This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
The Magazine On The Business Of Travel. Like It?
The COVID-19 pandemic has delivered severe blows to the aviation industry which has already been under pressure due to various issues. Unprecedented travel restrictions throughout the first half of 2020 have forced aviation operations to all-but grind to a halt as both the leisure and business travel felt the full force of a global lockdown. The whole aviation ecosystem has been impacted by this crisis since the fear of virus forced the world to remain isolated. The crisis is growing longer and deeper than anybody could have imagined.
According to IATA, airlines burned through $51 billion in the June quarter and will burn through $77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute) despite the restart of operations. This makes up nearly 80 per cent of $162 billion of bailout money they have already received and airlines will not return to pre-COVID traffic levels until 2024 . The slow recovery in air travel will see the airline industry continuing to burn through cash at an average rate of $5 to $6 billion per month in 2021, IATA forecasts.
Another global agency, the International Civil Aviation Organisation (ICAO), in its latest report, has projected international and domestic aviation could take up to a US$399 billion hit, in terms of gross passenger revenue for the first quarter alone. While the global situation is quite alarming, the situation in India is not any better despite the growth in domestic passenger post lockdown. In India, the domestic traffic has reduced from 5,85,30,038 during March-July 2019 to 1,20,84,952 during March-July 2020. The revenue of Indian carriers has reduced from Rs 25,517 crore during April-June 2019 to Rs 3,651 crore during April-June 2020. Airport operators also saw their revenues decline to ₹894 crore in the June quarter of 2020 from ₹5,745 crore a year earlier.
Consultancy firm CAPA India estimated that Indian airlines are expected to report consolidated losses of $6-6.5 billion this fiscal and an estimated $4.5-5 billion of funding will be required to overcome the covid-19 crisis. Meanwhile, Indian carriers have asked the government to set up an interest-free line of credit of at least $1.5 billion for the aviation sector.
Thought leaders of the industry feels that there would be fewer players as the industry is all set to witness consolidation in near future. They predict that COVID-19 would make airlines more resilient as most airlines are restructuring in a very positive way.
Optimism in the air
However, airlines are optimistic with a hope that coming months will bring some respite. “As the world starts to adjust to the next phase of the pandemic and international borders gradually re-open, we are optimistic this will bring some stability for global travel demand to return. We look forward to resuming passenger services to India when it is commercially and operationally feasible to do so. In the meantime, we will continue to support repatriation flights to/from the country including Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kochi, Kolkata, Mumbai, and Thiruvananthapuram - facilitating travel and helping stranded Indians return home,” Jabr Al-Azeeby, Vice President - India & Nepal, Emirates Airline said. Emirates operate passenger services to more than 90 destinations via Dubai and is committed to fully restoring its network.
The Indian aviation industry is witnessing a continued recovery in domestic passenger traffic since the opening up of the service. The domestic market saw a 37 per cent growth in traffic to 39 lakh passengers in September over August 2020. The increase in capacity deployment helped airline in attaining the growth. However, it will take time to come back at pre-COVID level.
“We believe that it may take anywhere between 12-18 months to recover from the current situation and come back to the Pre-COVID levels of travel demand, also depending upon how other countries resume their international operations and how receptive are they towards international travellers. However, we do foresee a rise in demand at the onset of the festive season, with people travelling by air to meet their family and friends and with air travel being the safest mode to travel, this will also contribute to the overall rise in demand,” Sanjay Kumar, Chief Strategy and Revenue Officer, IndiGo, said and added that travel demand has shown consistent growth after the opening of the domestic markets since May 25, 2020. “We have seen a positive trend over the first 100 days of resumption of operations post the lockdown including the steadily rising PLF, unit revenue and future bookings on the back of increasing customer confidence in air travel. We are bullish that our passenger loads will grow with the increase in capacity across our network,” he said and hoped that if the regulation around the various states becomes consistent and more liberal in terms of rules and regulations, we should see much faster growth in passenger numbers.
Vistara too is augmenting its operation to come back to pre-COVID level. “Since the resumption of operations, we have been constantly monitoring passenger demand and have been scaling up our operations in a calibrated manner. We are operating at over 50 per cent of our pre-COVID capacity, connecting 27 domestic destinations (as on 08 October 2020). We plan to further scale it up to 60 per cent of our pre-covid capacity in the coming weeks, which is the capacity allowed by the Ministry of Civil Aviation,” a Spokesperson of Vistara said. Vistara was operating operating close to 200 flights daily in the domestic sector before pandemic.
With demand from passenger gradually going up, all these carriers are incorporating innovations in its overall operations to infuse confidence among travelers. “We introduced our Lean Clean Flying Machine initiative, aimed to educate our passengers about the steps being taken for their safety and safety of others, once air travel resumed in May to enhance their confidence in air travel,” Kumar said highlighting the findings of their survey that says 95 per customers prioritize health and wellness of the airline staff, while 92 per cent feel that sanitation and safety protocols by airlines need to be in place. Personal safety kits (90%) and contactless travel experience (89%) were next on priority. “As an industry we have done well in communicating all our safety measures and protocols across platforms, with almost 93% of travellers being aware of them,” Kumar said and shared that indigo added the 6E Double Seat option, for a single passenger to book 2 adjacent seats for added emotional security based on the customer demand. Moreover, airlines are also providing complementary travel insurance globally. “Additionally, IndiGo’s travel assistance has hospitalization benefits along with coverage for COVID-19. Complementary travel insurance is being provided by Karvat Cover-More Assist Private Limited underwritten by Bharti Axa General Insurance,” Kumar revealed that IndiGo has re-started Tiffin services through pre-booking.
According to Vistara, safety and hygiene will continue to be key considerations for customers and technology will play a key role in ensuring that throughout the passenger’s journey. “At Vistara, we were already on our digital transformation journey which has only been fast tracked due to the pandemic. Initiative taken by Vistara like casting of kiosk screens on passenger mobile, scan & fly, Self-tagging, self-baggage drop, self-boarding, e-gates, biometrics/face recognition, e-boarding passes and bag tags are all touchless solutions which will go a long way to build confidence in flying again. We also launched an integrated campaign #FlyingFeelSafeAgain, aimed at generating awareness about air travel being the safest mode of travel during the Covid-19 crisis and informing customers about the airline’s various initiatives, “the Spokesperson added.
Emirates too always placed customers first and their top priority is also the health and safety of the communities we serve. “We know customers are yearning to fly and we are very proud to lead the way in boosting confidence for international travel. We modified our services to mitigate risk of infection, ensuring we always keep in line with the latest hygiene and safety protocols made by authorities and health experts. We were also the first airline in the world to offer free, global cover for COVID-19 related costs. Customers can now travel with confidence, as Emirates will cover medical expenses of up to EUR 150,000 and quarantine costs of EUR 100 per day for 14 days, should they be diagnosed with COVID-19 during their travel, while they are away from home. This cover is immediately effective for customers flying on Emirates until 31 December 2020 and is valid for 31 days from the moment they fly the first sector of their journey,” Al-Azeeby said.
Emirates also revised their booking policies to offer customers peace of mind while planning their travels. “Customers who purchase an Emirates ticket for travel on or before 31 March 2021, can enjoy generous rebooking terms and options, if they have to change their travel plans. Customers have options to change their travel dates, extend their ticket validity for 2 years, or convert their ticket into a travel voucher to use against any future flight-related purchase for themselves or their family and friends,” he said.
Sluggish demand from corporate travel
Despite all health and safety measure, traveler’s confidence are still low. While leisure and essential travel is taking place, although in slower pace, corporate/business travel is yet to be back to the market, not even with slower pace. Business travel contributes substantially in airlines’ overall business.
According to Al-Azeeby, corporate travel is heavily dependent on the reopening and recovery of economies across the world. “While some businesses may continue to use virtual meetings, we are optimistic corporate and leisure travel will resume as the world adjusts to the next phase of the pandemic. We’re currently seeing a positive trend in MICE travel across parts of Asia, which is a very positive sign of economic recovery. However, these are still early times. For us, we remain committed to serving our customers and we hope to resume our full complement of services and destinations as quickly and safely as the situation allows,” Al-Azeeby said.
Vistara also feels that a slow but consistent increase in business travel can be observed as people have started going back to their place of work. “In our customer study concluded in June 2020, 65 percent of the respondents mentioned that they expect to take their next Vistara flight before December 2020. 35 percent of the respondents expected to fly for business while 25 percent of them indicated that they would fly to visit their friends and relatives,” the Spokesperson informed.
