Blab Business
Indias Corporate Travel Shifts to Tier-2 and Tier-3 Cities
India’s corporate travel is moving beyond the glitter of its metros. In the first half of the current fiscal year, nearly 60 % of domestic corporate bookings are either originating from or routed through smaller cities, reshaping the country’s business‑travel landscape.
The shift is powered by the rapid rise of manufacturing hubs in Tier‑2 and Tier‑3 locations, now the go‑to destinations for executive travel. MakeMyTrip’s data shows that executive travellers account for 80‑90 % of hotel bookings across almost 200 non‑metro cities—including Ashoknagar, Hamirpur, Bhilwara and Jaipur. The platform’s corporate division crossed USD 1 billion in gross bookings in 2025, serving more than 40 lakh corporate employees and 500 large companies.
FCM Travel India, the corporate‑travel arm of Flight Centre Travel Group, reported that close to 60 % of its domestic bookings between April and September were on non‑metro routes, a sharp rise of 30‑40 % compared with the previous year. Raj Rishi Singh, chief business officer for corporate, flights and Gulf Cooperation Council at MakeMyTrip, said: "For instance, Ashoknagar, a city in Madhya Pradesh, sees 90 % of its total accommodation bookings tied to work trips. Similarly, Hamirpur in Uttar Pradesh, Shahpura and Bhilwara in Rajasthan, Jajpur in Odisha, Fatehabad in Haryana, each record more than 80 % of their accommodation demand driven by business requirements." The cities mentioned are home to major manufacturers such as Tata Steel, Tata Power and Neelachal Ispat Nigam Ltd.
Sunny Sodhi of FCM Travel India added: "Close to 60 % of all domestic bookings in the last six months were on non‑metro routes," noting that smaller cities are "emerging as the new growth engines" thanks to improved rail and air connectivity. He cited Goa, Surat, Raipur, Lucknow, Vijayawada, Nagpur, Indore, Visakhapatnam and Ahmedabad as key emerging business‑travel centres.
The hospitality sector is responding. The HVS Anarock September 2025 report recorded a 29 % year‑to‑date rise in branded hotel signings, adding 38,806 rooms. Tier‑3 and Tier‑4 cities accounted for 42.3 % of new signings, while Tier‑2 markets contributed 30.2 %. JLL’s March 2025 report found that Tier‑2 and Tier‑3 cities represented half of all hotel transactions, largely in unbranded mid‑scale properties, and that better‑quality hotels were now available in markets such as Amritsar, Mathura and Bikaner.
Corporate flight demand is also shifting. Airports in Nagpur, Vijayawada and Visakhapatnam—home to companies such as Vizag Steel Plant and Hindustan Zinc—have seen steady growth. Between April and September 2025, Vijayawada handled 682,129 passengers (up 11.6 % year‑on‑year), Visakhapatnam 1,456,686 (up 4.6 %) and Nagpur 1,395,384 (up 2.7 %). Industry executives say that direct flight connectivity and hotel inventory in smaller towns still lag behind demand.
Online travel agencies are recalibrating to serve the expanding SME and MSME sector. Gaurav Patwari, CBO (Air & B2B) at Cleartrip, said: "The single biggest driver of travel growth today is the expansion of the SME and MSME sector," adding that hubs such as Hosur, Chhatrapati Sambhajinagar and Tiruppur are key.
Thomas Cook’s Indiver Rastogi, group head of global business travel, noted that regional demand from multinational and Indian corporates is rising in industries such as automobile, oil & gas, FMCG and audit & consultancy, giving a strong lift to business travel in Rajkot, Indore, Visakhapatnam, Lucknow and Jamnagar.
Even leisure markets are seeing a corporate push. Yatra Online reports that destinations including Varanasi, Guwahati, Shillong, Puri, Pune and Kochi are emerging as meetings, incentives, conferences and exhibitions (MICE) centres, in line with expanding infrastructure and air connectivity.
The trend underscores a broader shift in India’s business‑travel ecosystem, with smaller cities becoming critical nodes for corporate mobility. The growth is supported by manufacturing clusters, improved transport links and a surge in SME activity, while the hospitality and aviation sectors are expanding capacity to meet rising demand.
