This is the peak season for business travel,yet companies are cutting down on official trips because of the uncertain economic outlook and the high air fares.

Companies are reducing the number of trips, bargaining harder for air fare and hotel room rates, and even opting for mid-market stay options, travel trade sources said.

“Companies are being more and more conservative about travel spends,” said Gaurav Sundaram, Country Director of corporate travel firm Egencia India. According to him, corporates are increasingly focusing only on trips that bring returns on investment; trips not involving business development or sales are being cut down drastically.

Travel firms believe economic uncertainties, higher air fares as well as the depreciating rupee have all contributed to the tightening of travel spend by corporates.

“With a large number of mid-market hotel rooms coming up, corporates are also opting for these and negotiating harder for bundled deals,” Sundaram added.

In 2008-09, corporate travel had seen a significant dip only to bounce back thereafter. But, now, uncertainty seems to be looming over this segment yet again.

Says Geeta Jain, Chief Executive Officer, Carlson Wagonlit India, “Corporates are definitely becoming more cautious about travel spends, but the volume of spend has not come down.”

In the next few months, corporate travel firms believe that the growth in the segment is expected to be in single digit or flat. The segment was earlier logging double-digit growth.

Malvinder Singh Rikkhy, Chief Executive Officer, Kuoni Business Travel India Ltd., said, “I believe the sentiment will continue to be subdued in the next few months, but the corporate travel volumes are likely to pick up in the latter half of the year.”

> Meenakshi.v@thehindu.co.in

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