Airlines across the globe have adopted various humanitarian measures to support a larger section of the society by giving complimentary tickets to health professionals, teachers or by extending other kind of support.
In order to contribute towards the society and help our nation in these difficult times, IndiGo operated cargo flights to ferry vital supplies and Vande Bharat repatriation flights for stranded Indian citizens. “We transported medicine, equipment and relief supplies from one part of the country to another, while adhering to all the precautionary measures. In addition to this, we also created the first ever blood plasma corridor to save the life of a patient suffering from COVID-19. The plasma units were transported on IndiGo CarGo from Bengaluru to Srinagar via connecting flights,” Kumar informed.
Community services is deep-rooted in Vistara’s culture and the airlines strongly believes in giving back to the local communities they operate in. “As part of our ongoing efforts, we had launched the Vistara Wellness Initiative in April this year by collaborating with Indian Hotels Company Limited (IHCL) to distribute over 50,000 long shelf-life nutritious food items to the frontline health workers. Since then, we have been able to distribute over 100,000 nutrition and sanitisation items to thousands of people across the country,” Vistara Spokesperson informed.
Emirates too kept communities connected through repatriation flights and cargo operations. “While waiting for borders to re-open, we actively engaged with embassies and consulates to support repatriation of stranded travellers and citizens, including our special flights to India. We also scaled up our SkyCargo network to maintain trade lanes and movement of essential goods across the world,” Al-Azeeby said and added that Emirates ensured an adequate flow of critical supplies such as pharmaceutical products, and perishables.
Despite all these challenges, airlines are keeping connect with the trade partners regularly. “We are grateful for our trade partners across the world who continue to play a vital role in our operations and success and we look forward to supporting and strengthening such crucial ties,” Al-Azeeby said. The pandemic has severely impacted all aspects of the travel industry and travel trade is a very integral part of it. “We have tried to maintain constant and transparent communication with our trade partners as we are collectively trying to re-build demand in the market,” the Vistara Spokesperson said.
We all know that rising to the challenges of a crisis is nothing new to airlines and the broader aviation, travel and tourism sector. Just as the industry has overcome past health epidemics, economic recessions, unfortunate safety incidents, and other debilitating events, it too will overcome the COVID-19 crisis.
The Republic of Indonesia has become the first signatory of the Framework Convention on Tourism Ethics, the landmark instrument created to ensure global tourism is fair, inclusive, more transparent, and works for everyone.
The ceremony, hosted by the World Tourism Organization (UNWTO) in Madrid, is a significant step towards the ratification of the Convention, which was adopted during the 23rd meeting of the UNWTO General Assembly in September 2019. With the sector currently facing up to the biggest crisis in its history, today’s signing was a clear sign that Member States are looking to UNWTO for firm leadership and remain committed to its mission to use this pause as an opportunity to realign tourism.
The Convention was hailed as a “big step forward” towards introducing a universal, legally binding ethical code for tourism, one of the world’s most important socio-economic sectors. In a special ceremony attended by the country’s Ambassador to Spain Bapak Hermono and hosted at the UNWTO headquarters, Indonesia became the first country to sign, signalling its strong commitment to uphold the highest ethical principles as it expands its tourism sector.
Indonesia played an important role in the drafting of the Convention as part of the Committee that converted the Global Code of Ethics in Tourism into an international legally binding instrument.
South Asia, which is expected to see nearly 47.7 million travel and tourism jobs getting affected due to the COVID -19, needs to adopt a regional approach to in order to revive tourism sector. While the governments in the region moves from crisis to recovery planning, governments and destinations have an opportunity to think strategically about the future of their tourism sectors and implement policies that will improve the industry. Regional collaboration could help tourism throughout South Asia rebuild itself as a stronger, innovative industry, says World Bank.
Meenakshi Sharma, DG – Tourism, Govt of India opines that tourism in the neighboring countries is very crucial for India. “There are so many things: history, heritage, culture, religion, architecture, cuisine etc. which we share all among our neighbors. We also have a lot of connectivity with Nepal, Sri Lanka, Bangladesh, Myanmar, Afghanistan etc. There is no reason that why we should not have a very strong regional tourism. We do get numbers from region but there is a whole new scope of improvement on Buddhism, the Himalayas, beaches, Sundarbans etc. The linkages are very strong. Only thing is how to take benefit of this. India is very keen, and we are working on the Act East policy,” Sharma said.
Almost all countries from South Asia feel that regional tourism is the way forward. “The enhancement of regional cooperation on tourism will be not only useful to the successful restoration of tourism but far beyond. This could be pursued at the government level through the existing structures like the SAARC or even create a new body. This body could discuss various matters such as minimum common standard and protocols under new normal tourism, facilitating seamless transit, entry, exit of tourists, development of regional circuit tourism packages, common marketing and promotional strategies. Special arrangements like the travel bubble and green lane could be also discussed and developed,” Dorji Dhradhul, Director General, Tourism Council of Bhutan, says.
Maldives, which depend on tourism for 60 per cent of GDP and jobs, reopened its tourism sector on July 15 with strict safety standards to protect vacationers and employees from the coronavirus. “This pandemic has definitely brought countries closer together as we fight against a common threat. Thus, it's important for us to strengthen the relationship between tourism promotional bodies, tourism regulatory bodies & NGO’s within the region, to assist in cross promotional activities,” Thoyyib Mohamed, MD, Maldives Marketing & Public Relations Corporation, said and added that each country is gifted with its own uniqueness thus by utilizing the media and various mediums in each country to promote the similarities (cuisines & culture) we share within the region to restore the tourism sector to its prior status.
Javed Ahmed, CEO, Bangladesh Tourism Board, also shares the similar opinion. “Due to pandemic, it is better to promote short-haul tourism than long-haul. In this connection, regional integration like extended group tour programs, regional MICE, study trips, health tourism etc. can be formed to restore the tourism sector,” Ahmed said.
Dhananjay Regmi, CEO, Nepal Tourism Board opines that supporting each other’s’ tourism is crucial for the restoration of regional tourism. “Cooperation and collaboration should be the main ‘mantra’ in the recovery phase. Intense homework has been done previously on regional tourism promotion; BIMSTEC, SASEC, Great Himalayan Trail to name a few. We must fall back on the knowledge and experiences collected earlier for these projects. We share the Buddhist heritage, and the grand nature and culture of the Himalayas. I believe that with strategic promotion, customized packaging, effective branding, tourism sector of the region will definitely gain momentum once the crisis takes a backseat,” Regmi opined.
Despite so much of similarities, the regional tourism is prospering in the region. “South Asia is blessed with diverse cultural and natural heritage; however, the potential remains largely untapped. Together, we can take tourism to the next level, by improving air connectivity, streamlining immigration procedures, sharing of information and best practices, promoting collaborative research and innovation, enhancing the quality of services, promoting private sector participation, etc. However, the biggest impact will come from improving the personal safety of a tourist,” Dhradhul said and informed that while COVID 19 has added the health safety as a new priority for everyone, but all along even without COVID 19 or similar health pandemic, South Asia does not have a good reputation as far as personal safety is concerned. “South Asia in general is viewed as “not so safe” to travelers. Therefore, South Asia needs to do a lot in correcting this wrong reputation. This will have a significant influence on making South Asia a popular destination. This is of course a major task that will demand concerted efforts from all countries and more critically from every citizen,” Dhradhul suggested.
According to Regmi, the prime factors that constrain the growth of tourism in South Asia are lack of access, tourism infrastructure and lack of trained manpower. These are inadequate in the rural areas especially in the Himalayan region that have high tourism potential. Similarly, sanitation and hygiene standards are sometimes not on par international standards, and we are losing out to that. Insufficient promotion of products and destinations play a part. Apart from these, I also think we position ourselves low due to our developing economy. If we can brand and position as high-value tourism region, our tourism sector will move towards quality and sustainable,” Regmi opined.
Echoing the similar opinion, Mohamed says that strengthening the air connectivity further from the key cities within the region could play a vital role in promoting tourism within the region. “During this time, charters also could be something that will work. Additionally, strong relationships between tourism boards, tourism NGO’s can help to create awareness within the region. Our simple lifestyles & welcoming culture are interconnected within this region; hence we believe that this could be an added advantage in terms of regional promotion,” Mohamed added.
