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Consistent GDP growth and a growing business environment are fuelling the overall performance of hotels globally. Various industry experts including Parmeet Singh Nayar, General Manager, Shangri-La’s – Eros Hotel, New Delhi; Dilawar Singh Nindra, General Manager, Jaypee Vasant Continental, New Delhi; Vaibhav Sagar, Director of Sales & Marketing, Crowne Plaza Greater Noida spoke to T3 magazine exclusively on the current scenario, future outlook and challenges. Excerpt:
Q] How would you explain the current scenario of Indian hotel industry?
Parmeet Singh Nayar (PN): The Indian tourism and hospitality industry has emerged as one of the key drivers of growth for the services sector in India. Foreign Tourist Arrivals (FTAs) and domestic traffic (leisure & MICE) has increased considerably over past few years and attracted huge Foreign Direct Investment (FDI). Considering this growth potential, a lot of International hotel chains are increasing their presence in the country. Quite recently, even the Ministry of Tourism, Government of India has started investing in events that can help establish India as an attractive tourist destination for the untouched markets. We recently collaborated with India Tourism Mart to showcase our hotel.
Dilawar Singh Nindra (DN): The current scenario of Indian hospitality is still very volatile and dynamic. The Indian market with infusion of digital tools has been successful in opening gates for the digitally-advanced traveller. These tools help in planning, booking and enhancing the entire experience journey. We can also observe that the end user has moved away from the shackles of making bookings via the traditional methods and rely on the new age solutions. It is imperative to be equipped with all online portals so that inventory can be updated on real time basis. Also, efforts need to be made to understand the customer journey from the time the booking is made till the time he/ she checks out. In order to capitalize on the repeat visits of guests, it is vital that their previous feedbacks, expectations and complaints are addressed to on time.
Vaibhav Sagar (VS): Indian hotel industry is booming with more and more International players expanding portfolios in the country. Leisure (domestic & inbound travel) and business travel segments are witnessing major growth, with most hotels opening in Tier 2 & 3 cities. For a business & conferencing hotel like Crowne Plaza Greater Noida, we are experiencing increased demand from all segments resulting in promising revenue figures and profit margins.
Q] We have been witnessing a lot of disruptors like OYO, Airbnb and others consolidating in the market. What is the impact of these on the organized hotel sector?
PN: It’s good to see these new hospitality companies grow as they are eventually helping to organize the fragmented market which was operating in a very unstructured and unorganized manner so far. While they will certainly create competition for organized budget and mid-segment hotel chains, consolidation of the long tail business will help standardize the offerings and benefit the end consumer.
DN: Disruptors being referred are not a direct competition for a 5 star hotel chain like ours. They may have snatched a small chunk of revenue from the organized sector but, their clientele was never a part of our target segment.
VS: Brands like OYO and Airbnb are preferred by leisure travelers while our target audience is business and MICE. Also these brands do impact the mid segment but does not have a major effect on the 5 star or premium hotel segments as the facilities and amenities offered are world apart.
Q] Most of the development is taking place in mid market segment. What is the impact on ARRs?
PN: The mid-market segment is growing fast on account of heavy demand coming in recent times. There are a range of factors that have bolstered the mid-market brands in India - a surge in middle class segment to an increase in business and leisure travel, urbanization, higher economic growth and the doubling of air travel over the past seven years. The price point and target audience for mid-market segment and luxury segment are completely different hence there is not much of impact on the ARRs for luxury hotels like us.
DN: We can observe that the ARRs have started to increase, however to reach its actual expected stage one has to be patient for the next 2 to 3 more years at least. The current ARR patterns are still 30 to 40% lesser in comparison to statistics from 10 years back.
VS: It is true that the branded, mid-market hotel segment is steadily growing particularly in Tier 2 and 3 cities. ARRs continue to grow but the growth pace has comparatively slowed down.
Q] How was 2018 for you in terms ARR, occupancy and RevPar? Have you noticed any change on these parameters over 2017?
PN: In 2018, we had a great opportunity to showcase our refreshed product including new rooms and a spectacular Horizon Club Lounge located on the 19th floor of the hotel, offering views of the bustling New Delhi and the most iconic landmarks of the city, including India Gate, Lotus Temple and Jantar Mantar. Our success story reflected not only in the numbers but also in various awards that we won last year like ‘Best Business Hotel’ award by Travel + Leisure and Business Traveller Asia Pacific, ‘Best Employer Brand’ by World HRD Congress, Responsible Business Hotel, etc. To sum up, we witnessed an increase in all the areas - ARR, Occupancy, RevPar and customer satisfaction over 2017.
DN: The ARR was constant for FY 17-18 and 18-19, whereas the occupancy and RevPar both saw a marginal dip.
VS: At Crowne Plaza Greater Noida, we witnessed double digit growth across all these revenue indicators last year.
Q] MICE is emerging as one of the main contributors for hotels in Delhi –NCR. What is the contribution of MICE in your total room bookings?
