GBTA Report: India's Business Travel Spend to Reach $26.2 Billion
The Global Business Travel Association Foundation has announced 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.
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.
Specifically to the last point, the report notes development across a number of global chains that cater to business travelers.
· Hilton is aiming to have 50 properties by 2016, up from 16 in 2013.
· Starwood Hotels and Resorts is on track to have at least 100 hotels either open or under construction in India within the next couple of years, up from the 36 hotels it had open as of 2013.
· Marriott also has plans to have 100 hotels open or under construction within the next six years, up from 21 properties in 2013. There is also evidence that the new administration and confidence in more robust economic growth is spurring hotel growth in the region.
· InterContinental Hotel Group recently announced plans to triple its properties in India over the next three to five years.
According to STR, there were over 53,000 hotel rooms in the development pipeline in India in the fourth quarter of 2013, a 27 percent increase from the previous year.
“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,” Welf Ebeling, GBTA Vice President of Operations for Asia Pacific, said in a statement. “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 GBTA BTI Outlook – India is free of charge to all GBTA Members by clicking here. Non-members may purchase the report through the GBTA Foundation by emailing firstname.lastname@example.org. To view an abstract of this research, click here.