Despite emerging global scenario, demonetisation and recently imposed service tax amongst others, outbound tourism from India is going to grow in coming time, feels Amod Thatte, Head – Products & Innovation, Outbound Division, SOTC. “We have seen terror attacks happening across the globe. The best part is that the Government of India does not issues travel advisories. Also, customers have a wider choice i.e. if a destination is disturbed, customers prefer to go to other destination,” Thatte said. Speaking on the demonetisation, he said players who were dealing in cash might have got impacted. “Demonetisation is a good thing to happen because it offers a level playing field for us. Indian outbound offers a huge potential and those who have not followed the norms are now falling in the line,” he said.
According to him, the Service Tax is now a reality. “The Government has passed the law. We have no options but to start implementing this. The ways it has come about is not fair. It is giving advantage to one part of the industry. The Government needs to understand. The foreign tour operators who are dealing with India have now big advantage over Indian players. Its high time that Govt recognises outbound as a industry. Govt has done a lot of for inbound but let’s not forget that outbound is one of the biggest sources for forex for Govt,” he opined. The Govt recently enacted a law by which tour operators have to pay 60 per cent service tax on 60 per cent of the invoice value. Prior to this, tour operators were paying 10 per cent on the invoice value for booking hotels and for other tours the tax is payable on 30 per cent of the bill.
Thatte suggested that the issue of air connectivity and visa should be addressed if Indian outbound has to realise its growth potential. “Any new outbound route is welcome. We have seen in the past that there has been a huge flow of tourists with additional seat capacity or new frequency,” he said citing examples from Air India when it launched the Vienna service last year. “This gave us a good impetus and we developed product around this. Any sector which are outbound friendly is beneficial for us,” he said.
Talking on SOTC, he said that 2016 started with a great challenge on several counts like Paris attack. Also sometime in November 2015, the biometric rule for Schengen visa has changed creating inconvenience for travellers. “The beginning was difficult and we fine tuned our strategy accordingly. By mid of the year, we were on track and finally 2016 emerged as a good year for us from the outbound perspective,” he said.
Replying to a question over new destinations, Thatte said that there have been destinations already present in India. For eg; Australia and New Zealand have been in India and now they are witnessing double digit growth and taking shape. “Eastern Europe sector has done quite good in 2016. Scandinavia is doing quite good for us as a lot of awareness are being created in India market. Vietnam and Cambodia, although very small, has been growing fast. The largest chunk to Vietnam and Cambodia is customised holidays. Due to being long-haul, it will take few more years for Latin and South America to become popular in India market,” he added.