Business travel outlook for India significantly upgraded
DELHI, India and MUMBAI, India - The Global Business Travel Association (GBTA) Foundation, the voice of the global business travel industry, today announces the results of its second GBTA BTI Outlook
DELHI, India and MUMBAI, India – The Global Business Travel Association (GBTA) Foundation, the voice of the global business travel industry, today announces the results of its second GBTA BTI Outlook – India report, a semi-annual analysis that relates unfolding economic events at home and abroad to their resulting impacts on India’s business travel market. The report, sponsored by Visa Inc., includes the GBTA BTI™; an index of business travel spending that tracks market performance over time.
Key highlights of the report include:
•GBTA projects India’s total business travel spend to grow 8.6 percent in 2014 to $26.2 billion USD, a significant upgrade from the 2.1 percent advance expected in our 2014H1 outlook. Business travel growth will advance another 9.2 percent in 2015 to $28.6 billion USD.
•India’s GDP grew 4.6 percent during the first quarter of 2014 and 5.7 percent during the second quarter – the best performance since 2011.
•Consumer spending reawakened in the first quarter of 2014 expanding by 13 percent, a rate not seen since the early 2000s and businesses are also feeling more confident in India’s economic prospects. Part of the story behind businesses’ rising optimism is found in the external sector as improving exports are a key reason for the upward revision to GBTA’s business travel outlook.
•Rising inflation is an ongoing concern for Indian policymakers as consumer price inflation reached a high of 11 percent late last year. Deft moves by the Reserve Bank of India have released some inflationary pressure however and rates have been falling since that time.
•Domestic business travel has grown rapidly over the last 15 years as Indian standards of living have been boosted significantly by market liberalization. GBTA forecasts domestic business travel to grow 9 percent in 2014, a significant upgrade form our previous forecast of 2.2 percent. It will continue its robust growth in 2015, rising an additional 9.2 percent.
•International outbound (IOB) travel from India has been extremely volatile over the last few years. GBTA expects IOB spending to grow only 4.8 percent in 2014 due to slower trade growth in the first half of the year. As it picks up the pace in the second half of 2014 and into 2015, IOB spending will gain strength and is projected to advance 9.7 percent in 2015.
•Infrastructure, particularly a lack of supply of quality hotel rooms for business travelers presents a challenge. However, there is increasing evidence that a more business-friendly administration and rising confidence in a more robust economic recovery is spurring hotel growth in the region.
“Growth in business travel spending in India over the last 15 years has been nothing short of remarkable, helping to pace the tremendous performance of the overall Indian economy,” said Welf Ebeling, GBTA Vice President of Operations for Asia Pacific. “Renewed optimism for the Indian economy on the heels of new pro-business leadership is great news for the continued future growth of business travel spending in the region.”
“The report forecasts business travel growth in India to return to high levels not seen for years,” said Tad Fordyce, SVP & head of Global Commercial Solutions, Visa Inc. “As organizations increase their business travel in India and elsewhere in the world, electronic payments play a lead role in helping companies track and pay for business travel-related expenses.”