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India’s second largest state, Madhya Pradesh has made great strides in tourism. “Ten National Tourism Awards in the last couple of years is a testimony that tourism is not only the top priority of our Government but the state is already there amongst the leading tourism destinations in the country. And we are not sitting on the laurels. There is a renewed thrust in our effort to promote tourism and investment in the state,” said Yuvraj Padole, Deputy Director, Events & Marketing, Madhya Pradesh Tourism Board.
Increasing participation of the private sector, making them a greater stakeholders and bringing in new investment in state’s tourism infrastructure like hotels, resorts, convention centers and other tourism related areas would be key to achieve further growth. The state is keen to woo new investors. “The work that has been done in the field of tourism in the state is remarkable. Besides all these tourist destination which we have and which have developed, we have also worked on certain other areas. We started investment promotion cell a couple of years ago within MP Tourism which is basically to promote investment in the state’s tourism sector,” said Padole.
“We came up with a new tourism policy two years ago and this tourism policy also invites people to come and partner with the government and develop their projects. We have land banks for projects like hotels, resorts and convention center where an investor can develop their own project. We have six MP Tourism hotels in different part of the state that are for the take on long term lease as well as MP Tourism’s wayside amenities. The policy is investor friendly and offers incentives, subsidies and discount in order to attract investments and make their projects feasible,” Padole ssaid while talking about opportunities for the potential investor in the state.
Commenting on the land bank policy, Padole said that the department has a very transparent system and everything is mentioned and clarified in the policy in black and white. There are certain norms that needs to be fulfilled, the land is allotted and that too at a very nominal rate. “We are working on all fronts to constantly improve state’s tourism appeal and environment. MP is inviting all potential investors to come and invest in the state’s tourism sector. Our department is ready to hand hold on every front and on every step,” Padole promised.
While interacting at SATTE last month he pointed that MP Tourism has got around 25 stakeholders participating under the MP Tourism Pavilion. “They are basically the people who have invested their money in Madhya Pradesh in the tourism sector, may it be a resort or a hotel or a transport or travel agencies or the like. We have taken new initiatives and new investment are coming up, new ventures are coming up in Madhya Pradesh,” he stressed.
Karnataka based Orange Country Hotels & Resorts has invested in the state. The company has taken land and are developing a resort near medieval town of Mandu, one of the state’s best kept tourism secrets near Indore. Oberoi Hotels is taken the majestic Ajaygarh Fort near Khajuraho that it is converting into a hotel. Likewise other companies are coming and they feel that Madhya Pradesh is a better place to invest, says the Deputy Director.
He also stressed that the state has rigorously worked on two things. “One is infrastructure development and you can see that we have world class accessibility and road network to remote areas and wildlife parks and everywhere. The air connectivity has also been increased so now you can see that many low cost carrier have started flights from different airports inside the state. We have five operational airports so far,” Padole said while concluding.
The tourist island of Bali has been the star attraction for Indians visiting Indonesia. However the 17,000 island archipelago country of Indonesia is keen to promote other destinations as well in order to distribute its tourism’s benefits to different parts of the country. With close to 1.5 million Indians visiting the city-state of Singapore annually, Indonesia sees huge opportunity to woo these travelers to parts of the country which is in close proximity of Singapore. Moreover Singapore is well connected with cities across India, and offers connectivity to 14 destinations all over Indonesia as well, and therefore presents Indonesian tourism opportunity to lure these travelers to other parts of its vast archipelago.
“Singapore’s proximity to Indonesia’s Batam and Bintan Island, just about 45 minutes ferry ride, presents us with huge opportunity to target a strong captive travel market. We want to tap into the Indians coming to Singapore. Singapore is connected with cities all over India. In short, if you come to Singapore, then please experience another destination. Not only Batam is very close to Singapore, but one can avail a whole range of services including ferry ride, food, spa, for as low as SGD 33 on week days,” said, Nia Niscaya, Indonesia’s Deputy Minister of Tourism Marketing.
“This is one of the best places for MICE as well as post-events. There are so many MICE events in Singapore, and then they have post events that includes Batam because it is close, hotels are cheaper as is food, with world-class services and exciting fireworks. There is room to grow,” Niscaya further added.
India probably emerged as one of the most resilient tourism source markets for Indonesia after the vast archipelago nation was hit by a series of natural disaster last year. Indonesia had registered a record 500,000 Indian tourist arrival and a robust 29 per cent year-on-year growth in 2017. Encouraged by this growth, Indonesia set an ambitious 40 per cent growth target in 2018 that it looked on course to achieve until a series of natural disaster affected the its inbound arrivals. And despite the tsunami and earthquake that affected the overall inbound arrivals to Indonesia, India has still delivered a double-digit growth in tourist arrivals to the country.
According to Niscaya, 540,000 Indians have already visited the Indonesia from January to November, registering 11 per cent increase over the same period the previous year, and about 8 per cent increase over the whole of the previous year number that was 500,000 in 2017. December figure was still awaited when Niscaya spoke on the sidelines of the SATTE 2019.
In terms of destinations, most of the Indians, 40 per cent, coming to Indonesia are coming to Bali, including holiday makers as well as honeymooners. Bali is also attracting Indian weddings. Some 30 per cent Indians are coming to Jakarta, mostly business travelers and 25 per cent, mostly tourists, are coming to Batam and Bintan islands.
Sidharto Suryodipuro, Indonesia’s Ambassador to India said, “We are working with our Indian colleagues in the government. Now we are working with industry also for doing flights between Indonesia and India. A number of Indonesian carriers are flying to India, but we are waiting for Indian carriers to fly to Indonesia directly. Remember this is a market which is growing by 20 or more per cent so the opportunities are growing and there is good business for everybody all around.”
Tourism is an integral part of the world economy and its role in the global economic activity will only grow in the future. According to UNWTO, more than 1.4 billion people travelled in 2018 generating a staggering US$ 1.4 trillion in international tourism receipts. The employment opportunity the sector is generating is equally impressive. One in every 10 jobs are in the travel and tourism sector, and if we look at the employment opportunities created worldwide in the last five years, one in five jobs have been created in the tourism sector. By 2028, this is further expected to increase to a quarter of all jobs coming from the travel and tourism sector.
With the world tourism body UNWTO announcing India to be the host country for this year’s official celebration of World Tourism Day (WTD) on September 27 themed “Tourism and Jobs: A Better Future for All”, it could not have been more fitting as job creation is something on top of the governments’ agenda in every country. And not only does it create employment but also stimulates new investments in different sectors, creates revenues which leads to taxes and more.
The SATTE 2019 brought together an international panel of tourism veterans to discuss the theme. The session was moderated by Ashish Gupta, Consulting CEO, Federation of Associations of Indian Tourism and Hospitality (FAITH) and panelists were VK Duggal, Former Governor of Manipur and Mizoram; YB Tuan Muhammad Bakhtiar bin Wan Chik, Deputy Minister of Tourism, Arts and Culture, Malaysia; Eunji Tae, Officer, Regional Department for Asia and the Pacific, UNWTO and Subhash Goyal, Member, National Tourism Advisory Committee.
While laying the ground rules and asking the panelist to share their experiences and understanding of the co-relation between tourism and employment, Gupta asked the panelist to specifically focused on three things, that were, how can countries learn from other role models of increasing the indirect employment footprint around tourism? How can countries develop policies which ensure that tourism employment develop more product and becomes ingrained in the mainstream economy? And third, with so much of technology in terms of automation, self-drive and self-service, is that a threat to employment or can that be leveraged better?
Tourism & Jobs
For somebody who has closely watched the tourism sector in India grow and has spearheaded government’s drive to develop the sector in India, Duggal, while sharing his understanding of the sector, said, “Tourism is an all-encompassing activity. It touches the life of people across the board. As economies grow, as the spirit of travel grow, and which is growing continuously, in every field, be it technology, manufacturing or transport industry, tourism will continue to create new job opportunities like nobody’s business, especially in a country like India. Already probably tourism is the largest employer as far as women and youth are concerned.”
