This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
The Magazine On The Business Of Travel. Like It?
Adventure tourism is witnessing an impressive growth in India. One of the indicators being, the inbound travel in the adventure space which is growing at an estimated rate of 5 per cent to 7 per cent per year. India has a vast coastline and about 73 per cent of the Himalayas waiting to be explored with the right infrastructure.
What is the state of adventure tourism in India?
Indian adventure tourism is yet at a nascent stage that is charting its own growth path. One of the contributors to the accelerated growth of this niche segment is the growing number of operators across different adventure beats including hiking, rafting, hot-air ballooning, paragliding etc. While there is an increase in the number of service providers, the larger question about their regulation needs to be dealt with. The adventure tourism industry still includes an unorganised sector that needs to come under immediate scrutiny. Laying foolproof checks and standing operating procedures will further accelerate the growth of adventure tourism in India.
Two months ago the government released an adventure tourism policy? What is your take on this?
It’s a step in the right direction. The adventure tour operators along with the rest of the stakeholders will be benefitted with consistent guidelines and set rules to follow. While the guidelines are welcomed, we hope to see an effective execution. There is a need for larger dialogue with the associations and operators to constantly analyse the policy and address the gaps. The policy must be mapped to local environmental aspects as much as the implementation of its feasibility. There is a need for an all-round assessment of the clauses that make the policy comprehensive.
For instance, the adventure equipment must meet the international safety standards for the sector to exponentially and consistently grow. However, in the absence of manufacturers of this equipment with required safety conditions in India, compel the operators to import them. Heavy import duties discourage the purchase of standardised equipment that leads to an increase in the risk factor of operating adventure tourism. All the relevant stakeholders must work with the government and associations to study the nitty-gritty of the policy and make it as comprehensive which will, in turn, lead to a sustainable development of the sector.
Should we be only dependent on the government or should private sector chart their own path and raise standards in this space?
A major share of the responsibility rests with the private sector given they are the subject matter experts. While they are at the receiving end of the profit, to be a responsible service provider works in their favour. It is in their interest to promote sustainability and operate responsibly. The forests in their originality will attract more visitors and mountains that remain unpolluted will stay with us longer. Education and Right Practices being the two key elements, the private players must take these up to sustain the adventure sector in India.
What are the opportunities that you see in the adventure travel space?
We haven’t even scraped the tip of adventure travel opportunities available in India. With the coastline we have, the river bodies running through the entire length and breadth of the country and the beautiful mountain ranges in the north and south, the national parks we have in the country we can in the next 10 years be the top destination for Adventure Tourism. It is an achievable target if we work with a long-term approach and realise the potential of this market.
Adventure tourism is a space that needs to be looked upon in more depth as it does not only contribute to the overall growth of the industry but ensures the ecology, mountains and the forests are safe. We can also see a dearth in domestic players in the adventure equipment manufacturing sector that is giving an open field to many foreign brands to become a household name. This shows the immense potential of the adventure sector and its various subsidiaries have.
Are Indian operators geared up to address the demands of the new age adventure travel community?
There are many Indian operators who are very well equipped and are efficiently handling the demand of the new age adventure travel community. There is excitement and eagerness to grow further and contribute positively to the adventure community. However, a majority portion of the fraternity seems to have underestimated and unexplored the industry's potential. While the resources needed to successfully operate the sector are in abundance, those in control must network and work with a common goal. The right set of collaborations between various stakeholders will prove fruitful for the entire adventure ecosystem.
You have completed one year in this space? What are your thoughts on the industry?
Trip 360 was started with the intention to create safe, sustainable and social experiences for travellers across the world. During the last one year, we have materialized some wonderful journeys to far out places like the South Pole and Mt Vinson Massif and taken our travellers to climb the remote mountain in Papua and brought them back safe. We have tried to keep the spirit of adventure alive and up the game at every given opportunity. Our travellers have cherished every bit of experience we’ve offered them. We have consistently introspected and kept innovating to ensure a greater contentment of our customers - whether it's cycling from Mumbai to Goa or walking the Indus Frozen River in Winter Ladakh.
We need to educate our clients about all things adventure so people don't get drawn with wrong ideas. I feel the adventure industry in India both from its stakeholder's perspective and from the client's perspective is going through a shift and it's very important that at this learning stage we make the right decisions.
Organised by Red Hat Communications, the half-day conference saw leaders from cross section of the industry pondering over the challenges that industry faces and possible solutions through two panel discussions titled as ‘Technology & Tourism – Boon or Bane’ and ‘Aviation – Challenges for Growth and Decline’.
Welcoming the audience, Jyoti Mayal, Secretary General, Travel Agents Association of India (TAAI), and the organizer of ICONIC Forum said, “We at TAAI, as an industry association wish to work closely with the Ministry of Civil Aviation and other stakeholders to draft the guidelines for better policies and governance for the future. In terms of GST implementation, we want a proper document draft to set the right processes in place.”
