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Covid-19 & Indian Business Travel - The future !
04/072020

Covid-19 & Indian Business Travel – The future !

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This analysis, from a business travel consultant’s standpoint, outlines how Covid19 will impact Indian business travel. 

Covid19 will have a far greater impact on the global economy & travel than 9/11.In the immediate short-term, the impact on business travel is severe. Apart from lockdowns and suspended flights, a new aspect – that of employee willingness to travel will be an added dimension. Post COVID19, employers will need to insulate employees from health risks – either with structured medical protocols, vaccinations, on-road protection, insurance & other mechanisms. 

These aspects – corporate duty of care & aversion of employees to health risks associated with travel, are situations that most Indian travel programs have never recognized. This will demand creativity and new models of operations. 

In the medium term, business travel will get back its importance. This will be driven by economic reasons. It’s expected that most countries will actively plan broad basing their manufacturing rather than keeping everything in China. 

This will be a massive opportunity for emerging markets like India, Vietnam, Indonesia and Thailand. Further , every time there is a global recession, the Indian economy & consequently business travel has grown substantially – Post 9/11 and then again after the 2008 recession. 

The economic arbitrage that India offers for in knowledge based industries like IT / Tech Outsourcing / BPO should be in high demand. 

Business travel managers, in corporate enterprise will be well served, to use the current downtime to critically evaluate their programs. Despite , India’s growth to being the 7th largest global business travel market, most business travel programs in India subscribe to legacy out-dated processes. 

Inertia & the desire to maintain status quo, are two major bottleneck that are very visible in the Indian business travel buyer community. This is supplemented by industry being unable to articulate the value of technology & innovation – they are still caught up in offering the lowest fees possible & generally perpetuating legacy opaque systems.

As a business travel consultant, ProKonsul has often highlighted the historical absence of CXO attention on business travel optimization in Indian corporations. Post Covid19, it is expected that Indian CXO’s will focus their attention on their 2nd largest controllable expense – Business Travel!

With the incremental pressures on the P&L , they should demand effective cost control with optimization, innovation & accountability from their travel teams. 

Those travel managers & administrators who are unable to deliver increment program efficiency & value, will have a short shelf life ! 

These are some of the most important opportunities that Indian business travel programs have

1.Strategic sourcing 

To be successful, buyers will need to deliver meaningful value to suppliers who offer the best value. This will mean limiting the number of partners, developing a share shift model so preferred partners get more business & driving year on year savings. This will also mean that the current buyer approach of exclusively sourcing the lowest cost vendor will need to be questioned. 

It’s been proven time and again that there is a minimum economic cost, for a service to be delivered. If a vendor claims to magically operate below that threshold or at a significant loss, the only way that can be done, is that the vendor operates unethically. 

This approach to strategic sourcing will need to extend to every aspect of the business travel program – Airline sourcing / Hotels / Business Travel events & MICE and other component of the business travel lifecycle. 

This will be of even greater value to Indian multinationals who have an expanding global footprint but operate without a global business travel program. 

2.Automate/ adopt technology / Optimize travel administration resources 

Much of business travel in emerging markets like India , is heavy on human resources. It’s common to see several internal staff managing, tracking, checking, paying vendors. These are superfluous, in todays world. 

Unfortunately this is equally true of iconic Indian global companies, who are part of the Fortune 500 list. They have given little thought to adopting accepted best practice. Most still have a dis-aggregated program structure with retail buying driving significant corporate exposure

Technology will need to be adopted in every part of business travel 

  • Self-booking technology
  • Event management automation
  • RFP and Sourcing platforms
  • Expense management
  • Payment systems
  • Reporting and analytics 

Travel managers will be challenged to evaluate these solutions and present a business case to their corporate leadership. They will equally need to demand innovation and ideas from their business partners – travelmanagement companies, event managers , airlines & hotels. 

It is time to stop the exclusive & self limiting focus on using the cheapest fare or appointing the lowest cost vendor , as the primary measure of success ! Program value , optimzation and automation can deliver far greater value than just the lowest fee or fare. 

3.Business Travel Audits 

Just as all companies conduct financial and tax audits, ProKonsul believes that business travel audits must become the standard, in all corporate programs. 

