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The year 2013 was a rocky road for Indian tourism. The Rupee dipped, and took a bit of the outbound travel numbers. Moreover, inbound also did not perform well on expected lines despite weakening of Rupee. Assembly election in some of the states and the Uttarakhand floods also hindered the growth of the tourism industry. News that leaked about the probability of a change in UK visa policies for threat countries including India caused an outrage. Last but not least, negative media reporting about sensational crimes in India deemed the destination unsafe.
Undeterred by these roadblocks, the Indian government and travel industry have taken measures to bring tourism numbers back up. Tourist Visa on Arrival is now available at additional gateway airports such as Goa, Trivandrum, Bengaluru, Hyderabad and Kochi. Uproar by the industry led to a rollback in the UK visa charges being mooted. Opening up FDI in aviation led to viable partnerships in the sector. Furthermore, revision of ATF costs and airport charges continued to be a point of discussion as the major focus for the growth of the industry. The Ministry also hosted the India Travel Mart, and through it promoted the North East region of the country as a tourist destination. For the first time, India started promoting Himalayas in 2013 to make itself a 365-day destination.
These measures have had some impact on FTAs. As per a recent report by United Nation World Tourism Organization (UNWTO), International tourist arrivals to India grew by 13 per cent during the first nine months of 2013, up by 5 per cent over the same period of 2012.
Last but not the least, the government is mulling over extending the VoA scheme to an additional 40 countries to further facilitate inbound tourist footfall, a move that has been welcomed by the Indian tourism industry. This may bring the industry some reprieve as a growth of 26.5 percent has been recorded in the number of tourists availing of the tourist VoA Scheme during the period January to November, 2013. A total number of 17,594 VoAs have been issued in this period as compared to 13,903 VoAs during the corresponding period of 2012 registering a growth of 26.5 per cent.
Overall, the Ministry of Tourism and the industry have done all they can to keep the tourism numbers up through the year, marking strong trends for 2014.
Hotels hope for a brighter 2014
The hotel industry has been faring well in India, with Indian hospitality brands growing leaps and bounds, and international chains setting up shop and expanding across India at rapid pace, most of them aiming 100 properties in five years or less. For instance, Starwood currently operates 34 hotels in India with 26 hotels in the pipeline. It aims to have 100 hotels under operation, development and management contracts signed by 2015 with eight out of nine Starwood brands flying their flag in India. Similarly, Accor, Marriott and Carlson, among others, are also set to dot India’s hospitality industry in the next three to four years. These chains have, however, faced the challenge of oversupply in most cities.
Sarovar Hotels has opened hotels as planned in 2013, but felt the rates were under stress in most destinations. They have, however, managed good occupancies all across at average ARRs, and also plan to add more hotels to their portfolio in 2014 with an additional capacity of around 700 rooms, revealed Ajay Bakaya, Executive Director, Sarovar Hotels.
“Overall the industry has grown but profitability has been under stress due to increase in capacity. The main challenge that we are facing is of increased supply in most cities. This widens the gap between demand and supply thus putting pressure on prices and profitability. We believe that this is a momentary issue that will level out soon,” Bakaya opined.
According to Rajeev Kaul, President, Leela Hotels & Resorts, hotel business will gather steam in 2014, and after the election it should take off. Sharing his views on the year gone by, Kaul said, “On a macro level there has been a small growth in occupancies but no growth in ARR in 2013 for the hotel industry. The year 2013 has largely been flat like the previous year. However, the trend has lately been positive. Despite such large supply, demand has kept up with supply.”
Speaking with T3 in an earlier interview, Rajeev Menon, Area Vice President (South Asia), Marriott International opined that the industry RevPar is down by 4 per cent owing to the slowdown and supply. However, he added that Marriott’s RevPar has seen close to 5 per cent growth, and predicted that 2013 would end with 70 per cent occupancy.
“We are expecting that there will be a mismatch of supply and demand in certain cities particularly Delhi – NCR with hotels opening in Aerocity Delhi, Hyderabad, Bengaluru, smaller towns like Ludhiana where supply will outstrip demand and will result in excessive competition pushing down the rates further. On the contrary, operating costs continue to escalate due to increased cost of manpower, heat, light & power,” Bakaya said.
S N Srivastava, President, Clarks Inn Group of Hotels called the year 2013 a mixed year for the industry. “Year 2013, like the year before, saw the continuation of weak economic sentiments. This, we expect, will continue for a while, at least until the country goes for election later this year. And therefore, we don’t expect much to happen in 2014. Although it looks like, in overall economic sentiment as well as business for our hotels, 2014 will slightly better,” he opined.
Berggruen Hotels, which forayed into the franchise model and launched its first premier Keys Klub property this year, has enjoyed significant growth this year. Sanjay Sethi, MD and CEO, Berggruen Hotels revealed that the first three quarters have been good and the company will significantly increase overall numbers – performance of existing hotels, signing of new hotels and opening of new hotels. “We have also taken up our expected numbers to 75 hotels signed end of 2015 – 16 from 54 hotels when we began the year,” he added.
Aman Aditya Sachdev, Senior Vice President- India, Rotana has chronicled five major hospitality trends for the year 2014 - Rationalisation of projects and operating assets; Focus on CSR; Consumer access through online channels and platforms; Hotel development in tier II and tier III cities; and Focus on enhancing India as a destination for the international leisure tourist outside of the traditional tourist hubs.