Delivering the keynote address, Ashwani Lohani, Chairman, Indian Railway Board, said that Indian Railways is investing hugely in “technology for passenger security and convenience” by introducing new-age automatic door closers, fire sensors, entertainment systems inside trains, smart card ticketing, etc. “While the ‘personal touch’ cannot be ushered by technology, it can be used as a tool for passengers to enhance their experience,” Lohani said and added that technology is being put to good use by the Indian Railways to bring sweeping changes in the quality of passenger comfort and interface. He noted that technology can never replace the experience of a people-to-people interface, therefore it is merely an enabler. He shared that Indian Railways is consistently looking to incorporate technology without exactly replacing the traditional ways already in its milieu. He informed that the railways had undertaken a large-scale program to install wi-fi connections at all stations. “Currently, we have this facility at around 600 stations. In the coming two and a half year, we will cover all the railway stations and provide them with Wi-Fi connectivity,” Lohani said.
The panel on ‘Technology & Tourism – Boon or Bane’ was moderated by Ashish Kumar, Managing Partner, Agnito Consulting and panelists were Suman Billa, Joint Secretary, Ministry of Tourism, Govt. of India; Dipak Deva, MD, Travel Corporation India; Rakshit Desai, MD, FCM Travel Solutions India; Sandeep Dwivedi, Chief Operating Officer, InterGlobe Technology Quotient; Aloke Bajpai, CEO and Co-founder, ixigo and Avijit Arya, Chief Mogul, Internet Moguls. They were of the opinion that technology has changed the way of doing the business.
Billa said that technology is revolutionizing the way business is done and there is probably in India no other sector that is getting as much impacted as the tourism sector due to proliferation of technology. “It is important for government stakeholders to adapt and become sensitive towards these changes and how fast we are going to scale up to adapt the change,” Billa said. Bajpai said every cycle of disruptions will have loser and winners and as an industry we have to think which side we are sitting on. “We need to reinvent our business and win the rewards,” Bajpai said. Dwivedi said that technology is a boon only if we evolve with the pace of the technology and prepare ourselves to sustain the demand. Desai was of the opinion that it is not technology but the availability of the cheap capital infusion that has brought in disruption in the country. Arya said that industry should treat technology as an enabler to the industry. Deva was of the opinion that despite technology travelers will need personal assistance which technology cannot provide.
Andhra Pradesh which is currently receiving 2.7 lakh foreign tourists aims to become top inbound destination in India. “We are working on a vision document which has been prepared by the state for the next 10 years. The document is divided into two phases: the first phase is getting over in 2029 and the second phase is by 2050. The documents aim to position Andhra as a top domestic and inbound destination by 2024 and 2029 respectively. We are lagging behind in foreign tourist arrivals (FTA). Our position in terms of FTA is 15th as of now and 3 years ago we were ranked at 22nd. Three years ago we were getting only 70,000 foreing tourists. Today we are getting 2.7 lakhs foreign tourists. In the next 2 years, we want to reach 5 lakhs and in another 10 years, we want to reach at top,” Mukesh Kumar Meena, Secretary –Tourism, Govt. of Andhra Pradesh said on the sideline of a press conference in New Delhi recently. Andhra is currently ranked at third position in domestic arrival. “Our aim to reach at the top in next 5 years,” he informed.
Keeping the target in mind, the state tourism ministry is also trying to develop adequate tourism infrastructure in the state by attracting private investment into the sector. “We are looking to attract private investment. We have received 195 proposals in last 2 years under which around Rs 15,000 crore of investment has been proposed. Our target is to complete the investment of Rs 10,000 crore on ground to create a lot of infrastructure by 2020. We have already completed Rs 4000 crore on ground and another Rs 6,000 crore will be completed in next 2 years,” Meena said adding that these are gestation stage for construction which takes time.
Elaborating further, he said that the Ministry is also emphasizing on developing 4 tourism zones in the state. “The first is the Vizag Zone where some sort of infrastructure is already in place. Vizag is already receiving a lot of people from the eastern and NE states. Here, we are creating an integrated resort in 40 acres which will have amusement parks, museums, craft village, accommodations and convention facilities. Hotels have already taken land there and we are now looking for some amusement park players for which tenders are already out,” he said and added that another important master plan has been prepared for River Island in Vijaywada on Krishna River where we have about 700 acres of land. “We are planning to set up a wellness resort to cater to the high end segment and amusement parks for common tourists. We have already finalized few thematic parks here. We are now calling for tender for 2 wellness resorts and a people’s plaza. There are small two islands of 70 acres and 40 acres,” Meena revealed.
