$20.8 billion market by 2030!, corporate travel, India travel, business travel, travel industry, Deloitte report, travel trends

One of the key sectors that underwent rapid transformation post-pandemic was the travel sector, with families and vacationers indulging in revenge travel once the pandemic ban was lifted. This set the wheels of this sector in motion to accelerate with time.

Currently, India’s corporate travel sector is valued over $10.6 billion and is in the most transformative phases with newer and more innovative ways of travel focussing on passengers’ budget, convenience and ease of travel.

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In its latest report on corporate travel innovations named — Decoding India’s corporate travel sector — the consultancy firm aims to decode India’s robust travel sector. Let’s analyse further…

The increasing business outlook in India is reflected in surging demand for domestic and international corporate travel. This surge is clearly reflected in the below figures:

* The corporate travel sector market is projected to grow at 10.1 per cent CAGR and double to USD 20.8 billion by FY2030. Meanwhile, the overall travel market in India is set to reach USD 97 billion at 9 per cent CAGR.

* In 2023, airlines and hotels accounted for 70 per cent of India’s USD 53 billion travel market with the remaining market share came from Railways and other transportation systems.

* Corporate travel represents 20 per cent of the overall market, valued at USD 10.6 billion, with the airline and hotel industries contributing 85 per cent to this segment. The report underscores the growing dominance of airlines and hotels in both leisure and corporate travel sectors in India.

Other key highlights of the report included an estimate that the Indian corporate travel market is set to double to USD 20.8 billion by the financial year 2029-2030 with about 50 per cent of business travellers prioritising environment-friendly travel practices.

“While leisure travel currently dominates India’s travel sector, the business travel segment is experiencing rapid growth, fuelled by factors favourable to the government reforms in creating manufacturing hubs, increased airport and rail connectivity, vibrant start-up ecosystem, increasing MICE (Meetings, Incentives, Conferences, and Exhibitions) travel and a robust economic sentiment,” the report added.

In an organisation, travel expenses comprise of roughly 35-40 per cent of the employee travel expense at least once a year. About 88 per cent of corporate employees travel for less than four days for domestic travel whereas 28 per cent travel for more than one week when travelling internationally for their business purpose and almost 34 per cent surveyed respondents mention they travel once or twice a quarter for domestic purpose. However, only 33 per cent travel once or more a year for international business purposes.

For small and midsize organisations, travel expenditure can reach Rs 1 crore per year. In contrast, large organisations allocate Rs 10 crore annually towards travel expenses. For large organisations, 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 Rs 2,600 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, emphasising the need for comprehensive travel solutions.

Emphasising the evolving expectations of today’s corporate traveller, Anand Ramanathan, partner and consumer industry leader, 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 travellers seeking a seamless, personalised experience that aligns with their professional and personal values.”

Meanwhile, the United Arab Emirates, Saudi Arabia, the United States, Singapore, and Thailand ranked as the top five countries attracting over 55 per cent of Indian travellers while the top five domestic destinations garnering a traffic of 60 per cent travellers were Uttar Pradesh, Tamil Nadu, Andhra Pradesh, Karnataka, and Gujarat.

In 2023, Indians took 27 million international trips, while Indian states and Union Territories saw around 2.3 billion domestic tourist visits, returning to pre-pandemic levels.

“From 2013 to 2019, international visits grew at a compound annual growth rate (CAGR) of 8 per cent and domestic visits surged by 13 per cent, highlighting the robust growth in domestic tourism,” The report mentioned.

Other details in Deloitte report

India’s domestic air passengers in FY23 were 136 million while international passengers accounted for 27 million. International visits grew at a CAGR of 8 per cent while domestic visits increased by 13 per cent, between 2013 and 2019.

Air passenger traffic grew at a CAGR of 11 per cent, between 2013 and 2019. In the same period, domestic passenger traffic surged at 14 per cent, outpacing international passenger traffic.

Approximately, 4.7 per cent of railway passengers travelled in air-conditioned coaches at 292 million in FY23.

In spite of this positive trends, certain challenges like inadequate infrastructure, rising costs and complex tax structures act as major roadblocks and government’s travel friendly policies will go a long way to address these challenges.

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