While the near term economic prospects of India see steady improvement, the double figure growth of the business travel spending in India remains pretty healthy to take the country ahead as a world leader in business travel industry in the coming years.
The Global Business Travel Association (GBTA) Foundation report estimates a 10.7 pc growth in business travel spending in 2016, followed by another 10.2 pc in 2017, taking the figure up to USD 36.1 billion. India is now the tenth biggest business travel market on the planet, climbing five spots since 2000, as mentioned in the GBTA Business Travel Industry Outlook – India report. Sponsored by Visa, it is a semi-annual analysis that relates unfolding economic events at home and abroad to their resulting impacts on India’s business travel market.
India to leapfrog Brazil this year
GBTA expects India will continue to ascend the market rankings and is likely to jump four spots over the next five years, becoming the 6th largest business travel market in the world by the end of 2019. In fact, India is expected to leapfrog Brazil this year and could surpass both South Korea and Italy in 2017.
“If it continues on its current path, India is poised to be a world leader in business travel for decades to come,” explains Gaurav Sundaram, GBTA India regional director. “The growth rate of business travel in India is on par with other leading industries in the country showing once again business travel playing an important role as a driver of economic growth and jobs.”
Business travel becoming a top sector
GBTA observed in the report that business travel as one of the top growth sectors in India, growing at the same rate as high technology services (10.7 pc) and only slightly behind land and pipeline transport (11.2 pc) and real estate and business activities (11.0 pc). While traditional industries such as wholesale trade, retail, construction or agriculture are falling behind in terms of growth, the rise of the business travel sector is definitely seen as a prospect for the future of growing Indian economy.
“The business travel market in India is one of the healthiest in the world and given its exponential growth rates, there is a clear need for innovative education and training to ensure there are enough qualified business travel professionals to keep up with the rise in demand,” said Michael W. McCormick, GBTA executive director and COO in a press release while announcing the launch of GBTA in India in April.
Challenges for the industry
Although India witnessed a huge growth in terms of private consumption and public infrastructure spending in 2015 and in the current year, there are challenges that might still needs to be addressed. India’s insufficient infrastructure continues to present a significant impediment to sustainable growth, but vast improvements are in the pipeline.
“Now as we see the Indian business travel industry growing rapidly, this growth will also pose challenges to Indian business travel managers. Travel managers in India need to make their businesses scalable and implement best practices to improve program efficiency & user satisfaction,” added Gaurav.
Moreover, the highlights of the report also suggests that the growth in international outbound (IOB) travel from India is much more volatile, as GBTA expects IOB spending to move forward just 3.1 percent in 2016, before an improved global economy and brightening prospects for increased trade activity will help push IOB spending ahead by 9 percent in 2017.
While the domestic spending will be the key driver of overall business travel performance in India over the forecast horizon, GBTA’s report expects domestic business travel growth in 2016 and 2017 to reach 11.5 percent and 10.3 percent respectively. Needless to mention, these are very promising prospects, even in a volatile and sensitive tourism sector they tend to depend on the evolution of a relatively unstable environment.