PN: MICE indeed has become one of the key contributors for hotels across Delhi & NCR. Personally for us MICE contributes approximately 13% to the overall hotel business and our focus remains to only cater to chic MICE business where we can help offer personalized, creative and thematic meetings that truly reflects luxury.
DN: MICE is one of the major revenue generating streams and the steady growth of business has helped us in capitalizing on this growing segment of business. The MICE sector is growing over the last one year as a significant part of the overall business and we expect this to continue in the coming years as well. We offer varied range of services for meetings, incentives, conferences and events. Our team helps in planning a customized event as per the requirement & budget of the client – from suggesting the apt venue to being flexible with the menu to planning some out of the box activities to surprise as well as help they unwind during long meeting hours – thus, providing end-to-end services. MICE contributes almost 10-15% of the total market share
VS: As a leading business and conferencing hotel in Delhi NCR, MICE is a major contributor for Crowne Plaza Greater Noida with 25% contribution to total revenue.
Q] F&B has gradually been emerging as a major revenue earner for hotels. What is the contribution of MICE & business travel, F&B and leisure in your overall business?
PN: As traditionally noted, creative F&B has been a DNA for success of hotels. Our key focus has been to offer authentic cuisine curated by the expat chefs from the region that we wanted to showcase. We brought in some famous dining concepts like a 47-year old legacy, the 39th Shang Palace in the World, Sorrento - the Italian restaurant certified with Golden Q from Ospitalita Italiana and world on a platter concept restaurant Tamra that keep us in the limelight. Launching unique food and beverage pop-ups and curating special dining offers and experiences through our dining programme called ‘The Table’ helped us with great positioning in the market. Business travel without wellness is incomplete and therefore our focus has been to develop our wellness facility ‘Chi, The Spa’ as a personal space for our guests to take a break and de-stress themselves. We have a good mix of MICE, business travel and leisure business.
DN: F&B is the backbone in terms of revenue contribution. It has a constant share of 50 percent in the overall business. As far as MICE & Business Travel go, one third of the business is derived from these segments.
VS: F&B including C&E contributes about 29% to total revenue, off this 65% is contributed by conferences and events segment/; 25% contribution from MICE and approx. 5% contribution from leisure segment.
Q] What is the ratio of foreign V/s domestic guests in your occupancy?
PN: Our hotel experiences an influx of foreigner guests who are travelling on business as well as leisure while from India, there are majorly business travelers staying with us from key metros. Situated close to the Presidential Estate, shopping and business districts in downtown, Shangri-La’s - Eros Hotel, New Delhi is at the beating heart of the bustling capital. With the City centre location, our guests stay easily connected to the best of the city.
DN: Jaypee Vasant Continental, New Delhi has an optimum mix of foreign and Indian nations being, 45 % and 55 % respectively.
Q] Despite the prevalence of OTAs, Indian market is still driven by B2B. What percentage of bookings you get from online channels?
PN: Our company drives large share from e-direct channels that is the hotel website and the mobile app, of course supplemented by our partner OTAs. Our focus remains to maintain rate parity.
DN: OTA have captured a major chunk of the revenue of the entire market for hotel business. We are in direct connection with guests which help us in ensuring personalization and attention to detail to guarantee repeat visits.
VS: OTA contribution to our business is about 27%. This includes OTA, brand website and GDS bookings.
Q] What sort of CSR activities you are involved with?
PN: I personally believe that CSR and sustainability initiatives are the heart of Shangri-La’s – Eros Hotel, New Delhi. Driven by our core values, the areas of CSR that we work within are Our People, Our Business, Our Environment and Our Communities. Some big initiatives have been taken to drive a socially responsible business. As a group wide initiative, the company has decided to ban single use plastics straws and stirrers at our properties in 2019. We joined hands with our embrace partner Noida Deaf Society back in 2010 to contribute in improving the lives of deaf students from all across the country, by providing them vocational skills and enhancing their overall confidence so they can face the world with élan. We have employed 6 people from NDS who are working with us. We have developed a property called ‘Reviving the ‘Shangri-La’ of Delhi’ and we aim to plan multiple events around this. The importance of Delhi’s cultural heritage is diminishing and we have taken a step towards keeping it alive. In January we took kids from an NGO to a famous historical site ‘Humayun’s Tomb’ as our step to educate them on the importance of our culture and history and ultimately Reviving the ‘Shangri-La’ of Delhi.
DN: We believe ‘doing social good is a social responsibility of every business organization’. We like giving back to the community by taking initiatives of the likes: organizing event for the differently abled children or orphans. Special food delicacies & gifts are offered to children and various interesting activities are organized. We organize ‘Camps’ where clothes and other basic amenities are shared with the needy. We also supply water to SDMC on monthly basis for conservation and horticulture purposes.
