Kuoni sees smaller cities boosting business travel

Meenakshi Verma Ambwani New Delhi | Updated on July 29, 2013

Manoj Chacko, Chief Operating Officer of Kuoni Business Travel

The growing number of corporate travellers in smaller cities and the demand from small and medium enterprises offer huge potential for growth, says Manoj Chacko, who took charge as the Chief Operating Officer of Kuoni Business Travel last month, in an interview with Business Line.

What is the company strategy for expanding corporate travel?

Corporate travel is a very critical aspect of the travel ecosystem as it gives stability to the travel industry. The seasonality attached with leisure travel is not so strongly associated with corporate travel. It is among the top discretionary spends that an organisation makes and is always under the radar for more cost effective management. We are among the top two or three corporate travel management companies in India. We need to now focus and leapfrog to a very different level and need to build scalability and bring in more cost efficiencies.

Do you see more growth coming from regional centres and small and medium enterprises?

There is only so much growth happening in the major cities while tier 2, 3 cities are growing at a much faster pace. To draw a parallel, air traffic growth in smaller cities has grown in three digits as disposable incomes have grown and more small and medium enterprises are emerging which are still relying on the unorganised market. My vision is to take corporate travel to geographies beyond the key cities. Once you build capabilities, you are no longer constrained by geographies.

Given the current economic situation, is there a cautious sentiment towards corporate travel spends? Has it led companies to freeze corporate travel or cut down on it drastically?

It is always a cyclical phenomenon, as the market sentiment starts becoming shaky, this is the first controllable expense and any chief financial officer of a company looks at it very carefully. This is the time when professional travel management companies such as Kuoni become even more important. There are a lot of parameters involved in controlling travel cost and it is not just about negotiating a good deal. As a professional travel management firm, we focus on changing the company’s travel behaviour. So, for example, if a company has 100 people with an average booking cycle of four days before departure, if they could even shift it to six days, the company can save substantially . Then the company might not even need to cut down on travel.

Do you think corporate travel spends in the first half of 2013 have been flat compared with the same period last year?

I would say it varies from customer to customer. In certain industries, travel spends have come down while in certain industries they have gone up. For instance, in the current scenario with dollar appreciation, industries involved with exports have increased travel whether it is pharmaceutical exports or software exports. It has been a mix.

Published on July 29, 2013

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