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‘Corporate Travel Worldwide Will Double In 10 Years’
 TQ3
president, CEO and global board chairman Marc Hildebrand in conversation
with Bhisham Mansukhani cites India as a relevant market not just because
his global clients include it frequently in their travel itinerary but because
he sees the explosion of local growth just round the corner
What is the level of growth that you anticipate for the
corporate travel market?
The growth of corporate travel is mirrored by the growth of the airline business,
which according to recent studies will double in the next ten years. A lot of
this will come out of business travel and out of emerging economies which include
China, certain Latin American countries and nonetheless, India. It is important
in the prelude to that, to time our establishment here.
How different is the Indian market in the international
context?
Every country is different and there is no one standard process applicable throughout.
There are several trends, which still remain the same globally. The developments
that take markets from emerging and evolved status play out similarly in all
these markets. They just happen at separate times. Online bookings are a trend
apparent in Europe and America and I see it now coming to India.
Have you observed any specific trends in the Indian market?
India still remains unique in so much as the labour costs account for 75 per
cent of our costs which is quite incredible in the present environment. The
cost of labour here is lesser than that in Europe and therefore can be deployed
quite actively. That is reflected in the fact that customers in India and most
of Asia are accustomed to being serviced. Yet the recent trend of reducing airline
commissions in India is a healthy one. When airlines move towards a zero commission
level, there is a faster move towards online reservations as it cuts away resource
consumption for both the agent and the airlines. We have achieved greater profitability
in countries that have moved towards a zero commission's regime. It is wrong
for the airlines to pay business travel companies commissions. It's absurd and
creates a conflict of interest as the agent is then inclined to work for the
airline's interest. We work in our client's best interest. The customer pays
us a fee for providing a service including the best pricing. I do not see us
as a distribution channel for the airlines. Our company is a consultant and
purchasing channel for the client.
Could you trace the evolution of business travel till date
and looking ahead?
Going from the vanilla travel agency that a corporate travel
agent used to be, that is now just one aspect of an entire proposition of value
that we offer. Account management, data transparency, ongoing T&E consultancy,
price negotiations, detailed expense reporting, process analysis. Our customers
spend hundred of millions of dollars a year on business travel and we optimise
these expenses to the tune of anywhere between 10 and 15 per cent which turns
up adding to their direct profits. These savings are found not only in reservations
but in the approach that companies take towards authorising travel. We bring
the efficient systems to the table.
We are no longer the distribution arm of the airline. Our objective is not pleasing
airlines. Airlines do not ask me if I am happy about their efforts towards direct
distribution. I do not have hard feeling regarding that. I remain convinced
that companies will still want to place us in the loop for our expertise and
array of services. Our philosophy is this -- the more my customer saves, the
more my customer saves, the more I will earn.
How do you help your customers attain cost effective with
regard to their travel spend?
These processes ranges from simply consulting wherein we help our customers
design their travel policy. The greatest form of cutting travel costs is to
travel less by identifying such opportunities. This question simply isn't raised
enough.
The complexity of our industry is deepening so quickly, the
only guarantee for attaining to the lowest travel cost model is by deploying
the right processes and the people best equipped to implement the same. Only
the large business travel companies are able to invest in the scale of technology
needed. This gap of accent on technology investment is getting bigger. We are
in a position to even compete with small niche players since we can take a customised
approach inspite of our size.
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Eyes Upside In Tertiary Indian
Cities
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| Bhisham Mansukhani - Mumbai
International business travel behemoth TQ3 bought its Indian franchisee
E Travel India (ETI) in May, following a three-year franchise relationship.
Marc Hilderbrand flew to India, specifically to complete the acquisition
formalities in May. While TQ3 has been working with E Travel India since
2002, it decided to acquire its Indian franchisee 'in light of a growing
multinational corporation interest in India and the need to bring India
up to speed in terms of systems'.
TQ3 currently has a presence in 85 countries with a 12 billion
dollar turnover and 12,000 staff globally. Hildebrand commented, "In
order to have a presence in India in 2002, we started working with E-travel
India. While that has worked well for the both of us, translating into
over 30 per cent year on year growth for the last three years, we felt
the need to own the company as many of our multinational customers were
increasingly including India in their proposals so much so that India
has now become a pre-requisite. An ownership position, strategically was
important for us as the growth of the Indian arm will be in a sense, synchronised
with our locations globally. We have to get into the top three."
TQ3 India managing director Ajay Bali revealed the company's expansion
plans from here on, saying, "We will be opening additional offices
in more cities to better penetrate the market. Chandigarh and Cochin are
two booming markets from a BPO point of view. While the metros are saturated
and suffer from a capacity crunch, the tertiary cities offer plenty of
opportunity for an upside."
Underlining the merits of the buy out, Ajay Bali, formerly
the CMD of ETI Travel said, "This is a good move, even from the perspective
of E Travel India as the investment into the company by TQ3 will be far
more substantial than it would have otherwise been. Further, the quantum
of growth that the company will now witness with access to holding company's
international network is up for speculation on the positive side."
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