As any corporate program ages, and different components are added at different stages, inefficiencies build up. This gets overlooked as the complexity rises and day-to-day firefighting becomes the standard.

ProKonsul is the only business travel consulting firm that offers a proprietary Program &  Process Analytics®  & complete suite of business travel audit solutions to validate invoicing, refunds, credits and commission reporting of the incumbent travel management company / vendor. 

To secure long term value through independent business travel intelligence, companies will engage external business travel consultants like ProKonsul,  who have depth of knowledge & the ability to optimise every element of the business travel lifecycle.

4.Secure immediate savings inherent in your business travel program

Global VAT Reclaim is the single biggest savings opportunity in Business Travel. This concept allows for recovery of the VAT / GST portion of expenses incurred overseas, in designated countries. The potential for savings exceeds 25% of specific expenses incurred . Similarly there are inherent opportunities in Business Travel MICE and Domestic VAT Reclaim. 

Post Covid19, Indian business travel managers will need to actively learn and implement best practice. They will need to present innovation and cost efficiency to their corporate leadership, as a way of maintaining relevancy & counting as an important part of the corporate decision making team.

Want to set up your 30-minute FREE consultation with a ProKonsul business travel expert?

                               Drop us an email  [email protected] or call +91-9873196115.

                                                We would love to work with you! Call us now !! 

 ProKonsul ® optimizes the business travel lifecycle of its clients. It delivers domain expertise in enterprise business travel. Established in 2014, it is the pre-eminent business travel consultant firm in India, Asia & emerging markets. We are located in Gurgaon, India. ProKonsul ®  advisory services are supplier agnostic & governed by a robust integrity policy. 

                                                        2020 © ProKonsul – All Rights Reserved 

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Business Travel MICE - Success in the post Covid19 world
03/242020

Business Travel MICE – Success in the post Covid19 world

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The post Covid19 business environment is likely to be extremely challenging. It’s important that every aspect, including Business Travel MICE, are reviewed and optimized. 

As a business travel consultant, these are some learnings that ProKonsul has executed for its clients, which can deliver immediate financial savings & a more structured approach to managing Business Travel MICE.

1.Calendarize all planned meetings annually 

It’s been seen across a variety of enterprise that business travel MICE (BT MICE) are generally based on Adhoc emergent needs. It is common to find business unit heads decide reactively to scheduling meetings & events – whether internal or with clients/vendors.

This ad-hoc approach poses an extraordinary amount of pressure on the internal travel & meetings team to source inventory, negotiate with respective suppliers &  organise requirements. Further, there is very limited opportunity for strategic sourcing, technology planning and optimization as each event is planned independently.

A far superior approach is to have all enterprise SBU & business heads calendarize events planned annually. Sales kickoff‘s, customer events, vendor meets & internal staff meets should be scheduled as part of the annual planning exercise.

A contingency for unscheduled meetings can then be plugged into this annual calendar to create an overall roadmap for the year. Data from the preceding year could be used to provide guidance.

2.Venue Planning 

Once a broad calendar of events is available to the BT MICE  team, the second step would be to plan prospective locations at venues. These would depend on budgets, facilities required, user preferences & prior events. There would also be a need to consider metro city location / historical &  beach resorts or simply extremely budget locations, based on event objectives.

The type of venue, and the related facilities and budgets, for each type of event in the calendar is an important step in operationalizing the plan.

This will require a degree of thinking to create a matrix of venue types/facilities and locations, that meet user needs. 

3.Strategic procurement 

At this stage, we recommend its customers to engage their strategic sourcing team. An alternate is to outsource this activity to a business travel consultant, who can independently source.

This phase would start with identifying hotel chains that may offer a large variety of accommodation options across different class categories, venue types, budgets &  locations. 

An example could be Marriot / Hilton or other domestic chains of hotels that offer a variety of venues, locations, inventory, and conferencing facilities. The objective, as a business travel consultant, is to recommend consolidation of all annual meeting spend across a couple of hotel chains rather than fragmenting it across a multitude of hotels individually. 

This approach generally will lend itself to financial benefits & value addition from the identified vendors who are able to now provide tangible value based on a committed volume of events. 