Tourism is an integral part of Malaysia’s economy contributing more than 14 per cent in GDP. Replying on his governments approach towards tourism’s role in employment and GDP contribution, Bakhtiar said, “One out of four people working in Malaysia are working in the travel tourism sector and altogether 3.4 million people are working in tourism. So, it is key to us to sustain this number. We are also getting stiff competition from neighbouring countries like Thailand, Vietnam and others because we are in the same neighbourhood. It is also important for us to come up with new products and promotion to sustain the number of tourists and hence the number of employment.”
Industry veteran Goyal added, “Tourism is one industry that’s creating millions of jobs. It’s a labour intensive sector and therefore very important for a country like India. And that’s why India has set a target to double the inbound arrival from 10 to 20 million in three years.
There is huge opportunity to channel tourism in creating rural employment, something all countries struggle with, “In case of Malaysia, the country is more about rural and community based tourism with products like clusters of eco-tourism divisions spread all over the country which are mainly catered by self-employed entrepreneurs running home-stays etc. in these rural areas and therefore not only help in creating rural employment, entrepreneurship and women empowerment but also help in mitigating migration to urban centers. Bakhtiar also pointed that tourism is not only one of the primary reasons of conservation and preservation efforts towards cultural heritage and monuments but also creates reasons for local crafts and artisans to revive and thrive and not to forget creating new employment opportunities for women and less privileged and semi-skilled.
An estimated seven million new jobs was created worldwide in the sector last year alone and close to 313 million jobs is related directly or indirectly to tourism. By 2028, Travel & Tourism is expected to support more than 400 million jobs globally. Most of the new jobs will come from some of the fastest developing tourism source markets like India and China, among others.
“By 2030, India is going to be the second largest economy in the world. With that comes the ambition or the desire to travel, not just within the country but all over the world. As the Indian economy grows, the bigger beneficiary will be the short and medium haul destinations like Dubai, Abu Dhabi, Malaysia, Singapore, Thailand, Korea, etc. driven by the spirit of adventure to try out niche activities like Golf and sports, and not just for weddings. And this in turn will continue to benefit new employment and job creations,” said Duggal.
Highlighting the role of some of the fastest growing tourism source markets like India, Goyal said, “More than 25 million Indians are travelling all over the world and are spending. They are the number one shoppers in Thailand, Malaysia, Singapore, Switzerland and London. These people are travelling in large numbers and with families and are spending a lot of money while travelling and shopping and are helping create lots of jobs in these places they are visiting. Even segments like Indian Wedding market that is more than just a few billion dollars, is going to destinations like Dubai, Spain, Malaysia, Thailand, Sri Lanka, France and elsewhere like Macao, and are contributing tremendously to the job creation and socio-economic upliftment in these destinations.”
There is no debating the fact that travel and tourism sector is not only a significant contributor to job creation, its role will only multiply in new job creation in coming years. If one in every nine people are employed in this sector today, in the coming years one in every four jobs will be created in this sector, which is absolutely staggering. However, challenges remain as the sustainability of these employments and talent retention has been some of the major issues the sector is grappling with. Tae says that the industry needs to look at this huge challenge and find out how it can sustain continuous growth of the industry with good talents.
“It’s not only about the big picture in our industry. No doubt, travel and tourism industry is very friendly for women and youth and also the minorities to enter the job market. But how sustainable is this? When we look at the figures that how long these employment will sustain after six months, the number is not so promising. How good are our retention at maintaining our talents? Australia will need 123,000 jobs by 2020 to sustain the industry. Canada says that by 2030 one quarter of a million jobs will be needed in the industry. But on the other hand, we are losing talents. In the Netherlands 70 per cent of the hotel graduate is leaving after six years of employment in the industry. Hong Kong, Australia say the same thing. Only 50 per cent of the hospitality graduate will stay and develop their career within the sector. What’s wrong? There is a huge gap between what industry needs and what our talents are. We need to address these issues. It is good that tourism is creating employment but we are not really good and succeeding in retaining our talents. Without talent without good leaders, there is no success in the future,” Tae said.
To overcome the challenge of sustaining trained manpower, Bakhtiar suggested that diversifying tourism offerings and having rural tourism products with facilities like homestays that involves ordinary people and making them stakeholders of tourism can help mitigate the demand of highly skilled and huge number of trained manpower. He added that sustaining the tourism number and ensuring that they travel to rural areas where there are quality products like homestays can ease the demand of trained and skilled manpower in organized industry like hotels. While at the same time, it can help generate quality economic activity and entrepreneurship at the local level leveraging technology. Citing examples of Malaysia’s success with homestays and how they have become popular with all kind of tourist and are also getting good online reviews. Malaysia today boasts of more than 50,000 home stayowners.
He also pointed that destinations will need to continue to explore and develop tourism source markets. He said that despite China producing 135 million outbound travelers last year, only 7 per cent of about 1.4 billion Chinese have passports, indicating untapped potential in the Chinese market.
Technology has become an integral part of almost every aspect of society and in the business world. Different sectors are increasingly becoming more and more reliant on technology. And when it comes to travel and tourism, technological footprints far exceeds its impact and disruptions than its role in other sectors. Disruption is the new norm in the travel and tourism industry. Two of the biggest disruptors, Airbnb and Uber, in the past decade have both come from travel and tourism sector and have forever changed the accommodation and transportation landscapes. Technology is continued to be viewed with mixed optimism.
The most recent disruptors are the Airbnb, Uber and the likes who have created a lot of unease amongst the traditional businesses. The recent spat between the brick and mortar travel agents, hotel owners and OTAs and aggregators like MakeMyTrip, Yatra, OYO, and the likes, in India, is just one example in this part of the world. Are these technology unicorns threatening new businesses and jobs? How should that be viewed?
Acknowledging that there is a problem as the governments are not yet ready to put in right policies in place, UNWTO’s Tae, said that we cannot just deny the new tendency and pattern as to what the consumer wants as the travellers demography is also changing and more and more young people are travelling. We cannot just deny rural stays and home stays to be distributed through platforms like Airbnb. She said that in the absence of any significant policy guidelines and frameworks, the new technology driven entrepreneurs are creating a market and making a profit out of it and this cannot be stopped. “The industry needs to work together to solve this and this is the responsibility of the international community and the member states (Of UNWTO) to learn fast and quickly and come up with the right guidelines and policy framework,” she insisted. Tae also pointed that there are a number of good case studies in this regard from countries across the world that can be accessed and learnt from.
Duggal suggests TIP (Technology, Innovation and Patience) recipe that he says will hold the industry, as well as new aspirants in the travel and tourism sector, in good stead. Sharing his experiences in the government while arguing that technology is an enabler and not a threat, Duggal said, “When I was DG Tourism we sent a proposal to Home Ministry for giving visa on arrival. Those were difficult days as we had World Trade Centre attack in the US and other terrorist activities elsewhere. So the Home Ministry said no. And as career moved, I myself became Union Home Secretary. And I invited the Tourism Ministry to send the proposal. I will identify the country where there is no fear of incursions or anything and I gave okay to 16 countries around the world who can avail VoA. Now, this was 13-14 years ago and today we have e-Visa for 160 countries. Now this is the gift of technology. And one of the major beneficiary of technology has to be travel and tourism industry.”
The key take away were to develop greater understanding between the industry and policy makers. New products need to be introduced in order to create new growth and employment opportunities, especially true for creating rural employment and entrepreneurship and mitigating migration towards already congested urban centers. Industry and government need to work together to not only create healthy growth opportunity for tourism in the country, but also to develop policy guidelines and framework to create equitable growth opportunity for all especially in the light of the disruptions by the technology driven enterprises. And most importantly, as Gupta said, “To ensure that tourism must not be outcome based but should be based on long term sustainability criteria.”
India’s corporate travel is considered as one of the fastest growing travel markets globally. According to reports it’s a US$ 30 billion market and growing at 11 per cent year-on-year which makes it a very lucrative and important market to get into. At the same time it is also one of the markets which is going to be disrupted the most over the years. And therefore, today in the larger travel & tourism arena, the corporate travel market is the new buzzword that the industry wants to know more about.
South Asia’s biggest travel industry event SATTE partnered with the global powerhouse in corporate travel industry Association of Corporate Travel Executives (ACTE) to do an impactful discussion on Technology that brought together some of the top corporate travel industry minds in an engaging session on the sidelines of SATTE 2019.