Sethi opined that the sector needs to get infrastructure status for smaller projects which is the future for the country and will get hoteliers access to cheaper funds for development. Inflation and taxation continue to be the major deterrents, he stated.
“The good news is that India continues to be one of the fastest growing economies. Besides there are plenty of new inventory ready to enter the market. One of the biggest challenges in 2014 will be to remain in healthy business amidst the growing oversupply,” added Srivastava.
2013: A tepid year for inbound
According to Sarab Jit Singh, Vice President, Indian Association of Tour Operators (IATO) and Vice Chairman, Federation of Association in Indian Tourism & Hospitality (FAITH), the year 2013 was neither good nor bad for inbound tourism to India. He called the year an average one for business, opining that the sector could have performed better despite the economic slowdown. The industry notched minimal growth through the year, barring the Visa on Arrival (VoA) numbers, which grew in double digits every month.
Arup Sen, Director, Special Projects, Cox & Kings, stated that the inbound market has seen modest growth for the first 11 months of 2013. According to the Ministry of Tourism, India received 6.04 million foreign tourists during January to November 2013, which in percentage terms is a growth of 3.8 per cent. “There can be a slight improvement in December but it will not be substantial,” he opined.
Contrary to this, Surinder Singh Sodhi, Senior Vice President & Head, Leisure Travel (Inbound), Thomas Cook (India) believes that the economic slowdown was a boon for India’s inbound tourism. “The depreciation of the Indian Rupee served to boost inbound tourism in 2013. The decline of the Indian Rupee meant that India had transformed into a destination that offered immense value for money to the foreign traveller. As a result, inbound tourism witnessed a boom, and our traditional source markets such as the UK & France did exceptionally well,” he said.
When asked about the industry’s expectations for the year 2014, ‘hopeful’ was a unanimous opinion. Singh believes that the industry coming together to form the FAITH is a silver lining, giving the industry a single, stronger voice. Furthermore, a written submission has been sent to the Department of Commerce with suggestions from the tourism and hospitality industry for the foreign trade policy. The Ministry of Commerce is helping us now to improve tourism services. They are mooting a comprehensive economic partnership with ASEAN countries, Australia, China, Japan, Korea and New Zealand,” he added.
When asked about what makes him optimistic about the new year, Sodhi shared that 2014 is expected to be a good year for the industry, especially due to the emergence of new traveller segments such as last minute travellers, Gen S (senior citizens) and the youth, apart from newer source markets.
According to Sen, experience shows that VoA introduced so far have yielded results. “There has been a 26.5 per cent growth in VoAs in the first 11 months of this year which translates into more than 17,000 arrivals. This gives us hope that this will remove one more bottleneck. We are seeing the emergence of ``green shoots’’ in the US and European economies and we believe that these are key markets for Indian inbound tourism. In the last one year, inbound tourism has not grown to our expectations due to sluggish economic climate. We believe this will change,” he added.
However, Singh believes that the extension of the VoA scheme is not the answer to India’s inbound footfall woes. “The Ministry of Foreign Affairs has heard us out, understood the issues with a cumbersome visa process, and are keen on working out a solution. VoA extension is not the solution, an e-visa is. We are trying to get online visas in place,” he revealed.
States up their ante
While Incredible India continues to work its magic both within India and beyond its borders, individual efforts by each state in the country is also visible and commendable. Gujarat, for one, has put in tremendous effort via broadcast advertising to promote a vibrant Gujarat, in addition to participation in roadshows, major international and Indian expos, and also hosting its own trade show in the state. Jammu & Kashmir put in their efforts to promote the Sufi circuit last year.
Kerala, despite its established reputation as the home of Ayurveda, has been attracting trying to tap new markets such as Japan and USA by participating in JATA Travel Showcase in September. They also organised roadshows in New York, Chicago and Los Angeles for the first time last year. “We’re confident of achieving further growth in 2014. Steps like extending the list of VoA countries, most of the countries in the new list being our major source markets; participating in trade fairs and organising roadshows in new markets like Japan, USA, Finland etc… are expected to positively impact arrivals in the coming years. Kerala Tourism and its partners in the private sector are looking forward to participating in MATKA Nordic Travel Fair - Finland, FITUR - Madrid in January. It will be followed by BIT Milan, ITB Berlin and MITT- Moscow. A series of roadshows have also been planned in the coming months,” said S Harikishore, Director, Kerala Tourism.
And all these efforts have borne fruit. Gujarat for instance, welcomed 254.09 lakh tourists in 2012-13, an increase of 12 per cent over 2011-12. In 2012 as many as 1.07 crore domestic tourists and 7.93 lakh foreign tourists visited Kerala. Compared to the previous year, growth in terms of foreign tourist arrivals in 2012 was 8.28 per cent and in case of domestic tourist arrivals, it was 7.41 per cent. With varying percentages of growth, the success story has been the same across India.