The next steps involve identifying potential event planners/managers who can provide the infrastructure required at the respective venues to operationalize the event. Creating a master list of required utilities, technology, and infrastructure that needs to be installed at the venue, can form the basis for building an RFP  to identify a set of event managers to support the entire spectrum of events planned.

3.Technology 

The importance of technology in a post Covid19, to minimize waste and inefficiency, cannot be overstressed. Event management technology can optimise logistics, reservations, travel & sourcing.

Agreed pricing terms including itemized costings into the enterprise ERP so that all SBU leads & BT MICE staff have direct instant access to negotiated terms. This creates a single virtual repository that can be centrally updated or modified rather than have a decentralized fragmented archive, which is the norm today.

Equally important is the ease and efficiency with which individual delegate travel & accommodation needs are consolidated on an event management platform to reduce administration effort.

4.Payment 

Given the scale of the BT MICE program, it is important to also plan the mechanism by which vendors are paid.. Efficient and quick processing of invoices, validation versus agreed terms and faster settlement can also drive improved pricing from vendors.

As a business travel consultant, ProKonsul actively recommends a meeting’s purchase card or a virtual card. This will facilitate quick reconciliation versus approved terms,  validate additional ad hoc purchases and settle claims in a speedy efficient manner. 

Deployment of a card based payment system will additionally deliver financial cashback, which is of incremental financial value to the enterprise.

5.Appointing a strategic meetings management partner (SMMP) 

Using a strategic meetings management partner (SMMP) is a well understood business practice in more advanced markets. However, in emerging markets like India, this is not a common business practice. 

This approach would require appointing one single vendor who would manage all events on a turnkey basis, negotiate with hotel suppliers & operate on the management fee model. This model may be more efficient for those organisations who have limited procurement and administration resources to manage a wide variety of events. 

This engagement will require a very strong contractual framework, to ensure that that the identified SMMP partner does not abuse the business model. In a post Covid19 world, where procurement and administration will be under extreme cost constraints, this approach of outsourcing to a specialist, is definitely worth considering.

As a business travel consultant, ProKonsul perceives tremendous pressure on every aspect of enterprise cost while facilitating business essential meetings and events. This is a fact that cannot be wished away. 

Further, ProKonsul believes that cost centers like travel administration, logistics and coordination will have to reduce resources and cut costs. The recommendations listed above can ensure that enterprise achieves its business objectives in a smart and efficient manner while eliminating inefficiencies resultant on perpetuation of legacy operational processes. 

It will be in the interest of travel administrators and managers to use the time off currently due to COVID-19, to rethink their work approaches.  

Question every aspect of your operations & build a business case for operational efficiency. This is the only way your CXO leadership will perceive you as a valuable business partner to the enterprise rather than a legacy cost center. New ideas, innovation, and tangible cost savings are the keys.

ProKonsul believes that that the time for inertia and keeping the status quo is over ! Unless travel managers/administrators can deliver on these aspects, their shelf life in the enterprise, is limited.

Given the financial pressures, enterprise CXO’s should also actively consider domain experts & consultants who understand the complexities and opportunities inherent in BT MICE. This can deliver quick, smart & efficient delivery of business objectives within restricted budgets.

 

Want to set up your 30-minute FREE consultation with a ProKonsul business travel expert?

                               Drop us an email  [email protected] or call +91-9873196115.

                                                We would love to work with you! Call us now !! 

 ProKonsul ® optimizes the business travel lifecycle of its clients. It delivers domain expertise in enterprise business travel. Established in 2014, it is the pre-eminent business travel consultant firm in India, Asia & emerging markets. We are located in Gurgaon, India. ProKonsul ®  advisory services are supplier agnostic & governed by a robust integrity policy. 

                                                        2020 © ProKonsul – All Rights Reserved 

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Business travel
03/122020

Secure savings in your business travel program- some low hanging fruit’s !!

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As a business travel consultant, ProKonsul has seen these simple steps to secure immediate savings in client business travel programs. Use them today in your program!

The single biggest objective that travel managers have today is to drive savings. These savings can be direct hard $$  or indirect soft $$ savings. Listed out some of the top saving strategies implemented by customers of ProKonsul.

1. Global VAT Reclaim 

This is the single biggest saving opportunity inherent in business travel programs across emerging markets like India.