Moderated by Varun Bansal, Co-founder, Airlines Technology, the session on “How Technology has Changed the Travel World” had Sandeep Shastri, Regional Director - South Asia, Sabre Travel Network; Rajdev Bhattacharya, General Manager & Global Head: Travel Services, Wipro Limited and Vikram Shukla, Head Strategic Alliance, Dnata India. The keynote address was delivered by Ranjeet Oak, Chief Business Officer – Holidays, MakeMyTrip.
Keynote: Customer focused innovation
Setting the stage for an engrossing panel discussion Oak in his keynote address said that many of the businesses that we see today did not even exist four-five years ago. And today there are unicorns and billion dollar companies standing in many of the verticals by creating a business models that has disrupted the traditional approach in which the business was conducted by leveraging technology. He further said that what it has also done is that it has kept the consumer in the focus. The end consumer has been at the center of every of these breakthrough ideas that has come out.
“I think it’s a very crucial time for all stakeholders within the corporate travel segment to come together and say how we can look at the consumer one more time and build value for the consumer out of the entire value chain that exists today. It is probably the right time for us to start asking ourselves questions that are we pushing the envelope enough or not,” Oak stressed.
Talking about his ideas of two heroes, namely the ‘corporate traveler’ and the ‘corporate’ itself, that he used to explain his points, Oak said that a large number of times a corporate traveler is not taken into account whenever there is any kind of product that is built out. He pointed that the travelers’ priorities, needs, reasons for being the business traveler, mobility, last minute changes and challenges etc. needs to be rightly understood and accordingly addressed and delivered. Commenting on the second hero, i.e., the ‘corporate’, he said that today the corporate want their employees to have choices, but with controls, and therefore such solutions need to be created or developed and delivered. Furthermore, he outlined that the corporate also want to ensure that travel experience of their employee is hassle-free so that it doesn’t interfere with their productivity.
Technology: The enabler
While sharing GDS’ perspective on how new technological innovations have helped companies in this space adapt and evolve, Shastri said, “If we go back five-seven years the core focus of GDS was to provide a stable reservation platform for airlines. One of the changes since then, and I find it amazing, is that how new solutions have evolved.” Shukla insisted that instead of viewing technology as a “disruptor”, it should be view as an “enabler.” “It has really supplemented the way we do business,” he said. Coming from the corporate side, Wipro’s Bhattacharya said that technology is all about control, convenience and visibility as it provides greater choice.
So how has technology influenced the consumption? Bhattacharya says, “Ten years ago anything I wanted to do personally was a pain. If I had to buy a Railway ticket I had to go early, stand in queue and etc. And anything from office was easy. And then technology switched. Anything I want to do personally would happen in a jiffy and anything through office will have to go through compliance and all. And now, it is very difficult to tell a guy, who is used to doing everything online, to go through 15 steps to get a ticket or hotel reservation. He is frustrated. So we need to understand that the consumer behavior has changed between Gen X and Gen Y. You need to give these guys things in simplified steps and on a platter.”
Acknowledging that technology has ushered a massive change in the way travel is being purchased, Shastri also argued that the brick and mortar agencies are there to stay and will not be fully taken over today by online agencies as Gen X and older will continue to look for human touch. “And I think both have to make sure that the technology is serving their need and the customer is benefitting from it,” he further added.
Shukla pointed that the technology has covered a lot of things like online booking, auto ticketing, auto cancellation, but there are gaps that remain. Bhattacharya pointed that people tend to overestimate technology for what it can do in the next one year, and really underestimate what technology is going to do in the next ten years. And corporates and suppliers need to focus on that.
Commenting on the cost part of technology, Shukla said, “It’s very interesting. We find ourselves in a market where people are not willing to pay for technology. Fortunately or unfortunately most of the applications that we download are for free. So when we take solutions to our corporates and we ask them to pay for it, they are obviously not very comfortable with the idea, because it’s like who pays for technology. I am not paying for an Uber app or an Ola app.”
Quoting Uber CEO Dara Khushroshahi, Shastri pointed that it’s like an armed race when it comes to investment in technology which is huge. “As an example sabre spent about a billion dollar making sure that from technology stand point we are able to deliver. Investment in technology will go up. And there is a challenge. Customer will want it free of cost. But I think that’s where company like ourselves are there by making sure that we support that growth from a technology perspective.”
Sharing his idea on handling challenges that the industry faces in terms of acceptance of technology or lack of willingness to pay for it, Bhattacharya suggested that the ecosystem need to be developed first as lots of problem cannot be solved inside out, but outside in. Citing cab aggregator Uber’s example he said that first the ecosystem was created and then taxi drivers jumped in.
While concluding the session, Bansal opined, “I think technology has totally shortened the definition of generation also. Probably ten years back I would say a generation gap is between my father and me. Now that is changing every year. Technology is something evolving and what could have evolved in the last hundred years, probably we will see double of that growth in the next ten years.”
One of the newest entry in the Indian market, Azerbaijan as a destination has already tasted a good success in terms of tourist arrivals growth from India in 2018. Around 40,000 Indians visited Azerbaijan in 2018 recording a whopping 175 per cent growth in 2018 despite any noticeable market development activities in India, indicating a latent demand in the Indian market for the country on the Caspian coast.
Azerbaijan Tourism Board (ATB) opened a Representation Marketing office in India last December to grow its share of India’s tourism pie and attended South Asia’s biggest travel show SATTE 2019 in India last month as the “Focus Country.” Around three million international tourists are visiting Azerbaijan annually with Russia, Georgia, Turkey, the GCC and central Europe countries, and now India too, being some its key tourism source markets.
Speaking on the ATB’s growing interest in the Indian outbound travel market on the sidelines of SATTE, Florian Sengstschmid, CEO, ATB, said, “Azerbaijan has seen a great increase in Indian tourists in 2018. One of the reasons for the growth rate was a very active Air Arabia pushing the new destination of Baku with their network here. It also shows that without our support a very interesting market has established and the growth rate proves there is obviously great potential and interest for Azerbaijan. This is all the reason for us in intensifying our activities in the Indian market. We now have an India representation office working from the beginning of this year.”
Furthermore, he informed, “In the pipeline, are non-stop flights between India and Baku by Azerbaijan Airlines in the next few months, very important factor because we are now mainly serviced by the GCC connections. Once the non-stop flight is established, this will also bring new opportunities in terms of new tourism experiences. For now, it was mainly corporate events coming to Baku, the new flight connectivity will bring the target audience we are looking at and the scope of looking beyond Baku.”
Commenting on ATB’s market development plans and product placement for the Indian market, Sengstschmid said, “In terms of marketing strategy, one important step was to identify India as one of our target source markets and the decision to install a representative office of the ATB in India and to work with media in this regard. This means like from the B2B perspective there will be lots of activities following this (Participation in SATTE) like road shows rolling out in certain mega cities in India. These will be targeted campaigns for families, for MICE, for weddings and for the film industry. In terms of product placement this is the four main categories. And beyond this, cooperation strategies with airlines and tour operators.”
Reflecting on the complex Indian market and common touch points, Sengstschmid said, “I think 2017 and 2018 were learning curves in that sense for Azerbaijan. There are a lot of cultural and historical touch points between Indian and Azerbaijan. Ties between India and Azerbaijan are very close. You will find Sanskrit inscriptions in temples in Azerbaijan. This proves that there has been a lot of travel over the centuries. In terms of food, Azerbaijani cuisine is very rich when it comes to vegetables and fruits, also catering to religious or vegetarian demands of Indian guests. A lot of Indian restaurants have opened in capital city and regions. On the other hand, people are very similar in terms of culture and social ties like weddings, daily life, family behaviour and lifestyle.”
Azerbaijan on a very small territory has a lot to offer. Baku, on the shores of the Caspian Sea, is a sea-side city and reflects, from extremely old medieval walled part of the city to very modern architecture, lifestyle and living and cuisine and shopping etc. South of Baku, the countryside offers a desert like landscape dotted with Mud volcanos and UNESCO Heritage Sites, while in the North there is high Caucasus mountains with peaks reaching up to 4500 meters high with beautiful Ski Resorts, all within hour and half or two hours of drive.
“Nine out of eleven climate zones on a very small territory brings along a lot of opportunities for tourism experiences,” said Sengstschmid. Indian nationals are also eligible to apply for e-Visa that can be availed in as little time as three hours.
