Concur Technologies eyes $1 bn business travel market

Travel and expense management solution provider Concur Technologies has said it aims to double the number of clients in India in the next two years and garner a major share of the business travel segment pegged at USD 1 billion.

"India's corporate travel market is biggest in Asia. However, only five per cent companies have a T&E policy in place. The segment holds immense growth potential and we intend to tap this opportunity," Concur Technologies Sr Director Marketing, Asia-Pacific, Christopher Juneau told PTI.

According to Concur, which offers cloud-based automated travel expense management platform, travel and expense (T&E) spending is the second largest spend category for most companies after payrolls.

Concur believes the slowdown in the economy will further push the growth of T&E management solution as companies are looking for ways to reduce expenses. "We already have 400 customers in India. We aim to double the number of clients in the next two years.

"We expect more companies to come on board as with a global economic crisis looming, companies are increasingly spending their T&E budgets as smartly as possible to remain competitive," Juneau said.

The total travel market in India is valued at USD 20.9 billion. India is expected to be the fastest growing travel market in 2012 with gross bookings of USD 24 billion.

In India, the company is focussing on MNCs and fast growing domestic companies. Online booking tool adoption for corporate travel, estimated at 10 per cent at present, is expected to rise to 20 per cent by 2013, he added.

Concur recently acquired a minority stake in domestic online travel company, Cleartrip, for USD 40-million. To gain traction in India, Concur aims to align its products with the local market. "We have integrated features unique to India. For example Travel request or Pre-Travel Authorisation to control spend before it occurs is unique to India," Juneau said.

Concur has offices in Mumbai and Delhi, and will soon open one in Bangalore. The company has also tied-up with ICICI Bank, American Express and Citi Bank to promote its T&E management tool as it feels that their customers are more likely to opt for automation.

Germany is India's first choice for business travel

 Germany has emerged as the most preferred destination for India's corporate sector. According to a survey conducted by Synovate Business Consulting on the Indian outbound MICE (meetings, incentives, conferencing, exhibitions) market, which was commissioned by the German National Tourist Office (GNTO), India, 62% of the Indian corporate companies have chosen Germany as the most preferred destination for business-related travelling.

The report states that out of the mid-sized and large corporate companies who have organized MICE trips in Europe during 2010-11, 73% opted for Germany, followed by 52% for the United Kingdom. The most preferred city for business-related gatherings was Frankfurt with 54% companies voting for it, followed by Berlin at 51% and Munich at 44%.

The report highlights lower hotel rates and carrier options in Europe, robust infrastructure, reliable and professional partners, superior technology and good-quality service as key factors driving Germany's success as a business travel destination.

Indian outbound MICE market was estimated to be around USD 550-600 million in 2011. It grew strongly and resulted in an outbound trip volume of 6.2 million, with around 1.5-1.8 million passengers travelling outbound only for MICE. Industry verticals like Pharmaceutical, Cement, FMCG, IT and Financial services are the major contributors to the Indian outbound MICE sector.

Indian businesses increased spending on rail fares by 58% in 2012

Led by a depreciating rupee, spending by Indian businesses on railway fares saw a 58 per cent increase and airfares saw a jump of 18 per cent in 2012, travel and expense management solutions provider Concur Technologies said in a report.

"The rupee declined 12.4 per cent against the dollar from 2011 to 2012. Accounting for this change in exchange rates, we can see that India saw an 18 per cent increase in the average price of airfare. Rail costs also increased greatly - nearly 58 per cent," according to Concur's third annual global report on travel and entertainment spending.

The report analysed more than $ 50 billion in corporate travel and entertainment expenses in the US, UK, Canada, France, Germany, Hong Kong, Japan, Australia and India.

According to the report, Bangalore emerged as the top destination in India for business travel, ranked 12th in the 25 most-visited cities, followed by Mumbai in 20th place in terms of number of overnight hotel stays.

Average spending in Bangalore was around $ 227 for categories of lodging, ground transport, dining and entertainment, whereas Mumbai's average spending was $ 238.

Expenses on lodging were the highest in India, with an average of 31 per cent of total spending, compared with APAC countries such as Japan (23 per cent), Hong Kong (25 per cent) and Australia (14 per cent).

"Through this report, we aim to help our customers in understanding and organising their employee spends accurately," Concur Technologies Senior Director (Marketing, APAC) Christopher Juneau said.