The growth in numbers has only encouraged these states to increase their efforts to woo tourists. Vipul Mittra, Principal Secretary, Tourism, Civil Aviation and Pilgrimage, Government of Gujarat shared that the last phase of the Bachchan campaign will be shot early this year. “This will cover some new destinations in Gujarat and give a major boost to them. From a tourist point of view, Gujarat will witness improved and better infrastructure at existing tourist destinations, leading to a substantial growth in footfalls. Also, we plan to initiate some new projects which include new religious circuits, caravan tourism, beach tourism and adventure tourism,” he opined.
Kerala is moving further west to tap newer markets. Harikishore revealed that, after targeting markets such as Middle East and countries such as Germany and UK, we’re planning to target the East European markets like Poland and even focus on the VoA countries such as Japan and Finland apart from aggressive marketing in USA.
Other states have taken different routes to woo travellers. Addressing the rising issue of safety in India following criminal incidents in the country, Dilip Parulekar, Minister of Tourism, Government of Goa recently announced a zero tolerance on drugs in a bid to portray Goa as a safer destination for tourism. Maharashtra and the Japanese state of Wakayama signed a Memorandum of Understanding to facilitate trade and tourism exchange between the states.
West Bengal promoted its largest festival Durga Puja last year as the ideal time to visit, and also launched its ‘Chalo Bengal’ campaign. Madhya Pradesh most recently launched its Chhindwara Circuit with Central Financial Assistance from the Government of India.
Announcing the dates for this year’s Chaar Dham Yatra at a press conference in Mumbai, Umakant Panwar, Secretary, Department of Tourism, Govt. of Uttarakhand revealed the state’s new developments. “We are rebuilding Uttarakhand. What we learned after the floods was that the destination has a limited carrying capacity, which we ignored in the past. We will be more careful this year and monitor traffic. We have a Tourism Revival Plan in place for the same,” he said.
Uttarakhand Tourism is building ropeways to battle any possible road problems. In addition, 29 heliports are under construction to facilitate chopper transportation. The seven daily night flights from Delhi to Dehradun are also expected to fuel footfall. The Tehri Lake, a man made lake, is a mega project, with an adventure centre to be built around it along with a floating restaurant and a floating restaurant to be added by mid 2014 and end of 2014 respectively.
The Vishnu Prayag meditation centre and new accommodation options on the yatra route have also been developed. Furthermore, Lansdowne now features log house accommodations for visitors. However, in keeping with the new focus to limit footfall as per carrying capacity, a cap has been put on 500 overnight visitors at a time. The day visitor numbers will have no limit, revealed Panwar.
Tapping a whole new market, Binsar, Tehri and Champawat are being opened for film tourism.
In a bid to attract traffic during the lean season, the Tourism Board is planning a Winter Chaar Dham and a Winter Carnival for devotees who want to visit the deities when they are brought down to lower lands during the cold season. “The dham usually closes because of the snow and the deities are carried downhill for the period. These places are accessible by road, and we hence want to woo tourists and thus encourage year round traffic,” said Sandeep Sahni, President, Hotels & Restaurants Association of Uttarakhand.
Wonderla Holidays has proposed an initial public offering of 14,500,000 equity shares of Rs. 10 each for cash at a price to be determined through the book-building process. The Issue will open on 21 April 2014.The Price Band has been fixed between Rs. 115 and Rs. 125 per Equity Share. The minimal Bid Lot is 100 Equity Shares and in multiples of 100 Equity Shares thereafter. The Bid will close on 23 April 2014. The Issue would constitute 25.66 per cent of the fully diluted post Issue paid up equity share capital of the Company.
The company, which runs successful theme parks in Cochin and Bengaluru, is set to open a third park in Hyderabad to its portfolio. The Rs. 160 crores issue has been announced to raise funds for the same. “The Hyderabad project will be designed on the concept as the Bengaluru theme park, and will take two years for completion. We should begin operations by FY 2016-17,” said Kochouseph Chittilapilly, Vice Chairman, Wonderla Holidays.
Arun K. Chittilapilly, Managing Director, Wonderla Holidays further added that the company also manufactures rides for in-house use, and will build a project workshop for maintenance and repairs within the Hyderabad theme park land, as they have done at their other venues.
Speaking about the company’s performance Kochouseph Chittilapilly revealed that Wonderla Holidays generated a turnover of Rs. 140 crores in 2013, 80 per cent of it from ticket sales. When asked about expansion plans, he stated that the company’s focus will remain South India as they have brand recognition there. “If we expand, it may be with a new theme park in Chennai,” he said.
Nandakumar T., VP – Finance, Wonderla Holidays commented that the company’s margin has averaged at 45-48 per cent in the last few years. “The Hyderabad project is expected to generate as much revenue as the Bengaluru establishment as the size and the offerings are the same,” he added.
Nijhawan Group of Companies recently organised a roadshow for The Address Hotels and Resorts Group (Dubai); The Armani Hotel, Dubai and Milan; and Vida Hotels and Resorts. The delegation was led by Seema Pande, Group Director of Sales and Marketing, Emaar Hospitality Group. The focus of the evening was to highlight their new brand Vida Hotels and Resorts, as well as introduce the latest additions to the established properties.
“Our focus for this year is enhancing our F&B offerings. A new restaurant or bar has been added to each of our existing properties. In addition, we will have the Opera House ready by the end of next year or 2016. We also have The Address BLVD Hotel; The Address Sky Views; The Address Fountain Views; and Vida Hotels and Residences in the pipeline for the next few years,” said Pande.