Another zone that the state government is planning is the adventure zone in Andikotta. “It has got beautiful gorge, an old fort and beautiful facilities for adventure. We have sanctioned ropeway there,” he said. And the last tourism zone comprises of the Buddhist circuit. “Initially, we have identified 5 places such as Visakhapatnam, Srikakulam, Vijayawada, and Nagarjuna Sagar etcetra out of the 40 Buddhist sites in the state. We are looking at setting up Buddhist culture centre and basic infrastructure,” Meena informed.
Apart from these, the state tourism ministry is also developing beaches to make Andhra a beach destination. “We have identified 5 beaches in Vizag and surrounding areas. We have already developed 3 beaches and development works are going on for another two beaches. All beach destinations will be ready in another 6 months,” he said. The state government has already allocated 12 acres of land to the Lulu Group for development of a Convention centre in Vizag. The foundation stone has been laid down,” he said.
Speaking on the marketing and promotional strategy, Meena said that the state tourism department is going to organize roadshows in overseas and various Indian states. “We have been participating in trade fairs and promoting the destination on various media channels including social media. Last year, we launched three campaigns. Our TV campaign is getting ready and we will be launching it in October. Overall our tourism budget is Rs 270 crores and marketing Budget is Rs 30 crore,” he said.
Virgin Atlantic recently celebrated 18 years of its operation in India since it launched its first flight from India on July 5, 2000 from New Delhi to London. Since then, Virgin Atlantic has welcomed over three million customers on board. T3 talks to David Hodges, Country Manager at Virgin Atlantic, India to understand the performance in India market.
You have completed 18 years in India. How has the journey been so far?
It has been an exciting and adventurous journey for Virgin Atlantic and Indian customers as well to try and get a fly on an airline with vibrancy. It’s been a great journey and the future is going to be even more exciting. We are looking what more we could more in India and how we can make our experiences for our customers in India even better.
What is your expansion strategy?
This is really exciting time for VA in India. The growth in this market is massive. The domestic market is very strong and the international market is also growing at good rate. We are thinking how much convenience we can give to Indian customers. We are expanding and enhancing and thinking how we can we give more choices to Indian customers. We have a code share agreement with Jet Airways. We see really good growth in Indians travelling from Mumbai to US on Jet Airways. We are also looking at how we can tap the potential of more destinations in India. There is tremendous growth from cities like Bangalore, Hyderabad, Chennai and others. Hence, VA is also actively looking and considering as it is going to be an exciting future.
In short term, we are looking at strengthening the partnerships. How do we work better with Jet Airways? How do we deliver onward connectivity from Delhi and Mumbai and this is the big part of our expansion as of now. We are looking at how we deliver onward connections to more cities in India. In medium terms, we are optimistic about what we can do about this market.
What is the percentage of traffic that flies with you beyond your hub in London?
We are taking large number of people to US from Mumbai. One can now connect to Virgin services from all over India through our partnership with Jet Airways, and reach destinations all over the UK and USA connecting with Flybe and Delta Air Lines. We are the most preferred for Indians to fly to Scotland. We also have JFK and both west and east coast from Heathrow. We are starting a Boston-Heathrow service and we also announced to starting Las Vegas service giving passengers more options in US. The great thing about the UK transit system is that you do not need the transit visa if you are transiting within 24 hours. I see a huge growth opportunity in India.
How has the occupancy and yield been?
We have been witnessing over 80 per cent and it looks really positive. We also have yielding traffic. We offer the best experience. The Delhi route is as popular as ever among Indian customers who love the great Indian food, the latest Bollywood films, interacting with our Indian crew and using our in-flight Wi-Fi to stay connected with their families as they travel. It’s also a time of tremendous growth for Virgin Atlantic in India.
You have announced of launching corporate programme for SMEs?
We launched a new reward programme with additional rewards called FlyingCo for SMEs. A free-to-join rewards programme, businesses will earn FlyingCo miles on all aspects of business travel like flights, home stays, foreign exchange, in addition to FlyingClub miles that individual travellers earn being part of the regular loyalty programme. Over the next few weeks, we will be out talking to SMEs. This is really exciting product. We are entrepreneurial airline and India is full of entrepreneurs.
The coming together of Ministry of AYUSH and the Ministry of Tourism will result into a win -win situation for both in terms of promotion of tourism and AYUSH both, opines Shripad Yesso Naik, Minister of State (I/C) for AYUSH, Govt of India. “Foreigners are attracted towards the yoga. We have to develop infrastructure as more tourist will be attracted to India due to yoga. We had a meeting with Union Tourism Minister and the Minister agreed to help us in promoting AYUSH. We are trying to work out how we can proceed jointly,” he said.
Replying to a question over AYUSH emerging as a major contributor in establishing India as medical tourism hub, Naik informed that the Ministry of AYUSH has signed MoUs with 12 countries for cooperation and research. “We have 10 chairs in foreign universities just to teach Yoga and other ancient medicines. Our information centres are working there. Gradually we are going outside the country and people are accepting this,” he informed.