According to the UN World Tourism Organisation (UNWTO), India´s as well as the South Asia’s position in the world tourism is increasingly becoming more significant both as a destination and as a source market. Tourism is among one of the leading economic sectors of the world, surpassing 1.4 billion in international arrivals in 2018, two years ahead of the forecasted time. South Asia, which achieved astonishing growth rate of 9 per cent in 2017, has continued to show increase in the first 9 months in 2018, reinforcing its potential as a destination as well as the source market. As 2019’s first international tourism event from the South Asia region, SATTE 2019, that recently concluded in Delhi NCR on January 16-18, has continued to play an integral part in South Asia’s growth as a tourism destination and has helped the global stakeholders develop the source market potential of the region as well.
Speaking at the inaugural function of the event at India Expo Centre, Yogesh Mudra, Managing Director of UBM India, said, “Over the years SATTE has built a reputation of being one of the most comprehensive B2B platforms catering to domestic and international buyers and professional from across the travel, tourism and hospitality sectors along with the national and state tourism boards. This has also enabled professionals to congregate and conduct business, arrive at solutions and innovations to counteract economic uncertainties by promoting inbound, outbound and domestic tourism in India. On our part, we have pulled all socks to celebrate this 26th edition of SATTE and the growth of this sector. This 26th edition of SATTE is the largest SATTE ever, spread over 25,000 square meters of gross area. On behalf of UBM India, I hope we make most of this unique platform that has been created over the years that understands entertains and celebrates all of us.”
Former Union Minister of State for Tourism and currently Union Minister of State for Culture (I/C), Mahesh Sharma, was the Chief Guest at SATTE 2019. Sharma, who represents the Gautam Budh Nagar constituency where the Greater Noida’s India Expo Centre, venue of SATTE 2019, is located, said, “I congratulate everyone involved in bringing the South Asia’s biggest travel and tourism exhibition, the prestigious SATTE to my parliamentary constituency. Other than SATTE and UBM, I am your Chief Co-host too,” he said.
Sharma pointed that being the largest travel and tourism event in the Indian sub-continent, SATTE’s role is integral to taking India’s and the region’s tourism to new heights. He said that the visionary Prime Minister of India Narendra Modi has undertaken great initiatives but impressive results cannot be achieved in isolation unless banners like SATTE is a part of tourism growth story that India and the region wants to script.
“The country’s and the region’s tourism will not thrive and grow unless institutions like SATTE are an integral part of that vision. Tourism contributes 6.8 per cent of our GDP. We have seen tourism growth by up to 13 per cent in terms of number of foreign tourists and in financial terms it contributes 1.56 lakh crore of foreign currency that India earns from tourism. We understand the potential,” said Sharma underscoring SATTE’s role in building the story of India tourism envisions.
Sri Lanka, one of the emerging tourism hotspot in the region has been participating in SATTE for a long time. Despite a challenging 2018 because of political turmoil in the island nation, Sri Lanka’s travel and tourism industry has witnessed a quantum leap in tourism over the last few years growing at double-digit figures year after year. India is Sri Lanka’s biggest tourism source market contributing over 424,000 in 2018. And as Sri Lanka tourism makes a sprint for 500,000 in Indian visitor arrivals this year, the destination showcase at SATTE at the beginning of the year is key to its target from India as well as from across the world.
Leading a strong delegation of Sri Lankan tourism suppliers to SATTE 2019, “John AE Amaratunga, Sri Lanka’s Minister of Tourism Development and Christian Religious Affairs, said, “I am extremely pleased to be here participating in South Asia Travel & Tourism Exchange. On behalf of the Sri Lanka Tourism, I would like to extend a warm welcome to all present here. Being held for the 26th consecutive year SATTE has grown from strength to strength over the year to become the South Asia’s leading travel and tourism show.”
“As far as last tourism data recorded in Sri Lanka, 20 per cent of all tourists that came to Sri Lanka last year, originated from India. This is the highest ever number of Indians who have visited Sri Lanka in a calendar. It is not secret that India for Sri Lanka is the most important and the biggest tourism market. And we want a close relationship between the two countries to achieve millions of bilateral tourism,” added Amaratunga further, reinforcing SATTE’s growing profile as a platform to showcase to trade buyers from not just India but all over the world in order to grow the country’s tourism interests.
Expressing “great pleasure” for Malaysia to take part in SATTE again this year, YB Tuan Muhammad Bakhtiar bin Wan Chik, Deputy Minister of Tourism, Arts and Culture Malaysia, said, “I am pleased to see the huge interest in Malaysian tourism. India has always been an important tourist market for Malaysia and SATTE is one of the major tourism platforms that we look forward to attending each year. This year we have got a bigger Malaysian tourism delegation to SATTE comprising almost 40 organisations, from travel agencies, hotels and resorts, tourism authorities, tourism product owners to airlines and state governments. We all are excited to be here at SATTE again to kick off another tourism year in a good spirit. I wish to extend my appreciation to the organizer of SATTE for putting together another successful event.”
Malaysia has set a target of 30 million international tourist arrivals by 2020, and sees India as one of its key tourism source markets that will help the country achieve its tourism target. It received around 26 million tourists in 2017. The number is expected to be closing in on 27 million international tourists this year. According to provisional figures, shared by the Minister at SATTE, Malaysia is expectedly received close to 600,000 Indian visitors in 2018.
Indonesia that has been participating at SATTE year after year witnessed a robust 29 per cent growth in 2017 with close to 500,000 Indian arrivals. And, despite a number of natural calamities, the country has recorded double digit growth in 2018 as well in Indian arrivals. Indonesia was the feature country destination SATTE 2019 and made a big splash showcasing the country’s massive diversity and products at the inaugural dinner that it hosted.
Attending SATTE 2019 with a strong Indonesian suppliers’ contingent in order to grow Indian market into a stronger future source market, Indonesia’s Deputy Minister of Tourism Marketing, Nia Niscaya, said, “It is really good for Indonesia to be a feature destination at SATTE 2019. Indians coming to Indonesia has grown by 11 per cent. This is really great and there is more room to grow. Now, there is direct flight from Mumbai to Bali.” She also pointed that Indonesia is so much more than Bali, which is one of the 17,000 islands the country comprises of. She drew attention to Batang and Bintan islands, among other destinations, which are very close to Singapore, less than an hour ferry, and can be conveniently included in the itinerary of Indians travelling to Singapore at cost as low as SGD 33.
Welcoming participants at the 26th edition of SATTE 2019 on behalf of UNWTO, Eunji Tae, Officer, Regional Department for Asia and the Pacific, UNWTO, said, “UNWTO is truly proud to share a long-standing partnership with SATTE and its partners. Together, we share the same concerns and vision in advancing tourism in a global and regional context. As South Asia´s leading travel event, SATTE is indeed an excellent showcase for its tourism industry, not only within the region, but also of the world. As one of the New Year´s first meetings of the international tourism community, SATTE is setting the excellent stage for a year of strong cooperation, dialogue and meaningful advancement in tourism.”
Also speaking on the occasion, Subhash Goyal, Member, National Tourism Advisory Council, said, “Many years ago we wanted to have an exhibition (In India) where the small Indian tour operators who cannot afford to go to ITB or WTM, could showcase their product here in India. And that was the beginning of SATTE and that time I was the president of Indian Association of Tour Operators (IATO). We sat together and we started this South Asian Travel & Tourism Exchange (SATTE) programme. And this is a dream come true that SATTE today has more than 50 countries. We now want the SATTE to be even bigger and better and probably have more than 100 countries at the next SATTE. We want it to be bigger than ITB and WTM, and why not. We can do that by owning SATTE and making it a real success.”
The three-day event witnessed live performances to draw trade buyers’ attention to the exhibitors and their products and offering, destination briefings, business workshops, meetings, awards, networking evenings, rich conferences, among others. SATTE 2019 was attended by over thousand exhibitors from 50 plus countries, 28 Indian states and drawing trade buyers not only from every part of India, but also from the region as well as around 200 international buyers from across the globe.
Commemorating the 25th edition of SATTE and the show’s Silver Jubilee celebration that started last year, UBM India this year partnered with Green Yatra, a non-profit organization for a cleaner and greener Delhi NCR region. The initiative is dedicated towards the protection, conservation and betterment of the environment to support the initiative of government for cleaner and healthier Delhi NCR region and enhancing the region as a tourism spot.
