MAGAZINE ARTICLE (C&E)

ENROLLMENT NO.: 21417793

SUBJECT: ECONOMIC DEVELOPMENT IN INDIA WILL INFLUENCE THE

BUSINESS TRAVEL MARKET AND THE DEMANDS OF THE CONSUMER

ASSIGNMENT CODE.: TH5BA95O

SUBMITTED BY: NIRNAY ARUN BASRUR

DATE: OCTOBER 25, 2019

ASSIGNED FACULTY: MS. DAKSHINA GHOSH

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T he business
travellers are the
most high-tech
and communally driven
travel segment in the
present-day world,
covering all age ranges
but one of the greatest
segments are the
Millennials, who can
hardly acknowledge a
day without internet and
transformed into adults in
the era of online travel
agencies and
smartphones; moreover,
its concept is aiding in
framing the future of
business travel, which
has changed with the use
of technology.
management program promotes growth by permitting
GROWTH OF BUSINESS TRAVEL GLOBALLY organisations to fixate on the business and
employees at work. Through booming corporate travel
Business travel has advanced globally, according to management, India can secure a better position”.
Rockport Analytics, from 5.8% in 2017 to 7.1% in
2018; however, it is forecasted for a balanced growth Approaching to the intranational (within India)
from 2019 to 2022. Furthermore, as stated from a business travel sector, women are viewed as 25%,
new report disclosed by Allied Market Research, the which is further predicted to grow as 41.6% of women
market was rated at $1266 billion in 2016 and is are getting matriculated in higher secondary
forecasted to attain $1657 billion come 2023, at 4.1% education and are joining top-level positions in the
CAGR (Compound Annual Growth Rate) during this professional scale.
period. This may have occurred due to the upsurge of
globalisation, express expansion of SMEs (Small & GROWTH OF INDIAN ECONOMY & ITS EFFECT
Medium-sized Enterprises) as well as the inflation of ON THE HOTEL INDUSTRY
infrastructural investment, which is predicted to
generate profitable circumstances for the corporate India has developed into one of the world’s fastest
travel market on the whole. growing economies, competing head over heels with
other developing economies on the planet, mainly
China. It is also one of the largest economies by
GROWTH OF BUSINESS TRAVEL TO & WITHIN nominal GDP (Gross Domestic Product), ranking at
INDIA $2,972 billion.

According to a whitepaper from KPMG, India is one of
the fastest thriving business travel markets in the
world with a spend of $37 billion in 2017, reaching
$46 billion by 2019 at an estimated growth rate of
11.5%. Out of the total spend, $7 billion arrives from
flights. Furthermore, it predicts India’s rise to be
amongst the top 5 travel markets by 2022. This can
be further sponsored with statistics from Rockport
Analytics, which exhibits India spend to be the most
rapidly developing business travel market in the world
by 2022 with its estimates close to $65 billion.
Jaideep Ghosh, KPMG India’s Partner and Head,
claims: “Corporate travel in India is being thrusted
with inventive technologies and travellers’ patterns,
sustained by millennials. A powerful travel
It is still persevering to harmonise with the world
economies, thus making it suitable enough for
regulating business from and within India. This
culminates in negotiating several jobs to the Indian
waterfront bringing in several corporate/business
travellers and meets, respectively.
Corresponding to the data issued by Department of
Industrial Policy and Promotion (DIPP), the hotel and
tourism division generated around $10.6 billion of FDI
(Foreign Direct Investment) between April 2000 and
September 2017.
This has been possible due to the economic growth of
our country, along-with the unmatched advancement
of I-T (Information Technology), enhanced