Enumerating the initiatives taken by his ministry, Naik said that All India Institute of Ayurveda was opened last year in Delhi to bring in the synergy between traditional wisdom of Ayurveda and modern diagnostic tools and technology. “It is a good model and at par with AIIMS in allopathy. It has started working towards facilitating quality patient care and research, bridging gaps in scientific information about quality, safety and efficacy of Ayurveda products, and developing benchmarks of Ayurvedic education, research and healthcare. At the time opening, 400 people were coming per day and this number has now gone upto 1200. We are developing such type of institutions as per our Budget. We need more funds to open more such institutes and have asked for enhanced Budget from the government,” he informed.
He also informed that his ministry has opened North Eastern Institute of Ayurveda and Homeopathy at Shillong in Meghalaya. The institute is having College ofAyurveda and College of Homeopathy with admission capacity of 50 students each along with a 100-bed Ayurvedic hospital and 50-bed homeopathy hospital. “We are getting good response. There are 50 seats for graduation and all seats are full. In Tripura, we started recently Regional Homeopathic Research Centre and Hospital,” he said and informed that the Ministry has announced AYUSH hospital in each district of the country. “We have already approved 100 such proposals of different states. We will have more than 600 hospitals in next 5 years. It is progressing step. We have adopted 10 districts where AYUSH and homeopathy is coming. The biggest benefit is creating awareness about health. We will take 100 districts and these all will have integrated facilities for alternative medicine,” he said.
Naik also informed that his Ministry is looking at an integrated Ayurveda resort in Goa, Rajasthan and Kerala. “We are also looking at promote AYUSH with tourism. We have already started working in this direction. In next 8-10 years, AYUSH will not be alternative system of medicine but it will be in the mainstream,” Naik informed.
The Ministry of Tourism (MoT) is in the process of appointing consultants for each iconic sites announced by the Financial Minister during his Budget speech of 2018-19 for 10 iconic sites. “We have initiated the development of the iconic sites. The main parameters of identifying these sites were footfall at these destinations. We ended of selecting 12 such sites for the development. The development includes better connectivity and even more aggressive marketing of these destinations. We have visited these sites and had stakeholder consultations with the industry. We got their views, looked at the existing facilities and the existing gaps. Our consultants have done away the preliminary gap analysis what is required at these sites. But, now we are in the process of appointing or selecting one consultant for each site so that they look at the feedback which we have got from the stakeholders and come out with a Master Plan for the development of these sites. With this, we hope to iron out many of the challenges these destinations face,” Verma said. Accepting the fact that these sites face huge infrastructure challenges, she informed that after getting the Master Plan there will be another round of discussions with stakeholders.
Talking about the ‘Adopt a Heritage Scheme’, Verma said that the Ministry is getting a lot of bids against the scheme. “We are in the process of signing MoUs with many of the organizations. Even schools have come forward to adopt a monument. It is really good to see that it is not only the people or industry or organization who have the stake in promotion of tourism but also others who have passion for maintenance of tourism destinations are coming forward to join hands with us in our endeavor,” she said adding that the initiative of ‘Adopt A Heritage’ scheme is a very unique initiative and will go in a long way in creating world class infrastructure and maintaining them at global level at various important tourist sites.
She also spoke on connectivity and emphasized that the Regional Connectivity Scheme (RCS) of the government in fact proving to be a total game changer for tourism. “As far as connectivity is concerned, huge strides have been taken in all directions. There has been a huge improvement in air connectivity. Udaan scheme is connecting many of the unexplored destinations in our country. The number of new flights is coming up; 400 airports are getting connected. With this, we hope to take tourists to those destinations in the country which are hitherto completely unexplored,” she said and added that all efforts of the Ministry of Civil Aviation is going to fructify this year resulting into more footfalls to these destinations. She also informed that with better connectivity domestic tourists are also travelling unexplored destinations and even in off season all hotels are getting good occupancy.
The Secretary spoke a great length on marketing and promotional strategy initiated by the Ministry of Tourism. “For the first time, we have drawn the integrated marketing plan which not only look at the centralized global campaign but also takes into account the marketing initiatives of the our global overseas offices. We have recently succeeded in restructuring our overseas offices. We are now having 8 major hubs and these hubs will be served by PR agencies and India Tourism Marketing Representatives. Our overseas offices have now become stabilized and we are in the process of sending senior officers to man these hubs,” she informed.