Ahmed also speaks on similar line. “Lack of regional integration, unstable social and political situation, excessive tour cost and lack of security are the main constraints for the growth of tourism in South Asia. To overcome this constraint, we should be more supportive for each other and more tourist friendly.
Long term measures
Currently Maldives is perceived as a honeymooners and couples only destination among Indian market. “Maldives offers varieties of options for families, adventure with lots of water spotting activities, health & wellness, MICE combined with leisure, hence we strongly believe that we should heavily promote these segments among Indians to create a more resilient region. Additionally, penetrating into other niche segments, such as the multi-billion Indian film industry. In terms of location, we are blessed to have amazing natural beauty, both above and under the water which is ideal to shoot movies, travel documentaries, travel magazines etc.,” Mohamed said.
Dhradhul suggests formation of a regional tourism body to facilitate effective networking and solidarity. “One important mandate of this body could be to give a new reputation to the region - that "South Asia is a very safe for travelers". The region could also champion the practice of sustainable tourism driven by the development philosophy of Gross National Happiness. Development of strong regional and domestic tourism could be other measures to build resilience in the tourism sector. The region could also have a regional tourism development fund which could be also used for recovery and rebuilding during such unforeseen difficult times,” Dhradhul suggested.
Regmi feels that this is the right time to prepare for a more sustainable and resilient future of the region’s tourism industry. “We must invest in eco-friendly infrastructure, train tourism manpower thoroughly, promote sustainable-responsible-green tourism exclusively to build resilient destinations and communities. Similarly, we need a tourism industry that works closely with the governments and communities. Raising the bar in tourism services through close adhering to safety protocols and hygiene, diversified products for quality experience of visitors could also play a role in the same. We must also try to cut off heavy dependency by promoting to increase arrivals from within the region,” Regmi said.
According to Ahmed, primarily we should focus on the strong regional integration to build resilience in this region. “After this, we can initiate a comprehensive approach for tourism development and promotion that can be ranged from low cost tourism to build up a common platform for promotion and marketing,” Ahmed revealed.
Meanwhile, countries are working on confidence building measures (CBM)to draw tourists. “Reinstating traveler’s confidence in Nepal, as a destination, especially pertaining to health, hygiene and sanitation, is our prime priority now. To ensure safety to tourists as well as the industry and the public, we have come up with "Covid-19 Safety and Hygiene Protocol for Tourism Industry". The protocol guidelines aim to support the industry in gaining back confidence of clients in the domestic and international market, and in mitigating the crisis among staff and the industry,” Regmi informed.
Fortunately for Bhutan, due to their long-standing tourism policy of High-value Low volume, the Kingdom would not require big changes in their policy and practice. “We will be focusing on reinforcing the tourism policy of High-Value Low Volume, which we have been practicing for the last fifty years. Under this unique policy, all tours in Bhutan is guided to ensure safe and exclusive experience of tourists, which could be an important element in the new normal in tourism. This will be further reinforced with our story of, how successfully we are containing the COVID 19 pandemic as evidenced by the fact that Bhutan has the lowest positive cases in the region and no loss of life to date,” Dhradhul said. Bangladesh will maintain frequent communication with our their consumers and provide excellent offers to rebuild the consumer trust and confidence for the tourism recovery.
To ensure safety of all travellers, Health Protection Agency of Maldives has made it mandatory for all inbound travelers to present a negative PCR certificate on arrival. “This has to be done within a maximum of 72 hours prior to departure to Maldives. Tourists will be allowed to visit the Maldives without any form of quarantine and travellers are required to submit a health declaration card before arrival and it is available online too,” Mohamed said.
According to World Bank, a full recovery of South Asia tourism is likely to take 18 months or more. “Domestic tourism will recover first, followed by intraregional travel between areas designated as “COVID-19 safe zones.” International long-haul travel will likely be the last to reappear,” the World Bank said in a blog.
COVID-19 has had an unprecedented impact on corporate travel bringing it to a sudden and complete halt. Experts have been raising the alarm that this is almost the demise of the of corporate travel arguing that it will take a long time to recover till the vaccine is out. Organisations adopted a people-first approach during the lockdown and work from home became the norm. Business travellers have become used to meetings on the likes of Zoom and MS Teams. As a result, many of them no longer see the need for constant travel for businesses.
According to a recent survey by the Global Business Travel Association (GBTA), almost every member company (98 per cent) cancelled or suspended international business travel in the immediate aftermath of the pandemic. Study suggests that business travel amounted to 1.7 per cent of global GDP with a 3X faster growth rate than GDP before pandemic. This year, due to COVID-19, business travel, despite making relatively smaller percentage of global GDP, is expected to reduce global GDP by 17 per cent.
A report from WTTC says that business-travel spending exceeded US$1.4 trillion—21.4 per cent of the global travel and hospitality sector in 2018. Corporate travel is significant for airlines and hotels not only in traffic but in profitability. For airlines, corporate travellers represent 12 per cent of passengers and generate billions in revenue.
With COVID-19, business travel will undeniably be different, but it will pick up slowly and gradually. The new normal for business travel will be a more mindful, thought-out way of travelling. In the long run, it will benefit both employees and employers, leading to a better life-balance for the former and a better return on investment for the later.
But is this the start of a new normal for business travel? T3 connected with Nadia Yahiaoui, Vice President, Corporations, Amadeus Asia Pacific; Todd Arthur, Vice President, Asia Pacific, Travel Solutions Agency Sales, Sabre; Sandeep Dwivedi, Chief Operating Officer, InterGlobe Technology Quotient; Rakshit Desai, Managing Director- India, Flight Centre Travel Group and Raj Rishi Singh, Chief Business Officer, Corporate Travel, MakemyTrip to know what might be in store.
The New Normal
It is believed that business travel will return in phases, spurred by proximity, reason for travel and sector. According to a GBTA’s survey, companies are twice as likely to have halted international travel as have halted domestic travel as of July 2020. So, what is going to be a new normal?
“There will be a heightened demand for IT solutions that help corporations manage corporate travel. Health and hygiene considerations and a seamless end-to-end experience will be the make-or-break factors for winning back corporate travellers in the era of COVID-19 and technology will underpin this strategy,” Yahiaoui says adding that one of the biggest changes that we anticipate is that lead times for bookings are likely to be much shorter, and cancellations more common. “It is likely that companies will change their booking policies to reflect this, and in turn, internal teams within corporations that manage employee travel will need to be more agile in how they work, and how they partner with TMCs. Across the entire travel industry, the idea of being able to predict booking volumes and revenue based on historical trends is now a thing of the past, so real-time data will be more important than ever for resource and revenue planning,” Yahiaoui adds.
Arthur opines that business travel planning and booking could become more complex as travellers will be looking to combine multiple trips, while corporate policies will need to adapt to cater for added insurance coverage and such factors as quarantine costs and swab tests. “Traditionally, corporate travel policies focused to a large extent on cost. Now, traveller safety will be the utmost priority and companies want to make sure they fulfill their duty of care to employees by ensuring the airlines, accommodation providers and other travel services they use are meeting stringent hygiene and cleanliness protocols,” Arthur adds.
Dwivedi says that some of the major advantages of corporate travel is the capacity to broaden understanding and knowledge with inflow of knowhow as a result of in-person consultations and observations. “With COVID-19 changing the face of industries’ economical and operational capacities, corporate travel will likely to evolve as a result with obvious polarity. With the continuous influx of virtual meetings, we are witnessing, may leave many accustomed to the comfort, ultimately limiting travel opportunities; and further limiting knowledge transfer and inflow of knowhow as a result. As far as the new normal is concerned, it is difficult to paint a picture with constantly evolving business and global scenario. The ‘new normal’, irrespective may take eons to emerge and getting accustomed to subconsciously, while consciously, it appears we are already living it,” Dwivedi adds.
Desai opines that government policies, public health situation and all other factors determining demand are still in flux and it is difficult to assess the new normal with certainty right now. “But we have no doubt that travel in all forms will see a phased but definite recovery. Organisations will be reconfiguring their corporate travel policies to focus on duty of care and brace for more spends on ensuring well-being of their employees while travelling. Short and frequent business trips will make way for longer business trips and suites and apartment hotels will be preferred for their privacy and long-stay features,” Desai adds.