Russell Dillon, Director of Sales – Leisure, Armani Hotel Dubai announced their new restaurant Cut, a chain which is already popular in the USA and rapidly expanding across Europe. Furthermore, a new restaurant Zeta is opening in The Address Downtown, a facility that will seat 200 guests and overlook the iconic Burj Khalifa.
Michael Sorgenfrey, General Manager, The Palace Downtown Dubai revealed the new attractions the Souk Al Bahar and Cipriani coming to the property in September. The latter is a four-floor restaurant that highlights the view of downtown Dubai.
Furthermore, the delegation showcased the new bar and upcoming Indian restaurant La Porte des Inde at The Address Dubai Mall, the refurbished Manzil Downtown Dubai property and the Vida Downtown Dubai establishment.
The year 2013 started off with a bang. India was ready and raring to go, notching outbound numbers that made NTOs heads spin. And this spirit encouraged these entities to further boost their marketing efforts in India. Malaysia announced its Visit Malaysia Year (VMY) 2014; South African Tourism (SAT) announced its ‘10 Days in South Africa’ competition and ‘Jonty Rhodes 2.0 campaign’; VisitBritain launched a Bollywood app that guides Indian film lovers to locations around the country where their favourite films were shot; New South Wales welcomed an Indian TV crew to shoot in the city, and so on.
On a B2B front, SAT is set to add to its Learn SA module; Tourism New Zealand launched a new trade website; Thailand has increased its sops for Indian film shootings; VisitBritain facilitated an MoU between travel associations in UK and India; Ireland launched a new brochure; familiarisation trips continued; trainings, workshops and roadshows by every destination saw more visitors and registered more interest... the list goes on.
While they all try to woo in various ways, the goal is common – a piece of the Indian outbound pie.
Halfway through 2013, the Rupee value fell against the US$, and the impact on outbound tourism was visible. While the slide provided the silver lining of increasing inbound numbers to India, the outbound traveller became more wary, their trips became more budgeted, and the destinations were more confined to short-haul ones. However, the Indian market has proven its resilience time and again, resulting in NTOs increasing their efforts to woo it.
The mediocre year
Despite the Rupee depreciation, India pulled through as far as expectations from the destinations went. A strong first half of the year meant that they registered a healthy Indian footfall, followed by a reasonable performance at the tail-end of the year, when the initial shock of the depreciated Rupee value wore off.
“2013 was great up to a point. We had a rocking start – our growth was in double digits, nearly 20 per cent. And if you take the previous year and the year before, we saw tremendous increases and were thrilled to keep that pace. We went storming into season, and then the rupee dropped in value, and the gates shut for us. However, people started getting smarter. They started calculating the land cost of the trip and that was where South Africa won as a value-for-money destination,” said Hanneli Slabber, Country Head, South African Tourism.
Echoing Slabber’s optimism, Arturo Ortiz, Director-India, Tourism Office of Spain revealed that the weakening of the rupee meant that the year didn’t start off as per expectations, but official statistics show a growth of nearly 20 per cent. The Indian footfall to Spain grew from roughly 60,000 to 72,000. Australia witnessed a healthy increase in visitor arrivals from India and welcomed 171,700 visitors during 2013, an increase of 7.9 per cent over 2012. According to Amanda Burns, General Manager - Middle East & Asia, Tourism Ireland, they estimate a 7-10 per cent growth in 2013. “Year-on-year numbers have been really positive coming out of India,” she said.
Emerging markets step up efforts
Realising the value of the Indian market, emerging destinations have begun to increase their efforts in the country as well. Most recently, Visit Tampa Bay announced Aviareps as their India representatives. In less than a year of functioning, Seychelles Tourist India office has recorded a growth in Indian arrivals to Seychelles. According to Lubaina Sheerazi, Head, Blue Square Consultants, Seychelles Tourist office, India, the first 10 weeks of 2014 itself have seen a rise in the number of Indians travelling to Seychelles by 37 per cent in comparison to the same period last year.
Tourism in India is currently worth an estimated A$183 million a year to the New South Wales (NSW) economy, revealed Sandra Chipchase, Chief Executive Officer, Destination NSW. She further added that, owing to the growing importance of India as a source market, there has been an increase both operationally and in their marketing budget in India.
Their most recent marketing effort saw a successful ‘Jhappi Time’ campaign’. Chipchase further added that NSW will continue to engage with the trade through hosted trade programmes and events, sales calls, training workshops, collateral support for marketing and co-op campaigns, as well as work closely with the various trade associations.
Short haul gets the long straw
The ones who reaped the benefits of the Rupee depreciation were the short-haul countries. Last year, about 651,000 Indian travellers visited Malaysia, making the country the sixth top tourist generating markets to Malaysia. For the period January - December 2013, Dubai recorded 888,835 Indian visitors staying at Dubai’s hotel establishments gaining ground of 16.3 per cent over the corresponding year 2012. Thailand witnessed 10,49,856 Indian travellers during 2013. This represented about 4 per cent growth over 2012. Furthermore, India’s share of the international tourism arrivals to Thailand was 4 per cent.
And the success of last year has further strengthened their resolve to attract more Indian visitors in 2014. Thailand, for one, is fine-tuning its focus on tier II cities, revealed Sethaphan Buddhani, Director, Tourism Authority of Thailand (TAT) Mumbai. Apart from roadshows and familiarisation trips, the NTO is also co-marketing with key Indian tour operators to lure repeat visitors.