VS: At Crowne Plaza Greater Noida we support a local school in the area engaged in the work of educating underprivileged kids. Apart from this, we regularly engage in community activities like road safety week, tree plantations etc. in
The New Distribution Capability (NDC), an XML-based data transmission standard promoted by the International Air Transport Association (IATA) that enhances the capability of communications between airlines and travel agents, is currently buzzword for the global airline industry. Although in nascent stage in many parts of the world, airlines are putting all their efforts to educate the travel agents and other stakeholders about the benefit of the NDC. Lufthansa Group, one of the pioneering advocates of the NDC, has been working on this since 2015 and currently received IATA’s level 4 certification on NDC.
Detailing about the benefits of the NDC for the industry and end customers, George Ettiyil, Senior Director, Lufthansa Group, said that NDC is bringing 3 main elements of travel to the fore: transparency, customization and a seamless shopping experience for the industry as well as air travellers. “Transparency is the key disruptive element of travel for the past 10 years which was not offered by the GDSs. Consumers do not know what is he paying and why is he paying the huge cost. Moreover, there are high technical limitations on the old technology to actually unbundle the services. Consumers have become very choosy because of customization which is the second very important disruptive element for travel. Transparency and high degree of customization has become need of the any airline and it is continuously increasing. Shopping experience was also not possible with old technology. New consumers are used to much more professional shopping experience and the old technology is not just fit for this,” Ettiyil said.
Replying to a question on the need of NDC while so many other distribution channels already exist in the market, he opined that GDSs could not scale up their technology and the distribution cost of the airlines went up. Going back to the history, Ettiyil detailed that airlines traditionally have always had a challenge of distributing their seats and making these available globally. “Looking 40 years back, there was no advanced IT technology like today. Starting from end 70s or early 80s, several airlines got together and created companies that could distribute their content or inventory. As a result, Sabre was started by several US carriers in the USA and several European carriers including Lufthansa started Amadeus in mid 80s. It was revolutionary on those days as GDSs were created by airlines to make a quantum leap. Looking 30-40 years later now, that technology still exists today. However, it is very expensive as it is based on old technology. From an airline point of view, the commercial agreements that were made on those days have become burden to the airlines. The distribution cost is very high when it is based on old technology and the cost is passed to the end consumer,” he said and added that the onset of low cost carriers showed the industry way that distribution cost can be lower down. “LCCS started delivering their content purely on their own direct platforms. LCCs in Europe started with internet only so there was no distribution cost. They were able to challenge the classic airlines because of their low cost in every way including distribution cost which was tremendously lower than classic IATA airline,” he briefed.
This is the reason that IATA started NDC which is providing standard for XML based APIs. “Now, every airline or any other travel service providers can actually follow the standard. IATA is also promoting ‘One Order’ offering shopping experience. Payment is also becoming future disruption which GDSs cannot be able to offer. Hence, there was a need for new technology. That’s why NDC has become so relevant,” he added.
Talking about Lufthansa’s adoption of NDC, he said that the Group has been creating an API based on NDC standard since the last 5 years. “Over the last years, our APIs have been developed to highest standard created by IATA. On old technology, our airline was not able to offer wifi. With new technology, it is offered now. So, there are developments which is possible with NDC today and are not possible with GDSs as it requires huge investment that does not justify the outcome,” he said adding the GDS system has restrictions of 26 booking classes.
Explaining it further, he said that when it comes to pricing it is limited by the number of alphabets that exits. The NDC is removing the cap from the 26-booking class restriction and by starting with the bid price or market fare generated in the system, pricing logic is applied earlier in the process and without the limitations of the 26-bucket problem. The airline then has more opportunity to fine-tune a customized offer, which can be further discounted, bundled, or promoted. This means that an airline-controlled Pricing Engine that can operate such a linear pricing model unlocks considerable more opportunity for airlines to earn more revenue and delight their customers. “NDC is opening up the whole new world. It is highly disruptive proposition in the airline and travel industry which will revolutionize the way end consumer experience the commercial aspects of aviation. Lufthansa is the first airline to go ahead with this kind of disruption and other airlines have also joined. More and more airlines are reaching to certain level standards,” he said and added that the GDS companies have actually also decided to participate in the new NDC space and we are happy they will also come with new solutions. “Other players are also coming,” he added.
Replying to a question over 80 per cent of content will come from non NDC channels for the next 4-5 years thus making the system more complex, he agreed and argued that airlines will try to bring the low cost cheap etc content through NDC. “They are forced to as they have no choice. Otherwise they cannot survive as competition is just too high. So, the more premium (premium classes of travel) the offer is, it will be probably on more traditional channels. Intermediaries will remain there. I do not think that a end consumer always going to get what he wants to on airline website. Many will get on airline websites but other will want the additional services which airlines do not offer and they will look for intermediaries who can package as per the customers need. Also, people do not want to spend much time on these. If they have trust on travel professionals, they will take their services,” he said and opined that either traditional intermediaries will change or transform or new players will also get added that are technically strong.
Coming to the complexity part, he said, I think complexity will increase. “I see complexities increasing in every domain. How these platforms are competing with each other will create further complexity. It is still to be seen that what will be the dynamics of the new space that is coming up,” he opined.
