India is currently ranked among the top ten business travel markets in the world. It has spent over $29.6 billion in 2015 and this cost is expected to triple to $93 billion by 2030. This is led by the IT, pharma, automobile and construction sectors in India.
Recognising the potential of corporate travel, a number of existing travel operators and aggregators have a vertical carved out purely to cater to business travel.
There are large companies like Cox and Kings and Thomas Cook, which have business travel services. Online travel aggregators such as MakeMyTrip, Yatra and Expedia also have a corporate travel vertical.
Looking at the opportunity of a market so huge, brothers Murthy Arardhi and Sri Arardhi decided to start a business in the B2B segment, purely catering to corporate travel.
They founded FastCollab, a year ago in July 2016, as a travel assistant that lets you explore options, plan your corporate travel and make necessary bookings like flights, hotels and cabs and even manages all travel expenses.
In a corporate setup, travel involves more than just booking. There are processes, approvals and compliances involved. Sometimes there are Visa and forex requirements as well for international travel.
FastCollab is a platform that lets corporates manage all requirements under one platform. And unlike travel agents, where there is a lot of back and forth between checking, deciding, getting approvals and then making a booking, with Fast Collab, corporates can log in, search and book on their own.
â€śThe idea is to eliminate the time gap and make FastCollab a self-booking tool. Domestic flight fares, for example, change every minute. If you send a mail to the client and wait for an approval, by the time you get that approval, the fare changes. With our self-booking platform, the latency in fare changes is protected,â€ť says Murthy.
It also has the option of either making the booking or raising an invoice to the company directly.
When employees who regularly travel try booking from an OTA, they will have to sometimes pay from their own pocket and then reconcile. Murthy says that they are trying to eliminate that. FastCollab acts as your one stop shop which consolidates all travel reports and gives it back to them, making their job easy.
It has tools that track everything and lets employees claim expenses with ease. It enables faster reimbursements and these can be bookings across countries and various currencies.
For visas, it has a third-party partnership with FCM, which assists companies with the visa process.
Revenue is generated in three ways. For every ticket, there is a margin added, which FastCollab earns. The startup has built an algorithm that recognises how much the margin should be for each booking and it varies from company to company. Second, the airlines offer commission for every ticket booked.
Thirdly, there is something called a performance-linked bonus where airlines pay travel agents a set percentage if they book a certain amount of travel with that airline. For example, say you do 20 lakh bookings with Indigo per year, they offer a certain percentage of that as bonus every year.
FastCollab has about 60 clients of which 40 are regular and repeating customers. There are also several clients who log on to the platform once in a while to make bookings.
It counts companies like Apollo, Care Hospitals, Net Excel, Tek Systems, Whishworks and T-Hub -- where it is currently being incubated -- as its clients.
The market that FastCollab is operating in, currently has hundreds of travel agents apart from the large established players.
The competition is tough. So how is FastCollab making a mark for itself?
Murthy says that FastCollab is trying to emulate the big companies to give competition to the smaller ones.
â€śWe are somewhere between regular travel agents and the big companies. Regular travel agents donâ€™t have a proper system in place while big ones have too many large processes in place,â€ť Murthy says.
Additionally, it is now building new technologies which will differentiate it from others significantly.
It is building a technology that helps corporates keep track of and easily claim travel expenses like food, stay and travel while on a tour. All one will have to do is scan the bills, which automatically uploads the transaction against the travel. It helps with consolidating the entire travel under one platform.
The other piece FastCollab is working on is an AI-based assistant that helps corporates with their travel plans. The system will make suggestions in terms of the best mode of travel, most cost effective way of travelling, the visa requirements and more. Murthy believes that this will give it an edge against all travel agents and medium-sized players.
Going forward, FastCollab wants to open offices in other cities, starting with Bengaluru. The idea is to focus on cities where there are companies in industries that involve extensive travel like IT, Pharmaceuticals, Medical and Construction businesses.
With this business, apart from competition, Murthy says that one has to be very cost conscious. There is always a risk with cancellation. If a flight gets cancelled, it directly impacts not just the client but his business as well.
And in terms of competition, it believes that once its AI-based assistant and expense manager tools are developed, it should see a lot more traction.
In June, the company did about 400 bookings and revenues of about Rs 80 lakhs. Murthy says that the business is seeing a strong growth of 20% month-on-month.
Currently, FastCollab is seeing excellent growth in domestic travel. Nearly 60% of its revenues come from domestic bookings and that is what FastCollab, with its self-booking platform, is betting on.
This article has been produced with inputs from T-Hub as a part of a partner program.