This single category allows for savings of up to 29% on overseas business travel expenses in specific countries. The expense categories permitted for reclaim are specific and include all accommodation expenses food & business entertainment. 

Additional categories include overseas MICE expenses, marketing & consultants fee, amongst others. The most attractive aspect of securing Global VAT Reclaim is that any fees payable in only if you receive an actual refund. The paperwork is simple and business travel consultants like ProKonsul facilitate submission to the individual tax offices of the designated countries.

2. Domestic VAT Reclaim 

Effective handling of domestic reclaims can secure 18% plus savings on domestic hotel expenses. The impact of air ticketing ranges up to 5% on the actual air ticket costs. This aggregates to a substantial annual benefit. While deploying internal finance & accounts resources is effective, it may be more financially prudent to deploy external VAT recovery specialists. External specialists are more conversant with the overall process and prove more efficient from the resource and cost standpoint.

3. Smart buying strategies

Much of the procurement for business travel suppliers in emerging markets like India, is still based on a traditional “ supplier aggregation model”.

This means most business travel programs have an inflated list of preferred hotels & airlines, with whom the travel/ procurement department has contracted a preferred rate. However, there is limited consolidation of spend, which results in fragile relationships that have limited value and almost nil incremental year-on-year benefits.

Smart buying implies having a limited set of truly preferred vendors who get a significant proportion of your business travel reservations.  When this happens & you fulfill your volume or market share commitments,  they would recognize you as a credible committed client with an ability to shift business.

This develops stronger client-vendor collaboration & normally results in incremental year-on-year benefits which have both direct & indirect value.

4. Optimize Travel Administration Resources

It is common to see small and mid-size travel programs in India (travel spend between $1-3 Million)  have a high number of internal staff resources, who administer the program, support internal customer inquiries & keep checks on vendors.

Globally, it is seen that multinational travel programs can be managed through a single internal resource if the technology is deployed intelligently and irrelevant controls are removed.

It is important to conduct regular business travel audits and continuously refine internal processes, so superfluous resources don’t get added. As a guideline, your internal travel admin resource cost should not exceed 1-2% of your overall business travel program spend at the maximum.

5. Domestic car hire

Most emerging markets like India require domestic car rental services with a chauffeur drive facility for airport transfers/ intracity usage. With the advent of Uber, Ola and Grab, app-based car rentals are becoming the standard for airport transfers.

Car hire services through legacy agencies are highly opaque. Many local vendors offer car rentals based on garage-to-garage mileage with incremental fees being paid for exceeding a pre-defined time limit. Such modus operandi results in massive amounts of fraudulent billings.

Many progressive travel programs have shifted to GPS-based billing that is charged only between the time and location of pick up and the time and location of termination of service. Wallet-based payments or direct credit card payment by individual travelers is preferred versus a bill-to-company model. Such steps can reduce your car rental spend by 7 to 9% on an annualized basis.

The recommendations listed above should be actively explored by travel managers. Presented as the business case to your corporate leadership, will allow you to create a stronger more positive impact on your corporate leadership.  

The travel department can actively contribute to reducing overall corporate spending & optimize the process. It is important that travel managers don’t give in to inertia and maintaining the “status quo” but step out of their comfort zones to evaluate new and better ways of managing their travel programs. Active well presented recommendations to the corporate leadership, will result in the travel department being recognized as an important internal business partner & contributor to corporate success.

Want to set up your 30-minute FREE consultation with a ProKonsul business travel expert?

                               Drop us an email  [email protected] or call +91-9873196115.

                                                We would love to work with you! Call us now !! 

 ProKonsul ® optimizes the business travel lifecycle of its clients. It delivers domain expertise in enterprise business travel. Established in 2014, it is the pre-eminent business travel consultant firm in India, Asia & emerging markets. We are located in Gurgaon, India. ProKonsul ®  advisory services are supplier agnostic & governed by a robust integrity policy. 

                                                        2020 © ProKonsul – All Rights Reserved 

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Globalizing your Business Travel
10/152019

Globalizing your Business Travel program

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Integrating emerging markets like India into your global business travel program can be challenging.

Your recipe for success must include a well thought out strategy. Active engagement of in-country stakeholders and a clear “Go To Market “ roadmap are equally important.