So, what should be the business model for NDC? “We as Lufthansa feel that we have the clear picture for the next few years to go forward. Because we have the clear picture, we started off a program called the NDC Partner program. In the NDC Partner program, we actually offer very clear spectrum of the commercial aspects. Our API is provided by Farelogix which provides front end known as SPRK. Through SPARK, any IATA agents can enroll and immediately access our NDC content which is not just 16 Euro cheaper but we even have price differential ranging between Rs 1500 to Rs 3000 for economy class and going upto 5000 for business class. SPRK is our entry offer. The next one we promote is our direct API that can feed the agents front end system like online booking tool. We have another model of using intermediaries that we call ‘travel tech provider’ which can be classic GDS and many of the new ones that are coming and let them provide you with the API because they have booked on our API and if you have an API with them they can also be already fed by the travel tech providers. Many travel agencies today are already selling LCC content. These models are existing and we are just providing our content over there. We have commercial offer for all these. We pay incentives for all models. For model II, we invest together with our partners in to the technological change that is required,” he said.
With MICE and F&B emerging as a good contributor for Delhi-NCR hotels, hotels in the region is now increasingly focused on these segments. “MICE indeed has become one of the key contributors for hotels across Delhi & NCR. For Shangri-La’s – Eros Hotel, New Delhi, MICE contributes approximately 13 per cent to the overall hotel business and our focus remains to only cater to chic MICE business where we can help offer personalized, creative and thematic meetings that truly reflects luxury,” Parmeet Singh Nayar, General Manager, Shangri-La’s – Eros Hotel, New Delhi.
According to Nayar, creative F&B has been a DNA for success of hotels. “Our key focus has been to offer authentic cuisine curated by the expat chefs from the region that we wanted to showcase. We have a good mix of MICE, business travel and leisure business,” Nayar added.
MICE and F&B also contribute significantly for The Park New Delhi. “MICE segment is showing an annual growth around 20 per cent year on year and as of now it stands at 9 to 10 per cent of our total room bookings,” Rohit Arora, Area General Manager, The Park New Delhi said and added that MICE contribution towards F&B is around 25 per cent and business and leisure traveller contributes 20 per cent each in hotel’s overall business.
For Crowne Plaza Greater Noida which is closer to the India Expo Centre, Greater Noida, MICE contributes almost 1/4th of the hotel’s revenue. “As a leading business and conferencing hotel in Delhi NCR, MICE is a major contributor for Crowne Plaza Greater Noida with 25 per cent contribution to total revenue. F&B including conferences and events contributes about 29 per cent to total revenue of Shangri-La. “Off this 65 percent is contributed by conferences and events segment and 25 per cent contribution from MICE and approx. five per cent contribution is from leisure segment,” Vaibhav Sagar, Director of Sales & Marketing, Crowne Plaza Greater Noida, said.
Jaypee Vasant Continental, New Delhi also gets a good business from MICE and F&B segments. “MICE is one of the major revenue generating streams and the steady growth of business has helped us in capitalizing on this growing segment of business. The MICE sector is growing over the last one year as a significant part of the overall business and we expect this to continue in the coming years as well. MICE contributes almost 10-15 per cent of the total market share. F&B is the backbone in terms of revenue contribution. It has a constant share of 50 percent in the overall business. As far as MICE & Business Travel go, one third of the business is derived from these segments,” said Dilawar Singh Nindra, General Manager, Jaypee Vasant Continental, New Delhi.
However, The ARR was constant for FY 17-18 and 18-19 for Jaypee Vasant Continental, New Delhi whereas the occupancy and RevPar both saw a marginal dip. Shangri-La’s – Eros Hotel, New Delhi witnessed an increase in ARR, occupancy, RevPar and customer satisfaction in 2018 over 2017. The Park New Delhi also witnessed a growth in performance in 2018. “The ARR and RevPar overall has seen an about 5 per cent to 7 per cent increase as compared to year 2017. In fact, the industry has seen an upward trend in the past 2 years with 2018 showing a greater increase. Our strong brand appeal and our Anything But Ordinary experiences have definitely caught the eye of the consumer,” Arora said. Crowne Plaza Greater Noida witnessed double digit growth in ARR, occupancy and RevPar in 2018.
ARRs could have grown up more but the massive growth in mid-market hotels hindered the growth. “We can observe that the ARRs have started to increase, however to reach its actual expected stage one has to be patient for the next 2 to 3 more years at least. The current ARR patterns are still 30 to 40% lesser in comparison to statistics from 10 years back,” Nindra said.
Nayar, however, does not see much impact on ARRs due to the growth in mid-market segment. “The mid-market segment is growing fast on account of heavy demand coming in recent times. The price point and target audience for mid-market segment and luxury segment are completely different hence there is not much of impact on the ARRs for luxury hotels like us,” Nayar opined.
The recently concluded PATA Annual Summit 2019, under the theme ‘Progress with a Purpose’, in Cebu, Philippines saw the presence of 383 delegates from 194 organisations and 43 destinations including student chapter representatives from 21 educational institutions hailing from eighteen destinations.