With this, the Ministry also changed its campaign strategy. “Earlier, there was a generic campaign for the entire world. The ‘Incredible India campaign 2.0’ which we launched on the World Tourism Day last year, is more thematic and market specific. We have drawn up global campaign plan and the plan was launched. The campaign is already running on various electronic channels and digital platforms. Another shift has been that we are giving a lot of focus on digital marketing rather than focusing on print media. So, a large chunk of our marketing budget is now going for digital marketing. Our marketing Budget has also increased this year as we were able to spend 100 per cent of our Budget last year. We have already negotiated with various channels for our campaign this year. Again this year, our campaign is not going to be seasonal but with enhanced budget we will be able to do it year round and also in many of the new markets like China and Japan in their respective languages and we hope to penetrate many new markets in Latin America and many other areas,” she informed.
The Ministry is focusing on new markets like China and Russia. Russia has in fact shown 30 percent growth last year. “We will continue to focus on Russia which is a great market for us. We will have campaign in these markets. We are also going to have roadshows. We are also focusing on Buddhist countries as getting numbers from Buddhist countries in fact is very low hanging fruit,” she said. The Ministry is aiming to tap the global Buddhist market. “Better engagement with these countries with our marketing campaigns and roadshows will get us larger number from these countries. In fact, we started our roadshows by going to Vietnam, Cambodia, Myanmar and Thailand,” she added.
While the Ministry was focusing on Buddhist market, it also found great interest in other segments. For example: Myanmar is looking at India as a medical tourism destination and Thailand looks at India for other reasons including wellness tourism etc. Hence, there are a lot of potential and the Ministry along with the industry is set to work in these countries to get larger number at the regional level. “We are focusing on getting tourists from Buddhist countries, regions and ASEAN in a big way. That’s the strategy we are adopting,” Verma informed.
Meanwhile, the Ministry is organizing a Buddhist Conclave in August in New Delhi. “We are not only getting Tour Operators from Buddhist countries but also the leading monks and prospective investors from these countries. We are also getting film made of important Buddhist sites in India which will be running in these countries. During the conclave, we are also having an investor meet and trying to get investment for these Buddhist sites. So, after having a conclave here, we will be taking all delegates to Ajanta by charter flights and from there we will take them to Bodh Gaya and other locations,” she informed. The Ministry which launched new films on Yoga and wildlife is moving to other films on new themes like luxury, cuisine and others. “All these films are already ready and we hope to use these films in various markets as per the requirement of the market. So, this thematic is going to be the focus of the Incredible India Campaign 2.0 this year,” she informed and added that the Ministry is planning roadshows in Russia, China, Australia and New Zealand in the next two months.
Having realised the potential of Indian outbound market, Taiwan Tourism Bureau (TTB) is all set to further its marketing and promotional activities in India. “India is a very important market for us. We welcomed 35,000 Indian visitors in 2017, reflecting growth of 16 per cent over 2016. India is coming up for Taiwan. We are so positive about market trend,” Trust H J Lin, Director, Taiwan Tourism Bureau, Singapore Office, told T3 on the sideline of the recently concluded Taiwan Expo in New Delhi. TTB was part of the Expo with two operators bringing the tourism component of Taiwan to India. “We participated to increase our brand visibility. Our national airline is also participating in the Expo,” he said.
Talking about importance of India market, he informed that Taiwan recently launched New Southbound policy and India is one of the most important partners. The policy is designed to strengthen Taiwan’s relationships with the 10 countries of ASEAN, six countries in South Asia “The aim is to have two per cent of India. In tourism also, we are aiming to have two per cent of share in the Indian outbound,” he added.
To achieve this target, TTB has chalked out an aggressive marketing strategy for India market. “We have been organising fam tours for agents, media and wedding planners for the India market. We will further enhance Taiwan’s image as a tourism destination in India market. We are also looking at TV, social media, digital marketing to strengthen our brand. We have already in joint promotion with players in travel trade such as Thomas Cook and Cox & Kings. We are now working with PR companies to develop a short film to be displayed in cinema halls in India,” he said and added that TTB is also opening a branch office in Mumbai in June this year. Apart from these, TTB is also organising five city raodshows in Delhi, Kolkata, Hyderabad, Pune and Kochi. TTB recently organised a roadshow in Bengaluru where it showcased the destination with the help of virtual reality. The Bureau earlier also conducted online agent training programme in India and it is currently creating awareness through various webinars.
Replying to a question over tapping the potential of Indian outbound cruise segment, he informed that the Bureau is working on this. “Taiwan is ranked at number two cruise destination in Asia after China. Last year, Taiwan received one million cruise passengers resulting into US$ one billion cruise revenue with 600 call of port. We also cooperate with other Asian countries like South Korea and Hong Kong. We will also be highlighting this aspect to India market,” Lin said. TTB has earlier promoted cruise tourism in India three to four years ago and the response from India was really good.