Singh says that the impact varies across industries. “Pharma sector has been travelling more than IT and technology. FMCG are travelling within region. SMEs have started travelling far more frequently,” Singh says and adds that we are seeing some recovery in last one-month week-on-week, overall recovery if to the tune of 15-20 per cent from pre COVID.”
Road to recovery
COVID-19 is arguably one of the biggest challenges that industry will have to overcome. Hence, new products/innovations/modification has become central to every aspect of business strategy.
“We are evolving to grow with an innovative and adaptive mindset, holding dynamic needs of our community of travel agents as the epicenter of our developments during and beyond the pandemic. Our prime focus at this moment is to bring latest developments and updates in aviation sector to our travel agents and for the same we have been relentlessly exploring and deploying technology. From chatbot to plugin, including COVID-19 plugin released by Travelport lately; advanced fintech for optimised financial and accounting operations to enhanced processing capabilities with simplified transactions; exclusive researches to COVID-19 resource hubs; we have been constantly observing and innovating ways to ease the process of making and managing travel bookings during the pandemic,” Dwivedi says.
For Amadeus also, the top priority is to develop minimal viable product propositions to make it easier and more cost effective for travel companies to trial new technologies that address the problems created by COVID-19. “We hope that this will help accelerate the adoption of the technologies that will be so vital to the industry’s recovery. We have enhanced the Amadeus Mobile Messenger to provide real-time status alerts about specific regions and countries at risk and to locate all travelers globally at a glance by their region, country or city, to keep employees safe and their business continuity plans on track. We’ve also partnered with world-leading travel security and risk consultant, Riskline, to integrate specific COVID-19 related information within the tool,” Yahiaoui informs.
Understanding how demanding and complicated corporate travel management can be, Sabre’s corporate booking engine, GetThere is helping businesses to plan in uncertain times. “Hygiene and cleanliness have never been so important, and our airline and hospitality partners are able to communicate the health and safety measures they have in place through our GDS. Travel agents are then able to make a choice for their corporate clients based on these protocols. Airlines and hotels are able to put their offers in front of a wide, high-value audience while growing geographic reach so agents can create unique trips based on the changing priorities of travellers and companies. Our clients are also using our solutions to help automate exchanges and refunds and to minimize disruption during these uncertain times, freeing up more time to improve customer service at a time when corporations may need extra support,” Arthur says.
Flight Centre Travel Group India has partnered with leading insurance companies and Indian Council of Medical Research accredited COVID testing laboratories to make travelling safer for customers. “In the MICE segment, we have introduced virtual reality events which closely mimic the on-ground meetings and events experience. In retail, we are building a network of work from home agents with Travel Tours Associates who will take our services direct to customers to supplement our retail presence and generate employment,” Desai says.
According to Singh, there is a culture of trust in most of the Asian countries where personal meetings play a key role. “So, rebound will happen. Remote working especially in the IT sector will be the new normal and travel may go down dramatically in such segments. Now suppliers with good health and safety guideline will be the frontrunner. Cancellation policy should be traveller friendly and customised. A lot of travel will also move from unstructured to the structured segment,” Singh adds.
Changing long-term plans
Speaking realistically, Dwivedi informs that that with the global economic, development and national plans in a mayhem as a result of this pandemic, our business like every other business has been impacted. “Our long-term focus has now more strenuously shifted to innovating our technology, making it more adaptive to unexpected shifts while bringing more advanced automations like robotic process automations, artificial intelligence and natural language processing to forefront. With these automations we are hoping to optimise and enhance our community’s travel booking and management processes, making it more adaptive and agreeable with modern technologies,” Dwivedi adds.
Similarly, Amadeus was also working on a lot of the technology to help make travel safe and frictionless in the COVID-19 era such as contactless technology in airports, airlines and hotels; real-time disruption management; and AI-powered booking and revenue management systems. “These will remain central to our long-term strategy. A unified, industry-wide approach will be critical to the travel sector’s recovery, and that’s where I think Amadeus can make the biggest difference in the long-term. We already work across all aspects of the travel eco-system, and by connecting the different parts of the industry and ‘traveler journey’, we can help co-ordinate a cross-sector plan for recovery. To this end, we are committed to collaborating with the right stakeholders and organisations to rethink travel and prepare for a brighter future,” Yahiaoui says.
Flight Centre Travel Group India understands that it will take atleast 18-24 months for travel to fully recover to pre-COVID levels and our strategies will have to be both long and short term. “The pandemic has accelerated the implementation of some of our plans slated for the next few years – an expansive network of work from home agents and using technology to make customer experience better,” Desai says.
Singh, being optimistic, expects pre COVID level recovery by end of Q1 next year. “The one critical element is vaccine for the market, when there is a news, things will rebound quickly,” Singh adds.
Sabre has also been impacted in the same as other travel partners. “As soon as Covid-19 started to impact our business, we took immediate action to reduce expenses before making more significant cuts as the pandemic took hold, as well as a capital raise of more than $1.1 billion. However, in the same way that our new and existing clients are continuing to invest in our technological solutions in order to recover and, ultimately, grow, we remain very focused on our own long-term strategic imperatives. We are actively positioning Sabre to take advantage of the opportunities on the other side of Covid-19 so we can support our clients to do the same,” Arthur informs.
Trends in bleisure
According to Dwivedi, bleisure shall eventually prove a good source of opportunities for travel booking and experience providers, especially when considering most people’s zero to limited travel during pandemic.
As corporate travel emerges from hibernation, it could be that it takes a different shape. “While businesses need to ensure that the right protocols are in place so their team members are as safe as possible, business travellers may wish to include more leisure time during their trip so they can enjoy travelling without having to take two separate trips with their perceived risks and potential quarantine measures,” Arthur adds.
Yahiaoui feels that the trend was picking up rapidly before the pandemic hit and we can expect a renewed interest in bleisure travel as corporate travel itself recovers. “However, while bleisure travelers might have been keen to explore novel experiences previously, the priority now will likely be around safer, “tried-and-tested” options and known brands. Employers might be able to encourage a return to corporate travel by facilitating bleisure arrangements; and likewise, there might be an opportunity in the COVID-19 era for TMCs to support bleisure, as well as pure business trips, as an additional revenue stream,” Yahiaoui adds.
Anand Ramadurai, Vice President – Marketing, Indian Hotels Company (IHCL) shares his views on how the brand has been successful in leveraging digital marketing during the crisis. Excerpts from the interview:
The COVID -19 has pushed stakeholders of the tourism industry to go aggressive with their digital marketing strategy. How are you re-strategizing your marketing and promotional plan?
Digital marketing has always been a key area of focus for Indian Hotels Company (IHCL), and a substantial proportion of marketing spends have been allocated to digital marketing. In the current context and immediate period going forward, it is expected that travellers will seek greater comfort in seamless online journeys. In fact, recent studies have shown that there has been an exponential rise in the time people have spent on digital platforms or browsing social media channels over the period of the lockdown. This has led to a boom in digital and social media content consumption. We are optimizing our websites in line with the anticipated consumer trends so that discoverability is made easier. Our customer outreach plans currently centre around the digital space.
What new elements have you incorporated in your current digital marketing strategy and how are you planning to approach the market? Is this going to be a long-term strategy or just a temporary requirement?
Consumption of data and content in the digital space has increased manifold, and we have stepped up our engagement through our social media outreach. We will be soon launching chat-bots to provide increased touchpoints for the consumer and enhance their experience with the brand. Similarly, enhancements in our Mobile App is also underway.
We strongly believe that the trends that have surfaced in this recent period have been under-currents that were bound to see the light of day in the near future. The COVID-19 crisis has largely served to precipitate action and bring digital initiatives to the centre-stage of an organization’s plans.
What appealing offers/incentives you are rolling out in the market to draw travelers?
Our customer propositions are based on a well-founded understanding of the consumer and insights with regards to their requirements. For example, our 4D – Dream, Drive, Discover and Delight travel offer is based on the insight that consumers, having been cooped up within the confines of their homes, will be looking forward to taking a break. However, social distancing and increased awareness about health and hygiene will continue to be priority, and people will be keen to travel to destinations within close vicinity of their homes; thereby leading to an increase in demand for driving holidays. Our 4D offer gives guests the perfect opportunity to drive with families and friends to discover, unwind, and be one with nature once again at our resorts and hotels across the country.
