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Monday, 13 February, 2017, 14 : 19 PM [IST]

‘Business Travel in India’ Emerging Trends & Opportunities

FCM Travel Solutions & KPMG released a White Paper on “Business Travel in India” Emerging Trends & Opportunities. Providing a definitive look at business traveller spend & behaviour, the report predicts business travel spending in India to rise by 12% over the next 5 years. India is currently ranked amongst the top 10 business travel markets with a spend of USD 29.6 billion in 2015. TravelBiz Monitor presents highlights.

FCM Travel Solutions and KPMG released industry first insights via a white paper titled “Business Travel in India” Emerging Trends & Opportunities. With business travel rapidly evolving, and travel gradually emerging as the second-largest area of controllable business spend for corporates, the paper delivers a comprehensive look at where and how business travellers in India are spending. The report also details business travel spending in top 15 countries across multiple sectors over a period of five years. India is all poised to lead this growth and accordingly by 2030 business travel spending in India will have trebled from the present levels. Asia has become the world’s largest business-travel market, and trends suggest India’s significance within APAC will only grow with time.

Business travel trends tend to ebb and flow with economic and cultural shifts. Listed below are some key insights from the paper including significant research findings.

India: The next big frontier for business travel
As compared to any other country, India is poised for phenomenal growth when it comes to business travel. India is now a USD 30 billion business travel market and is expected to more than triple to USD 93 billion by 2030. In 2015, India saw a 15% increase in business travel spending, which will grow by a compound annual growth rate (CAGR) of 12% through 2020 to 6% by 2030. This increase in all possibility will be greater than the increases in business travel growth in the next 3 largest countries combined, including South Korea, Italy and Brazil. Thirteen years from now (by 2030), India will likely be amongst the top 5 in business travel spending. Moreover this stupendous growth and evolving mix of sectors and markets brings a greater complexity to travel.

The mix of sectors contributing to this phenomenal growth is truly diverse with IT, pharmaceuticals which top the list as two of the fastest-growing sectors further complemented by natural resources, auto and construction sectors.

Technology: The major change driver and disruptor
The most important aspect while travelling for business is having reliable connectivity, be it wireless access points or smartphones that are enabled to work in the geography one is travelling to.

Mobile technology is having a profound impact on business travel in India as travellers now expect information to be at their fingertips – anytime and anywhere. Business travellers in India have embraced mobile and social media as a way to connect with colleagues, clients and other contacts. This is no surprise, since smartphones have increased in both usage and popularity among Indian business travellers. The data in the paper indicates a dramatic 300% growth in usage from INR 34 billion worth of transactions in 2009 to INR 109 billion worth of transactions in 2014. In fact Indian travellers are most likely to be transacting on their smartphones as this region has consistently led the charge with smart phone usage growing at 12% from 2014 to 2015. With nearly 25% of mobile phone users in India owning a smartphone/tablet, the use of these devices to manage travel needs “on the move” including destination research and booking management is only expected to increase.

Business travelers achieve greater autonomy
As travel decisions clearly migrate from corporate-travel desks into the hands of individual travelers, companies must change their behavior accordingly. In particular, they need to develop a clearer understanding of the needs of business travelers and address these directly. Corporates now wish to offer their employees more flexibility in managing their travel needs. As a result, employees can adopt mobile tools for research and booking and will no longer have to go to a fixed internet location to manage their travel. On their part corporates will use data at their end intelligently to understand traveler behavior and also encourage the use of user generated content to improve the overall experience.

Three distinct business traveller profiles
The paper also presents three distinct business traveller profiles i.e. Hi - Fliers, The Compliant and The Budget Traveller, in the Indian context. As such, the data makes both KPMG and FCM Travel Solutions uniquely qualified to provide a very comprehensive perspective. These three personas essentially transform data and numbers into real, relatable, and understandable characters, with varied business travel styles, needs and expectations.

According to Jaideep Ghosh, Partner and Head, Transport, Leisure and Sports, KPMG in India, “Despite some recent economic speedbumps, the business travel market remains incredibly robust and dynamic with a number of countries such as India, China, Germany and Canada, growing at a remarkable rate. The report predicts that India will emerge as a leader in business travel spending over the next decade or so. In fact when one looks at India, one sees one of the highest growth rates in business travel in the entire world. If India continues on that trend, in another 15-20 years, it will surpass the U.S. as well and be second only to China. In fact India is statistically where China was close to 15 years back. It is clearly a story that no one is talking about yet, but it bears watching. On the horizon, we’ve identified trends, sectors and specifically markets prime amongst them being India that are seeing extraordinary growth and could very well turn into the potential business travel markets of the future.”

