As business travel plunges, firms save thousands of crores in costs – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/company/corporate-trends/as-business-travel-plunges-firms-save-thousands-of-crores-in-costs/articleshow/84154988.cms

SynopsisAmong the large companies, TCS posted a decline of Rs 2,215 crore in its travel costs to Rs 1,081 crore in FY21. Reliance Industries posted a 70% decline from Rs 788 crore to Rs 236 crore. Bajaj Auto is among the companies witnessing the steepest decline in travel cost — 93% — from Rs 77 crore in FY20 to just Rs 6 crore in FY21.

Travel costs for corporate India slumped 70% in the previous fiscal, with home computers and hand-phones replacing oak-panelled boardrooms and business-hotel poolside lawns as meeting venues through a period of protracted lockdowns and mobility curbs.

An estimated 180 companies reported this decline in consolidated travel costs, data compiled by ETIG from company annual reports showed, leading to major cost savings for India Inc.

Among the large companies, TCS posted a decline of Rs 2,215 crore in its travel costs to Rs 1,081 crore in FY21. Reliance Industries posted a 70% decline from Rs 788 crore to Rs 236 crore. Bajaj Auto is among the companies witnessing the steepest decline in travel cost — 93% — from Rs 77 crore in FY20 to just Rs 6 crore in FY21. ICICI Prudential has had an 81% decline to Rs 10 crore in FY21.

A Tata group official said a lot around ‘Why we travel” will change for all group companies. “A lot of critical work has been done digitally including signing deals or major contracts. So, while travel will happen wherever needed, it will not go back to the previous way of getting work done,” he said.

Biocon has been the company posting the steepest decline in travel costs — of 98% from Rs 87 crore to just Rs 2 crore.

As Business Travel Plunges, Firms Save Thousands of Crores in Costs

“Industries like pharma will have to resume travel. In our kind of business, travel is important as we need to inspect or audit vendors and meet our customers,” said Biocon chairperson Kiran Mazumdar-Shaw.

Going forward, Mazumdar doesn’t see any huge savings coming in from travel and marketing costs.

There has been a 97% decline in travel costs for mid-sized IT firm Birlasoft. For FMCG bellwether HUL, the travel cost declined 43% from Rs 157 crore to Rs 90 crore. IT firms Infosys and Wipro witnessed 80% and 71% declines, respectively, while Dr Reddy’s Labs reported a 70% decline. Rakesh Sharma, ED, Bajaj Auto, said travel curbs still prevail due to the fragility of the situation and the second shot is yet to be given to everyone, particularly the younger people.

“We are not making any international visits and will open the travel aperture cautiously based on the situation in destination countries, vaccinations as well as other travel requirements,” Sharma said. “Face-to-face meetings and being in the markets are essential for advancing the business agenda, but the last 12 months strongly indicate that efficiencies are possible and virtual methods can be better leveraged. We are keen to organise our work systems to capture such efficiencies.”

Nine European countries will allow travellers from India who have received Covishield vaccine to enter their territory.

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