Our Urban Getaways proposition provides consumers who wish to take a break, an opportunity to enjoy a mini vacation within the safety and comfort of their resident city. We have several other such consumer-focused propositions that we will be bringing to the market progressively.
Evaluating the ROI has been one of the major challenges for digital marketing. What mechanism are you putting place to measure the ROI?
Digital marketing is a space where at least indicative ROIs are relatively easier to arrive at than anything done in the off-line space. Using analytical tools and an attribution model, we get an indication of the impact our digital campaigns have on generating revenue.
It is however, important to note that while campaigns may serve to drive traffic to our website, the customer may then decide to book through our Customer Service Centre or directly at the hotel. In order to account for such reservations and bookings, which will not be captured in conversions or ROI calculations, it is critical to look at the trend rather than only focusing on the absolute number. As long as we use like-to-like comparisons, one can assess what’s working.
Furthermore, we do A/B tests on our websites on a regular basis so that we can take informed decisions.
On which social media platforms are you present and how is the response? How are you leveraging social media platforms?
We are present across Facebook, Instagram, Twitter, YouTube and LinkedIn. Each of these perform different roles and are important in their own right. Instagram has increasingly become the platform that showcases a greater degree of engagement, while Facebook has the largest audience that one can reach out to.
We use social media as a platform for storytelling for our brands and I believe it can be a significant channel to establish our brands. We have started increasingly experimenting with Instagram Live – starting with Yoga Day – and we will continue to use different formats to engage with our audience. With amongst the best collection of Safari Lodges in the country, we have also now started to have live sessions with our naturalists, which allows consumers from across the globe to not only connect with the brand but also experience armchair travel.
Besides content, social media remains an important channel for any campaign. We use different techniques to target relevant audiences for different consumer propositions and offers, and direct them to our website for bookings.
Has Social Media brought in transparency in the travel segment (for example: the reviews and comments) and how is it received by the travel trade?
The digital space in general has been a great leveler as it gives voice to even a single individual. Consistent with its wonderful culture of service, IHCL has recognized the importance of this channel and built an online reputation management platform to listen to and respond to comments in the online space. We call this Taj.Live. This enables us to be closer to customers, resolve concerns quicker, and in general understand what people are talking about and engaging with the brand.
Reviews have become an integral part of many online users’ journeys. As individuals, we tend to rely more on what our peers have experienced, than what a company or brand puts out. We see this as an opportunity, a mirror that reflects what consumers see of us – areas of excellence that we can further strengthen, and things that can be further improved and enhanced.
However, like two sides of a coin, digital and social media platforms come with their own set of challenges and this is something that is something every brand has to manage.
Anything more you would like to add from your side
We believe that for a brand to successfully communicate with its target audiences in relevant and timely manner, it is key that the brand’s digital marketing plan has to be integrated into the overall marketing and communication strategy and approach. Further, each digital channel has to come together seamlessly and evaluating each one – be it search, meta search or social media – independently could lead to incorrect conclusions. Digital marketing is a fine blend of science and art!
Anthony Lim, Managing Director, Asia - Insight Vacations and Luxury Gold talks about the prepared of his company to offer a safe and secure tour to tourists
Insight Vacations anticipates the rise of multi-generational travel in 2021 as people will seek to reconnect again with their loved ones and extended family members and friends. It will also expect travellers to look for holidays that offer them enhanced personalization and specific experiences where all the details are taken care of, allowing them to enjoy their holidays hassle free. Excerpts from the interview:
How do you see the scenario unfolding for the luxury travel in Asia?
As travel becomes more complicated, people will not travel unless they know that their well-being is well taken care of. This is where luxury travel can provide this reassurance where there is an entire team dedicated to taking care of everything, every step of the way, allowing guests to be able to enjoy their holiday without having to worry about the logistics. There will be more thoughtfulness towards taking a holiday, and we will see more travellers seek out experiences that allow them to spend time with loved ones or simply rejuvenate and recover from their hectic lifestyles.
What do you believe are the most important points to consider to ensure success for Insight Vacations?
It is most important to listen to our travellers and truly understand their needs. Through engaging our customers, we understand that there is a lot of concerns around the "what ifs". The Travel Corporation, under which Insight Vacations operates, has announced a specific Peace of Mind promise that gives our customers the confidence that our company is financially secure and highly solvent.
We have also introduced an industry-first innovation of having a Wellbeing Director on every trip having more than twenty guests. They will travel with the groups full-time to ensure guest safety while allowing travel directors and concierges remain focused on the travel experience. Our new wellbeing directors are specially trained to monitor and respond to any situations. Our dedicated team will take care of the details to help ensure guests, staff and suppliers are following health and safety protocols aimed at preventing the spread of Covid-19.
We allow customers who have booked with us to change their booking up to 30 days prior to the departure of their trip.
What new SOPs and safety measures have you adopted to instill confidence amongst travelers?
We have taken additional measures to elevate our hygiene and sanitary practices following the outbreak of COVID-19 in accordance with guidance from the World Health Organization (WHO) and as required, applicable government regulations. We have made the need for on trip insurance as a requisite to travel and will also require all travellers coming onto our trips to have a pre-trip well-being declaration. We have adopted a 3-step approach: Always on Support Team, Distancing & Hygiene Protocols and 24/7 Incident Response – to instill confidence among our guests.
Travel is going to be more complex. Are you tweaking your existing offerings or coming out with new packages to make it more suitable to customers?
The desire for more intimate travel is now become prevalent and Insight Vacations has responded by introducing new small, private group journeys for 12+ guests that are typically part of our Autumn, Winter, Spring (AWS) itineraries to Europe, the Eastern Mediterranean and North America. Guests can now create their own travel bubble with this new Private Group Option. We have also changed our booking policies to offer our guests greater flexibility allowing them to make changes up to 30 days prior to when they start their holiday with us. If they need to postpone their trip or change to a different destination, they can do so without penalty on the land portion of their trip.
How are you preparing your frontline staffs to handle the situation post pandemic?
We have launched an e-learning module on our well-being measures for travel agent partners, along with well-being webinars. We have also created communications materials summarizing our well-being protocols, with details on individual components of our well-being measures for pre/during/post trip, so that our frontline staff can provide this information easily to customers.
Overall, the definition of luxury is going to expand post pandemic to ‘conscious luxury’. What is your take on this?
Covid-19 has impacted our world globally in huge way and is a wake-up call to all of us. One positive outcome from this pandemic is a greater awareness of people being more engaged citizens and conscious travelers. Having seen how nature has made a comeback during the worldwide lockdowns where our natural environment has been allowed to flourish while we stayed indoors, more travellers will seek to reduce their impact on our planet. There is also a greater desire for human connections, and travellers will seek more meaningful experiences that will positively benefit local communities and wildlife in the destinations they visit.
What new marketing strategy have you adopted to regain your business?
With many countries still on lock-down, we have focused our efforts primarily on inspiring travel using social media and other digital channels such as our blog and e-newsletters.
There is going to be a rise in wellness travel post pandemic. How are you preparing yourself?
Ahead of the pandemic, we have curated trips focused on wellness for custom groups. Whether it’s a spiritual retreat in India, a visit to Iceland’s thermal baths or a yoga retreat in the Mediterranean, we can help travellers plan their wellness holidays. We will evaluate how these trips appeal to our audience before expanding on our wellness offerings.
We have a trip that offers a spiritual retreat at the Ananda Luxury Spa in the Himalayas. We also have a trip to the Carnoustie Ayurveda & Wellness Resort, located in the south of India. Like our guided trips, guests will be accompanied by an expert Travel Director who will arrange everything from accommodation, transportation and immersive Insight Experiences.
The gradual opening of the hotels post lockdown has brought a ray of hope for the hospitality industry in India. Although very low on occupancy currently, hoteliers are optimistic that domestic market and other segments will gradually pave the way for business.
“India’s domestic tourism market is strong and that will be a key factor in the industry’s recovery. Outbound travel will be minimal and discretionary, and travelers will prefer places easily accessible through roads. So, overall, domestic business driven by the leisure segment, followed by weddings segment is expected to recover faster. Business travel will resume slowly and gradually in the second phase,” Rahul Puri, Multi Property General Manager, The Westin Gurgaon New Delhi and The Westin Sohna Resort and Spa, says.