In the words of Rakshit Desai, Managing Director, Flight Centre Travel Group – India, “In order to understand how emerging trends will impact business travel programs in the near future, it is first important to understand the perspective of business travellers today. Consequently for corporates, managing business travel is becoming increasingly complex, with changing traveller preferences, integration with mobile technology, and strategies adopted by travel suppliers. This white paper helps analyse the disruptive changes happening today and forecasts how they will impact managed travel processes, the Indian business traveller experience and their expectations in the near future. It also examines the impact of technology on the way business travellers would purchase products and services, thereby predicting leading trends until 2030.”

According to the paper, in 2015 India ranks as the 10th largest business travel market in the world spending a total of USD 29.6 billion. Moreover it is projected to be the most robust business travel market in APAC over the next five years and is estimated to grow at 12% CAGR over that period. With its improving economy and rising consumption, it is no surprise then that India will emerge as the next fastest growing market between 2017 and 2020.

Traveller type       Demographic attributes       Travel preferences and expectations
Hi – Fliers

  • 35+ years
  • CXO, VP level and above
  • Working in large to mid –sized companies
  • Seamless and convenient travel
  • Flying business class with lounge services at airports (incl. chartered and private jets)
  • Stay at high end 5 – 7 star rated hotels Use luxury cab services
The Compliant

  • 21 – 40 years
  • Line staff
  • Working in large to mid –sized companies
  • Convenience and value for money travellers
  • Key focus is on compliance with company policies
  • Fly business class or economy class depending on company policy
  • Stay at 2 – 4 star rated hotels with basic amenities, internet etc.
  • Standard cab services from local taxi service providers, aggregators etc.
The Budget Traveller

  • All age groups
  • Owners and/or employees of SMEs
  • Priority to value for money, low cost with convenience being secondary factor in travel choices
  • Fly economy class, bargain hunting key factor in airline/flight choice
  • Stay at budget – 3 star rated hotels
  • Standard shared economy travel services, public/local transportation also being used if possible to contain costs

The top 15 business travel markets
The paper identifies the top 15 business travel markets and their rapid growth assures that these countries will define the future of business travel

Overall projections
Overall the white paper reveals that global business travel spending will hit USD 1.3 trillion in 2017, with a 5% growth over 2016. Growth will remain strong through 2020, with business travel projected to grow at 5% from 2016 to 2020.

Regional Projections – Asia Pacific continues to dominate
  • The APAC region continues to be the largest business travel region in the world, comprising 37% of global business travel.
  • Business travel spending in Asia Pacific totaled USD 458 billion in 2015, and is expected to grow at 7.8% CAGR over the next five years. 6.5% of this total spend came from India, while China, Japan and South Korea accounted for nearly 90% of the remaining spends.

  • India is projected to be the most robust business travel market in APAC over the next five years, projected to grow at 12% CAGR over that period.

  • Currently Asia Pacific owns the largest share of the business travel spend market with 37% followed by North America with 25% and Western Europe with 18%.

  • The methodology used by KPMG includes analysing business travel booking and expense reporting data from its database of more than 100 corporates & small businesses and 20 users, representing nearly 5% of business travel spend in India.

Total Business Travel Spending: Top 15 markets - 2015
Sl. No Country Business travel spend (US$ Billion) in 2015 CAGR (2011 -15) in % CAGR (2016 - 20) in %
1 China 291.3 14% 8%
2 USA 289.8 4% 3%
3 Germany 63.5 6% 7%
4 Japan 62.1 -2% 3%
5 UK 47.1 4% 3%
6 France 37.1 1% 5%
7 South Korea 32.6 2% 5%
8 Italy 31.6 -3% 5%
9 Brazil 30.5 3% 4%
10 India 29.6 9% 12%
11 Canada 23.1 2% 8%
12 Australia 21.7 1% 5%
13 Spain 19.4 0% 6%
14 Netherlands 18.2 -1% 6%
15 Russia 17.2 -4% 5%
Total – (1 to 15) 1,014.8 5.1% 5.6%
Global 1,236.8 5% 5%
Share of Top 15 82.1% - -
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