Dubai Department of Tourism and Commerce Marketing (DTCM) is getting ready to embark on a series of joint travel trade promotions (trade coops) to tap the upcoming summer holiday break in addition to encouraging niche segments such as weddings, special occasions and leisure sports. In addition, DTCM will have a robust marketing and advertising campaign to reach out to the travelling public at large on a pan India level, inclusive of tier II and III cities, stated Carl Vaz, Director – India, DTCM, Government of Dubai.
As part of their VMY 2014 strategy, Tourism Malaysia has planned over 200 exciting events for Indian travellers which can be customised and packaged. “We look forward to working even more closely with our partners and travel trade here to increase arrivals from India to Malaysia. We are reaching our end consumers through various joint promotions and contests. FAMs and attractive incentives are planned for tour operators and wedding planners. Tourism Malaysia has taken a multi-channel approach with steadily increasing its presence on the social networking platform, thus making an effort to cater to all sections of the society,” said Manoharan Periasamy, Director, Tourism Malaysia.
What lies ahead
India is ranked as one of the top five countries in the world for potential outbound travel. The number of Indians travelling overseas is set to rise from nearly 15 million at present, to 50 million by 2020. A report by Amadeus-Frost & Sullivan stated that outbound travel from India has more than doubled over the past five years. The NTOs are hence, unsurprisingly, optimistic about 2014. NSW hopes to grow international tourism from India by 10 per cent this year. Spain expects a growth of 8-10 per cent. “The incredible thing about the Indian market is that it is incredibly resilient. It falls and recovers with equal vigour. For us Rs. 62 to US$ 1 is the new normal,” said Slabber.
According to her, competition on the ground will get a lot stricter in 2014. Travellers will get more difficult this year and demand for tailor-made itineraries will increase. “At ITB, UNWTO said they are looking at 4-6 per cent growth, with Africa being one of the big beneficiaries. I think countries such as Africa, India, Brazil, South America, will outperform the others as we provide value for money and great travel products,” she opined.
NTOs have left no stone unturned to make themselves visible to Indian travellers. “Going beyond the realms of traditional advertising, in 2014, we have explored interesting in-film and in-serial placements to leverage the popularity and reach of Hindi cinema and television drama serials. The latter half of the year will also see a build up to the mega sporting event – the Cricket World Cup that will be co-hosted in Australia in 2015,” said Nishant Kashikar, Country Manager India & Gulf, Tourism Australia.
Catherine Oden, Director, Atout France India revealed that Atout France will continue to promote novel experiences under the “Be There! Do That!” banner which essays to portray France in a different light. Towards the end of March, in collaboration with the Chamonix Tourism Board, the destination will be hosting a gastronomic dinner for food and travel bloggers. “Cognisant of the impact Bollywood has on Indian audiences, we are in talks with a production house for filming song sequences of a movie in picturesque French destinations in May,” she added.
TAT is working towards promoting Thailand’s culinary products and festivals, and is focusing on increased length of stay. “People are staying longer in Thailand, given that travel agents (responding to customer interest) are adding new destinations and experiences to itineraries. We hope to witness and increased length of stay with Indians opting for Muay Thai classes and culinary classes while also exploring more of the destination,” said Buddhani.
Working with the trade
The importance of the travel trade in India is not lost on any of the destinations. While their advertising campaigns and promotional strategies seem extravagant, their plans for the travel trade are more intricately sketched out. Atout France‘s focus this year will be to enhance France’s positioning as a business destination, so their actions will include participation in a MICE-centric workshop. They will also conduct an online training focusing on the MICE segment that will be launched towards the end of March. This will be followed by a visit from the suppliers from the Champagne Ardenne Tourist Board in June, who will tour New Delhi and Mumbai.
“The travel trade fraternity and their contribution to helping us promote our destination remains invaluable. We are looking at fortifying our relations with the trade and will plan on developing valuable contacts in tier II and III cities to enhance our positioning in other potential markets in addition to Mumbai, Delhi and Bengaluru. In an effort to enhance product knowledge, we have also launched an online training in collaboration with the Chamonix Tourist Board that shall focus on presenting our destinations from the experiential viewpoint,” Oden added.
Tourism Australia has a consistent trade engagement program, at the core of which is the online Aussie Specialist Program for providing destination training to travel agents. This program currently has over 3,500 agents of which over 900 are qualified Aussie Specialist agents across India.
“Furthermore, our annual trade activity, India Travel Mission (ITM) is usually held in the month of August, and the Australian Tourism Exchange (ATE) is to be held in Cairns in May this year – which provides a fantastic opportunity for our trade partners to meet and engage with suppliers of Australian tourism experiences,” said Kashikar.
Dubai DTCM is taking measures to amplify its online training programme- ‘Dubai Experts’ which has met with considerable success. They currently have over 2,000 travel agents and tour operators that have registered, completed or are in the process of completion the Dubai Expert certification. DTCM also conducts destination training workshops at regular intervals that help build relationships with the travel agents to promote the Destination and provides them an insight into the destination thus encouraging them to promote the emirate, revealed Vaz.
