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Tourism: Flying High

Travel and hotel aggretators are in for a windfall this summer as there is no stopping the Indian tourist

Photo Credit : Shutterstock

1493897605_HRpCE2_Merlion-of-Singapore-shutterstock.jpg

When the bhatias (name changed on request), based in Chennai, decided to have a family reunion in Europe last summer, they planned everything to the T. The service apartment in London was to be their base for nearly three months and they would travel across the continent one place at a time. Bengaluru-based Mohan Subramanyam’s family of four recently returned from a 20-day Australia tour. Petting the Kangaroos, visiting the famed Sydney Opera house and, of course, getting a taste of the local culture and cuisine were part of their trip. Bhatias and Subramanyams are part of estimated 15 per cent growth (year-on-year) that India’s outbound travel industry is witnessing. Within India too, Orchha in Madhya Pradesh, Bekal in Kerala, Karwar’s pristine beaches are among the favoured destinations of the adventure loving Indian seeking work-life balance.

The International Air Transport Association (IATA) numbers reveal that India topped the domestic growth chart for the 23rd month in a row in February. IATA’s release in April said that domestic travel accounts for 45 per cent of the country’s operations. India’s RPK (revenue passenger kms, an indicator of passenger traffic) in February stood at 17 per cent, pointing to a consistent surge in travel. The global RPK declined to 4.8 per cent in the same period.

One Click Destinations
Booming travel aggregators and online travel portals are assisting several Indians in their quest to travel. Gurugram-based TripAdvisor says the company is witnessing significant year-on-year increase in summer travels. Nikhil Ganju, Country Manager, TripAdvisor India says, “We are optimistic about the overall growth.”

Among international destinations, South Africa’s nature trails and safaris are among the many experiences appealing to Indians. Hanneli Slabber, Country Manager (India), South African Tourism, says, “We notice a marked shift from seeing to experiencing among Indian travellers.” Indian leisure visitors to South Africa surged 21.7 per cent during 2016. The year saw arrivals of 95,377 compared to 78,385 in 2015. As the pound value is going south, Indian travellers are also heading to the UK for their holidays. The bookings for the UK were up 10-12 per cent in 2016.

Domestic travel too saw a spike in numbers. The Ministry of Tourism numbers point to a record 15.5 per cent growth in domestic tourism in 2016 — 1,653 million visitors in 2016 as compared to 1,432 million in 2015.

There has been a tremendous change in the travelling behaviour of the travellers, according to Oyo Rooms, a hotel brand and an online hotel aggregator. In fact, impulsively planned trips have emerged as the top driver for both business and leisure travel segment. Last year, 61 per cent of all the bookings made on Oyo platform were made within 24 hours prior to check-in, says Ritesh Agarwal, Founder & CEO, Oyo. “The combination of an aspirational middle class, government reforms and a strong economic sentiment has resulted in an increase in travel,” says Agarwal. Oyo, confident of registering high growth this summer, has added 7,000 hotels till end 2016.

The Global Indian
Close to 65 per cent of outbound travellers tour between April and July, primarily driven by family holidays. And over 60 per cent of the outbound travellers prefer group holidays to Europe, the US and the Far East. Still, Western Europe continues to be an all-time favourite with destinations such as the UK, Switzerland, Germany and France attracting the bulk of the travellers. Karan Anand Head Relationships, Cox and Kings, says, “We expect the tourism business to grow between 15-20 per cent this year.” He adds that domestic tourism is expected to grow by 25-30 per cent and outbound between 15 and 20 per cent.

The ‘Summer Travel Trends’ report by the online travel company, MakeMyTrip says that 39 per cent more Indians are travelling this summer and mobile is their most preferred booking platform. International destinations saw 36 per cent growth in booking so far in 2017, says the report. The traveller’s preference to combine business and leisure is boosting the sector’s growth. Moreover, the foreign exchange rates have gone down and international trips are working out lot cheaper this year. The robust ready-to-eat segment offering varieties to the choosy Indian, easy access to Internet and the growing bed & breakfast (Read: homestays, AirBnB) options are providing options to the Indian bit by the travel bug.

“We are definitely expecting a much more attractive travel trend from leisure side. Business and leisure combined, the overall sentiment in the travel market, the spending patterns, the currency, etc., 2017 is turning out to be favourable for the business of tourism this summer,” says, Geeta Jain, CEO (India), Carlson Wagonlit Travel.

Touring India
India was ranked 40th among the 136 economies across the world in 2017 Travel and Tourism Competitiveness Index released in April by the World Economic Forum (WEF), moving up 12 places from 2015.

The reason for India’s advancement in the index was also thanks to some of the key steps taken by the tourism ministry. Easing of entry formalities and e-visa facilities for tourists worked for the tourism sector in India. The direct contribution of travel and tourism to GDP was Rs 2,668.3 billion (2 per cent of total GDP) in 2015, and it is set to rise by 7.9 per cent per annum, from 2016-2026 to Rs 6,115.5 billion (2.4 per cent of total GDP) in 2026, highlighted the economic report 2016, released by World Travel and Tourism Council (WTTC). The report also says that the domestic travel revenues are projected to increase to $203.3 billion by 2026 and revenues earned from foreign investors are expected to increase to $40.11 billion by 2026.

Tourist-friendly reforms and a climate conducive to travel is only going to see more foreign tourist arrivals and Indians travelling abroad. Add to this, the recently launched UDAN scheme — connecting airports in more than 20 states and union territories — will not only boost domestic tourism but also act as feeder transport to those travelling abroad.


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