‘Free Service Could Be Counterproductive’

GET Lionel CEO Gaurav Sundaram is busy not just augmenting his company’s share of the US$ 2.5 billion Indian corporate travel market. We are keen to get our clients to transcend the current trend of fragmenting towards integrating their travel spend and using the travel management company (TMC) to the fullest, he tells Bhisham Mansukhani

How have you positioned GET Lionel in the business travel space?

As an organisation that is constantly in the process of creating brand equity, it is important to concentrate on key areas so that we are not lost in the noise, so to speak. Clients these days are being given to believe by some agents that they can be everything to everyone. There is a difference between a one-window agent and an agent who claims to handle inbound, outbound and MICE, retailing to parties other than the core clientele. Then the corporate becomes one of the many customers. Today, an agent, consolidator and tour operator, all evidently handle corporate travel. It then becomes important for the client to tell the difference. Staying away from retail is one way we can imbue that distinction. We do not intend to do that. Our core market is the global corporates based out of India which does not have a global travel management company (TMC).

What is the profile of your target market?

These would include multinational companies that have Indian operations and Indian transnationals who are progressively increasing their spend but are yet to understand the merits of professional management of their travel or who have just allowed it to be fragmented amongst different suppliers.

Are corporates clear about the role of TMC?

To cite an example: One of our clients, a mega transnational perceived its airline ticket spend of Rs 30 crore annually as its travel spend in isolation. That is where we initiated a paradigm shift in their perspective. We said we wanted to manage not just their air travel expenses but their foreign exchange requirements, travel insurance, hotel room reservation, car rentals and several incidentals all encompassing their travel and entertainment (T&E) expenses adding up to about Rs 90 crore as that would constitute an optimum utilisation of our services. It was quite a revelation for that particular client.

Do you think the trend of corporates internalising their travel management is here to stay?

I think that trend is short-lived on two fronts, volume and complexity. A policy of internalising corporate travel management is not tenable in the long term. That said, there are companies that manage their employee travel, would still need to consult a specialist who would advise regarding and evaluate technology and MIS processes. We are looking at tapping this space. I still maintain however that Indian organisations trying to professionally manage and sustain the T&E expenses of their in-house staff, is an exercise in futility.

Is technology being used enough in the business travel space?

Not entirely. GDS is a classic case in point. GDS systems have many utilities besides just reservations. There are tools to create customer profiles and quality checks but in my experience, less than 20 per cent of these utilities are actually incorporated into processes. It has been reduced to a reservation module instead of evolving into an accounts management module. Ourselves, we can do more in this regard. The GDS companies themselves need to focus on these utilities to enhance the value of their product.

Do you support the thrust towards a zero per cent regime on the agent commissions' front?

Almost 98 per cent of all our business is transacted on a management fee premise. We also inserted the audit clause in our contracts with clients from the onset wherein we said that we so sure of our billing integrity that they could check our books. The element of transparency is vital. It is illogical for clients to believe that their agent are working on a zero margin basis or is actually being offered incentives to avail of their services. PLBs are not a permanent revenue model. There is no value for the agent or client, following this approach.

What do you reckon, is the size and growth rate of the Indian business travel segment?

Based on our research, the present quantum of all travel in India is pegged at US$ 3.5 billion of which corporate travel accounts for US$ 2.5 billion. The market seems to be growing in certain key cities in a way that far outstrips the rest of the country. Hyderabad and Bangalore are notable cases. I see an annualised growth of up to 12 per cent for corporate travel. The tendency to fragment business travel by not having a single agent for all locations, corporates
desisting outsourcing their travel management and generally lacking clarity, has been one of the barriers to sustaining this growth rate going forward. Currently, we have a presence in seven cities. We are looking to ramp up branch locations in Mumbai, Delhi, Kolkata and contemplating a buy out in Pune. We certainly don't want to be in too many cities as technology allows us to connect with tertiary cities using email and the GDS.