MICE segments of corporate travel have demonstrated robust signs of growth
There are multiple shades and segments of tourism. The most notable among them are leisure, corporate, medical, education- and government-related and special interest travel. The last category includes travel for sports, films, adventure, pilgrimage and so on. Geographically, these forms of travel can be inbounded to or outbound from a country on a short haul or for long distance and for varying periods.
Corporate travel is presumed to be the most dominant travel and tourism segment, because it directly correlates to a country’s economy and trade. The higher the growth of the domestic economy and its international trade relations is, the greater the corporate travel into, out of and within the country gets.
Overcoming Covid-19
The only time this correlation broke was during Covid-19. While economies grew, their correlation to travel broke, necessitated by the medical need to maintain distance and driven rapidly by digitisation. For a brief moment during that time of 2020–2022, it was felt that corporate travel would never recover again, as meetings were held in virtual halls, and employees retreated to work vacations. But come 2023 and corporate travel has come back with a resounding bang. It is believed that pre-Covid figures in 2019 have been surpassed in many markets.
Overnight travel and MICE travel segments of corporate travel have demonstrated robust signs of growth, while the bleisure segment is gradually retreating. This is visible through sold-out hotel rooms in corporate and retreat locations and peak air travel demand. While digital meetings still exist as hybrid add-ons to physical meetings, they are gradually losing favour, as the need for handshakes and personal contact emerges as the preferred human language of business.
With inflation moderating, interest rates across developed and developing countries being put on hold after almost eight quarters of increase, fuel prices beginning to rationalise and employees returning to office, corporate travel is re-establishing its direct correlation to economic growth. It is time for travel agents, tour operators and hotels to recreate their value propositions for their corporate customers.
The Digital Dominates
While corporate travel reemerges, the buying behaviour of the corporate travel buyer is being rooted in the digital. Thus, travel and hospitality companies must imagine a completely new strategic form of corporate customer management, which should be shaped through a combination of digital and human services.
Corporate travel is set for a long, multi-year journey of growth and will be the defining factor for the global tourism industry with double-digit growth rates. It appears clearly now that corporates do not want to Zoom it but prefer to Zoom out.
Aashish Gupta is the founder of StrategyPluto and Consulting CEO of the Federation of Associations in Indian Tourism and Hospitality (FAITH)