Corporate travel between India and Asian nations seen rising

New Delhi: Corporate travel between India and various Asian nations is set to rise over the next three years as the volume of business gathers pace in the wake of free-trade agreements (FTAs) signed with countries in the region.

Business travellers to India from Singapore, Malaysia, Thailand, Japan and South Korea may grow by as much as 10 percentage points more than the compounded annual growth rate of 13.4% for the South-East and East Asia region between 2008 and 2010, industry experts and analysts said.

Recent tourism ministry data show there were 300,000 corporate travellers from South-East and East Asia in 2010, about 30% of those who made business trips to India.

Corporate travellers from the South-East and East Asia region may have spent in excess of $150 million on their trips to India in 2010.

“A business traveller from Singapore, Japan or any other South-East or East Asian country in India spends around $150 to $200 per day and around $500 per trip on an average in accommodation, food and transport,” said Piyush Mathur, senior general manager, international sales, Cox and Kings India Ltd. “This will at least go up by 30% in next three years.”

Spending by Japanese business travellers will be on the higher side, $500-700 per trip, or?10-12%?higher than last year, said Suraj Nair, senior vice-president, strategy and planning, Thomas Cook India Ltd.

India signed an FTA with the Association of Southeast Asian Nations?(Asean) in August 2009 and one with Japan last February, boosting business links amid uncertainty elsewhere.

“It can be seen in the perspective of an economic power shift from the West,” said Virat Varma, chief executive of Global Hospitality Consultants. “Considering conditions in European countries and the US, with the Middle East not doing that great, where else will corporates see business coming from, if not India?”

P.R. Srinivas, India head for hospitality and travel, Deloitte, said, “The Asian flavour has certainly increased with market share of corporate travellers from the region going up.”

Hotel occupancy by executives of Asean firms rose 17% in the last fiscal from the year before, according to a recent report by global consultancy firm HVS. It rose 5% for those from Japan, HVS said.

“With countries such as Japan, China and Southeast Asian countries investing in India, there is a direct correlation with an increase in travellers from these countries,” said Subrata Ray, senior group vice-president and sector head at credit rating company Icra Ltd. “The growth also depends on opportunities available in India and, to some extent, on the lack of opportunities in other countries; there aren’t many large economies in Asia.”

Exports to Asean nations were valued at $10?billion?in the first quarter of the current fiscal, and imports at $10.6 billion. Exports to north-east Asia, including Japan, China and South Korea, were at $9.6 billion and imports at $23.6 billion, for the same period.

Corporate travel will vary among countries, said Deepak Sharma, former secretary general of industry lobby Federation of Hotel and Restaurant Associations of India.

“Business travellers from Singapore may only increase by 5%, whereas from Malaysia, the growth might be around 10%,” he said. “In the case of Japan, it might be even more as many companies are shifting their production base to India in cities such as Bangalore, Pune and Gurgaon, to cover risks in case of a natural calamity.”

Iqbal Mulla, president of Travel Agents Association of India, another industry lobby, said one of the reasons for the trend is lower cost of travel to India than Western countries.

Economic uncertainty in Europe and visa-on-arrival for citizens of some Asian nations also help, said Pavethra Ponniah, a hospitality analyst at Icra.

Business travel and tourism spending grew 15% in India in 2011 over the previous year, whereas the figure was 10% for the US and 0.3% for the European Union, according to World Travel and Tourism Council data.