India’s corporate travel market is increasingly becoming a battleground for major online travel agencies (OTAs) and scheduled airlines, as business travel soars in lockstep with the resumption of normal office routines. “Return to office remains a key driver of increased corporate travel, as companies balance remote, in-office and hybrid work,” said Praveen Iyer, cofounder of Akasa Air. “With hybrid work models, employees are traveling frequently for meetings, collaboration and industry events like conferences and trade shows.”MakeMyTrip’s corporate travel platforms, myBiz and Quest2Travel, crossed a gross booking value of USD 200 million for the first time in the quarter ended June, underlining growth prospects.Yatra’s billing from the corporate segment crossed about USD 24 million (INR 200 crore) for April-June, 77 percent higher than the previous three-month period. “We have to focus on really doubling down on the corporate side,” said Dhruv Shringi, chief executive of Yatra Online. The OTA derives 55 percent of its revenue from the B2B segment.Corporate travel is expected to double in the next six years, after staying circumspect through the Covid years. New fares and products The market soared to around USD 11.3 billion in FY24, from around USD 10.6 billion in FY23, showed a Deloitte report. By FY30, the market is projected to expand to USD 20.8 billion.The resumption of normal business travel, which makes up a fifth of the country’s total travel industry, has intensified competition among OTAs and airlines to secure bookings, with flyers and corporate travel desks enjoying the discretion to either book directly with a carrier or use the services of a travel portal.Unlisted Akasa Air, financed by late billionaire Rakesh Jhunjhunwala, saw a 35 percent on-year increase in its corporate business as of October. The airline has secured over 1,000 corporate deals in just two and a half years.Similarly, Air India is seeing more corporate clients, from sectors such as FMCG, BFSI, government and pharma. “Corporate travel continues to grow, with positive economic activity driving demand. Domestic corporate traffic has surpassed pre-pandemic levels, while international corporate traffic is rising,” said an Air India official.Air India Express and others have rejigged their fare family, whereas IndiGo has now added a business product, ‘Stretch,’ to cater better to the corporate customer base. Indigo, India’s largest airline, will start operating with this new product on November 14 on select routes.The Deloitte report said airlines and hotels account for 85 percent of travel spending. Nearly half of corporate travel expenses are for air travel, valued at USD 3.4 billion for domestic corporate flights. Domestic airlines earn 40 percent of corporate revenue from coded fares and corporate products. International corporate air travel—driven by sectors such as IT, BFSI and pharma—is valued at USD 2.2 billion, representing 17 percent of outbound travel.Though spending has reached pre-pandemic levels, rising airfares have also contributed to the aggregate increase.The rise in corporate travel has intensified competition among travel management companies as well. According to Deloitte’s report, MakeMyTrip, Yatra, GBT India and CWT India control about 65 percent of the travel management market by value.
Published On Nov 11, 2024 at 09:00 PM IST
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