Thanking all the industry partners, exhibitors, sponsors and the various associations for extending all the support, Pallavi Mehra, Group Director, UBM India and Publisher, Travel Trends Today (T3), said, “SATTE 2019 has seen participation of various new destinations and has welcomed a record number of buyers and exhibitors from across the globe to become the biggest edition thus far.” She also hoped that more and more exhibitors will come back to the SATTE 2020 edition the next year.
The event also witnessed participation of several leading captains of the industry and associations like Indian Association of Tour Operators, Travel Agents Association of India, Federation of Hotels and Restaurant Association of India, IATA Agents Association of India, Association of Domestic Tour Operators of India; Travel Agents Federation of India; Enterprising Travel Agents Association; Skal International and India, PATA, Cruise Line International Association, TOFT Tigers, Adventure Tour Operators Association of India; Network Of Indian MICE Agents, Association of Corporate Travel Executives, Indian Tourist Transporters Association, India Golf Tourism Association; Outbound Tour Operators Association of India; Ecotourism Society of India, among others.
In 2017, at 2378, Japan received the highest number of port calls in Asia by cruise liners followed by China (1156 port calls), South Korea (747 port call) making up the top three destination by the number cruise vessels port calls. Indonesia, with 187 port calls, rounds up the top 10 destination in Asia. World’s second largest country in terms of population, seventh largest by area and one of the most endowed regions of the world in terms of its tourism attractiveness, India (128 port calls) doesn’t figure in the top ten in her continent – Asia in terms of cruise lines’ port calls.
The recently concluded SATTE 2018 Conference brought together an eclectic discussions with an international panel that discussed “Cruise Tourism - Untapped potential: Global Perspective & India” putting cruise tourism potential for India in the spotlight, while also discussing India’s potential as a cruise source market.
The panel discussion was moderated by Vinod Zutshi, Former Tourism Secretary, Govt. of India with Peter Kollar, Head of International Training & Development, Cruise Lines International Association (CLIA); Sean Treacy, Managing Director – Asia Pacific, Royal Caribbean International; Naresh Rawal, VP Sales- India, South Asia, Russia, Middle East & South Africa, Star Cruises; Felix Chan, Vice President of Sales - Asia, Norwegian Cruise Line Holdings; Ratna Chadha, Chief Executive, TIRUN Travel Marketing and Nishith Saxena, Founder & Director, Cruise Professionals, as the speakers.
India & Cruising: Overview
The policy on cruise shipping in India came as early as 2008 but significant little moved on this front in the later years. According to Zutshi, the current government that came in May 2014 had immediately swung into action to grow country’s cruise tourism. “In June 2014, a month after the new government took over Prime Minister Narendra Modi himself addressed the issue of cruise tourism in India and how to harness the potential,” he says.
Ever since, a high level Task Force has been constituted involving the two Union Ministries of Tourism and Shipping and Bermello Ajamil & Partners has been appointed as consultants to prepare a viable plan for cruise operation in India. The Task Force has conducted several rounds of meeting with travel trade, cruise professionals, custom officials, Home Ministry and other stakeholders to accelerate the process of bringing in cruise tourism in India.
A work in progress for a few years now, a new cruise tourism policy, with the main thrust to increasing the cruise line traffic to 700 vessels a year, is expected to see the light of the day soon. Other developments on this front include cruise hubs to be developed in Mumbai, Goa, Mangalore, Kochi and Chennai, a 30 per cent rebate on all cruise vessels related charge, number of the days a cruise ship can dock to be raised from one to three, foreign flag vessels, as part of cabotage reform, carrying passengers have been allowed to call at Indian ports without securing a license from the Director General of Shipping, eVisa facility for Mumbai, Goa, Kochi, Chennai and New Mangalore ports have already been initiated and foundation stone for a new 300 crore international cruise terminal at Mumbai that is expected to be ready by June 2019.
India’s untapped cruise potential is enormous. Rawal says that India’s strong reputation as an enchanting, exotic, historic and beautiful destination would have an immediate advantage in catapulting India as one of the leading cruise destination. “Long and scenic coastline, with access to many ports, several natural spots and breathtaking destination like Mumbai, Goa, Cochin, Andaman, among others, creates natural advantage for the country to attract more international cruise lines,” he says.
Besides, India has certain strategic advantages in the area that it can exploit. As Chaddha says, “India is in a very strategic positioning today. Unlike China and other parts of the world, India is the only country that allows people with multiple port experience and that is a huge advantage for us. If you look at China, it’s a turnaround port. It’s the same with other parts in Europe, it’s the same in the US. But in India, you are doing multiple ports. So we need to take advantage of that.”
According to Zutshi, Bermello in their initial report has pointed that India is sitting on a gold mine of cruise tourism with a direct cruise revenue benefit to the government to the tune of Rs. 35,500 crore (US $5.5 billion) as against current Rs. 712 crore (Around US $110 million), clearly showing that there is massive untapped potential to grow the current size to a staggering 50 times more from the revenue point of view!
According to CLIA statistics, in 2017 India had a mere 128 cruise calls, whereas Thailand and Malaysia in the region get about 500 cruise calls a year. “There is a real opportunity if India can get to the number of calls that Malaysia or Thailand is getting. We are talking about say 400-500 per cent increase in calls,” says Treacy. He also pointed that with 94 ships on order by the global cruise line industry; there is also significant employment opportunity that India can take advantage of. “The industry is looking at 80,000 employees that will be hired,” he pointed.
Furthermore, he said that in terms of passenger destination days India only does 140,000 compared to over 4.3 million of Japan. “The economic impact is significant when we look at the number of visits. With over 8 million visits in North Asia (Japan, China, South Korea and HK), the direct expenditure through cruise tourism was to the tune of US $ 3.23 billion,” he informed.
Challenges & Way Forward
So how do we get the cruise liners into India and grow the market? It is important to prove to the cruise line decision makers that India is also a profitable region to bring their ships to, deploy and to invest in for long term benefits and profitability. To meet India’s untapped cruise potential, Treacy highlighted five key fundamentals- Government cooperation, infrastructure to accommodate today’s cruise ships, stable and consistent operating conditions, collaboration with all the stakeholders like travel agents, tour operators, developers of infrastructure and all other stakeholders and profitability, as key to building cruise industry in India. He particularly highlighted that stable and consistent regulations and operating conditions is very important as companies typically plan two to three years ahead and therefore need to know that the basic conditions of operating are easy to predict.
Chaddha says, “The fundamental problem at the moment remains that something else is discussed at the top level but it is not percolating down to the grass root level. There are so many agencies that one need to co-ordinate with. We need to get all stakeholders from the government side on the same page. What happens in Goa may not be in conjunction with what we have already discussed in Delhi. And that is where cruise lines are facing challenges because every day is a new day. We can’t have that kind of scenario. We need to be easy to do business with and there should be one window approach for all our issues. Although the SOPs are in place based on our recommendations but the implementation is not there yet.”
Rawal advocated the need to develop international standard accessible, convenient and well equipped port infrastructure with passenger services, linkages and security, fast immigration and transit passage through ports and cruise terminals, especially at port cities like Mumbai, Goa and Cochin that will be key to developing cruise tourism in India. He also said that it is crucial to develop more such ports in India at Porbandar and Kandla on the West Coast and Vishakhapatnam, Kolkata and Paradip on the East Coast to create new cruising opportunities for the country and cruise liners. He also stressed the need of skilling cruise personnel through training programmes, developing their awareness on tourism, safety and security, among others, and for the cruise lines and authorities to have regular and ongoing dialogues to decide attractive cruise circuits.
Kollar drew attention to other markets that have had similar challenges and have succeeded. “One of the best examples is Australia that has the highest penetration rate in the world at 5.3 per cent that means one in 19 Australians cruise every year today. Firstly it started by selling to capacity the odd ships that did arrive in Australian waters. It started by selling more close-to-home cruises so the passenger counts from Australia grew. This drew the attention of the cruise lines and so few more ships came which was also sold out. And this started a boom with big companies all of a sudden deploying in Australian waters full time. In fact we were the first nation to have a cruise line ship based perennially year round outside of the US market,” Kollar said.