Lin informed that of the 35,000 Indians that visited Taiwan in 2017, 4500 were leisure travellers and remaining were business travellers. There are over 100 Taiwanese companies in India, with an investment of over US$1.5 billion. “We are looking at Indian wedding market in a big way. We hosted 20 Indian wedding planners in 2017 to give them ground experience. We regularly organise fams for media, trade and now for social influencers,” he added.
The FIFA World Cup 2018 is one of the biggest global events this year and it coincides with one of the busiest travel time for Indians who are holidaying during the summer season. The surge in bookings for Russia this year also corresponds with multi-city travel itineraries that holiday goers have picked on our platform including cities like Volgograd, Saransk, Sochi apart from Moscow and St. Petersburg.
“We have witnessed a growth of over 400% for bookings in the time period between June-July 2018 over last year. This uptick in booking is expected to grow further as we get closer to the event dates. The Russia FAN ID visa has furthermore added ease in visa formalities for all the visitors during the world cup period. Travellers just require a match ticket and registration on the site for the visa and it is couriered at the doorstep,” added the MakeMyTrip (MMT) spokesperson.
Additionally, the weather at the time of the World Cup is warm and sunny by Russian weather standards, so it’s no surprise that Indians are picking Russia as one of their top international travel picks for this summer.
Coinciding with the matches where FIFA world cup is being held, MakeMyTrip lists down most frequently booked destinations in Russia this summer season: Sochi, Volgrograd, Saransk, Moscow, St. Petersburg, Rostov-on-Don and Kazan.
Varun Rathi, Co-Founder & COO, Happay speaks about the importance and effective way to manage T&E.
What is the current status of the corporate travel market and T&E Expense Management in India?
T&E forms the second largest operational cost for most organizations after employee payroll. Managing T&E expenses is one of the key priorities for all organizations today. However, most enterprises focus on cutting down on travel rather than finding ways to control the expenses. That may not be a good idea for companies looking at building relationships with customers, partners across different countries. To stay competitive in a world with increasingly connected commerce this is critical. An American Express business travel study shows that 52% of companies view their investment in business travel as a way to maintain market share, and 44% see travel as a route to increasing share.
Instead of cutting down on travel, it would be prudent for companies to manage these costs wisely and get the maximum impact for what they spend.
What are the kinds of inefficiencies you see in corporate T&E expense management today in terms of, compliance, approvals, etc.?
Managing T&E spending is a huge challenge for businesses. This is due to lack of real-time data visibility that can throw useful insights on employee spends. Travel expense management process is data heavy. Information flows from different sources – employee reimbursement, accounts department, vendor invoices, credit card statements, travel desks, etc.
Additionally, travel vendor choices and payment methods are also expanding. As per a BCG-Google report, by 2020 mobile will be the leading mode of travel bookings, with 62% bookings happening through mobile. With players like WhatsApp opening up to mobile payments, the transactions will happen in newer ways. Further bookings through Ola/Uber have also increased as opposed to corporate travel agencies earlier.
While airfare and hotel stay forms the larger cost in T&E, there are several other micro spends like luggage fare, meals, local travel expenses etc. All these expenses add to the information deluge. To compile information from varied sources into a central management system and draw relevant insights is an arduous task. It is also prone to mistakes, if not done in the right manner. Despite digitization, most organizations function on an old and archaic system of expense filing, which requires manual entry of data.
The top challenges with T&E Expense management for organisations who follow manual processes are -
Poor visibility into T&E spending: No readily available data on - How much are employees spending on travel? Which are the most common expense categories? Who are the top spenders? Who are the top travel vendors that are being used?
Poor policy adherence: How to create travel policies that are easy for employees to comply to and at the same time improve the profitability of the company?
Lack of cost controls:
a. How to keep T&E costs under control? How to make the most cost-effective travel bookings whether airfare, hotel, and lodging, taxi rentals, etc.?
b. Which travel vendors to negotiate deals with and how?
Daunting T&E expense claims and reimbursements:
a. How to enable employees to submit their travel requisitions and travel expense claims in time without having them do a lot of manual work and data entry?
b. How to make the reimbursement process simpler and faster for employees (who are your biggest revenue generators) so they can focus on growing your business rather than spending hours on expense reports?
Poor budget planning and execution: How to use expense data to optimise budgets, take smart and strategic business decisions, easily identify cost-saving opportunities without compromising on employee comfort and happiness?
To overcome these challenges, organisations need to recognize the critical role digital and automated T&E expense management solutions play. These solutions provide visibility and controls that can help businesses monitor costs and optimize spending as well as provide a comfortable travel experience to their employees who travel frequently for business.
How a digital solution like Happay helps companies manage T&E costs efficiently and overcome all T&E related challenges?
Automated T&E expense management solutions like Happay digitise and streamline a company’s entire T&E expense management process from Travel requisitions and approvals, T&E Expense reporting, policy compliance and approvals to settlement, accounting integrations and MIS.
