India’s corporate travel sector, valued at over USD 10.6 billion, is entering a transformative phase, betting on new ways of working and technological disruption. Deloitte’s latest report highlighted corporate travel innovation, which is essential for employee experience management and cost efficiency.
The corporate travel sector market is projected to grow at a 10.1 per cent compound annual growth rate (CAGR) and double to USD 20.8 billion by FY2030. Meanwhile, the overall travel market in India is set to reach US$97 billion at a 9 per cent CAGR.
Despite the positive trends, the report added that the challenges such as inadequate infrastructure, rising costs and complex tax structures remain significant barriers to growth. The government’s role in addressing these challenges will be crucial for the sector’s future.
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.
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. These travellers need to engage deeper and faster using AI-powered chatbots, voice-assisted booking systems and real-time data analytics. These technologies can be tailored to customers’ needs while simplifying the experience for business travellers.
Additional Trends
The global tourism sector is projected to contribute US$15.5 trillion to the GDP by 2033, representing 11.6 per cent of the global economy. This underscores the long-term growth potential of the travel industry, particularly in the context of corporate travel. Since the end of the pandemic, the global travel and tourism sector has rebounded significantly to reach its pre-pandemic highs, driven by pent-up travel demand, government support measures and innovative strategies, the report added.
The report identified the top industries driving corporate travel expenditures, including information and technology (IT) services, banking, financial services and insurance (BFSI), engineering, aviation, oil and gas, pharma, fast moving consumer goods (FMCG) and automobiles.
Notably, these sectors account for 86 percent 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 such as Ahmedabad, Vadodara, Bhubaneswar and Lucknow are emerging as new corporate hubs.
The B-leisure trend is gaining momentum, with 37 per cent of respondents extending their business trips for leisure. Among these, 81 per cent add one to two extra days, while the rest extend their trips by three to four days, showcasing the evolving work culture and personal preferences.
Anand Ramanathan, Partner and Consumer Industry Leader, Consulting, 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 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. As the economy grows, the meetings, incentives, conventions and exhibitions (Mice) sector will also drive the demand for corporate travel.
“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.
India Inc: Traveller’s Expenses And Demand
Talking about operating cost efficiency, the report stated that travel expenses represent a considerable portion of an organisation’s operating budget. On average, 35 to 40 per cent of employees travel at least once annually. Almost 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 purposes and almost 34 per cent of surveyed respondents mention they travel once or twice a quarter for domestic purposes.
However, only 33 per cent travel once or more a year for international business purposes. For small and midsize organisations (up to 250 employees), travel expenditure can reach Rs 1 crore per year. In contrast, large organisations (250 to 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 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, emphasizing the need for comprehensive travel solutions.