The most expensive international city for business travel was Brisbane in Australia ($ 547.53), followed by Tokyo ($ 540.91) and Sydney ($ 524.01).

America shuts down, opens a window for India

The American government has shut down as the Republicans and the Democrats refused to budge from their respective positions on the healthcare bill.

The impact: About eight lakh government employees will be asked to work without pay, or go on a leave. Besides, US soldiers will not be paid as scheduled; only essential services will be provided for, like the police, fire department, etc, while all non-essential services are halted.

How does it impact India for good

"This (shutdown) just raises uncertainty; we saw large amount of outflows over the last eight weeks. They've really started to go back into emerging markets, in particular to India in September. While we (the US) saw some growth, it does not look like under current conditions that is necessarily going to be a trend until the thing is resolved. Investors will pull back and the saving grace here is that I believe emerging markets are way oversold and that we are going to see a lot of Q4 adjustments to portfolios and some window dressing and that is going to bode well for emerging markets," says Seth Freeman of EM Capital Management.

Could it be a damaging event anyway for Indian markets?

"The general expectation is that the politicians will keep quibbling, but beyond a point, they cannot afford a prolonged shutdown. It has happened many times in the past and it is not for the first time. Typically, the markets have sold off some few percentage points. The average is around 3% sell-off in those 15-20 days when this lasts and then after that, the markets slowly recover. Therefore, for most investors it is a near-term worry, but it is not going to be prolonged because ultimately they have to find a solution. No politician can afford to have a prolonged shutdown of the US," says Jyotivardhan Jaipuria, BofA-ML.

It doesn't impact India Inc?

"In terms of impact on our industry, we do not do very much work for the Federal government. This particular shutdown does not impact the state government where we do some work. So, I do not think on our business there is a direct impact; however, if this continues for a longer period, then there would surely be some macroeconomic factors that will impact and it will start impacting the rest of the industry. But we do not think it will go that far," says Som Mittal, President, Nasscom.

How does it reflect on mobility of Indians to the US for work?

"Yes, it would have very marginal impact but it is only about those people who are here, who have applied for visas. But as I said most of our companies have a larger number of people there in the US; so, we will probably make through with them as I said business travel would become a little more difficult but surely a couple of weeks is something that we and our customers would be able to bear without any impact of sorts on our business. But if it does go on for months, then we have a problem," he adds.

Is it good for the Indian rupee, companies?

"Yes, I believe that could potentially happen (emerging markets doing well because of this crisis). This will have an impact on a lot of things, including the currency and also the ability of Indian companies to raise equity and debt (abroad). If you see return of that (phenomenon), you could see to some extent, a self-fulfilling prophecy where fund flows will help. I think it will hopefully clean up some balance sheets of Indian companies," says Gautam Trivedi, Religare Capital Markets.

 What kind of gains can the markets expect?

"Markets are looking at a cautious gain ...," Jeremy Stretch, Head-forex Strategy, CIBC, said yesterday.

The Sensex, India's benchmark index, saw some volatility in today's trade, and was trading with gains of over 100 points at noon.

And why should the Indian markets not see a positive sentiment as we have seen earlier that Sensex gained over 25% in calendar year 2012 when FIIs flocked emerging markets such as India in search of higher returns when the developed markets were facing crisis.

Also, two quarters ago when the issue of 'fiscal cliff' surfaced, emerging markets benefited. It is likely that history repeats.

Looking not far back, just some days back when QE tapering fears were put to rest 'for the time being' the Sensex had shot up 700 points.

The American government shutdown has happened in the past also ranging from a few days to a few weeks, and sadly, yes, it will have an impact on the country's deficit numbers.

Back to basics, why this shutdown at all? It is because of the lack of appropriated funds, something for which the US government will have to raise its $16.7-trillion debt ceiling. Already under heavy debt, it's a tough decision.

Besides being a tough call, the issue of raising the debt ceiling has become a battle of nerves in the US political arena. It's a deal that is not being reached between the Republicans and the Democrats over the contentious Obama-backed health bill spending.

Previous debt ceiling crisis was averted on Jan 1, 2013, after much mishmash. But now, time has come full circle. The new deadline for America is near - Oct 17 - to decide on whether to raise the borrowing limit.

What happens if US debt ceiling is not hiked?

America's financial department will not be able to borrow more money to meet its debt obligations. There are high chances it defaults on payments, something which Obama says will have 'profound destabilising effect'.