How does this happen -
• Lift and shift the process on paper to process on the system: A company already has all policies and workflows related to T&E on paper. What Happay does is it replicates the existing process of a company which is on paper onto the Happay system - right from the users, their roles and designations, the company approval hierarchy, expense forms and fields, expense categories, expense policies and workflows. Once all data is digital, the company has complete visibility into every aspect of the process which was not possible before. 99% of the vendors currently in the market are not able to lift and shift a company’s existing process - this is where Happay differs. The flexibility and configurability of the Happay platform enable this seamlessly.
• Let the system run for a while and gather data
Once the entire process is on the system, the company can let the Happay system run for a while and start gathering information and data and based on this data, the company can optimise its process further. Since Happay is a cloud-based platform, expense data is available in real-time on both desktop and smartphone.
• Use data to fix gaps, optimise the process and save costs: How the data captured on Happay helps companies manage T&E expenses better
o Real-time visibility into T&E spending: Companies have complete visibility into the business travel that is planned and approved, business trips completed by employees, audit trail of all expenses and reports and settlement data at their fingertips
o System-driven policy compliance: With Happay, policies are available on the system and the system alerts both employees and approvers in case any expense violates policy. Companies can easily track the top violators, the spend categories on which violations typically happen and then optimise policies accordingly.
o More control over T&E costs and more cost-saving opportunities: Happay’s analytics and MIS reports help companies keep track of the top spenders in the company, top spend categories, most frequented cities of travel, top vendors used for travel bookings and more - all this data helps companies negotiate better deals with travel vendors and create more effective travel policies that consequently help reduce overall T&E costs
o Paperless and digital expense reporting process for employees: Employees can manage all their T&E expenses on the go, from their Happay mobile app. They can create travel requisitions, get their trip itineraries pre-approved by managers from their smartphones. They can capture their T&E expense data on the Happay app and web dashboard from any source: from the advances they get on their Happay cards (auto-capture of card expenses), the cash that they spend out of their own pocket or from their personal debit/credit cards. With Happay’s AI capabilities, employees can automatically import spend data from SMSs, from the invoices they receive in their email inbox, from travel vendors such as Ola and Uber, OCR scans, etc. Employees use the same app to submit their expense reports, track where their report is in the approval process.
o Quick approvals and reimbursements: Approvers can easily check employee travel requisitions and reports on their Happay app, review policy violations and add comments in return and take the necessary action on reports from Happay. Finance teams can do settlement and reimburse employees from the same platform.
o MIS for process cycle optimisation: Happay not only helps digitise the expense reporting process for employees and approvers it also helps companies improve their process TATs. Data captured on Happay can help companies understand when reports are typically submitted by employees, at which approvers the reports stack up and why, the time taken to process reimbursements once reports are approved, etc. Visibility into this data helps companies introduce policies that reduce cycle times.
o System integrations: Happay integrates with key softwares that Indian companies typically use such as HRMS, Accounting ERPs, TMC (Travel Management Company) software and travel portals.
With a digital and automated T&E platform like Happay in place, companies can gain 100% spend visibility and control, speed up their process cycle time by 7X, reduce paperwork by 96%, reduce leakage by more than 90%, and boost overall employee productivity.
Companies in India are increasingly looking for ways to minimise trip disruption and ensure the safety of their employees when incidents occur. Vishal Sinha, CEO, India, Carlson Wagonlit Travel speaks about how Carlson Wagonlit Travel (CWT) can support organisations with travel risk management.
How would you explain the current status of corporate travel market in India? What is the growth prospect?
India is still in the relatively early stages of adopting managed travel, but there is far more awareness today than there was a decade ago. India continues to be a very price sensitive market and therefore driving savings remains one of the key considerations for many corporate travel programs.
That said, corporates are getting increasingly alert and sensitive towards the need for traveler safety and security, compliance to internal policy and external regulations, and also to a certain extent to the comfort and convenience of their travelers. These form critical elements of a mature travel program anywhere in the world, and we see some encouraging trends in India as well.
As far as growth is concerned, India is forecast to remain the world’s fastest growing major economy over the next few years, with GDP growth projected in the range of 7 to 7.5 percent. Naturally, this is expected to translate into a lot more business travel in the years to come. The Global Business Travel Association (GBTA) forecasts continued double digit growth in business travel spending in India, making it the fastest growing major business travel market in the world, which is definitely exciting for us.
What’s equally exciting is that this growth is likely to be driven by Indian companies and SMEs. These two segments present an enormous opportunity for us, since a large part of this market is still “unmanaged” in the true sense of a corporate travel program. Recognizing this, last year we launched an exclusive offering for SMEs – CWT For You – to meet the unique requirements of small businesses, and we’ve seen a great response so far.