Hosted by the Department of Tourism, Philippines, the event included the Association’s executive and advisory board meetings, annual general meeting (AGM), PATA Youth Symposium, PATA Insights Lounge, the UNWTO/PATA Leaders Debate and a one-day conference that highlighted the fundamental challenges, issues and opportunities of the travel and tourism industry and how the industry working together can bring about actionable change for a better future.
“The need for demonstrated leadership in the travel and tourism industry has never been more critical. As an industry, we are grappling with large scale global and regional challenges including climate change, overtourism and the resulting strain on infrastructure, as well as and social and economic inequality in many destinations, which will require a new type of leadership from truly progressive entities,” Mario Hardy, CEO, PATA. “This year’s PATA Annual Summit, with the theme ‘Progress with a Purpose’ not only examined the issues and challenges affecting our industry but also challenged our delegates to take action and address these problems directly.”
Delegates were given the unique opportunity to hear from Airbnb Co-Founder, Chief Strategy Officer, and Chairman of Airbnb China, Nathan Blecharczyk, who sat down for a special one-on-one interview with BBC World News Presenter, Rico Hizon.
Sponsored by the Global Tourism Economy Forum (GTEF), the opening keynote on the ‘State of the World Economy’ was delivered by Andrew Staples, Global Editorial Director at The Economist Corporate Network. He shared the latest macroeconomic forecasts for the global economy from The Economist Intelligence Unit before identifying the longer-term opportunities and challenges facing the Asia Pacific region.
Moran Birger, Acting Head of Sales for Asia Pacific and the Middle East, British Airways talks British Airways centenary celebrations as well as its performance in India market
British Airways is hosting a range of activities and events to celebrate its centenary year. The airline is also hosting BA 2119 – a programme that will lead the debate on the future of flying and explore the future of sustainable aviation fuels.
British Airways celebrates its centenary this year. Apart from heritage liveries and a star -studded campaign, what sorts of activities are planned for the centenary?
A key focus area of British Airways activity this year will be on the future of flying, demonstrating that the airline is forward-looking and will continue to innovate and evolve over the next 100 years. We are working on interesting campaigns for 2019 that will revolve around the same theme. One such initiative is BA Magic 100 where we are looking forward to surprise many of our customers with gestures that add magic to their flying experience. In December 2018, British Airways made Christmas special for a group of children, by taking them on a trip of a lifetime to New York City to ‘live like Kevin’, inspired by the adventures of Kevin in the festive family favourite, Home Alone 2.
On International Women’s Day, we invited 100 young women to the Global Learning Academy to inspire them to become commercial airline pilots. Believing in empowering the youth to pursue career opportunities in aviation, hundreds of apprentices enjoyed a flying start to their career with British Airways through a Cabin Crew Apprenticeship programme in the UK – with this, we aim to employ around 2,000 cabin crew this year.
British Airways also recently launched a brand campaign featuring a love letter to Britain brought to life by some of Britain’s biggest names. This campaign is about thanking the amazing people who fly, work and partner with us.
British Airways is also hosting BA 2119. Could you please detail us on this?
BA 2119 will lead the debate on the future of flying and explore the future of sustainable aviation fuels, the aviation careers and the customer experience of the future. In collaboration with Cranfield University, this initiative aims at challenging academics from across UK, to develop a sustainable alternative fuel which could power a commercial aircraft on a long-haul flight, carrying up to 300 customers with zero net emissions. The winning team will receive funding for further research and the chance to work alongside industry leaders to develop their concept. British Airways is the first airline in Europe to invest in building a plant to generate renewable jet fuel from household waste.
You have launched a £6.5bn investment programme. What is the latest development on this plan?
We started this year with the £6.5bn investment programme, an initiative to enhance customer proposition on ground and in the air by introducing new aircraft, new cabins, new lounges, new food and new technology including Wi-Fi.
We have recently announced significant changes to our onboard product and service in our First cabin. The new look and feel are set to take to the skies from March 31 and will include new bedding, amenities and menus that would not look out of place in a revered five-star British hotel. Also, very recently, British Airways has announced its brand new A350 aircraft that will arrive in July this year with a highly anticipated Club Suite.
How has the performance been of British Airways on Indian routes in 2018?
India is British Airways’ second largest market after the US and we are committed to invest and offer exceptional travel experience to more and more customers. The popularity of our daily services from several Indian cities to UK reflects the demand from travellers wishing to fly to UK.
Are you looking at any new routes in India or increase frequency? How is your codeshare with Vistara going on?
We are happy with the current schedule of 53 flights a week from India. In fact, last year, we expanded our network in the region by having Vistara on board as a codeshare partner and currently we are focusing on the same.
Our codeshare with Vistara has been good so far. With this partnership, we have spread our wings by connecting 13 new destinations across the region, opening cities such as Ahmedabad, Amritsar, Bhubaneswar, Chandigarh, Goa, Kolkata, Kochi, and Pune that have previously been more difficult to access from the UK. In fact, British Airways’ customers travelling on the codeshare flights can check-in their bags straight to their destination and both airlines use the same terminals at Delhi and Mumbai airports, making it even easier for customers to connect on to domestic services.
