India becomes 10th largest business travel market in the world
The GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA) – announces the results of its first GBTA BTI™ Outlook – India report, a semi-annual business
The GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA) – announces the results of its first GBTA BTI™ Outlook – India report, a semi-annual business travel outlook and overall economic analysis of India. The report, sponsored by Visa Inc., includes the GBTA BTI™; an index of business travel spending that distills market performance over a period of time.
Key highlights of the report include:
After a period of economic growth stuck below 5 percent along with soaring inflation, GBTA projects total business travel spending for India to grow 2.1 percent in 2014 to US$24.9 billion. An improved outlook for the Indian economy, however, should bring business travel spend back on track in 2015 as GBTA expects 7.6 percent growth to US$28.8 billion.
Over the last 15 years, India has worked its way up the rankings of major global business travel markets from number 24 in 2000 to the 10th ranked market in the world in 2013. GBTA expects India will continue to move up the rankings and should pass Italy to become the 9th largest market in the next five years.
Driven by both the tremendous growth of the middle class and size and multitude of business centers throughout India, domestic business travel spending has dominated, comprising 90 percent of total business travel spend in the country.
Along with the ailing domestic economy, domestic business travel spend is expected to slow in 2014 only growing 2.2 percent. Thanks in part to the recent election results providing a boost in business and investor confidence, domestic business travel spend will regain its footing in 2015 advancing 7.7 percent to US$24.2 billion.
International outbound business travel spending has been extremely volatile in recent years and is only expected to gain 1.1 percent in 2014. It too will see major improvement in 2015 though as GBTA projects 7 percent growth to US$2.6 billion due to renewed strength among India’s major trading partners including China, Europe and the United States.
“This forecast is a very positive sign for the potential of business travel growth in India in the years to come,” said Welf Ebeling, GBTA Vice President, Operations for Asia Pacific. “The recent landslide victory of Narendra Modi and the Bharatiya Janata Party (BJP) party in India’s May elections have renewed optimism for more pro-business reforms and accelerated infrastructure investment. Winning 282 or 543 parliamentary seats appears to have given Mr. Modi and the BJP a mandate to repeat this success across India. Even incremental success in these efforts should eventually spark greater economic and business travel growth.”
“With business travel forecast to experience more growth to and from India, travel will play a vital role in helping grow the Indian economy,” said Tad Fordyce, senior vice president, global commercial solutions, Visa. “Visa is committed to providing a secure, globally accepted payment option for business travelers in India and everywhere in the world.”
Infrastructure Presents a Challenge to Continued Growth India’s insufficient infrastructure presents a significant impediment to sustainable growth. This includes not only physical infrastructure such as ports of entry and modes of transportation, but also urban infrastructure such as access roads, electricity, water supply and telecommunications. One particular challenge for business travel in India is that while the supply of hotel rooms is relatively large, there is a shortage of quality options, which are by and large expected by business travelers. This is beginning to shift, however, and development is taking place across a number of global chains that cater to business travelers.