2

transportation, outspread education, increasing
earnings, developing business culture and innovative
way of life.
GLOBAL GROWTH OF THE HOTEL INDUSTRY
According to Statista and Deloitte, the overall trade
price of the hotel industry worldwide has cruised
beyond $500 billion in 2018 (currently standing at
$525 billion), which, solely, is anticipated to continue
developing at the rate of 6-7% in 2019 and ahead. Its
due credit can be dedicated to the booming travel and
tourism industry.
Moreover, hotel companies and chains like Hilton and
Marriott International are keen to enhance customer
experience, due to the surge in individual corporate
travel, by incorporating technology in order to survive
in the hotel world, which can be further accentuated
from a universal survey conducted by TripAdvisor in
2013, stating that 87% of travellers utilise a
smartphone and 44% make use of a tablet while
touring.
Most brands are retiring from the “home away from a
home” concept and are promoting smaller
guestrooms with functional architecture, public spaces
modelled to encourage social interaction that
advocate an active standard of living.
As indicated by the chart above, most millennial
business travellers are much intrigued in using
technological luxuries which are not included in most
hotels worldwide. These include USB ports, streaming
services like Netflix, and in-room chargers for portable
devices like laptops and smartphones; however,
those who regularly travel prefer managing ‘guest
profiles’ to hand over a personalised sojourn.
GROWTH OF HOTEL INDUSTRY IN INDIA
The hotel industry in India has flourished since the
post-independence era in the country, with the
Oberois and the Taj Group acquiring several British
properties and sustaining high standards of products
and services, thus spreading their business
internationally. The latter decades recognised the rise
of ITC conglomerate as a hotel company under the
brand of ITC WelcomGroup, and the introduction of
the Park Hotels. However, over the previous two
decades, overseas hotel-chain players like Marriott
International, Hilton and InterContinental Hotel Group
have arrived to the Indian market and expanded their
business. This has resulted in serious rivalry among
both national and overseas hotel chains, respectively,
especially in the metropolitan cities across the nation.
Moreover, the hotel industry is subject to 50% of
overseas exchange revenue for the country, as it
yearly witnesses 7-9% growth due to the increasing
traffic of MICE travellers/tourists.
The ones responsible for such a boom in the hotel
industry include: Delegation of Bureaucrats,
Corporate Tycoons, Overseas Tourists, Global
Seminars/Events, etc. However, the industry is greatly
reliant on metropolises, as they account for 75-80% of
its revenues, like Delhi and Mumbai, which are
heading the hotel revenue charts. Additionally, tier-2
cities, like Jaipur and Vizag, and tier-3 cities, like
Chandigarh, are also being targeted by these hotel
chains, therefore steadily increasing the rivalry in
these cities.
Some of the factors propelling the growth include
tourism, which is due to diversified culture and
topography, causing it to be a lively tourist hub for
communities globally; and room occupancy, which
decide the hotel’s revenue profitability, which also
relies on region, star ratings and quality of services
and amenities offered.
MICE & ITS RELATION TO BUSINESS TRAVEL
MICE is an abstract for Meetings, Incentives,
Conventions and Exhibitions. Meetings can be
defined as a body of corporates gathered for a
business session; these travels can even include a
corporate picnic. Incentives comprise of
benefits/bonuses offered as a source of
encouragement for better accomplishments.
Conferences include the setting up of tours,
conventions, seminars, etc. Exhibitions consist of
mostly brand displays (mainly electronics and
3