What is the travellers profile out of India?
Travellers in India are constantly evolving; their profiles have changed too with more Indians opting for International holidays. From corporate to leisure travellers, the average Indian travelling abroad is now more likely to be young and prefers travelling solo. We have also seen an increase in women travellers – both solo and in group, stepping ahead of their comfort zones and unveiling the travel experience. With our extensive global route network, and with new destinations launching all the time, we hope that we can enable and inspire adventurous travellers to continue exploring without limit.
How important is b2b travel agents for you?
B2B travel agencies play a crucial role in widening our customer reach. We work very closely with the travel communities especially in India, as there are many markets where agents are the primary choice for bookings.
“T” for “Tourism” was of one of the 5Ts of the BJP’s election manifesto in 2014. We have completed 5 years and the dates for the next election is announced and a new government will be in place in May. And while the debate rages in the industry about whether the government lived up to the industry’s expectation, a careful analysis of the growth in tourism in the last 5 years depicts a mixed picture.
The industry was far too enthused and hopeful of a change in the country’s tourism fortune towards the beginning of the Modi government’s term in 2014, that expectation has seen some correction over the last five years. The inbound growth for 2014-2018 period for India is definitely more than the international growth. However, most of this growth has been driven by a single market, Bangladesh. Diversifying sources markets and growing the existing markets at a consistent and healthy rate remains a work in progress.
During the first two years of the government, we have had PM Modi talking about tourism on every national and international platform. He accorded the utmost importance to tourism in the ASEAN meet giving a hope that regional tourism could start off. His thrust on Buddhist Tourism also created hope in the market. However, this hope could not continue to last longer even as the Prime Minister gave his best shot to establish India as a popular tourism destination.
Statistics suggests that the inbound arrival was 6.97 million in 2013 which rose to 10.55 million in 2018, reflecting a growth of 5.2 per over 2017. Bangladesh has emerged as the standout performer. The country accounted for 524,923 foreign visitors in 2013 with a share of 7.53 per cent in total inbound arrivals and ranked 3rd as source country. This number increased to 2.15 million, a share of 21.49 per cent of FTA to India by 2017. The country has emerged as the top source market of India followed by the US and the UK, whose market share have dropped to 13.72 per cent and 9.82 per cent in 2017 from 15.52 per cent and 11.62 per cent in 2013. However, the arrivals have increased from both of these markets, albeit not as strongly as from Bangladesh.
At an industry meet recently, representatives of inbound trade suggested a dip in inbound tourism to a tune of 10 per cent. However, that may not be true but it definitely calls for introspection. Many of the top source markets (200,000 plus arrivals) like the US, the UK, France, Germany, Japan, Sri Lanka have shown below-par single-digit growth in 2016 and 2017 that calls for attention.
NYC & Company, New York City’s official destination marketing organization, recently conducted an eight city India showcase to create awareness in the market about their upcoming iconic tourism products. The delegation, led by Fred Dixon, President & CEO, NYC & Company, presented a new global initiative—'2019: A Monumental Year’ describing about new openings and development taking place in the city.
“We are going to see the opening of Hudson Yards on Manhattan’s far west side—the largest private real estate development in the history of the United States; The Shed, a multi-arts centre dedicated to global displays of visual art, design, media; and Vessel, a climbable urban landmark and museum of modern art amongst others,” Dixon said.
New York welcomed 373,000 Indian visitors in 2018. “We are expecting India market to grow in 2019 by about 6 per cent. India has grown by 60 per cent over the last 5 years. So, it is showing very good momentum going forward and we are very optimistic about India,” he said.
Replying to a question over further building up on this high growth, he said that it is always a challenge but we need to always innovate and come up with new ways to stimulate the market. “One of the most exciting things about Indian market is youth which offers a great future opportunity here. Also, with some expanded promotion from members of the trade with us and the dynamic growth in this market, we will continue the momentum,” he added.
Talking about segments in the India market, he said that VFR is the large component from India due to the presence of huge Indian community in New York, followed by business travel, MICE as well. “We are going to be more looking into the meetings and incentives space. The real opportunity on the leisure side is probably going to be in the FIT segment. A lot of new hotels brands like Aman, Six Senses are opening their hotels in New York and these will bring new interest from luxury travelers,” he opined. He said that India has a huge youth population and people are certainly looking for experiences. “New York is well suited for the future growth,” he said.
He also informed that New York is investing an enormous amount in number of areas including airports. “An amount of US$23 billion is going to be invested in the redevelopment of all the airport specially JFK, New York and LaGuardia. We needed expanded airports and it is coming. We are also investing heavily in our train stations,” he said and added New York city ferry launched last year and it is growing and very popular with locals and visitors. “So, we are going to see more this kind of development is happening than before,” he said.