Similar to what Kollar said, Saxena also pointed that a vast coastline may not essentially be an advantage. He said, “Instead India should focus on developing one or two ports and make good examples of successfully handling cruise ships and then replicate the modal elsewhere in the country, that way cruise companies will have more confidence in bringing their ships.
India: A Cruising Source Market
The global cruise industry is growing rapidly. It grew from 10 million in the year 2000 to more than 25 million in 2017. And with 94 ships on order today, the number of cruise passengers is projected to reach 40 million by 2025. With India’s overall outbound travel growing at a robust pace year-on-year and being estimated to be a 50 million outbound travel market by 2020, cruise industry is keen to develop this largely untapped and hitherto a very small cruise source market.
While pointing at India’s growing economic clout on the world stage, Treacy says, “If we look at the World Bank statistics, India is projected to surpass Germany as the fourth largest economy over the next 12 to 15 years. We are looking at population that will afford to travel on cruise abroad greater than that of US. So when we look at cruise passenger numbers of 130,000, to let’s say we get 200,000 this year (2018); it’s still quite small compared to the 14 million that we are seeing out of US, or over one million that we are seeing out of Australia. There is untapped potential but there is a lot work to do.”
Chan pointed that as a source market India should be viewed in terms of the number of cruise passengers that it is generating against the total outbound leisure travel. “We may have about 26 million Indians that travelled abroad in 2017, but less than 150,000 people going on cruising,” he said alluding that there is lot more that travel agents can to do to grow the numbers.
Sharing tips on how to convert land vacationers to cruising, Chan particularly highlighted two key aspects, value-adds and choices. “A lot of guests don’t care whether it is cruise vacations or land vacations. They care about if they want to go to a certain destination, at a certain budget, which form of vacation can offer them the best experience. Over the past three years, Northern Europe has become a very attractive cruising destination because the hotel, dining and transportation is expensive in the Indian market and in Asia. If you compare a cruising vacation to Northern Europe and are telling about having the same experience at much less total cost and value-adds, you will find great value. This is one of the most powerful ways to sell cruise vacations,” he suggested.
Furthermore he suggested that the travel fraternity need to highlight the range of choices a cruise vacation offers. “A lot people in India and Asia have strong perception that there may not be many offerings on a cruise ship. We need to change that perception. Talk about the choices,” he suggested.
Big Bucks for Agencies
Kollar says that it’s a simple fact that without the travel agent, the cruise industry could not survive. “Apparently 80 to 90 per cent of the world’s cruise bookings come from travel agents. The 60 odd cruise lines that are in existence, they have limited reservation capacities to handle 27 million people that will cruise this year and are dependent on travel agencies across the world to fill their inventory. It’s a travel agent who actually recommends a cruise or advises it as an option. Why do America, Germany, Australia and the UK have the highest amount of passengers? Because they also have the highest number of travel agents that believe in cruising and recommend them,” Kollar says.
Drawing travel fraternities’ attention to selling cruise vacations, Saxena said, “When it comes to cruise, that is the easiest package vacations that are available in the world. You talk to one cruise line and you can sell 200-300 destinations over their fleet of vessels. And compare that to any other vacation options or tour packages, the value that you get on cruise is far superior to anything else that you get elsewhere.”
Importantly, he however also drew attention of agencies’ dwindling income in India because of vanishing ticketing commission and warning travel fraternity of the same fate by cruise lines if they fail to grab the cruising opportunity. “Cruise lines are giving a lot of commission away to the travel agents and intermediaries, let that day not come when the cruise lines are forced to reach out to the consumers directly and slowly and gradually the importance of travel agencies fade away. This is the time to wake up. If the travel agencies don’t start supporting, the cruise business is going to get very-very difficult,” warned Saxena.
Ashwani Nayar, Multi-property General Manager, Westin and an IHM Pusa alumnus with 27 year of experience in the hospitality industry recently had his Batch Reunion. He says he could count the number of hoteliers on one hand out of 270 students from his batch. There is widespread concern that the hospitality sector lacks enough quality institution, then there are lack of quality students coming forward for a career in hospitality and tourism sector, and to top it all there is also a gap in hotel graduates’ expectations and the reality on the ground in terms of long working hours, split shift, remuneration and to some extent opportunities as well. No wonder, Nayar could count those from his batch still around in the hospitality sector, on one hand.
Nayar was speaking at a panel discussion on ‘Enhancing employability of hotel graduates’ at SATTE 2018 in Delhi last month. Moderated by K K Pant, Principal, IHM Pusa, other panellists on the session included Swarup Sinha, Principal, ITC, Hospitality Management Division; Chef Vivek Sagar from Tourism & Hospitality Skill Council and Nimisha Seth, faculty with IHM Pusa and also representing National Council of Hotel Management. The panellists delve on a range of issues concerning enhancing of employability of hotel graduates.
Setting the tone of the discussion, Pant said, “We are in a situation where the educational institution and the people who enrolled in those institutions are not really happy. There is a kind of disenchantment in the industry and it is not helping anybody. And, with the kind of ambitious plan that the government has about tourism, if this situation were to continue, I don’t think that the government is ever going to achieve the kind of task it has set out for itself.”
Outlining key industry issue on talent, employability, grooming and meeting expectations, Nayar said, “In my generation a decade or two ago we in the hospitality industry fought the war on customer acquisition. Now this is the time, especially going ahead, the war is going to be fought on talent acquisition, particularly right talent acquisition for the right job and retention of that talent.” He also said that those days are gone when we were under paying people, and also insisted on students developing the right attitude and behaviour.
Furthermore, he said, “When I look at us serving the millennial as guests today, I definitely need millennial in my team to be serving them. It is very important for industry to understand them, their requirements and what is it that they are seeking, and then selling those expectations right. It can happen at the level when young students pass out of school when we first approach them. That’s when we need to reach out to them and set those expectations right. There are few basics about this industry which are not going to change. Long working hours, hard work, especially in departments like F&B and kitchen is not going to go away.”
Sinha, while outlining what it takes to make the cut for ITC’s Hospitality Management school, one of the top hospitality institute in India, pointed that less than two per cent of boys and girls who are interviewed actually become Management Trainee. “We look at the right service orientation. We not only want you to anticipate the needs of the customer, we also expect you to understand the desires and needs of the customer when they have not asked for it also,” Sinha said.
Furthermore, he advocated a “tsunami of change in Indian education system, especially in hotels and hospitality.” He said that the catering college institutes need to focus on two key aspects. “One is to educate the boys and girls who are just 17-18 year old. A lot of focus also needs to get into the people who are teaching because they also need to be contemporary. If you ask me, like there is internship for boys and girls, there should be permanent internship every year for the faculty with the industry.”
He also advocated the need of reverse mentoring. “We need to look at the youngsters and need to learn from them and then we should guide them. We might be senior by age, but the millennial are much more superior to us with respect to knowledge, IT, social media and they are the future customers for us. So its important for us to listen to them also,” said Sinha. He also drew attention of stakeholders to the fact India is a very young country and now is the time to make use of the “demographic dividend” or the opportunity is lost.
While outlining the course curriculum and system of education, Seth said that the turn off is really seen when the students proceed for their industrial training when they see the industry. “We have seen major trend of students deciding to move off from the industry towards ancillary hospitality units,” she said and added that the technology savvy millennial, with a world of opportunity in front of them, starts looking at all the avenues of opportunities available to them with remuneration considerations, like career in cruise or retail sectors.
Highlighting the role and responsibility of Tourism & Hospitality Skill Council and the various platforms that it is helping develop to meet the demand, especially at the lower end of the pyramid, Sagar informed about the changes being introduced into the courses like Apprenticeship, Hunar Se Rozgar in order to enhance the employability of students enrolled in these courses.
Sinha also suggested that students should be thorough in their research of the company they are applying to, are well groomed, have the right demeanour with great profile and understanding of the industry and are good at communication skills, especially in English, with right soft skills. Furthermore, as his parting words to the students of hospitality, he said, “The best only comes out when you challenge yourselves. In comfort no good happens.”