The current situation shows sustained growth in non‑metro corporate bookings, increased hotel signings outside metros, and rising passenger volumes at regional airports. Upcoming corporate‑travel reports and airport traffic data will further clarify the trajectory of this shift, while regulatory developments around airport infrastructure and hotel licensing may influence future expansion.
The shift is powered by the rapid rise of manufacturing hubs in Tier‑2 and Tier‑3 locations, now the go‑to destinations for executive travel. MakeMyTrip’s data shows that executive travellers account for 80‑90 % of hotel bookings across almost 200 non‑metro cities—including Ashoknagar, Hamirpur, Bhilwara and Jaipur. The platform’s corporate division crossed USD 1 billion in gross bookings in 2025, serving more than 40 lakh corporate employees and 500 large companies.
FCM Travel India, the corporate‑travel arm of Flight Centre Travel Group, reported that close to 60 % of its domestic bookings between April and September were on non‑metro routes, a sharp rise of 30‑40 % compared with the previous year. Raj Rishi Singh, chief business officer for corporate, flights and Gulf Cooperation Council at MakeMyTrip, said: "For instance, Ashoknagar, a city in Madhya Pradesh, sees 90 % of its total accommodation bookings tied to work trips. Similarly, Hamirpur in Uttar Pradesh, Shahpura and Bhilwara in Rajasthan, Jajpur in Odisha, Fatehabad in Haryana, each record more than 80 % of their accommodation demand driven by business requirements." The cities mentioned are home to major manufacturers such as Tata Steel, Tata Power and Neelachal Ispat Nigam Ltd.
Sunny Sodhi of FCM Travel India added: "Close to 60 % of all domestic bookings in the last six months were on non‑metro routes," noting that smaller cities are "emerging as the new growth engines" thanks to improved rail and air connectivity. He cited Goa, Surat, Raipur, Lucknow, Vijayawada, Nagpur, Indore, Visakhapatnam and Ahmedabad as key emerging business‑travel centres.
The hospitality sector is responding. The HVS Anarock September 2025 report recorded a 29 % year‑to‑date rise in branded hotel signings, adding 38,806 rooms. Tier‑3 and Tier‑4 cities accounted for 42.3 % of new signings, while Tier‑2 markets contributed 30.2 %. JLL’s March 2025 report found that Tier‑2 and Tier‑3 cities represented half of all hotel transactions, largely in unbranded mid‑scale properties, and that better‑quality hotels were now available in markets such as Amritsar, Mathura and Bikaner.
Corporate flight demand is also shifting. Airports in Nagpur, Vijayawada and Visakhapatnam—home to companies such as Vizag Steel Plant and Hindustan Zinc—have seen steady growth. Between April and September 2025, Vijayawada handled 682,129 passengers (up 11.6 % year‑on‑year), Visakhapatnam 1,456,686 (up 4.6 %) and Nagpur 1,395,384 (up 2.7 %). Industry executives say that direct flight connectivity and hotel inventory in smaller towns still lag behind demand.
Online travel agencies are recalibrating to serve the expanding SME and MSME sector. Gaurav Patwari, CBO (Air & B2B) at Cleartrip, said: "The single biggest driver of travel growth today is the expansion of the SME and MSME sector," adding that hubs such as Hosur, Chhatrapati Sambhajinagar and Tiruppur are key.
Thomas Cook’s Indiver Rastogi, group head of global business travel, noted that regional demand from multinational and Indian corporates is rising in industries such as automobile, oil & gas, FMCG and audit & consultancy, giving a strong lift to business travel in Rajkot, Indore, Visakhapatnam, Lucknow and Jamnagar.
Even leisure markets are seeing a corporate push. Yatra Online reports that destinations including Varanasi, Guwahati, Shillong, Puri, Pune and Kochi are emerging as meetings, incentives, conferences and exhibitions (MICE) centres, in line with expanding infrastructure and air connectivity.
The trend underscores a broader shift in India’s business‑travel ecosystem, with smaller cities becoming critical nodes for corporate mobility. The growth is supported by manufacturing clusters, improved transport links and a surge in SME activity, while the hospitality and aviation sectors are expanding capacity to meet rising demand.
The current situation shows sustained growth in non‑metro corporate bookings, increased hotel signings outside metros, and rising passenger volumes at regional airports. Upcoming corporate‑travel reports and airport traffic data will further clarify the trajectory of this shift, while regulatory developments around airport infrastructure and hotel licensing may influence future expansion.