With a focus on costs and driving profitability, a lot of India companies are looking for solutions to stretch their travel budgets further and CWT is in a strong position to help them achieve this by providing state-of-the-art technology, data and analytics solutions.
At the same time, changing demographics and the growing adoption of technology have resulted in a lot more ‘self-servicing’ among younger travelers. India has one of the youngest traveler populations in the world. Close to 60% of the travelers from CWT’s clients in India are millennials, and they account for almost half of all trips taken. Millennials – more so than other generations – expect a business travel experience that is technology-driven and more closely resembles their leisure travel booking experience. Our mobile and self-booking tool offerings, as well as a 24x7 servicing environment, provide the “anytime, anywhere” support that this generation expects.
Going forward, we believe that travelers will look for far more personalized solutions and services. With the large technology and data capabilities that we already have in place, we are well-positioned to provide companies and travelers with personalized solutions that suit them best. And through RoomIt by CWT, our dedicated hotel distribution division that launched last year, we’re also working on ramping up our hotel offer by giving our clients around the globe access to more hotel content across all channels – online, offline and mobile.
What sort of inefficiencies you see in corporate travel management today in terms of, compliance, approvals, etc.?
Often in business travel, managing costs and improving the traveler experience are often seen as competing objectives. But this doesn’t always have to be the case. There’s tremendous potential for companies in India to use data and technology to achieve both these objectives simultaneously.
One such area is with pre-trip approval processes. Companies in India can have some of the most complex and lengthy approval processes in the world. It’s not uncommon here for an employee to have to get four or five levels of approval before they can travel. Ironically, we’ve found that in the end most trips do get approved, particularly for domestic travel.
Given this insight, it might make more sense to automate and simplify pre-trip approval processes. This could result in a better booking experience for travellers, and it can also save the travel program money because airfares and hotel rates might increase significantly while the traveller is waiting for their trip to be approved.
In fact, some of our clients have recognised this opportunity and approached us for support. We’ve been working in partnership with these clients and jointly investing in developing bespoke technology and solutions to improve their pre-trip approval processes.
How important is Duty of care in your view? Are your systems and policies in sync with that of corporate to support them in achieving high level of commitment to Duty of care?
In the context of business travel, duty of care refers to the obligation of an organization to take responsibility for the safety of its employees when they travel for work.
Travel risk management, on the other hand, refers to the procedures a company has in place to respond quickly to risks faced by its employees during business trips. These risks can include severe weather, political unrest, lost passports, and anything else that may cause disruption to travelling employees. Travel management companies like Carlson Wagonlit Travel (CWT) can support organisations with travel risk management.
Companies in India are increasingly looking for ways to minimize trip disruption and ensure the safety of their employees when incidents occur.
One of the key elements of travel risk management is being able to track travelers.
With many Indian companies expanding their operations nationwide and even overseas, they’re going to have a lot more employees traveling for work. It’s going to become trickier for them to keep track of where everyone is and ensure they are safe. The good news is that today we have a lot more tools and technology to help us track where travelers are and contact them quickly when an incident occurs. However, these tools are only effective if all the data about travelers’ flights and hotel bookings are captured in one place.
This is where a travel management company like CWT comes into the picture. Most of our clients require that their employees make all their travel arrangements through us, and this allows us to collect data on where each person is traveling to, the dates of their travel, which flight they’re on and which hotel they’re staying at. When an incident takes place, we can quickly generate a report through our CWT AnalytIQs tool which shows us all the travelers from a given company who are in that city and where they are staying. We can then contact them to see if they are ok, and make alternative travel arrangements to evacuate them if necessary. Through the CWT To Go mobile app, we are able to update the impacted travelers on the situation, and any changes we make to their travel arrangements also appear on the app.
One of the key challenges is that travelers sometimes break the rules, and instead of booking through the TMC they book their flights and hotels through various websites online. Booking data for these “rogue travelers” often doesn’t get captured by the TMC. When an incident takes place and we try to track all the travelers who are in that city, these travelers won’t show up in our tracking reports.
How and where do you think predictive analytics help?
There is a lot of opportunity for predictive analytics to improve corporate travel programs.
One area where it can be applied is in predicting behavior. Human beings are surprisingly predictable and travel managers can use this to their advantage. For example, adherence to travel policy is a function of demographics, job grade and travel experience. It’s not rocket science but when modeled correctly it can generate savings and improve efficiency. You can nudge non-compliant travelers to change their behavior.
Compliance is not the only behavioral predictive application – travel preferences, personalized booking experiences and auto-generated predictive itineraries are not all that different from what services like Amazon or Netflix are doing today.
Another application would be in predicting spend. The key here is to understand how travel expense correlates with the business itself. Companies can identify the key performance indicators for their business, use historical data to correlate those with travel expense in each cost center, and then get a prediction on those KPIs.
Sign up for the T3 Newsletter