Study on the impact of IT industry on outbound travel in India

A Chi-square analysis
Lakshmipriya Iyengar [10] Gaurav Bhogale [03]

2008

MBA SERVICES MANAGEMENT I YEAR

The Travel and Tourism industry is still one of the largest single businesses in world commerce and its importance is widely recognized. The tourism industry is now one of the largest sectors earning foreign exchange. In the face of many benefits, many countries have started assigning due weightage to the tourism industry in their national development agenda.

Tourism statistics:
The tourism industry as a whole is presently estimated to earn over US$ 3.5 trillion worldwide. The travel and tourism industry generates about 11% of world GDP and 200 million jobs across the global economy.

The fast development of the Indian economy combined with a growing middle class will see Indian outbound travels skyrocket within the next few years. Since India is undergoing many and rapid changes, up-to-date information is scarce. As a consequence, in-dept analysis of India outbound travel and the impact that IT has on it is a challenging and time consuming task, why this research is intended as a general scanning only. The influence that IT has over the number of Indians traveling abroad has already been established by analyzing the outbound traffic for the period when the IT industry had a slowdown. The general trend of Indians traveling abroad had shown a rising tendency. However, the peak season of summer 2001, saw a minor decrease due to a slowdown in the IT market.

The slowdown in the IT market meant that the largest group of travelers, the business travelers, dropped. Currently, business travel is noted as the main purpose for traveling. However, many businessmen and entrepreneurs generally understate their income as pure leisure travel can attract the attention of the tax authorities. Therefore many travelers state their main purpose of travel as business, thus enabling them to claim expenses as business expenses.

Kesari Travels is one of Indias Leading travel and tour operations company. It prides itself on constant innovation and pioneering services brought about by keeping in touch with changing customer needs. The president of Kesari, Mr. Sitaram Kesari has recently come across a report about the of IT professionals making business trips abroad. He has a hunch that frequency of travel is impacted by the number of years of work experience held by a person. If this hunch of his is backed by empirical evidence, he would like to launch special schemes catering to this segment of customers which would bring in additional revenue to the company. It also wants to assess how the IT industry has had an impact on the outbound travel trends on the Indian market and the various factors in the IT industry that influence the chances of outbound travel for an IT professional. Kesari Travels has hired the services of Survey-Qual Inc. a leading market research company to do a survey amongst Indias leading IT companies to ascertain whether there is indeed a correlation between frequency of outbound business travel and work experience. Accordingly, Survey-Qual Inc., will assess how the IT industry has had an impact on the outbound travel trends on the Indian market and the various factors in the IT industry that influence the chances of outbound travel for an IT professional. Survey-Qual has used data from 334 respondents from 15 leading IT companies across India. The questionnaire was designed so as to gain insights into work experience details, job description, frequency and purpose of travel. The findings were as follows:

Frequency of Outbound Travel (in a year) 1 20 22 27 18 2 1 1 1 92 2 14 24 30 15 2 3 2 2 92 3 7 10 20 4 7 9 8 11 76 4 0 1 1 2 14 16 17 23 74 Total 41 57 78 39 25 29 28 37 334

Work Experience (in years)

Total

H0 : The frequency of outbound travel for an IT professional is independent of his work experience H1 : The frequency of outbound travel for an IT professional is dependent of his work experience

Survey-Qual ran a chi-square analysis on this data to ascertain possible dependencies in the data. The results are tabulated as follows: Degree of Freedom 21 Level of Significance 0.05
2 2

Results Reject H0

Cal 186.32

Tab 32.671

Backed by the results of the primary research, Survey-Qual has reached the conclusion that the frequency of outbound travel by an IT professional is indeed dependant on his work experience. Specifically, the higher the work experience, more is the frequency of outbound travel in a year by an IT professional.