Sheerazi commented that Seychelles is glad with the positive response of the Indian travel trade for Seychelles. “An apt testimony for this is the phenomenal footfalls we saw at our booth in SATTE, New Delhi. We are currently working towards getting the trade community familiarised with the destination and support them in designing market sensitive products. For the same we will be conducting roadshows, destination trainings, participating in trade fairs and organising FAMs,” she added.
Tourism Ireland has launched its Ireland Specialist Programme online on irelandspecialists.com, with six modules, some of which is tweaked to be a bit relevant to the Indian market. “The trade is a really important facet for us. What I would love is for the Irish industry to come again to India to engage in more personal sales calls on the back of the India sales mission. Another effort we have been making is to get Ireland India-ready, to educate the Irish about what the Indian consumer is looking for and expects, such as the need for service, the search for best price, religious and cultural preferences and so on,” said Burns.
Spain has tried to be consistent on the marketing plan and not introduce new products or dramatically change the products being promoted so far, stated Ortiz. “We will continue to focus on Delhi, Bengaluru and Mumbai. Last year started penetrating tier II as well. Furthermore, we took agents to Madrid last year for a workshop there, and plan to take another 18 to Andalusia in September this year for the same,” he concluded.
Visit Anchorage, Alaska Alaska Travel Industry Association and Alaska Airlines recently came together to address agents in Delhi, Mumbai and Bengaluru in a bid to promote the destination. According to Moire Duggan, Travel Trade Marketing Manager, Alaska Travel Industry Association, the destination received 1.85 million tourist arrivals in 2012, of which 51 per cent were cruise travellers. She further added that Alaska receives a lot of repeat visitors as travellers don’t realise how much there is to see.
While Duggan recommended state parks, national parks, glaciers, wildlife excursions and scenic sights, Marsha Barton, Tourism Sales Manager, Visit Anchorage highlighted museums and downtown sights, and rail tours for wildlife and backcountry viewing.
“We were invited by Visit Anchorage to come after the success they met with on their visit to India last year. India is a huge emerging market for us and we are really excited to be here. We can see that there are several Indian families and FITs coming in, although we don’t have a breakup of numbers. We have noted that word is getting out that Alaska is an exciting and unique destination and that is why we have come all the way here,” said Duggan.
On their visit in 2012, Visit Anchorage and Alaska Airlines promoted the destination to agents in Mumbai and Delhi. Witnessing a rise in numbers from Bengaluru, however, they have added the city to their 2013 visit. “Maybe next year we will see a fourth city in our itinerary,” Duggan added.
Duggan further revealed that there are 500 Indian travellers booked to Alaska for 2015, so the destination knows there are large groups expected that year. The destination is working with hoteliers for Indian – specific menus and services to cater to the market better, she added.
American Low Cost Carrier (LCC) Alaska Airlines has enjoyed 12 per cent year on year growth for the last few years from India. According to SK Mittal, Executive Director, ETA Travel Agency, which is Alaska Airline’s GSA in India, the airline ferries 1,200 Indians to the destination every month, with the numbers rising to 2,000-2,500 during the peak season between April and July. He further added that Bengaluru a big market for the airline.
“Travellers from India to Alaska are on the rise, and we have seen several varied segments of tourists coming in. The country sends 200-300 soldiers on Air India for combat training in Fairbank, which adds to numbers. There are also good universities in Alaska, so we see a lot of student traffic. Business travellers also increasing owing to Alaska’s oil industries. And finally, expat Americans in India also travel via Alaska Airlines. Traffic is growing. It earlier grew by 25 per cent, and recently by 12 per cent, which has been the average growth year on year,” revealed Mittal.
Speaking with T3 on the sidelines of its recently concluded product presentation in association with Visit Anchorage and Alaska Travel Industry Association, Susan McKenzie, Manager Charter, Group & International Sales, Alaska Airlines stated that they have recorded a healthy growth in numbers coming in from India via codeshare partner airlines.
“My personal opinion is that, from the western world, coming into India is easiest via Emirates. With only a three and a half hour layover in Dubai, it’s the perfect connection, and the flights go into several cities across India,” she opined.
When asked about considering Air India as a codeshare partner to boost numbers, Mittal mentioned that the airline used to have the national carrier as a codeshare partner, but the ties have been severed. “We don’t know their policies, but we believe they should be one of our partners. We also had Jet Airways on board, but that got cancelled as well since the airline does not fly into US any more. If Etihad operates to the country, then maybe, through their partnership, we can rekindle that agreement,” he concluded.
The twin celebrations of the Hotel Investment Conference - South Asia (HICSA) , and its long time host The Grand Hyatt Mumbai completing 10 years, made for the perfect platform for hoteliers to gather, network and exchange ideas. Delivering on its annual promise of an opportunity to meet and greet the industry’s who’s who, and providing attendees with a fill of food for thought, HICSA wrapped up its 10th edition successfully in the first week of April.
The conference for the hotel industry was first held in the Trident Mumbai and welcomed 200 attendees. The show has now grown to 500 attendees in 2014, comprising brands, owners, consultants and developers of hotels. To commemorate its 10th year, HICSA added a ‘Hotel of the Decade’ award category.
Among the important announcements for the year, Manav Thadani, MRICS, Chairman, Asia Pacific, HVS revealed that HVS is working on a management contract database this year, and hopes to publish a White Paper on the topic in a few months.