Echoing similar sentiments, Aditya Shamsher Malla, General Manager, DoubleTree by Hilton Pune Chinchwad, says that domestic tourism will start limping back to pre covid days, and maybe beyond due to pent up demand and ‘anti-lockdown’ sentiment. We are all looking at the last quarter, given sustained efforts, to yield some wins for the tourism sector as a whole,” Malla adds.
Crowne Plaza Greater Noida also hopes for an improved business coming in for them. “With Unlock being executed in phases across the country, we are hopeful that things will only improve from hereon for hospitality. We are focusing on corporate stays, weekend staycations as well as the wedding and social event segment for the coming months,” Ashwani Nayar, General Manager, Crowne Plaza Greater Noida.
For Sheraton Grand Bangalore Hotel at Brigade Gateway, its repatriation flights that is bringing business for them. “We have been getting the repatriation flights-based group business and some local retail room nights intended for leisure. Amidst rising cases in the city, our new self-isolation package aimed for families with senior citizens and children have received a good response from the neighboring citizens. We are presently looking at an occupancy of 10- 15 per cent and confident that this will scale up gradually,” Rishi Kumar, Director of Operations, Sheraton Grand Bangalore Hotel at Brigade Gateway, informs.
Hoping to get an improved occupancy, these hotels have implemented a lot of safety measures to instill confidence among guests. Social distancing and 360-degree contactless guest experience is the new norm and hotels are prepared for it. “We at The Westin Gurgaon, New Delhi & The Westin Sohna Resort and Spa stand committed to reinventing our services in line with the new normal and adhering to the guidelines issued by the government for the hospitality industry, while seeking ways to deliver enhanced guest experiences, safety and value. We have in place a Marriott International branded program “Commitment To Clean” which defines enhanced measures to comply with the highest cleanliness and hygiene standards along with dynamics and nuances of how we will operate when we welcome guests back,” Puri says.
Similar sort of SOPs has been adopted by Sheraton Grand Bangalore Hotel as this is also the part of the Marriott. “Marriott International’s ‘Commitment to Clean’ program has invested multifold towards ensuring the safety of our associates and guests. Every aspect of guest and associate journey has been relooked into and aligned as per the new normal. We engage the guest right from pre arrival stage informing them about the measures taken to ensure their safety. SOP’s are designed to deliver contactless experiences at touch point from arrival to departure,” Kumar elaborates adding that isolation rooms have been setup at all our hotels both for associates and guests in case of a situation that may come up.
The Crowne Plaza Greater Noida is also maintaining enhanced cleaning and disinfection procedures. “The hotel utilizes IHG’s established Way of Clean program which includes deep cleaning with hospital-grade disinfectants in guest rooms and public spaces,” Nayar says. Hilton also introduced the Hilton Cleanstay program with its signature Hilton CleanStay room seal.
And, to effectively implement the safety measures, these hotels have been imparting training to their staff. “An integral part of the roll out of the Hilton CleanStay Program was the training and safety of our Team Members and Heart of the House processes. We have followed the strict hygiene and sanitization training guidelines and even included the local Administration’s advice in ensuring a safe and compliant environment for our guests and Team Members, allaying any fears or anxiety,” Malla says.
According to Puri, requirements around trainings are now much more specific and frequent in a post COVID-19 world. “Department wise focused trainings are being conducted on a regular basis. We are focused round-the-clock on the health and safety of all our guests and associates, without compromising the high standards and quality of guest experience. The focus has just shifted from aesthetic cleanliness to clinical cleanliness,” Puri says.
Crowne Plaza Greater Noida is using a blended learning approach of online IHG My Learning sessions, classroom sessions with special seating arrangements and digital learning sessions at scheduled intervals. “There are around 105 new SOP based training sessions which are mandatory for colleagues to complete before resuming hotel operations in the new normal including the IHG Culture of Clean, Food Safety and more. A set of 6 new Leadership programs are launched by the IHG EMEAA (Europe Middle East Asia and Africa) Learning team exclusively for General Managers, ExComs and HODs,” Nayar informs.
One interesting trend that came into the light was these hotels started home delivery of food. This was necessary to keep some revenue coming in. For Sheraton Grand Bangalore, F&B business is doing better than anticipated on account of ‘Marriott on wheels’ home delivery. This hotel forayed into the food delivery segment in the beginning of the lockdown itself and received encouraging responses from patrons. “Our thematic ‘Weekend Brunch in the Box’ concept has got us cash registers ringing on all the weekends. The F&B revenue contribution will continue to dominate in large part of Q3 and the room mix may get higher from Q4 basis consistent relaxations in the coming months. We are gearing up for the festive season with some innovative offerings for celebrations,” Kumar says.
Crowne Plaza Greater Noida launched food delivery services in June 2020 and have so far received a favorable response. “Restaurant dining will remain impacted, but we have started to receive footfalls where guests are celebrating special occasions like birthdays etc. Till positive sentiments towards dining out returns, at Crowne Plaza Greater Noida we plan to roll out new and interesting food promotions every month that our guests can enjoy via home delivery,” Nayar says.
DoubleTree by Hilton Pune Chinchwad initiated the home delivery service more as a response to queries from our guests and regular patrons. “The service was initially executed by the hotel through our own resources but as demand increased, we signed up with a delivery partner and are now available on popular food delivery apps. I think there will be a whole paradigm shift when we look at F&B business in the foreseeable future. While the urge to return to your favourite restaurant exists, we will have to give time for guests to address their inhibitions and concerns, allowing them to build confidence about the safety measures deployed and the assurance of the brand. We hope to see the graph going up steadily in the coming months,” Malla opines.
The Westin Gurgaon, New Delhi started delivery services in May 2020. “The hotel also launched a first of its kind in Gurgaon, luxury Gourmet –To Go Drive Thru service which allows guests to pick up their order from a dedicated pickup junction in the driveway of the hotel, with minimal contact from the comfort of one’s car seat. While we are now ready to welcome our esteemed guests back to the hotel for exclusive gourmet experiences, we also take pride in continuing to being a part of their dining conversations even in the comfort of their homes; through our delivery and drive-thru pickup services. We have seen a major spurt in this segment, and I am sure this demand will continue for some time to come,” Puri says and adds that there has been a major spurt in this segment this demand will continue for some time to come.
Weddings and social events
According to Puri, weddings on a smaller scale including social events are certainly important for all hotels and resorts since they generate revenue for multiple points of sale in the hotel. “People will avoid going abroad for destination weddings and even out of the city for some time, hence the industry is hopeful of many weddings on smaller scales to happen within the city, focusing on the safety and hygiene factor as the most important priority. We too, are witnessing an encouraging response on the weddings and socials front,” Puri adds.
Crowne Plaza Greater Noida also sees a good business prospects from these segments. “We are, in fact, targeting weddings and social events in a focussed manner. We managed to secure quite a few weddings in June and July and have a constant stream of incoming queries for Q4 2020. This is now the time for ‘intimate wedding’ that will replace the ‘big fat Indian wedding’ where hotels can play the perfect host with appropriate venues and an elevated event experience possible with a small gathering,” Nayar says.
Sheraton Grand Bangalore has also been proactive in reaching out to the social segment and communicate their preparedness in hosting special events in accordance to the new guidelines. “We are equipped to deliver engaging, meaningful and tailor-made experiences keeping in mind the safety of our guests and associates. We are offering an all-inclusive ‘Intimate weddings package’ at an attractive price point. This includes complimentary stay in our suites, live interactive regional & international cuisine kiosks, décor & planning assistance, venues for shoots and more. Our proposition has been well received in the market and we are optimistic about the times to come,” Kumar states.
Hoteliers are differing in their opinion over the ARRs. “The average room rates will be significantly lower until the end of 2020 and may see a drop of about 40-45% from 2019. We can look at reviving the rates in Q1 of 2021. Realistically, the rates will not be what it used in pre covid times until 2022. Hence it is become even more significant to drive ancillary revenue to bridge the gap and help hotels stay afloat,” Kumar opines. However, Malla sees no reason for any adverse effect on the ARRs. “The RevPAR would ideally be impacted over the short term, but given good business ethics, and genuine efforts across all segments, that too will correct itself and consumer sentiment improves. MICE and resumption of International connectivity will greatly facilitate this recovery,” Malla adds. Nayar echoes the similar opinion when he says: “We do not foresee any significant changes in pricing structure despite the currently lowered demand whilst a lot more hygiene investments will be made by hotels to serve the new hygiene and cleanliness requirements. We anticipate that neither these nor the demand / supply situation with severely impact long-term pricing,” Nayar adds.