Replying to a question over air connectivity between India and New York, he said that this is an area where we need more investment. “We are hoping to see more attention going forward. Middle East carriers and United have done wonderful job. As the market grows, we do need the more capacity,” he informed.
New York City welcomed a record 65.2 million visitors in 2018, the City’s ninth consecutive year for tourism growth, with 49.7 million domestic and 13.1 million international visitors.
Any mega festival taking place in any part of the world emerges as a major tourist draw if marketed well. Organisers of the global festivals like Germany’s Beer Festival and Tomatina of Spain and others that draws millions of tourists from domestic, neighbouring and international markets start promotion a year and two in advance. The reason being the travel market in US, Europe and other developed countries are organized and finalize their itinerary much before the travel.
For ongoing Kumbh 2019, experts of the industry are of the view that Indian inbound and domestic tour operators have missed the bus. Kumbh, the largest congregation of people in the world could have well been developed as one of the best tourism products of India. There are foreigners and domestic tourists’ visiting Kumbh in good numbers, but this number could have been gone up steep northward. The concern here is that majority of the tour operators did not even come out tour packages related to Kumbh. Report suggests that the ongoing Kumbh did not draw numbers from Nepal or Bangladesh even. This is despite the fact the Uttar Pradesh Government has created a better infrastructural facility to offer a good experience to visitors.
For Kumbh Mela which has previously been comprised by UNESCO in the list of 'Intangible Cultural Heritage of Humanity, a new provisional city has been built along Prayagraj, which has 250-km long thoroughfares and 22 platform bridges. For the first time, an Integrated Control Command and Centre has been set-up in the Kumbh area. The Mela also witness the use of artificial intelligence for dealing with superior crowd supervision for the first time this year. More than 1,000 CCTV cameras were equipped to track several movements all over the Mela. UP Government has put up more than 4,000 tents at the site.
But, still the travel trade could not benefit out of this? Why so? One of the foremost reasons is the lack of marketing and promotion. No doubt, the Centre and the UP Government started the promotion in overseas and India market, but the effort was not cohesive. It was a half heartedly promotional efforts. The UP Tourism organized roadshows in Indian cities with travel tourism associations just few weeks prior to the Kumbh. There was a need to target Indian Diaspora in US, Canada, UK and other countries in an effective manner.
Now, this Kumbh is the missed opportunity but we have good learning from here. We have enough time to work towards the next Kumbh. What is needed here is a strong collaboration between the host states and stakeholders like industry association, India Tourism Offices Abroad and Indian embassies and High commissions to work on the next Kumbh and develop this ‘biggest carnival of humanity’ as a major tourist draw. Around 120 million people is expected to visit the ongoing Kumbh.
In an attempt to change the ‘negative perception’ and clear apprehensions of people in the domestic market about visiting Kashmir, the Department of Tourism, Jammu & Kashmir has started an outreach activities in various cities of India.
Speaking exclusively to T3 on the sideline of an event in New Delhi, Rigzin Samphel, Commissioner/Secretary to the Government, Tourism Department, Govt of J&K, said that the Department along with other stakeholders including representatives of tourism trade fraternity from all the three regions—Jammu, Kashmir and Ladakh has decided to reach out to different Indian cities to send out the right message that Jammu & Kashmir is the most safest destination for tourists.
“We recently come back from Mumbai. We had a very good response from stakeholders there. Today, we are stressing on Leh and Kargil in New Delhi and tomorrow we will be in Ahmedabad and focus will be Kashmir and Jammu. The idea is clear the misinformation about entire regions for Kashmir, Ladakh and Jammu. The situation in the entire state in terms of the prospect of tourism for the coming months is very good. There was a lull for the obvious reasons but now the number of bookings has increased suddenly. So, we are very hopeful that we will have a good season this time,” Samphel said.
There had been a lot of negative publicity about our region in the aftermath of February 14 attack, which has badly hit our tourism.
Apart from the promotion in the domestic market, the Department has also chalked out strategy to go to overseas markets. “We will be visiting Bangladesh, Malaysia, Thailand and few other European countries during the year. The number of foreign tourist visiting the valley was up by 45 per cent compared to the previous year for the calendar year 2017-18. These are data which normally does not go out to the public. We are conveying such information and try to enforce reality over perception to send the right information to tourists who wish to visit the state,” he added.
Replying to a question over having a permanent crisis management or PR Cell in the department, he said that the Department is working on these lines. “The entire region is very safe, especially for women travelers. We have a lot of women solo and group travelers. The valley for tourist is always been normal. We are hopeful that tourism will pick up,” he said.
He said that there is basically the problem of perception. “To kill this perception, we are going to all across the country. We are putting forward the right picture for the entire state including Kashmir and promoting three regions,” Samphel said.
He informed that the Department has recently been able to convince the Department of Finance to allocate Rs 2 crores for Project management Unit (PMU within the department. “Right now, the department is run by bureaucrats. But, we need to have professional skills and institutional memory to continue our work. Hence, we will have professionals and experts in tourism working with us very soon. The RFP for the PMU needs to be floated. I hope that we will have PMU in the department in 2019,” the Secretary said.