The two-day event saw a series of informative business sessions that touched upon various trends and challenges in the hospitality sector. 10 Years Later – Then and Now; Global leaders – CEO Panel; The Story Behind the Numbers; and Brands and Owners: Managing Expectations were the topics discussed on day one.
Day two opened to discussions on the topics of Global Leaders Check-In and How to Solve Development Woes! What followed were impacting concurrent sessions that addressed the topics of Management Contracts – The Eternal Debate; Asian Spice; Is This the Best Time to Buy?; Debt: Equity – Where is the Money; Business of Leisure, Wellness and Luxury and More Than a One Night Stand (Extended Stay); Budget/Economy – Formula for Success; Hotel Owners 2.0 and Introducing New Brands in the Region. The conference came to a close with a panel discussion on Conversions – The Next Wave, followed by the much anticipated Hot Seat for Owners.
Sharing her sentiments on expanding and running a business in the Indian market, Diana L Nelson, Chairman, Carlson opined that a global hospitality company in the current scenario cannot ignore India and must compete in this market. Delivering the key note speech on day one of the conference, Nelson said, “The hospitality sector is estimated to be a US$ 32 billion industry in India, which is a clear indication of the potential the market holds. We are very positive about the market and believe in investing more.”
Manav Thadani Uncensored
As unapologetic as ever, Thadani opened the Conference with a 10-point presentation on what the industry’s focus should be: Sustainability – to focus on optimising bottomline and increase value; professional skill development – especially among international hotel chains hiring Indian staff; food & beverage – 70 per cent of the sector remains unorganised; social media – it is not just for the young anymore; domestic tourism – 1036 million domestic tourists in India, a number that would put India among the top tourism markets if highlighted more; Visa on Arrival – expected to be a game changer; build v/s buy – development of new hotels; new opportunities to invest – huge opportunities in sectors such as Indian railways and the Buddhist circuit etc.; and how to bring down Under Performing Assets – banks need prudence in lending decisions.
The Wonder that is India
Nakul Anand, Executive Director, ITC and Chairman, FAITH, made a hard hitting presentation highlighting all that India has to offer, and what can be done to improve tourism in the country. He listed the Incredible India campaign, Clean India campaign, competitive hotel rates, the formation of FAITH, State Tourism Board’s increased efforts, opening up of FDI in aviation and the construction of world class airport terminals, as some of the key achievements in India.
“Today’s Indian traveller is well connected, knowledgeable, wants to be alone together and has moved from the desk to the couch. The industry needs to understand this. We should boost wellness tourism, grow culinary tourism and improve our Buddhist circuit to attract foreign tourist arrivals,” he suggested.
The story behind the numbers
Since its inception, HVS has produced hundreds of market studies, economic feasibility analyses, and large scale portfolio valuations, varying from limited-service properties to upscale and luxury hotels. In his presentation, Achin Khanna, Director, Consulting & Valuation – SA, HVS explained the nitty-gritties and the back story of how these numbers come into existence.
According to HVS, the basic nature of the hospitality business revolves around cycles. These cycles are a direct result of the environmental, economical and social conditions of the country. Since the 90’s, the Indian hospitality industry has survived three major cycles. Shedding light on this theory, Khanna explained that the period from the late 90’s to 2000’s experienced a rough patch. “Though the branded inventory rose from 18,000 to 27,000 rooms, the occupancy rate plummeted significantly.” Soon after, the industry saw a new era (2002/03 to 2007/08) wherein the Indian domestic market witnessed a boom, shared Khanna. During this cycle, the room inventory grew by CAGR 12 per cent, demand grew by CAGR 16 per cent and occupancy grew by CAGR 11 per cent.
Brands became optimistic and confident about the Indian market and started buying hotels or started greenfield projects. But what was to come soon after was not anticipated by anyone. The industry experienced a big hit with the sudden economic meltdown, “In 2014 so far, the average room rate has declined to CAGR 6 per cent and we expect occupancy rates this year to close at 58 per cent,” revealed Khanna.
On the positive side, Khanna believes that the industry is moving towards slow recovery, “In the next 12-18 months, with a stable government and improved sentiments, the industry is expected to pick up pace. For a buyer, this is the correct time to invest and a lender should lend wisely, but lend.”
Educating the attendees on the pressing need for Big Data: The Next Frontier for Innovation, Competition and Productivity, Stephen Rushmore Jr., President and CEO, HVS addressed the issues of structured and unstructured data, revealing that using big data can help hotels factor in profitability margins. He suggested that hotels could use big data on their loyalty programme members to record where the customer spends more money during his stay. If it is on F&B, for instance, he can be offered better room rates on his next visit, assured that he would spend on F&B anyway. He further recommended that a system like Zillow, which predicts real estate rates and trends, can be used by the hospitality industry through big data to help plan developments. Making strategic predictions, he said, is the direction the industry is headed in.
Role of Technology and Social media
Highlighting the importance of the ‘Role of Social Media and Technology-Based Innovative’, Rohit Verma, Professor Service Operations Management, School of Hotel Administration, Cornell University shared that social media and technology sets an unprecedented opportunity for brands to raise the bar in providing unique, personal experiences for customers past, present and future.
