Corporate travel that slumped after COVID-19 disruption has recovered very little, even after two months of domestic flights resumption, a senior executive from the travel industry said.
"At present, business travel is about 10 to 15 percent of the pre-COVID-19 level," said Dhruv Shringi, Co-Founder & CEO at Yatra.com, during a briefing on July 28. Yatra.com is one of the leading online travel agencies in the country.
Shringi added that much of the travel right now is essential in nature. "It is mostly essential travel that is happening now. Customers are also visiting friends and relatives. But there is no leisure travel at the moment," Shringi said.
Domestic and international flights were suspended in March, to coincide with the national lockdown to limit the spread of the virus. While domestic flights resumed on May 25, the government has allowed international travel to happen through the Vande Bharat Mission repatriation exercise, and air bubbles.
"The recovery in travel is gradual. It may not be a V or W-shaped recovery," said the Yatra.com CEO. Shringi added that capacity utilisation by airlines at present stood at about 15 to 20 percent.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
"If one goes by the daily update provided by the Ministry of Civil Aviation, about 60,000 to 70,000 people are travelling a day. This is in comparison to about 4.5 lakh tickets that were sold on an average daily, before COVID-19," Shringi explained.
Fares, consequently, have been 'meaningfully low,' as compared to last year, he said. "Yields are down by 7-8 percent from last year," added Shringi.
Shift is strategy
Yatra gets half of its business from corporate clients. To make up for the steep fall in corporate travel, the online travel agency is shifting gears.
"Yatra is becoming a digital services platform for its corporate clients," said Shringi. Its clientele includes 800 large corporates, 20,000 small and medium enterprises, and over one lakh hotels.
The company has tied up with education portal UpGrad to offer skill development courses for companies. It is also procuring consumables for these companies.
Yatra will also offer digital safety solutions. One of the solutions is Neodot, a bindi-like patch that can be stuck on the body to measure temperature. "This is ideal for places such as malls, hotels and airports that have high footfalls, and one needs to monitor body temperature," Shringi said.The company is hoping that the shift in strategy will help limit the decline in corporate travel. However, Shringi reiterated that the company has enough cash in its books. "We have $48 million in our balance. This will go a long way as our monthly burn rate is about $1.2 million," he said.