automobiles) and many companies launch their most
recent products.
It has developed into an indispensable role in
corporate travel. The industry currently ranks at $752
billion, developing rapidly at an extraordinary 7.5% in
the coming 5 years. Thus, several hotels have turned
up with 2-star/3-star hotel establishments, where
some of its biggest competitors include Courtyard by
Marriott, Hyatt Place and Hilton Garden Inn.
The fields and crews participating in this travel
category include corporate meeting planners,
meetings and conventions department of hotels,
logistics firms, professional trade managements, etc.
Due to this vast spread, many cities globally advertise
themselves as MICE regions and propose for events
through convention and visitor agencies. These also
submit allowances to entice large events because of
the raised revenues the visitors contribute to the
economic impact of the host location.
GROWTH OF MICE IN INDIA & ITS PROMOTION
OF BUSINESS TRAVEL
India, being the country of all season, has abundant
capability of capturing MICE travel. It only cropped
up after the liberalisation of the Indian economy in
1991, helping the booming tourism industry.
India’s global market contribution in the MICE industry
stands at a meagre between $1.5 billion and $2 billion,
as it is capitulating from a healthy clash from Australia,
Japan, Malaysia, Singapore and Thailand. It is
forecasted that the country will develop as an
important source of MICE travel by 2020.
Moreover, MICE is gradually improving with 15 to 20%
of annual growth predicted. The Government has
projected a 2% stake in the MICE market by 2025 at
USD 9 billion. Some of the
urbane cities like Mumbai,
Bangalore, Chennai and Delhi
are the dynamic business hubs of
the nation.
India also has a solid blend of
infrastructure like
lodging/accommodation,
convention facilities and city
interests, such as amusement
parks and museums. Some
metropolises have facilities
beneficial for the corporate sector
in hosting lucrative conventions,
like the Bangalore International
Exhibition Centre (BIEC), New-
Delhi Vigyan Bhavan, Bombay
Exhibition Centre, etc. and
several other transient properties with the greatest
requested corporate facilities, where the hotels can
achieve half the revenue from MICE alone. In 2016,
both Mumbai and Delhi hosted 40 and 18
conventions, respectively.
Additionally, the Indian rail and air systems,
respectively, are offering an excellent promise in
exploring India for an incentive tour, thanks to its
diversified culture and topography.
Adding to the aforementioned points, India has also
endorsed abundant accords with the first-world
countries to advance the tourism section, that benefits
MICE. This can be connected with good human
resource, since youthful, creative brains are involved
in MICE, as well as an inexpensive workforce and the
expeditious boom of the software industry.
As mentioned before, India is also now being aimed
by other nations due to its advancement in their
respective economies. According to Indianinfoline,
India is expected to produce 6.5 million outbound
luxury and MICE visitors by 2020, emphasising the
nation’s impact as an important market for MICE, as
stated from the statistics mentioned ahead of the 5th
MILT (MICE India and Luxury Travel) Congress.
FUTURE TRENDS IN INDIAN HOTEL INDUSTRY
The emergence of Artificial Intelligence (AI) - Many
hotels in this industry have turned to AI robots for
housekeeping duties and food and beverage services,
such as blending drinks at bars and delivering food to
the guestrooms, since there is no necessity of a
personal communication. Alibaba has launched an
innovative hotel, which is operated by only robots,
which are black-disc shaped, from the reception till
departure; it can be utilised by guests for check-in,
elevators and opening the rooms.
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Smart Rooms - These have speech-recognition
gadgets that can perform in-room operations, such as
adjusting the room temperature, lights and switching
on and off the television, as per guest choice, making
the room “smart”. Hilton has commenced enforcing
smart technology in rooms to produce convenient
rooms; moreover, Marriott International has set up
Alexas at rooms in US hotels. This factor can help
mould the prospect of this industry.
Mobile Room Keys – The smartphone apps being
provided by hotel companies are aiding them in
saving money from naturally dangerous plastic
keycards and getting rid of the commotion of keycard
inventories.

Technology and Social Media - This can be used to

improve the participation in conventions, which are
being modified with appealing technology, adaptable
workspaces to motivate teamwork and innovative
solutions, especially during MICE-related activities.

WAYS TO CAPITALISE & HOW TO IMPROVE

REVENUE

The hotel industry, in the country, can achieve new

heights through world-class architecture, which can
be advanced through reducing taxes on real estate
development to push up investments, since there is
subtle dearth of flawless architecture of hotels in the
country.

In addition to that, the advancement of MICE in the

country is equally crucial, by arranging hi-tech devices
that can aid in organising MICE-related activities, as
well as regulating services across exhibition directors
and professional coordinators. Resorts and hotels,
that advertise themselves as MICE terminals, should
be offered tax allowance and encouragement, such
as bonuses, which also can be accomplished with
effective marketing of the destination.

Word Count: 1,904

5
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