Japan has placed tourism at the centre of its growth strategy and inbound tourism has emerged as one of the important engines of economic growth in Japan in recent years. Japan achieved its target of 20 million inbound tourists by 2020 five year early and the revised target stands at 40 million today. In the last three years (2015-2017) it has recorded robust year on year growth of 20 per cent as inbound arrivals grew from 19.7 million to over 24 million and has now reached almost 28.7 million at the end 2017. Japan’s decision to relax its Visa rules for China and its other Asian neighbours has emerged as the biggest reason in the turnaround of its tourism fortune.
In 2016, Indonesia probably came up with one of the most pathbreaking Visa policy in the world as it announced free Visa for citizens from 169 countries, including India, which was hailed by UNWTO as “setting example to the world.” As a consequence to that Indian arrival to Indonesia has grown by 30 per cent in 2017 with about 500,000 Indians visiting the country last year and replacing South Korea to emerge Indonesia’s sixth largest source market. In the wake the two countries have also witnessed significant direct air capacity growth in recent time.
World over Visa reforms have proven to be critical in the growth of travel and tourism as is evident in Japan’s case. Moderated by Travel Agents Association of India (TAAI) President Sunil Kumar, the session on ‘Visa Reforms and Growth in Tourism’ at Silver Jubilee edition of SATTE last month included Şakir Özkan Torunlar, Turkish Ambassador to India; Dr Ahmed A R Albanna UAE Ambassador to India; Jagdishwar Goburdhan, High Commissioner of Mauritius to India and Mahendra Vakharia, President, Outbound Tour Operators Association of India (OTOAI), to delve deep on Visa reforms impact on tourism growth with a view of growing security concerns the world over.
Setting the tone for the discussion Kumar pointed at the burgeoning Indian outbound travel market that is projected to become a 50 million outbound travel market and how amidst increasing recognition of this fastest growing source markets, Indian travellers are being wooed with as many as 58 countries today attracting Indian tourist with Visa free travel, Visa on Arrival or easy access of Visa through eVisa application. He asked the panellist what impact Visa reforms will have on tourism while at the same keeping the security concerns in mind.
Highlighting the fact that tourism contributes a staggering 18 per cent to UAE’s GDP, Albanna pointed that ease in obtaining UAE Visa figures prominently in the UAE’s plan to further develop tourism and grow the sector’s GDP share in the UAE economy to 25 per cent in the coming years. “Looking at the need to relax the Visa rules for tourism growth, the government has made it possible for the citizens of more than 38 nations to enter UAE without prior Visa. Aside from that the industry itself in terms of airlines, whether Emirates Airlines or Etihad or Air Arabia or flydubai, are able to issue for their own passengers, visit or transit Visa. Similarly the hotel industry is also allowed to issue the required Visa for the different nationals who are visiting the UAE.”
Further adding on Visa reforms he said, “I think it is very important that we control in certain ways, but control does not mean prevention. Control in terms of keeping your own security and making sure that people are safe. But at the same time we open in terms of tourism. The tourism industry is very important.”
Recalling how as 19 year old when he obtained his first Greek Visa and could travel as backpack for months without any Visa requirement from any of the remaining countries that he travelled through, Torunlar said, “Today a Turkish Universities student needs to spend weeks to apply and get his Visa for the same countries I travelled to in 1979. Today not only Europe but the entire world has become more conservative in issuing Visas to foreigners.” He however also pointed that the successive Turkish government has always been in favour of Visa free travel. “The nationals of foreign countries who need to get Visa for Turkey are the citizens of the countries whose government prefer to implement Visa on Turkish nationals and restrict them. In such case Turkey acts on the basis of reciprocal system.”
Furthermore, he said, “Turkey is one of the top tourism destinations in the world and to make it sustainable Turkey has been implementing eVisa to the nationals of 110 countries, including Indians, who hold valid US, the UK and Schengen Visas. Any applicant who has access to internet may get his Visa in three steps in less than three minutes. The results proved that the number of tourist visiting Turkey has increased by millions.”
Goburdhan while informing that Mauritius today offers Visa free travel to more than 114 countries whose citizens can stay for days or months, has also greatly helped Mauritius promote its business and trade along while growing its tourism economy. Furthermore taking tourism and security concerns directly, he said, “Tourism is a wonderful industry, very humanitarian, helping so many countries and helping in countering terrorism. The best thing is for the countries to eliminate Visa in line with the philosophy of ‘Vasudaiva Kutumbakam’ (The world is one family).”
Referring to a question on the future of travel in regard to Visa, Albanna said, “We need to open up and we need not to prevent. But the control has always to be there. In today’s world lots of things are happening. The limitation has to be there within certain reason and limitations has to be there within certain procedures.”
Responding to expectations of a world with minimal or free of Visa requirement, Torunlar said, “I cannot see this happening tomorrow or the day after tomorrow or anytime in the predictable future. We may take 9/11 which has changed the global atmosphere in Visa free travel. Today we are two countries here from the same region where people in neighbouring countries are suffering domestic violence in their countries. They are not travelling to the neighbouring countries for tourism but they are fleeing brutal regimes fleeing from where they were living for generations. On the other hand there are countries who are discussing whether to allow 24 or 48 of these people. All this can also be combined with economic bottlenecks in trade and investment, and the problems that governments are facing in terms of employment. I think this Visa free travel will not happen in my generation or generation of my son.”
Referring to the need to provide the tour operators across centres with consulates or Visa facilitation centre as well as the need of easy Visa access, Vakharia said, “India is a last minute market. So when they decide at the spur of the moment that they want to go on a holiday, countries which have Visa on arrival facilities or countries which have extended the online facilities really get the advantage. Something like this is what encourages tourist to look at a destination or a tour operator to identify destinations and push it through to the client.” Furthermore he advocated the need of dialogue between the embassies and trade to ensure that tourism continues to thrive while at the same time safety and security concerns of the governments are also duly acknowledged by the industry.
Taking note of what ambassadors of UAE and Turkey said in terms of air connectivity between India and their respective countries, Kumar pointed that Visa reforms and good air connectivity need to go hand in hand. He said, “Its Visa facility connected with flights. 1070 flights (Number of weekly flights between India and UAE) they get 5 million Indians and 14 (Number of weekly flights between India and Turkey) and they just get about less than 100,000 visitors.”
Las Vegas welcomed 42.2 million visitors in 2017, 19 per cent of which were international visitors that accounted for 31 per cent of direct visitors spending. Today, the city lays claim as the number one trade show destination in North America for the last 23 years. It registered record convention attendance in 2017 as it hosted more than 6.6 million convention attendees. The city is home to some of the largest Convention Centres in the United States. In terms of economic impact, the convention and exhibition segment has become one of the vital segments of Las Vegas’ economy.
Closer home, Singapore, a city-state, is one of the top destinations, both in terms of leisure as well as MICE tourism. This Asian Tiger has often been considered as the financial capital of the South-East Asia. Despite the absence of key tourism attractiveness like great natural beauty, heritage and monuments, Singapore is one of the top tourism destinations in the region, thanks to a very proactive tourism board that undertakes all round promotion of Singapore, as well as a Convention Bureau that promotes Singapore as a MICE destination in particular.
Unfortunately, the same cannot be said for India that has lagged on both fronts, leisure as well as MICE, despite being so richly endowed with natural beauty, history and heritage, amongst others, and a fair bit of existing MICE related infrastructure that may not be as world class as those in Las Vegas and Singapore but are quite capable of handling a much larger share than it presently does.
The role of tourism to jumpstart fledgling economies worldwide has not only been well explored, but well proven. MICE (Meetings Incentives Conventions and Exhibitions) has emerged as the most important sub-sectors of tourism for its greater per capita expenditures compared to leisure tourism, and furthermore its role in growing a destination’s profile as well as incremental traffic through repeat travel for leisure activities in coming years. So much so that it is in fact often considered as a precursor to establishing a destination’s leisure profile. And if that is the case then destinations like Singapore and Dubai do come to mind which have first emerged as the financial capital in the region and have benefitted as a leisure destination soon after.
According to Rajeev Kohli, Jt. Managing Director, Creative Travel, who has also led reputed international bodies like Society for Incentive Travel Excellence (SITE) and India Convention Promotion Bureau (ICPB), “It is a fact that no destination in the world really has succeeded effectively in leisure tourism until the business tourism came about. The reason for this is when business tourists come and they also take a day trip to say Agra or some other destinations then they come back to the destination with family for long trips and tell friends about it.” The research conducted by National Convention Bureau of South Africa states that 40 per cent of all convention delegates attending meetings in South Africa return in the next five years as tourists, further boosting tourism growth and job creation years into the future.