The Ministry of Tourism organised its 50th webinar titled “Atmanirbhar Bharat – Issues confronting Tourism & Travel” under Dekho Apna Desh Webinar Series recently. The webinar presented the MSME sector and its classification, registration process for MSMEs, credit/Finance Schemes of Ministry of MSME for services sector, Public procurement policy etc.This webinar was organized with the vision to provide information and guidance to the stakeholders on benefits from the various elements and schemes of MSME.
The webinar was presented by Devendra Kumar Singh, Additional Secretary and Development Commissioner, MSME and Anand Sherkhane, Additional Development Commissioner, Ministry of Micro, small and medium Enterprises.
After 14 years since the MSME Development Act came into existence in 2006, a revision in MSME definition was announced in the Atmanirbhar Bharat package on 13th May 2020. As per this announcement, the definition of Micro manufacturing and services units was increased to Rs. 1 crore of investment and Rs. 5 crore of turnover. The limit of small unit was increased to Rs. 10 crore of investment and Rs 50 crore of turnover. Similarly, the limit of medium unit was increased to Rs. 20 crore of investment and Rs. 100 crore of turnover. The Government of India on June 1, 2020 decided for further upward revision of the MSME Definition. For medium Enterprises, now it will be Rs. 50 crore of investment and Rs. 250 crore of turnover.
After the package was announced on 13th May, 2020, there were several representations saying that the announced revision is still not in line with market and price conditions and hence it should be further revised upwardly. Keeping in mind these representations, Prime Minister decided to further increase the limit for medium Units. This has been done in order to be realistic with time and to establish an objective system of classification and to provide ease of doing business.
The Ministry of MSME has reiterated that it has put in place a very strong handholding mechanism for MSMEs and new entrepreneurs in the name of Champions (www.champions.gov.in) which was recently launched by the Prime Minister. Interested Enterprises/People can take benefit of this mechanism and can also put their queries or complaints. The same will be attended to with utmost promptness.
The Presenters also shared the procedures for registration in MSME.
· Udyam registration is compulsory https://udyamregistration.gov.in
· Free registration- no fees
· Only Adhar number is required
· Permanent registration number
· Registration certification issued online. If registered once, no need for renewal
· Champions centers (DICs) will provide support.
· Registration process is totally free
· No cost or fees are to be paid to anyone.
A step towards Self-Reliant India, global tenders will be disallowed up to Rs.200 crores. This will be a step towards Atmanirbhar India and support Make in India. The presenters also shared the subsidy benefits of the programme wherein general category beneficiaries can avail of margin money subsidy of 25 % of the project cost in rural areas and 15% in urban areas. For beneficiaries belonging to special categories such as scheduled caste/scheduled tribe /women the margin money subsidy is 35% in rural areas and 25% in urban areas.
The presenters also highlighted the MSME registration benefits pertaining to small businesses:
1.Loans without collaterals:
The Government has introduced various initiatives for MSME/SSI that allow them to avail credit without collateral. One of the best MSME registration benefits, the initiative to provide collateral-free loan is undertaken by GOI (Government of India), SIDBI (Small Industries Development Bank of India) and the Ministry of Micro, Small and Medium Enterprise under the name The Credit Guarantee Trust Fund Scheme. This is by far the best MSME registration benefits for small business owners.
2. Subsidy on Patent Registration & Industrial Promotion:
Business enterprises registered under the MSME Act are given a hefty subsidy of 50 per cent for patent registration. This can be availed by sending an application to the respective ministry. In addition to this, one of the great MSME registration benefits is to get subsidy for industrial promotion suggested by the Government.
The presenters also highlighted Pradhan Mantri Mudra Yojana:3 offerings ‘Shishu’, ‘Kishore’ and ‘Tarun’. The primary product of Pradhan Mantri MUDRA Yojana will be providing refinance for lending to micro businesses/units (medium and small entrepreneurs). The initial products and schemes under this umbrella have already been created and the interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur as also provide a reference point for the next phase of graduation / growth for the entrepreneur to aspire for:
1. Shishu: covering loans up to Rs 50,000
2. Kishor: covering loans above Rs 50,000 and up to Rs. 5 lakh
3. Tarun: covering loans above Rs 5 lakh and up to Rs. 10 lakh
Now, there will be no difference between manufacturing and service sectors. The new definition will pave way for strengthening and growth of the MSMEs. Particularly, the provision of excluding the exports from counting of turnover will encourage the MSMEs to export more and more without fearing to lose the benefits of a MSME unit. This is expected to exponentially add to exports from the country leading to more growth and economic activity and creation of jobs.
Emirates customers can travel with confidence, as the airline will cover medical expenses of up to EUR 150,000 and quarantine costs of EUR 100 per day for 14 days, should they be diagnosed with COVID-19 during their travel, while they are away from home. This cover is provided by the airline, free of cost to its customers.
Sheikh Ahmed bin Saeed Al Maktoum, Emirates Group Chairman and Chief Executive said: “Under the directive of His Highness Sheikh Mohammed, UAE Vice President and Prime Minister and Ruler of Dubai, Emirates is proud to lead the way in boosting confidence for international travel. We know people are yearning to fly as borders around the world gradually re-open, but they are seeking flexibility and assurances should something unforeseen happen during their travel.”
He added: “Emirates has worked hard to put in place measures at every step of the customer journey to mitigate risk of infection, and we have also revamped our booking policies to offer flexibility. We are now taking it to the next level, by being the first in the industry to offer our customers free global cover for COVID-19 medical expenses and quarantine costs should they incur these costs during their travel. It is an investment on our part, but we are putting our customers first, and we believe they will welcome this initiative.”
This cover for COVID-19 related medical expenses and quarantine costs is offered by Emirates free of cost to its customers regardless of class of travel or destination. This cover is immediately effective for customers flying on Emirates until 31 October 2020 (first flight to be completed on or before 31 October 2020). It is valid for 31 days from the moment they fly the first sector of their journey. This means Emirates customers can continue to benefit from the added assurance of this cover, even if they travel onwards to another city after arriving at their Emirates destination.
Customers do not need to register or fill in any forms before they travel, and they are not obligated to utilise this cover provided by Emirates.
Any impacted customer who has been diagnosed with COVID-19 during their travel simply has to contact a dedicated hotline to avail of assistance and cover.
The hotline number, and details of what COVID-19 related expenses are covered, is available on www.emirates.com/COVID19assistance.
The ongoing COVID-19 crisis has brought the travel and tourism industry to a total stop. The global restrictions on travel by almost all destinations across the globe has pushed the industry to deal with unprecedented challenges at every front. Industry is yet to find out the recovery plan amidst a totally uncertain environment. These are unprecedented times that have impacted every individual and businesses across. Travel sector has been one of the worst hit sectors, with operations shut but fixed costs to be taken care of. Hospitality and aviation sector have come together to decide the way forward. At the same time, hotels and restaurants continue to do their bit by helping communities and extending their services to those in need.
According to hotel consultancy firm Hotelivate, the solutions for post COVID-19 will be completely different from those in the past. “Business models and value propositions will also change. So, it may be important not to simply follow what worked during SARS, 9/11, 26/11 or the financial crisis of 2008… While various segments of basic economic life are currently closed, they too will have their new normal. However, it is easy to fathom that amongst the worst hit will be travel and tourism,” Hotelivate said and added that the economic impact and cost of this lockdown is uncalculatable at this stage and no one can possibly accurately project this out. Also, the impact is going to be across industries and will be more in some than others. This will also lead to change in consumer behaviour in the short term or even permanently.
Envisaged exit strategy
Experts are of the opinion that a V-shaped or U-shaped recovery, as seen after the financial crisis a decade ago, will not be the case this time around. “Post the lockdown, when domestic and possibly some international travel is feasible again, movements will occur causing a small uptick for the industries. However, in the absence of a vaccine for the disease, this is likely to cause a resurgence in COVID-19 cases which will eventually lead to a second decline. Hence, we anticipate a W-shaped recovery curve for the hospitality and aviation industries. Recovery for the Indian hospitality industry is dependent on factors such as spread of COVID-19 in the country, extent of the ongoing lockdown and subsequent zoning exercise, lifting of travel bans in India as well as internationally, availability of the vaccine and possible relapse of the virus in typical feeder markets. The advent of recovery, in some form, in the coming three to four months is the best-case scenario for the industry now. In the worst-case scenario, this recovery may take close to two to three years,” said Achin Khanna, Managing Partner, Hotelivate and Shailee Sharma, Senior Associate, Hotelivate in an article ‘Potential Scenarios to Exit COVID-19’.