Casting a web for business travellers

Web conferencing (webcon) emerging as a strong substitute for business travel. Many company executives now prefer to do a webcon instead of catching plane and undertaking a strenuous travel schedule. The medium is also being encouraged by managements seeking to control costs.

Cyber Bazaar, a Bangalore-based provider of conferencing services, says the adoption rate for Web conferencing, the cheapest mode of conferencing (cheaper than an audio or video conference), growing at a rapid pace in India with several Indian organisations such as Infosys, flex, Polaris, MindTree and Johnson Johnson Medical increasingly using it for pre-sales and sales, training and support functions.

Says Rajeev Purnaiya, MD of Cyber- Bazaar: "Where travel managers might have sent ten people to a meeting they now send three and conference with the other seven.''

Travel agencies acknowledge the impact of conferencing.

On condition of anonymity, a top executive of a travel consortium said, "Web conferencing definitely impacts our business with organisations cutting down on travel expenses.

Conferencing facility is what they have taken recourse to in order to avoid travel and hotel accommodation expenses involved in business travel.'' "Web conferencing is helping companies to expand their market, accelerate sales and reduce travel costs and production time by holding interactive meetings through the Web,'' Purnaiya added. He, however, says conferencing will complement face-to-face interaction, but can't replace it completely.

Web conferencing is seen to help techies collaborate remotely on executing computer

projects. A simple problem which used to take a long time earlier to solve can now

be addressed immediately through the Web.

For conducting a Web conference, one needs is a phone, a web camera and any browser with a Net connection. Says Srikanth Soundararajan, senior manager (Process Automation), MindTree Consulting: "We primarily looked at Web Conferencing for cost-effectively conducting our training programmes involving employees across various locations on the globe.

The reasons were to save cost, time travel and manage the calendars of various people involved. Web conferencing has enabled us to train people, without jeopardising their regular work functions.'' Johnson & Johnson Medical, India, has embraced Web conferencing for conducting real-time collaborative research with its counterparts in Australia, US and other countries. Says M.S. Prabhakar, regional R&D manager, J&J Medical: "It helps us offering real-time interactivity with other teams. During meetings, we share and discuss ideas, concepts and problems with real-time samples and situations.''

Slump & weak rupee? India's hi-fliers selling their jets & chartering flights

India's big companies are selling their own jets and chartering flights because of rising operational and input costs amid a sluggish economy and a weak rupee.

In the past year, the number of nonscheduled operators in the country has fallen to 125 from 150, with several companies getting rid of their private jets. The slack has been taken up by private jet operators.

"We are currently doing 55 flights a month now, up 20% from a year earlier," said Atiesh Mishra, general manager of Taj Air, the Tata Group's charter unit. Taj Air has an alliance with Deccan Charters Ltd and Business Jets India Pvt for operating business jets in India. Companies are scrapping or delaying plans to buy planes because of the economic environment.

"There are a lot of corporates who have postponed their plans of buying planes and are looking to hire services of private charter operators. That has led to a rise in passengers for us," said Robin Sharma of Reliance Transport Travels.

The rupee weakened about 20% between January and August, increasing foreign exchange costs for Indian companies. That included costs of buying and leasing planes as well as salaries to expatriate staff. The rupee has strengthened since hitting a record low in August. Business plane prices have risen 25% in the past year because of the currency weakness, said Rajeev Wadhwa, chairman and managing director of Baron Luxury and Lifestyle.

Baron sells business jet flights through annual memberships at rates ranging between Rs 25 lakh andRs 2 crore. It has a fleet of nine planes and shares flying hours with other charter operators for 18 more planes in India. Vedanta Resources sold its jets two years back and now charters planes, an executive said.

Mishra said landing, parking and ground-handling charges have increased, adding to expenses. Most charter operators have been passing on such increases as additional charges to customers, while keeping their base rates intact. But that too is set to change.

For instance, Taj Air has been charging Rs 2.85 lakh per hour for its Falcon 2000, but plans to increase this by up to 15% in the next few months. Another factor that discourages companies from having their own jets is the lack of parking space at Mumbai airport. As the business capital of the country, this is where most of business travel originates.

Mumbai currently has about 30 parking slots for business aircraft, the last one allocated in 2006. But only half of them can be used for permanent parking. The companies using the rest of the slots, can only park their planes for 48 hours. Any operator parking a plane for more than 48 hours has to pay a penalty, said a Mumbai International Airport Ltd spokesperson. This ranges from Rs 1,000 to Rs 8,000 an hour.