India’s standing as a MICE destination:
Around 10 years ago, Indian Institute Management, Bangalore conducted a research on “India as a Global Conventions Destination: Prospects and Strategies” on behalf of ICPB and Ministry of Tourism. The project was taken by the Government of India, quoted in the national budget to sanction two mega convention centres in India that never happened. Of course that is beginning to change, albeit slowly, amidst increasing cry from the industry as well as growing recognition from the government on the merits of developing large MICE infrastructure to cement India’s appeal as a world-class international destination for large scale events like conventions and exhibitions.
Following the opening of South Asia’s first world class offering and India’s largest, Hyderabad International Convention Centre, in 2006, few more such infrastructures have come up in places like Greater Noida, Lavasa, Kochi and Ahmadabad among others. Delhi’s Pragati Maidan, host of some of the biggest event is the country is undergoing major redevelopment today. A world class integrated convention infrastructure, and probably one of India’s most ambitious infrastructure projects today, is coming up close to Delhi’s international airport.
Besides, with the existing MICE infrastructure and new hotels with large meeting places, the industry today largely believes that India is good to host over 90 per cent of the events taking place today and it is only a matter of time before it catches up on the remaining as well in the coming years.
“I don’t think we have major challenges in selling India as a MICE destination. We have major challenges in the mindset of us who are promoting and selling the destination and not in terms of infrastructure the way we have been crying about for generations. Meetings will go where business needs takes them. I don’t think meetings are as destination dependent as conferences and conventions,” points Kohli, indicating the problem is more of the perception both, in the government and private sector as well as how the business is approached.
According to Madhu Dubey, Executive Director, ICPB : “The nomenclature of MICE tourism that still persists in the government is perhaps misunderstood. The Ministry of Tourism had been looking at tourism as multi-product with MICE as a niche tourism activity. Now, time has come as the Ministry has acknowledged the importance of MICE. There is considerable place for MICE and its growth in the new draft policy of the government. It’s not that we are not promoting ourselves enough, but the fact is that our competitors are doing a far more aggressive job and we can’t afford to be left behind.”
There is also a problem of popular perception as well that India as a MICE destination grapples with problems related to logistics. Highlighting the same, Saurabh Bhargava, Associate Vice President – Sales, North India, Taj Hotels Palaces Resorts Safaris, said : “India is perceived as a very complex destination to do an event or a congress. From licenses to a music event to a sporting event, it’s just complicated. And then there are last minute surprises too. So people are not ready to bet on India in the long term where they are supposed to put in money. We saw the World Cup Soccer happening which was a great success. But there were lot of hiccups like logistics. The first 4-5 metros are very well connected but how do we open new destinations? How do you go to Coorg or Corbett? When you tell your international delegates that you are flying to Delhi, the next morning we will take you by bus and it takes seven hours to reach a certain destination, it doesn’t work.”
“The other thing is most of the people that we speak to say that India is not a fashionable destination for MICE. It’s a fashionable destination for a leisure visit or a holiday. Incredible India took ten years to reach where it is to get that leisure traveller into India. We need a sustained campaign, a sustained effort by the government and all of us to change that perception about India. And to tell everybody that a MICE delegate spends 1.4 times of what a leisure traveller will spend in the country so there is more money to be made in the MICE,” Bhargava further added.
Touching upon both exhibitions and conferences, Sudeep Sarcar, Vice President, India Expo Mart & Centre, said that the exhibition industry has today understood the revenue model and how to earn money out of an exhibition. He pointed out that the same cannot be said for the conferences and it is one of the sector’s bigger challenges. “There are a lot of conferences happening, but it seems that the revenue model is not very clear to most of us in the conferences industry. Unless and until we do not makes conferences a viable and sustainable revenue model and can feel that we can make money out of this table or this event, the main (other) challenges cannot be overcome.”
Furthermore, he said that there are venues of various sizes that can accommodate 1000 pax or 5000 pax in various cities but the challenge is for the association or PCO to understand the viable and sustainable revenue model for all associated stakeholders. “If that happens, I am sure everybody is going to jump on the train to bring in more and more conferences,” he stressed.
Drawing a cinematic analogy, Amit Saroj, Director, Attitude Events, a PCO, said, “India needs a MICE story which needs to be built in a big way. For that, we need a producer and the director which has to be the Government of India. We also need a lead character for that story as well which I think has to be CVB (Convention and Visitors Bureau) or ICPB, in its current form or maybe the new constitution that is being formed, which has to play the lead role in the story. The other change that is necessary is to bring the industry in the supporting role and let the Convention Bureau take the lead role. That’s the change that is required that according to me is the biggest challenge in the industry right now.
Furthermore, sharing his learning from an unsuccessful bid for a World Congress that he attempted with ICPB in the lead last year, he pointed that despite some hard-selling for venue and with the government here and pitching India as a culture and knowledge destination in the bid, there were some practical challenges that came out of the interaction with the event organisers, like tax issues, getting the tax credit for their spend in India, hotels proximity to the venue, as well as grants that the eventual winner Abu Dhabi offered to the event.
Sarcar also drew attention to big domestic industry with large national conferences that is not being showcased to global event organisers. “The gap here is that the organisers of these domestic events are not coming together in their own sphere and bringing in the related stakeholders and joining hands with the international events in order to throw out a large platform for the international conferences or events to come in and witness what we already have. We have to augment our own associations and all stakeholders together, come with a revenue model, and then pitch to the international organisers to show them what is already on the platter, come and join us. We are already 5000, if you join we will like 10,000. This needs to happen, maybe by Government of India, by ICPB or by all the stakeholders,” he said.
Dubey points that since the ‘Incredible India’ campaign launched in 2002, government’s thrust has been to promote India as a multi-product round-the-year leisure destination and now the need of the hour is also to create focussed and aggressive MICE marketing and promotion plans for the country.
“MICE by itself was a small component of that promotions, which today in ICPB I realise requires focussed marketing with a creative tagline along with ‘Incredible India’ campaign to bring out our strength as a MICE destination. We cannot get lost as a leisure destination, hoping that people will perceive us as a MICE destination too. Thankfully the ‘Incredible India’ campaign which is one of the most recognised Indian brands now will be our strength in promoting India as a MICE destination.”
Not that large events are not taking place in India. India Expo Centre in Greater Noida today plays host to over fifteen events that is spread over more than 100,000 square metres. Out of these, there are at least four events that are the largest in the world. So there are large events taking place, at least in the exhibition space, while at the same time there are challenges to be addressed in moving forward, especially in bringing the industry under some rules and guidelines in order to avoid unhealthy competition.
However, Sarcar lamented that on the contrary what also frequently happens is that whenever there is a large event that comes up there are some other parallel events that comes along and brings down the 5000 pax conference to 2000 pax. “The moment there is a success story, there is a parallel event that has stood. If you look at events in Germany or the UK or US, the events that have become large have not become large in a day’s time or in a year’s time. They have kept that event married to that particular venue or the region for years. At IMTEX (Indian Metal Forming Exhibition) in Bengaluru, it took us 17 years to make it one of the world’s largest Machine Tools show. If this event is happening here today, there has to be some regulation that this does not get repeated very soon in other part of the country. There need to be some regulation by ICPB, by Indian Exhibition Industry Association in force.”
Concurring with Sarcar, Bhargava also opined, “There is business for all of us. We don’t need to fight. We don’t need to compete with each other. There is enough to keep all of us happy. So the joint pitch is going as a nodal body with a little blessing from the government saying that yes this is legitimate bid, these are legitimate people, who can deliver what they are promising.”
Bhargava also pointed that there are also challenges that come unannounced like demonetisation and liquor ban. “All these things impact tourism, impact MICE. You may not see the impact in the next 45 days but you will see the impact over the next 12 or 15 months. And this year we are seeing the pipeline which is not as strong as the last year.”
Highlighting the high taxes in the sector, he also pointed out that when you compete you are not only competing with various other hotels or cities, but you are also competing with various other destinations. So you look at a Sri Lanka, Nepal, Bhutan, or in the region at Singapore. We are one of the highest tax paying nations and that also deters the potential MICE organisers to come to the country.
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