Destination India is now touching newer highs. Business travel in India is expected to grow at 12% per annum in the coming years and international travel management companies are gearing up their operations in India, as they seek a chunk of the pie. India has become a vital market for Carlson Wagonlit, the second largest travel management company in the world with sales to the tune of $19 billion. The MNC already employs more people in India than in Japan, Australia or China.

While current estimates indicate that growth in top markets like the US would be around 4% in the near term, growth in India is expected to be around 12-15% in the business travel segment. Leisure travel expectedly would grow at a far faster pace of 30% in the next couple of years. Mr Berthold Trenkel, chief operating officer of Carlson Wagonlit’s Asia-Pacific division says in an interview to the Economic Times, “ For us, India has emerged as a key market. We employ 550 people in India as compared to 500 in Japan, 400 in Australia and 230 in China. We are hiring nearly 15 people per month. We have nearly 2,000 people in the Asia-Pacific region out of the 13,000 people we employ worldwide.”

With India as the popular choice for the global traveller, there has been a sprout of a number of new players in the travel management sector and you have various options including corporate deals, advance purchase fares, bucket fares, bulk purchases and check fares. It is not easy for the customer to decipher the best deals. Similar is the case with hotels and car rentals.

In the case of the corporate client, there is the additional responsibility of finding the most suitable choice for all levels of management within the organisation. What is OK for a sales manager will not be suitable for a CEO. In addition to all this, there is the most important aspect of finalising the most reliable and flexible travel plan. Often a travel plan requires very specialised and customised planning owing to the official purpose and also fitting the required bill (read budget). As a result of the increasing complexity, more and more Indian companies are appointing travel management consultants. Many professional travel management companies have managers, consultants and help-desk executives working out of their offices. They also locate trained personnel at the client’s location.

The trend in evidence in the developed market is the gradual elimination of agency commission by airlines. Travel agents are increasingly working on a service charge or a consultancy fee. . In India, airlines have been cutting down on travel agency commissions gradually. That does not imply a total extermination of travel agencies working on commissions. The individual customer may still prefer to procure tickets from an agent and pay a commission rather than forking out a consultancy fee, which might be quite high in countries where services are expensive. That said, corporates are likely to work more and more on a management-fee basis rather than persevere with commissions.

It is the given that when new players enter the market and competition intensifies, there is bound to be a shakeout. The most competitive survive while others fall back and out. The advantage right now seems to lie with new players, especially the low-cost types since they are so aggressive. In any case, they have turned into catalysts by stepping up growth of the Indian civil aviation market to unprecedented levels. If people shift from other forms of transport, it will help the entire industry.

Whether it is airline seats or hotel reservations, there are persistent constraints regarding lack of capacity deployment in both the segments. Moreover, most hotels and airlines are still not on global distribution systems (GDS). Lack of internet penetration is also an impediment for growth in travel. Lack of airport infrastructure is still a major hurdle to growth on the fast track.