"So a business jet has to now park in a place like Aurangabad since there are no slots in Mumbai," said Wadhwa. This means an increase in flying time and charges, he said. An executive at Indiabulls, which recently lost its parking slot in Mumbai, said that because of the penalties, the charges at the airport are 10 times what had been agreed upon when the company started flying to the airport. Ahmedabad is therefore becoming the new hub for business aircraft.

Kuoni India in alliance with Business Travel

Kuoni india has struck a strategic alliance with business travel international and, pursuant to this, has rebranded its business travel division as bti-sita. bti-sita will provide advice in the delivery of corporate travel solutions as also tailored solutions to small and medium enterprises and major national and multinational companies. the focus of this division will be on providing quality services for the business travellers. kuoni india, a 100 per cent subsidiary of kuoni travel holding, is india's largest travel company employing 1,100 travel professionals organised in six different divisions. he said the company was looking at high growth and this was a bid to capture a major share of the rs 3,000-crore corporate travel market in india. announcing this at a press conference here, the group ceo of the parent company, kuoni travel holding, hans lerch said, "bti-sita will be providing quality services for the business traveller combined with the strategic intent of becoming the leading player in corporate travel in india." bti-sita will also assist customers to re-engineer their entire corporate travel process. kuoni india, has decided to postpone its plans tap the capital market and divest 26 per cent stake for the time being due to unconducive market condistions. ranjit malkani, the ceo-india and asia-kuoni india, said that on the advice of merchant bankers, the company had decided to postpone its plans to tap the capital market.

Indian business travellers most likely to splurge: Study

Indian travellers are most likely to splurge during business trips by availing hotel room upgrades, high end meals and room service during their visit, compared to those from other countries, a study has found.

Indians were at the top when it came to upgrading their hotel rooms during business trips, while they were placed second when it came to enjoying high-end meals, a joint study by Expedia-Egencia on 'Future of Travel' has found.

Around 48 per cent Indians (globally highest) preferred to have their hotel room upgraded, while 55 per cent preferred to enjoy high-end meals during their trips abroad.

About 44 per cent Indians undertake five business trips in a year, followed by 39 per cent Thai people, but when it came to leisure travel, 34 per cent Indians travel more than five times a year, the second highest globally after 39 per cent Thai nationals.

Around 44 per cent Indian said they had turned their business trip into a vacation but travelled alone for the business part and 42 per cent said they have had a family member or friend join them, it said.

The study was conducted online between August 20 and September 12 to analyse the behaviour and preferences of employed adults of the age 18 and above across Asia Pacific, Europe, North America andSouth America by Harris Interactive.

It found that about 34 per cent Indians took two-day business trip, which was highest in the segment, followed by The Netherlands and Spain (28 per cent) and Canada (27 per cent).

"The survey shows a clear progression of Indian travellers with respect to increasing number of trips annually, both business and leisure. In fact, Indian business travellers are among the most likely to splurge during business trips when compared globally," Vikram Malhi, General Manager, South and Southeast Asia, Expedia, said.

"India is amongst the fastest growing business travel markets globally and is expected to be a USD 50 billion market by 2017. The business travel industry in India is maturing very quickly. The Indian business travellerexpects best in class technology," Gaurav Sundaram, Country Director Egencia India, said, adding that they were using smartphone and/or tablets for travel booking.

Most important criteria for Indians on a business trip was travel time, direct flights or layovers (54 per cent), location of hotel (51 per cent) and flight time (38 per cent) against globally most important factors: hotel location (53 per cent), price of hotel room (44 per cent), travel time, direct flights or layovers (42 per cent) and airfare (36 per cent).

When it comes to leisure, most important criteria for Indians were location of hotel (54 per cent) and price of hotel room (54 per cent), airfare (43 per cent), staying in a nice or luxurious hotel (34 per cent) against global factors of price of hotel room (63 per cent), airfare (50 per cent) and hotel location (50 per cent) and travel time, direct flights or layovers (33 per cent).

Around 11 per cent Indians gave preference to hotels' loyalty programmes (fourth highest after the US-15 per cent, South Korea-12 per cent, Hong Kong-12 per cent).