Such markets have unique complexities and challenges. It’s important that you have a knowledgeable in-market business travel consultant/ India expert like ProKonsul. Prokonsul can help solve local market complexities and align the project with global objectives.

The Challenge

In commencing your India integration initiatives, some of your top concerns will include:

  1. Demand for legacy  high touch service delivery 
  2. Desire to maintain “Status Quo” in view of “unique India specific needs”
  3. Strong resistance to change
  4. Complex operating models & varying degrees of technical maturity – self-booking technology, expense management & payment systems
  5. Limited MIS, Data & Analytics on the health of the program
  6. Absence of a structured employee CSAT & vendor performance scorecard

To secure success, one would need to start by understanding the dynamics of  Indian business travel. Always consider employing an external business travel consultant who can help you navigate the road ahead to achieve success.

1. Market reality

Indian business travel market is  the fastest growing business travel market worldwide. The market stands at US$40B approximately. It will grow north of 10% YOY for the next 3-5 years. 

Despite the exponential growth in business travel, most India corporations still regard business travel as primarily a fulfilment activity. In-adequate attention is given to matters of strategy & forward planning. Success in business travel, is still largely deemed to be securing the lowest possible transaction fees.

Often, service fees are so skewed that the only way the travel management company (TMC) can operate is at a sizeable loss !!

It’s not uncommon for travel agencies/ Travel management company (TMC) to offer

  • Minimal transaction fee
  • Free account management
  • Free Onsite staff or implants
  • Extended credit and on-account payment facility

Many global travel management company’s have a very different (and truncated) technology, operating & service delivery model in India v/s their global offering.

There is very limited engagement from the senior leadership in the corporate business travel program. Most Indian CXO’s recognize that travel is a big cost. However, they are limited in their ability to drive meaningful change due opaque systems & lack of quality data/ analytics. Predominantly, buyers & travel partners share an antagonistic relationship, driven by lack of trust & transparency.

2.   “Unique” India specific needs

Often, in market’s like India, there is very strong resistance to change. It’s important to take an objective neutral view of such situations and understand the underlying drivers that fuel such comment.

Engaging a business travel consultant or India expert like ProKonsul allows you objectively navigate the dynamic’s and develop relevant market-specific responses.

Yes – there are many operating situations in India that very different from European & American markets. These have to be understood & taken in account when planning a transition.

Visae 

Indian’s require a visa to most countries. Further consular requirements can be complex. Requirements can vary even by the respective consular location where the visa is applied. This poses additional challenges when planning a self-booking tool (SBT) implementation. These would need to be thought through and planned to ensure an effective migration.

Credit cards & Foreign Exchange advances

Many companies in India do not provide their employees with corporate credit cards. If provided, they can be limited to  senior management. There is preference to work with foreign exchange advances. Alternately employees are equipped with foreign exchange advances using a debit card that is preloaded with the relevant currency.

Traditional Cheque payments 

Most companies still pay their travel agency/travel management company using a cheque payment or on account models. There is still limited lodge cards/purchase card implementation.

This results in a unique eco-system of travel advances for domestic & international travel. Supplier payments are made on-account payments with attendant reconciliation challenges. There are many organizations that still dont implement automation in business travel expense management , which pose additional challenges.

Market conditions

Enterprise business travel in India has just remained behind in innovating and accepting new ideas. A large part of the problem rests with the business travel industry, who have been unable to change the  narrative. They have been unable to verbalize and ideate value. Concurrently, buyers have not evolved  and understood best practice. They remain  focussed on fee minimization & using the lowest common denominator.  Hence the the old adage gets repeated often “ if you pay peanuts, you get monkeys”.

While these realities exist, it would be correct  to point out that …. Indian’s don’t live on another planet! What’s required is the need to understand issues, socialise the change and drive an effective transition.

3.   Engagement with the India stakeholders

The size & criticality of your Indian business travel program mandates a robust transparent engagement with your India team. This would require a multi-level employee engagement commencing with the India leadership team.