The hospitality industry in particular has an enormous opportunity to market in innovative ways via tools like Twitter, Facebook, YouTube, blogging, mobile-based applications and initiatives and more. Verma further opined, “While social media has emerged as a marketing tool that needs to be integrated into the marketing plan, hospitality businesses need to keep abreast of the emerging trends, evaluate the ones that are best suited to their marketing efforts and implement them before they are outmaneuvered by the competition and lose out on market share.”
In a bid to build strong relationships and instil trust in the Indian trade and consumers, the One & Only brand has increased its efforts to market its properties to the Indian market. Speaking with T3, Brett Armitage, Senior Vice President Global Sales, Kerzner, developers of the hotel brands Atlantis, One & Only Resorts and Mazagan Beach and Golf Resort Morocco, revealed that the company has spent time to identify key partners in the Indian market.
“When a destination has a strong presence in the source market, the property’s marketing is that much easier. Certain tourism boards don’t have a presence in the source markets that aren’t important to them, and the difference is like night and day. If a destination has a strong presence in the source country, with the backing of an airline, the property just slips right in,” he opined.
Kerzner began the year by participating in Tourism and Events Queensland’s ‘Queensland on Tour’ five-city roadshow in India. Kerzner recently etched a management agreement with Australia’s Hayman Island property, which Armitage believes gives the property the One & Only brand and the international distribution and reach that the brand brings. “The property there is an existing one with a new message, and adding an international brand gives Australia something to talk about. We are working with South Africa as well. The energetic India team drives the success of our properties in source markets. We have had a strong relationship with Dubai DTCM as well over the years,” he added.
Comparing the efforts needed for One & Only vis-a-vis the Atlantis, The Palm, Armitage opined that Atlantis’ being an iconic structure helped Kerzner get in the door. The property witnessed a 24 per cent increase in room nights from India last year. “We have been consistent and we see growth five years into operations. One & Only doesn’t have that same iconic advantage. Also, they are very niche, so are not attracting the masses either. Getting the consumer to understand the brand proposition and value is hard work,” he opined.
He further revealed that the company plans to bring the One & Only properties’ General Managers to meet with the fraternity key decision makers in the Indian industry later this year. He is also eager that the brand starts participating in Indian trade shows. He added that the relationship between Atlantis, the Palm and SATTE is well grounded, and as the One & Only brand picks up in India, he would like to see it participating as well.
Speaking about the importance of the Indian market, Armitage stated that India is still a small element for One & Only. “I am looking at substantial targets, but it’s still a very small base. Having ridden the success of Atlantis, starting again with One & Only is a big task. PR, marketing and trade/sales activation on the ground are of utmost importance. We have put our money where our mouth is, so to speak, and have a sizable budget for promotions in India,” he said. For the Indian market, Armitage opined, one needs to be persistent, consistent, have the investment, follow through, and keep the commitment to the market.
Heritage hotel group Samode Hotels recently announced an alliance between its Samode Safari Lodge Bandhavgarh (Madhya Pradesh) and Relais & Chateaux, an association of the world’s finest hoteliers, chefs and restaurateurs. Addressing the media in Mumbai recently, Yadavendra Singh, Owner, Samode Hotels revealed that the partnership is for a period of three years, during which the property will adhere to Relais & Chateaux’s service standards and will be subject to regular inspections to this end.
Speaking on the occasion, Singh said, “It’s a great tie up and I hope that it is a lasting relationship. It was announced about a month ago at their annual congress in Berlin. I believe it is a great branding exercise for Samode Safari Lodge, and also opens up our client base. The main reason we tied up with them is, the primary guests at Samode are ones who have travelled to Africa and now want to explore the Indian wildlife scenario. Relais & Chateaux are well known there, which will attract their loyal clientele to our property.”
Samode Hotels has a total of four properties, the other three being in and around Jaipur. Singh further revealed that he is considering another property for a tie-up with the Relais & Chateaux. “I will not reveal which one yet, but by the next annual congress I aim to have two properties in their association,” Singh stated.
Speaking about the performance of heritage hotels in India, Singh opined that the segment is faring well, with Samode’s own properties notching a 10 per cent year on year growth post the global meltdown. “There is a segment of people who want to experience a country, and by that I mean live in an environment which they feel is olden and traditional. It’s a big market. We have also realised the potential of the domestic segment, which was largely ignored. As hoteliers, we tend to focus on international clients and forget the domestic travellers. Although inbound is still my primary feeder market, I believe if we want to survive in India, we have to focus on the domestic market, which we have been doing and it’s been great,” he added.
Samode Safari Lodge Bandhavgarh is the seventh Indian property to join the Relais & Chateaux family. Speaking on the sidelines of the announcement of their alliance with Samode, Joerg Drechsel, Chairman of the Asian chapter, Relais & Chateaux revealed that the association is planning to launch a culinary academy in Paris that will offer an affiliation with a culinary school in France, as well as an online training with lobsterinc, a South African teaching programme for hoteliers and chefs.
“Lobsterinc has been successful in most wildlife lodges in south and east Africa, where they train locals as per the Relais & Chateaux standards of service. Being an online platform, it is available world over,” he stated. He further added that The Malabar House Fort Cochin, for which Drechsel is Joint Secretary, is starting a three-month summer programme through it.
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