Also, the study found that Indians were bad at balancing work on trips as 44 per cent worked for more hours and 35 per cent work lesser hours during business trips.

Only 22 per cent worked for the same amount of hours on trips. 25 per cent Indians did not extend their business trip into leisure (second lowest compared to most countries after Malaysia 23 per cent)

Indians were among the top five to give importance to loyalty programs while booking flight or hotels.

About 92 per cent Indians found loyalty programmes at least somewhat important while booking hotels while 89 per cent found loyalty programmes important while booking flights.

Among those who have some of the strongest feelings of entitlement toward their travel reward points were Brazilians (96), Mexicans (91), Hong Kong (90) and Indians (90).

The study also found that Indians were the worst cribbers.

Only three in 10 Indians have not posted a negative travel-related comment, while 40 per cent crib about hotels and 36 per cent about restaurants.

Germany is India's first choice for business travel

Germany has emerged as the most preferred destination for India's corporate sector. According to a survey conducted by Synovate Business Consulting on the Indian outbound MICE (meetings, incentives, conferencing, exhibitions) market, which was commissioned by the German National Tourist Office (GNTO),India, 62% of the Indian corporate companies have chosen Germany as the most preferred destination for business-related travelling.

The report states that out of the mid-sized and large corporate companies who have organized MICE trips in Europe during 2010-11, 73% opted for Germany, followed by 52% for the United Kingdom. The most preferred city for business-related gatherings was Frankfurt with 54% companies voting for it, followed by Berlin at 51% and Munich at 44%.

The report highlights lower hotel rates and carrier options in Europe, robust infrastructure, reliable and professional partners, superior technology and good-quality service as key factors driving Germany's success as a business travel destination.

Indian outbound MICE market was estimated to be around USD 550-600 million in 2011. It grew strongly and resulted in an outbound trip volume of 6.2 million, with around 1.5-1.8 million passengers travelling outbound only for MICE. Industry verticals like Pharmaceutical, Cement, FMCG, IT and Financial services are the major contributors to the Indian outbound MICE sector.

Business travel is no longer a perk

So, your job requires a lot of travel, it must be loads of fun. This is a stereotype response from many of us when we hear someone say his or her job entails a lot of travel. But do business travellers think the same way?

One thing is quite certain, travelling for business has long ceased to be a perk. Agrees R K Amar Babu, director, (South Asia), sales and marketing group, Intel, ''Business travel is no longer a perk."

The World Tourism Council (WTC) has estimated an increase in Indian business travel, both incoming and outbound by around 8 per cent annually. While this may be good news for the tourism ministry which has seen a growth of almost 100% in business travel since 2001, business travellers themselves are ambivalent about globe trotting.

Says Rajeev Anand, assistant director, PricewaterhouseCoopers, ''If there is an outstation client, I don't think twice before getting onto a plane. Moreover, corporations like ours approve of such travel as it helps us get the desired results." 

Travelling has certainly become more frequent and stressful. Babu of Intel lives in and out of a suitcase every week. The same is the case with Gautam Advani, director, multimedia, Nokia India who is hopping places 20 days in a month.

''I don't even consider it as something outside of my job. It is just another job that has to be done and surely, there is nothing to be envied about," says Chandrajeet Banerjee, senior director, CII.

According to one estimate by the Frequent Flying magazine, senior executives in the fields of IT, software, BPOs, banks and FMCG are amongst the most travelled lot in India. About 50 per cent of them go on long haul flights once every six months.

And, 90 per cent of them undertake domestic flights every month and a majority of t hem travel business class.

New technologies have only added to the woes. Babu of Intel has an interesting anectode to relate in this respect. 

''During our honeymoon, I carried my laptop along. My wife and I clicked a picture with the device in hand. Now, my wife always makes it a point to show this snap to all my friends and says, pati, patni aur woh!"

Or take the case of Salil Kapoor, head, marketing, Microsoft India. Earlier as the marketing head of LG, he had to tour 100 days a year. ''Business travel involves a lot of hard work and even when we have fun, it is combined with work," he says. Adds Anand of PwC, ''I am in constant touch with my office even when I am travelling. There have been occasions when I have dictated drafts to my secretary over phone."

Babu of Intel says frequent fliers have to take care of their health as one has to eat all kinds of food during sojourns. ''On my part, I try to take an early morning flight and be back in Mumbai the same day." That means getting up at the crack of dawn and hitting the sack well past midnight.