Talking about the steps taken on sustainable tourism front in the state, he said that the Department was able to finalise the guidelines for the entire state about a month ago. “Till now, the entire registration of hotels and travel agencies were done manually. In fact yesterday, we have launched our website and the entire operation has been now digitized. There are the ways we are trying to system to be put in place. The major SOPs in adventure guidelines is to ensure sustainability.
Lot Polish Airlines, which generally start thrice a weekly flight for any new long-haul routes, has announced 5 weekly flights on India route. The airline is also working closely with the Ministry of Tourism, Govt of India to bring inbound tourists from Europe.
You are going to launch New Delhi- Warsaw service from September 17. What kind of response you are expecting from this service keeping that there are many carriers flying between India and Europe?
So far, there has been no direct connectivity between India and Central Europe. Given the strong trade relations between India and Poland and growth of both countries, there was a need for connectivity between these two countries. Generally, when Polish Airlines starts any new long-haul routes, they start with 3 flights a week. In case of India, based on our business case, projection and anticipated demand, we have decided to start with 5 weekly flights already. This already shows the confidence and trust we have in the Indian market as well as other points of sale to sell this flight. This flight will probably be catering to those who want to go to Central Europe. We offer seamless connectivity to many European destinations via Warsaw. We welcome any competition and from our perspective, looking at the current size of the Indian market and projected growth, I think that the market is big enough to cater to more carriers and that why our strategic decision is that India has been defined as a very strategic market for Lot Polish Airlines.
What would be your strategy to divert Indian traffic to Central European destinations?
We are member of Star Alliance. There are certainly benefits for frequent flyers. We are a full service network carrier. We offer seamless transfer experience at Warsaw airport. The minimum connecting time is 40 minutes in Warsaw. You have hassle free transfer experience. Also, our Delhi schedule is designed in such a way that within two hours, passengers have connectivity to almost 40 cities. Moreover, the quality of product we feature and its going to be three class of service: Business, Premium Economy and Economy. This is also the value proposition that other carriers may not have. When you travel Premium Economy, you will be sitting on the Premium Economy for the entire journey. At Lot, we have a dedicated Premium Economy class to your final destination. This is where we differentiate ourselves from the competition.
How do you plan to tap the catchment traffic?
We are currently the fastest growing airline in Europe. For 2019 which is our 90th birthday as well, we expect to carry more than 10 million passengers for the first time. Its more than twice the traffic we had 4 years ago. We have doubled the number of passenger and aircraft. We have gradually increased the number of destinations too. Given the focus on quality, network and benefit of being member of Star Alliance, we see the opportunity. Poland is the central Europe’s largest aviation market. It is an untapped market where we feel we have a role to play. There is no other long-haul network carrier in Central Europe. Baltic States do not have one. Hungary does not have one. Czech Republic flies only thrice a week to Seoul. This is the natural catchment area. Poland has a population of 38 million but the whole catchment area in Central Europe has a population of 180 million. This is the catchment area where we have been growing very strongly and we intend to position ourselves as a primary choice for the Central European guests.
What sort of India centric services that you will be offering on this route?
We will have Indian meals on board. We will be having Indian cabin crew on board. There will be assistance provided at Warsaw airport for those passengers who will require assistance. We will make sure that it will be a hassle free and pleasant experience. We focus very strongly on products. We have the latest B787 aircraft to be deployed into the India market.
What sort of occupancy are you expecting on this route?
In the first year of operation which will be only 4 months of this year, our objective is to bring another alternative to the Indian consumer. We want to bring another Star Alliance alternative to consumer. There are multiple options to Europe on various alliances but we want to bring another alternative. We will cater to the different segments of the market. We will also have introductory fare and programme for small and medium size companies. Right now, we are not focusing much on seat load factor because the flight will be sold in Europe, North America and India. So, there will be multiple markets selling the flights. We want to adequately position ourselves as a full service, quality, and Star Alliance product to the India market.
Is there any plan to connect more Indian destination?
If the forecast and business projections materialize, we are willing to increase Delhi frequency for sure. We have sufficient number of B787 Dreamliner coming into the fleet this year and for the next 4 years the aircraft orders have been placed. We are looking into newer destinations across the world we would like to fly to. Indian market has been defined as a strategic market. Our intention to India for middle to long terms is bigger than just Delhi.
There will be mainly business traffic. Are you planning to be associated with Polish Tourism Organisation or other neighboring tourism boards to grab the leisure Indian outbound traffic as well?
Whenever any airline goes to a new country, it is also an objective to promote your home country as a leisure destination. We would like to give a new destination to Indian outbound leisure market which is Poland, Baltic States, Hungary. We work closely with Polish National Tourist Office but we also engage very strongly with other national tourism offices. On the flip side, we are also working with Dept of Tourism, Govt of India as an European outbound destination to bring Indian inbound from Europe.
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