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capa report jet acquisition to soar india’s order book beyond 1000 – page 10 volume 3. issue 2. june 2017. `50. no.u(ndgpo)-01/2016-2017 date of publication: 14/06/2017 rni no. deleng/2015/62794 posting dt. 12-17/06/2017 postal reg. no. dl(nd)-11/6180/2015-16-17 up tourism takes advantage of swadesh darshan scheme to rejuvenate agra t he up tourism board recently ﬁnalised ﬁve projects under the swadesh darshan scheme. several stakeholders in the tourism industry have been demanding a relook by the government at agra as a destination, as the taj mahal, considered the crown jewel of indian tourism, has also recorded a decrease in footfalls along with a general decline in tourism footfalls in to up. considering these factors, the agra tourism department has ﬁnalised ﬁve projects under swadesh darshan scheme to boost tourism numbers. projects like upgradation of the light and show facility at agra fort and setting up a new light and sound show at fatehpur sikri amongst others have been setup. times of india reported a senior ofﬁcial of the state tourism department as having said that “taj is visited by more than 10 million tourists every year while agra fort receives 50% of this number. to increase visitors at agra fort, tourism department is developing a walkway through this garden between the two monuments.” apart from this, the up tourism department is planning vari- ous other investments to rejuvenate popular tourist spots and if these investments fatehpur sikri could successfully manage to align with the central’s government’s recent boost to infra- structural projects like building roads, agra could well be on the path to regaining some of its lost sheen as a destination. act east policy gets road connectivity the construction of much awaited, 1400 km long, india-myanmar-thailand trilateral highway kicks off in june. the development comes as a welcome news for south asian connect and people-to-people movement in the region. breakfast with everest: rediscover nepal (page 38) jet airways and aeromexico sign landmark codeshare mou in a landmark agreement, jet airways and aeromexico, the ﬂag carrier airline of mexico, have signed a memorandum of understanding (mou) to outline coop- eration in the areas of enabling codeshare ﬂights and frequent ