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Akshay Kumar

Akshay Kumar

Thailand – based Akaryn Hotel Group is expecting a good growth from India market. “India is very important to us, as it is one of the few markets that is currently developing and expanding with a growing middle class and more spending power. I see it as a possible replacement market for China, which is struggling due to its trade war with the US. Historically, Thailand has good ties with India - lots of our citizens have Indian heritage. It is a strong market for weddings, friends and family travel, and Bangkok is a favourite short shopping destination for many well-heeled Indians,” Anchalika Kijkanakorn, Managing Director, Akaryn Hotel Group said.

The group is also looking for small and mid-sized MICE events as well as weddings. “Our hotels and resorts are small and intimate. The largest has 148 rooms but with no conference facilities, so we focus on intimate executive meetings, top management get-togethers and brainstorming retreats. We do lots of weddings; three to four days with 100-plus guests. We can’t do 500-600 guests, but I think that Indian weddings are getting smaller and more intimate nowadays,” she informed.

The year 2019 has been slow for the Thai hospitality industry compared to previous years. Also, Vietnam is emerging as a competition for Thailand with new increased inventory.  “The 2019 low season has not been good for arrivals, due to the warm summer in Europe, the strong Thai baht and the trade war between the US and China. Vietnam is also emerging as a strong competitor with lots of new room supply coming through. I think however, that Thailand will remain strong and will bounce back. We have excellent infrastructure and many great offers, and this is a good time to visit while hotel rates are low - and likely to remain low into high season,” Kijkanakorn added.

The Group is also set to open its first hotel outside Thailand in Vietnam and Indonesia. The group currently operates six hotels in Thailand namely; Aleenta Phuket-Phang Nga, Thailand, Aleenta Hua Hin-Pranburi, Thailand, akyra Manor Chiang Mai, Thailand, akyra Beach Club Phuket, Thailand, akyra Thonglor Bangkok, Thailand, akyra TAS Sukhumvit Bangkok, Thailand.

In the coming months, two of the group’s much loved hotel concepts will make their international debuts. Aleenta will be introduced to Bali, Indonesia’s “Island of the Gods”, and akyra, the trend-setting boutique brand, will arrive in Hoi An, the UNESCO World Heritage-listed port town in central Vietnam,” Anchalika Kijkanakorn, Managing Director, Akaryn Hotel Group said.

Aiming to empower the travel agents, Travel Agents Association of India (TAAI) recently organised a series of knowledge conclaves. The association organised these conclaves in New Delhi, Mumbai, Chennai, Kolkata, and Indore.

“The TAAI Conclave in Mumbai has been a huge success. We had over 175 delegates from the agencies in the Western India. It’s a huge success after New Delhi did well. The conclave is aimed at supporting travel companies, review their business models, understand their trends and update themselves with the new happenings of the travel and tourism industry. We are looking to encourage our members to evolve,” Sunil Kumar, President, TAAI said.

The conclave witnessed eminent speakers disusing various key topics which also addressed major industry challenges. “The speakers are not merely consultants, but they are from the industry and most of the speakers are ones who have successfully led large travel organisations. When they share experiences and interaction takes place, that mutual learning makes the conclave a rewarding experience,” he added.

Also, TAAI is soon set to announce its 66th Convention & Exhibition date and venue. The Association is most likely set to organise this year’s convention in Mauritius. “We are now working on the annual convention. We will soon get some responses. Hopefully, we are looking at an airline partner who can carry 500-600 delegates at a very industry price. We have a couple of destinations in mind; Mauritius is shortlisted to be one of the key destinations. But then they are ready to support us, but the other part is we arriving into Mauritius.”

The travel industry is not excited with the Annual Budget. The industry was further looking for more announcements which were missing. “The industry is not happy with the Union Budget. It clearly reflects that the Government is not considering travel as a priority. The industry must get recognised and acknowledged by the Government as an important revenue earner. It is a large and growing industry.”

Apart from the conclave, TAAI has also organised various roadshows for destinations. The association has recently signed an agreement with Destination Canada for a series of roadshow. “We have been successful in doing roadshows for destinations. We have done it for Abu Dhabi, South Africa, Destination Canada, Turkey, Malaysia, etc. The advantage of doing a roadshow with TAAI is, when we organise we get an audience who are majorly the owners or key decision makers. In the other roadshows, there is more of frontline staff.”

Wellness tourism has the potential of being the top most driver of the growth of the Indian tourism industry. In a consistently growing economy where people are facing a fast changing life, wellness tourism becomes even more important as it rejuvenates the body, mind and soul by detoxification provided by various healthcare therapies. India is perceived as one of the true spiritual homes of the modern wellness movement globally with its ancient practices of ayurveda, yoga, meditation, acupuncture, naturopathy, panchakarma and holistic health are among the experiences sought by wellness travellers in India.

Globally, wellness tourism is growing with 6.5 per cent annually, more than twice as fast as tourism overall (3.2 per cent), and it was worth US$639 billion market in 2017. This segment is forecasted to grow even faster through 2022 (7.5 per cent yearly), to reach US$919 billion, according to Global Wellness Tourism Economy report by Global Wellness Institute.

Looking at these lucrative figures, destinations are today creating wellness products to draw more travellers. India is known as a pioneer in the wellness segment in the world. Also, it is a known fact that India is the land of the much acclaimed ‘ayurveda’. In the recent years, India has started showcasing yoga as a form of wellness, which has been trending globally. Despite this first mover’s advantage, India is yet to realise the potential of this segment when it comes to tourism. With a vast array of products which has been present through ages, India can be termed as a goldmine of wellness tourism, which needs to be explored by the global market.

The concept of wellness tourism refers to travelling for activities planned for health and well-being as top priority. Typical wellness trips include healthy food, spa treatments, exercise, and opportunities for spiritual and creative development.

The Ministry of Tourism, Government of India in the last few years has charted various plans to further boost this segment. Moreover, luxury hotel chains and standalone boutique players have invested significantly in developing experiential wellness products to further attract travellers. With these efforts, India can soon become a high value wellness tourism hub.

Current Scenario

In 2017, India ranked 7th in the top 20 wellness tourism markets, and 10th among the top 20 spa markets in the world, while ranking 3rd in both the top 10 wellness tourism markets and top 10 spa markets in Asia Pacific. According to reports, Indians made 56 million wellness-related trips, both domestic and international, in 2017 (a growth of 45 per cent over 2015), which included expenditures worth $16.3 billion. Also, India ranked 2nd in terms of leading growth markets for wellness tourism, depicting an average annual growth rate of 20.3 per cent from 2015 to 2017, adding a little over 17 million wellness trips in the same period.

Earlier, known to be a very niche concept, today with a drastic change in people’s lifestyle, wellness tourism is set to become the mainstream.

“Wellness industry continued to emerge from niche lifestyle concept into a mainstream commodity with high growth prospects. Wellness industry estimated to be worth over US$3.72 trillion, representing more than five per cent of all global economic output. As per recent estimates of Ernst and Young, Indian wellness industry is estimated to grow at a CAGR of nearly 12 per cent for the next five years and is expected to reach Rs.1.5 trillion by 2020, rising disposable incomes, change lifestyle etc. or some important facts driving the growth of wellness services,” Sunirmol Ghosh, Director- IndoAsia Hotels, said.

The Indian wellness tourism industry thrives majorly on the key segments like ayurveda, yoga, meditation and rejuvenation amongst others. As per industry speculations, Indian wellness tourism is set to reach US$ 9 billion by 2020.

If we go by studies, it is said that India will touch great heights in the wellness tourism industry in the coming years, said Abhilash K Ramesh, Executive Director, Kairali Ayurvedic Group. “Year 2017 can be seen as a benchmark year for the Industry where Indian wellness tourism set tremendous standards for itself with overall volume of the Industry boomed at a CAGR of 20 per cent index. It is evident from the previous year result that the earlier made prediction will prove to be right and medical and wellness tourism is likely going to touch US$ 9 billion mark by 2020. For Kairali, the year brought major increase in revenue witnessing major growth in the profit centres of the company,” Ramesh added.

Today, India is majorly driven by the domestic tourists for the wellness segment. Rise in disposable income and consumers desire to enhance their mental, as well as physical wellbeing, has favoured the demand for these services. Furthermore, increasing hectic lifestyles characterised by work-related stress has been augmenting the market growth across the globe.

Speaking about the key factors, Rijesh Purakkal, Spa Head, Alila Fort Bishangarh stated, “The wellness industry is rapidly growing in India and has a tremendous scope. In this new era of health consciousness, individuals want to know more and willing to spend on living a full life, wellbeing as a service will emerge as a major industry. People are looking for destinations where more authentic wellness experiences can be found.”

Source markets

Due to the lack of focussed and directed publicity of wellness tourism, the major source market for India still remains the domestic market. In the last five years, the Government has taken keen interest in promoting this segment. The Tourism Ministry has offered 50:50 financial assistance to parties to up to Rs 10 lakh for participating in fairs and events approved by the tourism ministry in overseas markets under the Marketing Development Assistance (MDA) scheme. The ministry has also offered financial assistance of up to Rs 25 lakh for stakeholders participating in tourism promotion shows. It additionally also offers financial support for training courses on skill providing.

Speaking about the major source market for wellness tourism, Nikhil Kapur, Founder and Managing Director at Atmatnan Wellness Centre said, “The domestic market is our largest client base. It has always been considered that Westerners travel for health but things have changed. Indians are mindful about where they spend their holidays and look at holidays as opportunities to rejuvenate, heal and come back stronger to their regular lives. We have many guests who come to us more than two times in a year and this includes guests from Tier II & III cities. Health Holidays are becoming mainstreams for Indians. Some of the other markets which have mature wellness travellers include Americas, UK, Germany and now CIS and China is added to this list. At a property level, our share of overseas business is going up and in three years from now will be 40 per cent of the top line.”

The Indian wellness tourism players are now looking to develop novel source markets. Similar to the Indian outbound growth story, today many Asian countries are witnessing similar trends. This can create more wellness source markets from within Asia-Pacific region.

The traditional source markets are still stable and growing which are mainly German speaking markets Russia along with CIS and North America. What we are seeing changing is the growth from South East Asia and China and expect them to surpass some traditional markets by 2025,” Ramesh added.

In terms of the traveller’s profile, millennial travellers are the one who have always broken the norms and explored newer experiences. “The Millennials constitute the major travelling population in the world. Millennials have incredible spending power, and they seek for cultural vibrancy and authentic experiences. They like to indulge themselves in many holistic programs with spa gateway, detoxing cleansing with food, and fostering emotional, life-changing wellness journey. They like to share their experiences of wellness moments on social media,” Purakkal said.

Popular experiences

It’s a no brainer that being the birthplace of Ayurveda, it has to be the major driver for wellness tourism. But interesting to be noted, today travellers are opting wellness tourism for various serious health complications.

Speaking about the popular therapies, Hemanth Bagga, CEO, Fazlani Natures Nest stated, “We have found that ayurveda treatments like shirodhara, pizhichil and navarakizhi have been very popular among the weekend guests while the naturopathy therapies like deep tissue massage, acupressure and hydrotherapy have been very successful. However, we are witnessing a growing trend of patients seeking solutions and treatments for spondylitis, obesity, diabetes, Parkinson’s disease and ulcers.”

Today one of the major challenges globally has been the rapid increase in lifestyle diseases such as diabetes, obesity, infertility, etc. Indian wellness players are catering to these issues successfully and are curating customised treatments. “Our guests come to us for many reasons such as detox, weight management, medicinal reversal (diabetes, hypertension), illness-management, rehabilitation, emotional healing, fitness, ayurvedic panchakarma. Our expertise lies in our multi-dimensional approach where we integrate various sciences and modalities to give the maximum result to our guests. So besides treatments, the components of nutrition, mental health, improve sleep quality and a positive environment is a must for a successful wellness destination. Pranic healing (energy healing), Chi Nei Tsang (tao school of healing), and amongst ayurvedic treatments - udwartanam (using medicated powder, improves blood circulation and mobilisation of fat) and navrakizhi (with medicated rice from Kerala, fantastic for rejuvenation) are some of the popular therapies,” Kapur added.

Echoing similar opinion, Ramesh said, “Ayurveda has always been focused on preventive care as well as treatments, and with the last five years data what we have noticed is that the most sought or prescribed programme was the panchakarma programme by our in house doctors. Second to that were the customised solutions as each person is an individual and all the treatment plans are based on the patient’s body type. The maximum ailments we treatment were for obesity, infertility, psoriasis and eczema and bone disorders such as arthritis etc. and in the preventive aspect is has been rejuvenation and destress programme.”

Role of ‘AYUSH’ Ministry

The year 2014 has been a milestone year for the wellness industry as the Government of India set up the Ministry of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy (AYUSH). This has been a major step in not only increasing the awareness about the various practices, but also to bring regulation in these sectors.

Lauding the work done by the Ministry of AYUSH, Ramesh stated, “The Ministry of Ayush has definitely been a great support for the industry and will continue to do so, with a more pragmatic and targeted approach towards marketing and promoting AYUSH industry, we will definitely see a growth and we estimate a growth of at least 15 per cent to 25 per cent.”

Immediately after the introduction of the Ministry, the next major step was the introduction of ‘World Yoga Day’, which has again helped in promoting the ancient form of wellbeing.

“The government is promoting AYUSH and with the initiative taken on International Yoga Day that turned into global event recognised by United Nations, which helped creating awareness at the international platform about yoga and wellness in India. Yoga has been promoted as a therapy for physical and mental ailments, and this is what the customers look for during their vacations,” Purakkal added.

With such commendable steps by the Ministry, the industry now expects further introduction of incentives and relaxations.

Kapur stated, “I am hoping that they announce certain incentives or schemes which make it for feasible and attractive for entrepreneurs to develop wellness centres in India. However, in the meanwhile, AYUSH has been creating a lot of awareness about benefits of a good lifestyle and has been promoting Indian sciences like Ayurveda, Yoga etc”

Another major challenge is there is no proper focused promotion for the wellness tourism in the international markets. This segment has been usually promoted as an add-on to the normal vacations.

Ghosh added, “We as a nation have failed to leverage on our advantage of being the home of Ayurveda and Yoga. There are very few destinations in India that has been sold purely as a wellness destination and most others have been marketed as tourist destinations with wellness thrown in. The need of the hour is to market some destinations as pure wellness centres which could cater to tourists who seek rejuvenation and not a regular vacation.”

Challenges

Initially, one of the major challenges in this sector was to maintain the quality and authenticity of service providers. The Government has taken a very crucial leap of introducing quality management with the help of Quality Council of India to extend the National Accreditation Board for Hospitals and Wellness Centres (NABH) certification for spa and wellness centres. Despite this initiative, the government needs to look at various other challenges to further boost this segment.

“Safety and security which is a challenge, tourism is a fragile dedicated industry and wellness tourist will only come to visit our destinations for peace, calm, meditation, yoga, health, well being therefore the first foremost issue will be safety and security of the tourist because of presents of the fear because which we cannot promote,” Ghosh opined.

Lack of infrastructure remains another challenge which affects this segment. Kapur also feels that improving the brand image of India will help them promote the segment tremendously. “Our travel partners in Europe frequently tell us that their lady clients don't want to travel to India because it’s highly unsafe. Wellness destinations don't belong in the big cities but in tranquil and calm natural surroundings. But who is working towards improving the commute to these destinations. Unfortunately, the ground situation is quite pathetic.”

Another noteworthy challenge which the industry is facing is the lack of talent. Today, the supply of qualified personnel is depleting. “The supply of doctors and qualified personnel in the field of ayurveda and naturopathy has been dropping over the years. Moreover, there are segment of medical practitioners that are currently adamant to only converse in the local medium. Presently there is a lot of awareness to build up the language base to include international languages as well,” Bagga said. 

Being one of the most successful cruise-liner to be home ported out of Mumbai, Costa Cruises has announced the fourth season of scheduled cruising out of Mumbai. This November, the cruise-liner is set to deploy Costa Victoria, a 2300 passenger capacity ship. “We are the only international cruiseliner to be returning for an India deployment for the fourth Season. In November 2019, we will be deploying Costa Victoria, a 2300 passenger capacity ship and bigger than Costa neoRiviera & Costa neoClassicas,” Nalini Gupta, Head, Costa Cruise India, informed and added that Costa Cruises witnessed a YoY growth of 50 per cent since it launched Mumbai – Maldives sailing in December 2016. Interestingly, Costa Cruises is the cruiseliner to start home-porting ships to offer cruises from Mumbai to Maldives.

 Gupta further added that Costa Cruises is currently the only cruiseliner to offer cruises from Mumbai to Cochin, Cochin to Maldives, Mumbai to Maldives and Maldives to Mumbai. “We saw passengers coming back to us with their friends and family to either repeat the experience or explore our other cruising itineraries from Dubai, Europe, Far East, etc.,” Gupta revealed.

Talking about the market trends, she said that clients are adding cruises as an important bucket list item for every Indian traveller. “However, even with the growing numbers, the market size of Indian cruisers is estimated at around only 180,000 which is a small drop in the large ocean of outbound Indian travellers and global cruise numbers. Presently, India contributes to not even one per cent of the global cruising numbers, which are estimated to reach 30 million in 2019, as per reports by CLIA. As more cruise companies like us homeport ships from ports in India, bringing the cruising concept closer to the Indian traveller, the number of Indian cruisers is estimated to grow by leaps and bounds,” she opined.

Costa Cruises is now looking to aggressively tap the weddings segment from India market. “We were the first cruiseliner to have had an Indian wedding on our Europe sailing, with over 2000 guests travelling to Milan to embark on the cruise. Cruises are in fact one of the most cost effective wedding options, as cruises provide all inclusive wedding packages, with accommodation, entertainment activities to keep guests and kids engaged, multiple venue options that can even accommodate 1000 guests and unlimited beverage packages, all on the ship and at all-inclusive rate. For most of the venue options onboard the ship, unlike hotels, we give the lounges for the different wedding events at a minimal or no extra charge,” she said.

She said that the travel trade segment is the key for Costa Cruise in developing the segment. “We currently take almost about 90 per cent of our bookings from the B2B market. Since cruising is still in its nascent stages of growth, most customers still feel more comfortable booking their cruise through a travel agent, who also many times combines the flight and land package. However, as customers become more aware, it will be important for travel agents to be proactive, know more and serve these knowledgeable customers,” she informed.

Organised by the India Convention Promotion Bureau (ICPB), the 12th Conventions India Conclave (CIC) is set to be hosted in Kochi, Kerala from Aug 29-31, 2019. During this year’s convention, the association is set to promote sustainability in the MICE business in India.

Speaking about the convention, Chander Mansharamani, Vice Chairman, ICPB said, “This year the theme of the Conclave is “Mapping the Sustainable MICE Future of India”. The focus area during the Conclave will be aiming to be top ten meeting destinations in the World by 2023. We have as of now in total 85 Domestic and 28 International and quite hopeful of getting 100 domestic and 30 international buyers. The above figures are keeping in view of us being very selective in selection of buyers. On the exhibition front, we are expecting a record number of exhibitors. We already have 66 confirmed booths and target is to get 75 booths. We are very confident of achieving our target.”

MICE segment of the industry offers a huge growth opportunity for Indian tourism. Currently, India has been ranked 28th in the list of global meeting markets. “MICE business in India is poised to grow, buoyed by the recent initiative by the Ministry of Tourism because of the rising economic importance of the region. India’s sterling performance in areas of IT, biotechnology and pharma have made it economic hot spot. MICE is the only segment which has shown countries growth of 12 - 15 per cent year after year. India has ranked 28th position in the recent list of global meeting market published by ICCA rankings Worldwide and 7th position in the Asia Pacific Region, which is an encouraging trend for the Indian Convention Industry.”

Pinarayi Vijayan, Chief Minister of Kerala is expected to be the Chief Guest and CEO of ICCA is set to be the keynote speaker for the Convention.

“Having CEO of ICCA as a Keynote Speaker will definitely give us the insight of international convention industry and their marketing strategy. The Minister of Tourism, Kerala has confirmed his participation and the Chief Minister of Kerala is expected to be the Chief Guest. We have lot of other exciting activities also. We also have a Boat Race on 29th afternoon, a traditional race using canoe boats which has a history from Kingship period. The other activity which is our regular feature is Green Walk/Fitness challenge/Ayurvedic discourse and Golf Tournament. We will also be opening our second State Chapter on the lines of Kolkata Chapter,” he revealed.

Convention industry in India faces various challenges including fierce competition by the neighbouring nations and other marketing issues. “The challenges we face in the Convention Industry will be discussing during Convention is how ICPB as a frontal marketing organization of the Ministry of Tourism can market India as a preferred Convention destination. Apart from the marketing, the other challenge is to compete with other countries especially with neighbouring countries as most of them have a provision to underwrite the bid support and financial assistance for Conference,” Mansharamani further said.

Being one of the most successful cruise-liner to be home ported out of Mumbai, Costa Cruises has announced the fourth season of scheduled cruising out of Mumbai. This November, the cruise-liner is set to deploy Costa Victoria, a 2300 passenger capacity ship. “We are the only international cruiseliner to be returning for an India deployment for the fourth Season. In November 2019, we will be deploying Costa Victoria, a 2300 passenger capacity ship and bigger than Costa neoRiviera & Costa neoClassicas,” Nalini Gupta, Head, Costa Cruise India, informed and added that Costa Cruises witnessed a YoY growth of 50 per cent since it launched Mumbai – Maldives sailing in December 2016. Interestingly, Costa Cruises is the cruiseliner to start home-porting ships to offer cruises from Mumbai to Maldives.

 Gupta further added that Costa Cruises is currently the only cruiseliner to offer cruises from Mumbai to Cochin, Cochin to Maldives, Mumbai to Maldives and Maldives to Mumbai. “We saw passengers coming back to us with their friends and family to either repeat the experience or explore our other cruising itineraries from Dubai, Europe, Far East, etc.,” Gupta revealed.

Talking about the market trends, she said that clients are adding cruises as an important bucket list item for every Indian traveller. “However, even with the growing numbers, the market size of Indian cruisers is estimated at around only 180,000 which is a small drop in the large ocean of outbound Indian travellers and global cruise numbers. Presently, India contributes to not even one per cent of the global cruising numbers, which are estimated to reach 30 million in 2019, as per reports by CLIA. As more cruise companies like us homeport ships from ports in India, bringing the cruising concept closer to the Indian traveller, the number of Indian cruisers is estimated to grow by leaps and bounds,” she opined.

Costa Cruises is now looking to aggressively tap the weddings segment from India market. “We were the first cruiseliner to have had an Indian wedding on our Europe sailing, with over 2000 guests travelling to Milan to embark on the cruise. Cruises are in fact one of the most cost effective wedding options, as cruises provide all inclusive wedding packages, with accommodation, entertainment activities to keep guests and kids engaged, multiple venue options that can even accommodate 1000 guests and unlimited beverage packages, all on the ship and at all-inclusive rate. For most of the venue options onboard the ship, unlike hotels, we give the lounges for the different wedding events at a minimal or no extra charge,” she said.

She said that the travel trade segment is the key for Costa Cruise in developing the segment. “We currently take almost about 90 per cent of our bookings from the B2B market. Since cruising is still in its nascent stages of growth, most customers still feel more comfortable booking their cruise through a travel agent, who also many times combines the flight and land package. However, as customers become more aware, it will be important for travel agents to be proactive, know more and serve these knowledgeable customers,” she informed.

With a strong pipeline of inventory in the country, Lemon Tree Hotels is set to hit 8,800 rooms milestone by 2021. The Group recently debuted into Mumbai with the launch of the 303 room hotel - Lemon Tree Premier-Mumbai International Airport. This is the second city in Maharashtra, after Pune, with a Lemon Tree Premier and the third city in Maharashtra, after Aurangabad and Pune where the group operates.

“Currently, we are operating 5,525 rooms with 56 operational hotels and another 3,275 rooms with 31 properties are in the pipeline. By 2021, we will have 8,800 rooms with 88 hotels, which mean we will have close to 14 per cent rooms in India,” Patanjali Keswani, Chairman & Managing Director, Lemon Tree Hotels said and added that the Group is looking to try and consolidate the fragmented segment of hospitality in India. He opined that the opening of hotel in Mumbai is a very strategic move for as it is the financial capital. “Also, this is our first refreshed Lemon Tree Hotel. It took a long time for us to enter Mumbai, as it took time for approvals. Mumbai is a very difficult market to get approvals. It is a deliberately complex process here,” he added.

The Group has 1697 operational rooms with 12 hotels under the Lemon Tree Premier brand and 1684 rooms are in the pipeline with 11 hotels.

The Lemon Tree Premier brand will be their fastest growing brand. “Lemon Tree Premier will be our fastest growing brand, followed by Lemon Tree and Aurika. As of now, we don’t have any international aspirations, but Carnation has signed a few hotels - one each in Dubai and Kathmandu. We are open to go where our customers go, we feel that then we have the ability to make them stay in our hotels. Broadly, Indians go to New York, London, Dubai, Nepal, Sri Lanka, Thailand, Singapore, and Hong Kong. Therefore, wherever we have an opportunity to partner with an asset owner we will consider it.”

The group is set to enter the upscale segment with the introduction of Aurika brand. Currently, the group is slated to open an Aurika in Udaipur and second property in Mumbai.

Detailing about the Aurika, Keswani said, “As a product Aurika will be in the upscale segment with world class service. We have spoken to a few managed hotels for the Aurika brand. But, what we feel is before we go for a pipeline of this brand; we will open the Udaipur property and let people see what we do. This will help us convince a lot of owners about this brand. Next, we will have an Aurika property in Mumbai.”

The group is welcoming over 90 per cent of its guests from the domestic market. Over two million domestic travellers stay at Lemon Tree properties across India. “Over 90 per cent of our customers are from the domestic market. We are much focused that we want to serve the needs of the Indian middle-class, upper Middle-class travellers. The 10 per cent of travellers are from the international market -around a lakh or two lakh, these travellers typically are not looking for five stars,” Keswani said. 

SATTE, South Asia's leading travel show, successfully concluded its roadshows in Ahmedabad, Pune and Surat to create awareness amongst buyers for SATTE 2020. Further, the group is set to organise its roadshow in Indore on August 9. The Indore roadshow is expected to be attended by over 100 travel trade professionals. During the roadshow, Representative of SATTE will explain the benefit it brings for India tourism.

The idea is to promote the recently rolled out SATTE 2020 Buyer programme. The Buyer Programme for SATTE 2020 has been designed in a way that enhances delegates’ business networking opportunities by leaps and bounds. Buyers can interact with the highest number of exhibitors at SATTE 2020.

SATTE 2020 will be held at the state-of-the-art, India Expo Centre, Greater Noida from January 08-10, 2020 and will be spread over 25,000 sq mt.

The Self Drive segment is relatively at the nascent stage in India market. Today, as travellers are looking out for more personalised experiences, this US$35 million segment is set to grow substantially in the next couple of years. Earlier, this segment was majorly dominated by the unorganised self-drive car rental space, which is now changing.

Speaking about the evolution of self drive in India, Aditya Loomba, Jt Managing Director, Eco Rent A Car-EuropCar said, “Self-drive cars, a decade back, could be seen mostly in Goa. Back then, one would contact multiple local car rental providers for the best possible prices. Today, the self-drive industry is emerging rapidly in India. From a US$35 million market today, we expect it to grow to north of US$300 million within the next two years. Being a developing country with infrastructural issues, most of the metro and tier 1 cities in India are still facing issues of traffic congestions and inadequate parking spaces. This has compelled the millennials getting attracted to this idea of car rentals, disregarding the conservative Indian households’ preference of car ownership. Moreover, since a major part of this segment keeps relocating frequently for jobs, the idea of investing in a car does not appeal to them most of the times.”

Internationally, the most popular self drive markets for India are Europe, Thailand, Dubai and Bali. Majority of the Indian outbound travellers prefer the chauffeur driven cars. Now with Self Drive, which provides more flexibility, travellers are looking at this alternative.

“The chauffeur-driven vehicle trend has changed over the years as travelling has evolved from being a family activity to something, which can be done with friends and, in recent times, even solo. Exploring places and freedom to choose where and how to go for Indians has impacted the large chunk of the market. However, chauffeur-driven and self-driven vehicles still have a different set of user’s altogether,” he added.

Eco Rent A Car has invested a lot into technology to enhance the experience of the travellers as well as from the safety aspect. “The foundation of Eco Rent A Car’s innovative services lies on the deployment of its innovative and ground-breaking technology in booking, tracking and paying for the car services. We are using special devices like GPS and OBD (onboard diagnostics) devices to ensure seamless user experience. To be precise, every vehicle has an onboard computer which compiles ample data such as distance travelled, speed, fuel consumption etc. in real time. All this data is captured by the device, decrypted by the software and presented in a comprehensible form to the end user,” he added.

To further establish the self drive segment in India has a few hurdles to be cleared. One of the major challenges is the intrastate border taxes which have to be simplified or relaxed. “For the India market, the greatest challenge is interstate border taxes, which the passenger has to pay whenever they cross any state border in India. Not only is it expensive, but it is also inconvenient for the travellers,” he added.

JB Singh, President and CEO, InterGlobe Hotels speak about the growth and opportunities in the country and challenges which needs to be addressed for growth.

 

With a specific focus to build the Ibis brand in India, IGH currently operates 18 properties and has a pipeline of six more hotels.

How has the joint venture between InterGlobe Hotels and Accor fared over the years?

The partnership between IGH and Accor is currently the most successful joint venture running in the country. We have got multiple relationships with them and we remain committed. Now, we want to build more scale and to get even more efficient and disciplined. We are also working on bringing customer centric products. We have done a bit of that in Kolkata, with a new design. Now, the several other hotels in the pipeline under various stages of development and construction; already six of them will all have the new generation designs. We look at cautious scale, locations and all our locations are AAA locations.

As InterGlobe, we have other relations with Accor apart from Ibis. We have SPVs for Novotel, Pullman for other partners. But as InterGlobe Hotels we would remain committed with developing Ibis in India as India needs this product. There is a market for all segments in India, but the nation needs very high quality brand which is smart and provides value to the growing middle class. We have one Novotel in the portfolio, reason being we got AAA site and the area was near our Ibis in Bangalore and we felt that the properties will complement with each other. We may continue to play with a few more Novotel’s but that only depends on the future and broadly we will look at Ibis.

Do you feel Mid Scale hotels will witness the major chunk of demand?

India is driven by the mid scale brands as there has been a deep void. Industry has not focused on this segment much in the past. So a lot of ground needs to be covered. The upcoming middle class needs high quality hotels and Ibis is a brand which brings it in a right value. Products like ours have set new benchmark in the industry such as safety, hygiene, technology, sleep quality, f&b, etc. Today, sustainability is very important to any business, brands and products. IGH is very efficient on how we manage our resources. We need to build efficiently as land is at paucity in our country. We are environment friendly and low on land consumption.

Do you see any expansion plans outside India, especially in the subcontinent region?

Our arrangement takes us to other countries as well, but right now just the way India is shaping up we dedicate a lot of time to look for opportunities in India. I can’t say we won’t do it but given the opportunity we shall surely launch in other countries.

After all the new policies coming in, how much time does it take to build a hotel in India? Also to reduce the time, will you look at Brownfield projects?

It takes four to seven years for hoteliers to build hotel in India. At IGH, we have perfected this art and we can build hotel less than two years. We maximum take three years with licensing and other procedures and put a 160-170 room hotel ready for operations. We want to do Brownfield projects as it’s faster for us, but we are very focused on brand integrity. We have let projects go as it did not fit into our standards. Secondly, compliances keep us away from Brownfield.

The industry has witnessed significant demand, yet there has been no upward trend in terms of ARRs?

When markets grow there is always a greater demand which grows occupancies and that in turn should bring in more revenue. We have invested a lot in the revenue management systems and the way we sell. Our capacities have grown by 31 per cent, our revenue is growing by 27-28 per cent, and we are tracking a very satisfactory growth. We should get a much better return, the industry needs some demand drivers and products should be sold at the right price. The industry needs convention facilities, sporting events, and other events that boost cities revenue. This year, we will see better ARRs, as the demand seems to have solidified. ARRs should track a high single digit growth if not a double digit. The hotel industry should be brave enough to push the rates. Today, it’s such a hugely overcapitalised industry and the industry is not making money. We are in a good position though.

How is the current pipeline looking for IGH? Which are the regions you are majorly focusing on?

We have a very solid pipeline. Today, we have 19 Ibis in the country and we have six under development. We are constantly looking for new opportunities across the nation. Hopefully, we will start another 2-3 projects this year. We look at our areas in various ways, firstly we look at densification. If we are in Mumbai, we want to put more properties in Mumbai itself in AAA location. We have some 19 cities we look at in our drawing board. But, currently we are focused on the cities where we are present. Delhi, Gurgaon, Mumbai, Bangalore, and Goa they can take more Ibis properties. Out of the 19 places, a lot are Tier II & III locations.

Are the smaller cities performing well? Also, do you think the new Governmental schemes like UDAN and RCS are helping the industry grow?

A lot of the smaller cities are actually not performing well. Some of them do show acceptable numbers. We have come up with 19 cities to consider. A lot of things need to be done in these cities. Local Governments should boost development. Cities need to get decongested, they will happen for sure. But infrastructure takes time to be developed.

Currently what is the cost to build an Ibis in India?

On an average the way we build, including land building an Ibis in India takes INR 70 lakhs a key. If you want to take out the land, prior to GST we were averaging INR 34-35 lakhs a key, now it’s around INR 38 lakhs. We are very efficient; we are far lower than the industry. The industry at our style is around 30 per cent higher than us.

How has the implementation of GST impacted the industry?

Dynamics of the industry has changed to the negative side after implementation of GST. It has impacted the industry on two parts. It has impacted on the build side, now it will cost you 10 per cent more to build a hotel what used to cost us INR 34 lakhs, now costs INR 38 lakhs. We are not in the real estate business so we feel the pinch. Real Estate industry when they sell the property they get input credit. We can only create input credit on the movable items in the building which is a very small percentage. It has effected on the return of capital. On the operating side, GST is quite high on room. We are under the INR 7500 mark, so we are still better off, yet we are paying 18 per cent. Moreover, any major city has a city tax of 4-7 per cent. More importantly the consumption of these products is for the middle class who are the salaried class. We are trying to build efficiency; we have brought down the building cost by 30 per cent to be hit by a tax policy. The Government needs to look into this.

 

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