According to Ankur Bhatia, Executive Director, Bird Group, hotels and airlines will start operations with limited inventory once the lockdown is lifted. “Social distancing and sanitisation will be at the core of the operations. We have designed ‘touchless delivery’ for our restaurants through an app. We will restart with protocols such as checking temperatures of our staff and guests. We are assuming the demand would be from travellers for whom travel is essential. This would also include those who are coming in the city or country and don’t want to risk going home lest they infect other family members. They would be checking in at a hotel with isolation facilities,” Bhatia says adding that the second phase will look at leisure and MICE travellers. “By next year, we expect travel returning to normalcy. At every stage, we will have to follow government and WHO’s guidelines and protocols,” Bhatia adds.
Jaideep Dang, Managing Director, Hotels & Hospitality Group, JLL India opines that business will pick up slowly and in phases – certain trade centres which are dependent on agriculture, warehousing and logistics will pick up earlier than say tier I cities which are dependent on financial services, IT/ITeS, automobile manufacturing etc. “On the other hand, leisure destinations could pick up earlier than business hotels. Therefore, hotel companies – big or small and SME’s such as travel agents, tour operators will have to prepare their sales strategy accordingly and in a phased manner,” Dang adds.
Subhash Goyal, Chairman - STIC Travel Group and Hony. Secretary, Federation of Associations in Indian Tourism & Hospitality (FAITH) says that there is no time frame when this crisis will be over but hopefully by August, September this year we hope to see some light in the end of the tunnel of darkness. “However, if the world is able to come out with the vaccine then I am confident that tourism will bounce back with the bang,” Goyal adds.
Need for fiscal support
According to Goyal, it is not sure how many travel agents and tour operators will be able to survive after this COVID-19 pandemic. “Still we are trying our best jointly with all the associations under FAITH by writing to the Prime Minister, Finance Minister, Commerce Minister, Civil Aviation Minister and Tourism Minister on the following lines: The Indian tourism industry is looking at pan India bankruptcies, closure of businesses and mass unemployment as a result of this pandemic. It is estimated that around 70 per cent out of a total estimated workforce of 52 million could get unemployed (38 million in the first phase and 50 million direct and indirect) if a bailout package is not given immediately,” Goyal said and added that a large per centage of total tourism business activity of India, which is estimated at US$ 28 billion+ in forex and upwards of Rs two lakh crores in domestic tourism activity will be at economic risk through the year. Thus, in excess of Rs five lakh crores of direct tourism industry and almost double that of total economic activity is at risk, Goyal added. He further said that if the demand is met by the government and timely action is taken then we will not only be able to survive but also successfully revive the industry.
Mahendra Vakharia, MD, Pathfinders Holidays and Imm. Past President, Outbound Tour Operators Association of India feels that the government should definitely look into doing a lot of hand holding exercise to our Industry and give the exemptions / tax rebates, etc., as demanded by the different associations of our industry. “Sadly, the government has always ignored the tourism and travel industry in spite of it being one of the highest contributors to the GDP growth, creator of employment, contributor to GST coffer, income tax, foreign exchange earner and many more. Failing this then as always and in the past, the industry will have to fall back on its own means and strengths to sustain themselves for the moment and then restart again,” Vakharia feels.
Bhatia is hoping not just exemptions but some long-term corrective measures as well. “In aviation bringing ATF under GST’s ambit and rationalising airport charges has been a long-term demand. Similarly, in hospitality, reduction in GST last year bought some relief and we were hoping it to translate to business gains this year before pandemic struck. The strategy right now should be best customer experience without compromising on quality and safety as well as looking after our employees as travel industry as the industry employs crores of people across hotels, travel agencies, airlines and restaurants many of which are SMEs,” Bhatia adds.
Echoing the similar sentiments, Dang says that financial stimulus and exemptions by Central as well as State Governments are needed more than ever before. “The biggest problem that SMEs and even big players would face in the next two to three months is depleting working capital to operate their businesses and to pay salaries. In absence of revenue, debt servicing will become more challenging. All these factors would likely have a long-term negative impact on the sector and could create unemployment across levels,” Dang adds.
Bhatia feels that travel and tourism are the worst hit sector no doubt and will take time to recover. “While foreign travel might take time to recover and leisure travel (international) will pick up only once we have a vaccine, cure or very few cases of COVID-19. We do expect domestic travel to pick up this year itself. This means travel industry will have to go back to the drawing board and rework strategies. However, we are also a very resilient sector that has weathered many storms such as 9/11 attack, SARS and Mumbai Terror attack (26/11). We have always emerged stronger. Just like security checks at hotel that became the norm post 26/11 there will be new norms like medical certificates, Bhatia opines.
According to Dang, no one knows the bottom yet! “We all will have to wait and watch. In my view, volume of travel will only pick up seriously once we have the vaccination that will provide confidence to travellers to take short or long-haul flights,” Dang says. Goyal feels that unless and until the governments start giving visas and airlines start operations, tourism is not going to revive so soon.
According to Vakharia, domestic tourism will start in next couple of months and it will be in the order of local (self-drive destinations), regional and international travel. “International Travel will start depending on the upliftment of border restrictions and operation of the international airlines. Also, lot of consulates / countries are looking at imposing visa restrictions correlated with COVID Clearance Certificate etc. Within next three months or so, domestic local travel will be the one that will start for sure. Going forward, regional and inter state tourism will start and international travel does not look to start before October/November. South East Asian Countries, Sri Lanka, Bhutan, Nepal, Maldives are some of the countries that look to be the destinations that will open up for travel,” Vakharia informs.
Domestic as a savior
According to Bhatia, domestic travel will see the green shoots first. “People will be wary of taking flights or boarding trains. Hence, road trips will be the new trend and weekend destinations will see traction. Dang also feels the same when he says that domestic tourism is going to be the key for revival. “It is likely to begin with road journeys led by what many would call ‘Revenge travel’ – when you are stuck at a given place for a long time and naturally you would like an escape to a short holiday over shorter drivable distances. Air and rail travel may not be preferred as means of travel unless it is critical. Secondly, a lot of outbound travel from India will also be hampered. Therefore, this outbound foreign travel will get consumed in domestic leisure markets,” Dang says.
Vakharia feels that domestic will kickstart the travel but it will also have its own challenges as the hotels at destinations will have to follow a lot of protocols to adhere to prescribed standards of hygiene and cleanliness. “Post COVID, social distancing, hygiene and cleanliness, are parameters that will have to be taken into consideration strongly. How many hotels (small standalone hotels) will be able to fulfil this? So, there will be some challenges for sure in domestic tourism as these will be concerns from the clients,” Vakharia adds.
“If we will be able to survive with the help of the Government, we will have to completely restructure and reorient our businesses. International Outbound & Inbound Tourism will take at least six to seven months more or may be an year, so the only segments which will bounce back fast are: domestic tourism, yoga & wellness, spiritual and medical tourism,” Goyal opines.
According to some industry estimates, there are approximately 700 destination weddings planned in 2020 that have been booked overseas. “Most of these are towards the winter months. High probability that such social MICE business could get consumed in India. However, it is also likely that such affairs are cut short with limited gatherings. So, hotels in India may not get its entire benefit. On the other hand, business conferences and marketing events would give negligible business this year as most businesses will cut travel and entertainment costs,” Dang informs.
Bhatia feels that there will be some movement like off sites, conferences where usual teamwork is done albeit maintaining social distance. However, wedding business will take time to recover and that might not happen this year, Bhatia says. Vakharia opines that international MICE travel will not happen this year. “In fact, the government can give a lot of tax rebate to corporate for hosting the MICE within India and this can also help in kickstart the travel,” Vakharia suggests. Goyal opines that MICE will only bounce back after the vaccine has been found, government start issuing visas and airlines start operating domestic and international flights.
Sign up for the T3 Newsletter