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Added Capacity & More Tourists

With the Budget round the corner, there should be focus on tourism sector. We need to introduce tourism-focused states, large-scale state events and shopping festivals to enhance domestic tourism as that would prove beneficial to the tourism and culture industry

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The year 2017 would be good for both travel and hospitality. In 2016, the aviation industry witnessed growth that came from the increased capacity that low-cost carriers (LCC) introduced into the marketplace. There will be a steady growth in 2017 that will trigger lower fares and good packages. The simple reason being that more capacity is being planned on certain routes where the demand is not that high. Under the UDAAN scheme, regional carriers would deploy additional capacity and that will open new routes. An example is the new Bathinda airport. We would see new air routes in tier-2 and -3 cities. With Air India’s 787s, we might see even bigger aircraft on domestic routes.

On the international front, new enrolments are being planned by the government that will come to fructification soon. One would see international airlines such as Thai Smile Airways, Garuda Indonesia, Mega Maldives, etc. flying across Indian air routes, which will stimulate the demand for great prices and packages.

Demonetisation may have clouded the business scene a bit, but essentially those who have billed through proper channels would not have seen a fall. In December 2016, there was a growth of 15-20 per cent compared to previous year, and this will continue for airlines, especially for international travel.

The hospitality sector would not see any new significant openings in 2017. But it has always witnessed a parabolic graph. Although the average room rates were the same as 2015, we saw growth of 1.7 per cent in the average daily rates this year, and we will continue to see the same in future (as per reports). Hopefully, there will be more foreign tourist arrivals as well. There may not be any new destinations coming up in India, but the existing destinations will do well. Dubai is a short-haul destination, and is gaining popularity among Indians, especially with the opening of Bollywood Park. Dubai is being promoted as a destination in Indian market. Emirates is flying to 14–15 different cities, and it would try to target Indian cities with attractive packages. There is a constant need to create international and domestic brand awareness, hence, we are looking to expand our portfolio in India.

In terms of F&B, mid-market QSR costs will go up in 2017. Aerocity will become an important dining destination due to various F&B concepts emerging in and around the area. Healthy eating will continue to rise, as a section of audience is seeking healthy options for eating out.

From an industry point of view, the implementation of GST should be of prime focus. The introduction of GST will rationalise the tax structure. It is expected to be a welcome move for the hospitality industry.

With the Budget round the corner, there should be focus on tourism sector. We need to introduce tourism-focused states, large-scale state events and shopping festivals to enhance domestic tourism as that would prove beneficial to the tourism and culture industry. At this stage, the country is witnessing demonetisation, growing pollution, and terror that are not at all good for the tourism industry. But I do hope the government works towards gaining momentum in these areas in 2017, and eliminates the shortcomings.

As told to Vaishali Dar

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Ankur Bhatia

The author is Executive Director, Bird Group

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