Business travel improves, likely to recover fully in new financial year

Firms like Flight Centre Travel Group, Thomas Cook and hotel companies like Sarovar Hotels and Lemon Tree Hotels expect a complete bounce back by the end of the second quarter of the coming financial year provided there is no fresh covid wave.

Rakshit Desai, managing director, India, for the Flight Centre Travel Group said business travel started to come back in November and then became muted December and January possibly due to the spread of Omicron. February saw some recovery and the March momentum has taken the company by surprise. “As of today, speaking of our corporate clients, domestic spending is at 80% or more,” he said. 

Desai said for business travel, their operation was evenly spread between domestic and international clients. At this point, industries such as pharmaceuticals, consumer product companies and those in digital and infrastructure are showing strong business travel demand while professional and financial services are lagging, possibly owing to remote working, he said.

Ajay K Bakaya, managing director of Sarovar Hotels and Resorts said there has been a fairly strong rebound in travel overall. “Business travel has picked up slowly but surely. We are projecting strong straight-line growth in March-July despite the summer. “More consumer firms, insurance sector employees, banks, pharmaceuticals etc., are coming back. IT is still slow and will be a little sluggish,” he said.

Lemon Tree Hotels, which has a strong focus on business travellers, is also looking at a complete revival of business travel by Q2. The company is seeing the return of pharma clients, SMEs, MSMEs as well as consumer businesses. “We think the IT giants are not back yet because a lot of them are still working from home. But we do see some of the smaller IT companies sending their executives out now. By the second or third quarter of FY 2022-23, we expect that business travel will completely return, unless we are hit by another covid wave,” said Vikramjit Singh, the company’s president.

Desai of Flight Centre said dollar strength, crude prices and supply constraints have triggered a significant spike in the average ticket prices and underlying passenger counts are still at half of normal. Having said that, he is optimistic about returning to normalcy by June quarter but supply constraints and geopolitical tensions need to ease, he said.

Indiver Rastogi, president and group head for global business travel at Thomas Cook (India) & SOTC said the company is witnessing a definitive uptick from our corporate/business travel segment and our business has doubled month-on-month since January 2022 and that the announcement of reopening of India’s scheduled flights is already seeing a surge in positive corporate sentiment. “Our expectation is that we should close March at 80% of 2019 levels,” he said.

“Our key corporate sectors like IT, also SMEs, are fuelling demand for international and domestic travel respectively. Destinations that are displaying strong demand include USA, Canada and UK; and from a domestic perspective, sectors like Mumbai to Delhi, Bengaluru, Chennai and Kolkata. What is noteworthy is that while uptick is evident across key hubs, Mumbai is witnessing the fastest recovery for our business travel segment,” said Rastogi.

According to ‘Travel market in India’ by RedCore, research firm RedSeer’s arm. travel business in pre-pandemic India was $75 billion in FY19-20. This will expand beyond $125 billion by FY2026-27, taking into account both domestic travel, inbound and outbound travel by Indians, it said.