The best way to take this forward is to do a detailed objective assessment that includes

  • Survey the Indian employees & secure CSAT with the current program
  • Use this CSAT to establish new service delivery parameters / set expectations for the future 
  • Establish a check list of mandatory service deliverables & expectations of local India team across levels of management/ function
  • Evaluate the strengths & gaps in the current Indian business travel
  • Evaluate the value of current incumbent travel agency/TMC  V/s benefits consequent on implementation of the global program partner

Such analysis requires an external business travel consultant like ProKonsul, who can objectively assess inputs and connect the dots. Once the baseline assessment is done,  plan a formal presentation to the India leadership team. This is a key step in securing their formal buy-in which is essential for  future success.

It’s important for your India leadership to share this mandate with the wider organization. This will give confidence to your India team that your recommendation is based on solid facts. Further it will eliminate needless debate and pushback.

4.   Operationalizing the Mandate

Getting the mandate operationalized is now the next big challenge. This is the most critical part of your project. A lot of your success requires balancing your global objective with local business needs including cultural / operational nuances. 

The first step is to build a clear commercialization plan that outlines landmarks, tracks milestones &  service delivery stats.

Start with smaller pilot groups in SBU/ Regions, establish success and then widen the scope of the project.

Periodic CSAT surveys and benchmarking travel management company’s service delivery standards are crucial.

A project plan with scheduled check-in’s and sign-offs is imperative. Plan regular update sessions the senior management/executive sponsor in-country at periodic landmarks so they are kept abreast of the progress.

Based on your evaluation, you will probably find that you will need to conduct negotiations with your global travel management company (TMC) to meet India specific operational & commercial expectations.

High quality account management support from your preferred travel management company would be required both globally and in-country. This is essential to ensure your internal objectives interlink with your partner’s ability to deliver locally.

The assumption here is that you intend to perpetuate an existing relationship rather than conduct an RFP for a new vendor. Conducting a new RFP will require a different approach.

Your travel management company must assign a transition team, which project manages the implementation.

A note of caution – account management service delivery and project management can be widely different in-country versus global standards. This is a reality even with the established global travel management company’s (TMC). Be sure that you have effectively evaluated the process as also the specific candidate who will be responsible for this from your TMC.

Once the negotiations & commercial considerations are finalized alongwith the operational delivery, the stage is set for the actual program rollout!!

5. The Moment of Truth – “Going Live”

Planning a smooth “Go Live” can be both exciting and nerve wrenching !!

Getting to the moment of truth  will require several components to work in tandem:

  • Structured Employee engagement
  • Roadshows to socialise the changes in program management & operational processes
  • A continuing user feedback & survey mechanism through CSAT Surveys
  • A “Success Scorecard” that recognizes vendor program management & success with business-critical initiatives
  • Smooth de-implementation of the incumbent travel management company, if required
  • Progressive rollout of new phases in the project

The focus in this stage is to make the transition as free from “noise & smoke”, as possible.

It’s a  fact that something’s will not go as planned …. It’s important to tackle this with minimum fuss  thru an escalation matrix and  tiered levels of support 

6. Tracking Success

While the the program transitioned successfully, its important not to move your foot of the gas pedal! A program, especially in a market as complex as India should be monitored by you directly for at least 6 months post the “Go Live”.

This stage requires active involvement of your entire team and your an in-market business travel consultant. Progress needs to be tracked effectively against targets and challenges mediated.

This will include:

  1. Frequently scheduled meetings with your project leader & in- country support teams
  2. Close tracking of employee CSAT Surveys & Vendor “Success Scorecard”
  3. Re-training & refreshers so the employee user-base clings with  the new program
  4. Present regular executive leadership reviews  on performance, gaps & steps to improve.
  5. Active involvement of your in-country executive leader to drive unambiguous messaging
  6. Set the agenda for the next set of important transitions related to business travel.

Securing success in complex markets like India requires a clear understanding of market dynamics & unique user needs. 

Welcome to India !!!

 

Want to setup your 30 minute FREE consultation with a ProKonsul business travel expert ?

Drop us an email  [email protected] or Call +91-9873196115.

We would love to work  with you ! Call us now !! 

 

ProKonsul ® optimizes the business travel lifecycle of its clients. It deliver’s domain expertise in enterprise  business travel. Established in 2014, it is the pre-eminent business travel consulting firm in India,  Asia & emerging markets. We are located in Gurgaon, India

ProKonsul ®  advisory services are supplier agnostic & governed by a robust integrity policy. 

2019 © ProKonsul – All Rights Reserved

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