount of discrepancies and reimbursement issues to crop up. From a large organisation point-of-view, the travel policy management is required which may add a level of complexity into the system and lengthen the requisition process. Few organisations set up a travel desk to manage travel needs but this could constrain resources for many businesses. Small to medium scale businesses do not have adequate bandwidth or additional resources and support to manage such corporate demands and that’s why business tools backed by technology can help fill that gap,” Oak says.
Evolving technologies
The use of data analytics and Artificial Intelligence (AI) are key advancements that are taking place in the overall travel sector. Similarly, corporate travel segment is witnessing the entry of new tools and ways to cater to business travelers needs. Self-booking corporate travel apps are making their way in the organizations, especially the SMEs who typically have limited travel requests. “We see significant potential in new technologies such as AI for business travel, and our recent research with ACTE revealed that 32 per cent of travel managers in “younger” organisations are interested in using AI to understand and influence business traveler behaviors. Given the enthusiasm with which the industry has adopted innovations like mobile apps, it is only a matter of time until the use of AI and chatbots in managed travel becomes widespread. Currently, few have actually deployed such innovations, and while there is major scope for digitization and AI to improve customer outcomes, this will always need to be balanced with the need for human interaction,” Kishore says.
Dwivedi opines that more and more businesses are looking for self sufficient, custom made technology that answers their travel choices with minimum hassles. “The intervention of ‘SMART’ has become a necessity for fast track, real time and error free travel choices. The adoption of this smart technology enables travel desks of companies to be self-sufficient. The technology also helps to communicate transparency between the travel provider and travel buyer,” he adds.
According to Oak, business travel often involves unplanned flights, last-minute hotel booking, which can be hard to pull together at a short notice. “Hence, corporates are now taking to new travel tools that drive savings, efficiencies, compliance and traveller safety, all in one. For most organisations, travel and expense spending is a huge expense besides the regular payroll. Unexpected corporate trips create a lot of hassle viz multiple bookings from different vendors, unexpected travel expense, timely approvals, appropriate choices and reimbursement issues. The new corporate travel booking tools are solving these issues by deploying technology, taking the hassle out of booking and expensifying,” Oak adds.
Kishore says that their pre-trip booking tool, Expert Approval, helps companies increase travel policy compliance, and can deliver systems which require senior approval when travel is booked outside of company policy. “Many of our clients globally use automated systems for booking travel, with great effect. However, such tools are not foolproof and need to be combined with other approaches such as education, and even incentivization to increase compliance,” he adds.
According to Dwivedi, business travel management tools should also be made adept to corporate traveling compliances. “This would make the softwares deliver efficient and error free travel choices- thereby reducing huge number of cancellations, refunds and reissues- which take up a significant amount from the corporate travel budget,” he says and adds that Travelport is one such GDS provider which has tapped through the opportunities presented by current travel market and delivered tools that satisfy its demand. “With Travelport Smartpoint, corporate travel agencies have access to, not just more content, but to more features that help to sell more and earn more by offering corporate booking tool. This tool provides corporate travel agents with seamless and unified workflow by syncing the traveller profiles to the booking engines combined with intuitive application mid office. It has a Business Layer Automation feature along with audit trails of each entry,” Dwivedi says.
MakeMyTrip forayed into corporate travel space in August last year with the larger objective of capturing the majority of the SME corporate travel segment as SMEs are contributing to 70 per cent of the corporate travel business. “MyBiz works as a self-booking tool to cater to smaller companies which have not had many affordable options, up until now. We largely focus on the fragmented travel segment, which is over US$ seven billion (corporate SME) market for just flights and hotels. MyBiz helps them get the same advantages that large companies get for their business travels – giving choice to employees, keeping control with employer while providing savings & benefits for corporates as a self-booking tool,” he adds.
However, the awareness of corporate travel is low in India because the Tier II and III cities do not have enough corporate in the first place. “The sector can improve awareness within the developing cities by conducting awareness campaigns-wherein streamlined software can be demonstrated to lower business travel costs. Players of the industry are working towards this,” Dwivedi says.
Analytics
Primarily, corporate travel seems very simple however in reality it is a lot more complex. Here, it becomes important to track and analyze the experiences of business travelers. With detailed data and analytics, corporate can not only learn about demands and behaviour of the traveller, but is also able to identify the loopholes in payment systems, expenses, related risks and more. A lot of time and monetary savings can be made by observing the travel patterns of employees by analysing this data. It helps the organization to pick the right travel-planning platform, streamline the booking process and even provide personalised services. For several years, American Express Global Business Travel has mined T&E data to understand traveller’s behaviour, and aide future decision making. “Using predictive analytics, companies can mine and analyse troves of T&E data, for example, at scale to enhance decision making, from driving spend patterns to managing negotiated rates or preparing for rising hotel costs. Machine learning advancements have the potential to strip the laborious aspects of analysing data for travel program managers, allowing them to spend more time taking action. Machine learning and predictive analytics are complementary but separate technologies. Machine learning is better suited to transforming or extending data sets to make them more useful, while predictive analysis allows businesses to improve the way they use these transformed data sets to deliver value,” Kishore says and adds that GBT’s Premier Insights will take the masses of data and allow “what-if scenarios” so travel managers can be ahead of the game and influence behaviour. “You could predict what the savings would be if every individual in your company adopted advance purchase behaviour or booked premium economy on a certain route,” he adds.
According to Thiagarajan Rajagopalan, Founder & CEO, Tripeur, analytics provides valuable insights into employee behaviour such as when they apply for travel approval, where they are booking, what choices they are making, how many exceptions they are seeking and how much they are spending on travel. “By acting on these insights and by providing real time feedback to the travellers, companies are able to keep the compliance rate high. As far as our customers are concerned, we see more than 90 per cent compliance in using mandated tools. Only in emergency situations, the customers tend to go elsewhere to book their travel,” Rajagopalan says and informs that the Tripeur system allows a corporate in defining and monitoring commitments to various suppliers. “While supplier negotiations and contracting happens offline, the system allows the corporates to manage them effectively. Thus, if a corporate is over-delivering for a supplier while under-delivering for another, the system can automatically move business to supplier B from supplier A,” he adds.
Duty of care
Duty of care is a critical concern for travellers and organisations. With the rise in global unrest, businesses are increasingly adopting various measures and processes to ensure safety of their business travelers. “At GBT, we encourage businesses to adopt proactive planning, take the lead on duty of care and not wait for a crisis to occur. High levels of duty of care are essential elements of business travel planning. For companies with many travelers on the road, an automated system makes the most sense since you do not want to be wasting time making dozens of phones calls manually. Our most recent research with the Association of Corporate Travel Executives (ACTE) showed more than a third (37 per cent) of travel managers saw a rise in enquiries relating to traveller safety. But it appears that a significant number of organisations do not have the systems required to quickly address these concerns. More than a quarter (27 per cent) of travel managers claim not to have had a detailed emergency plan in place,” he adds.
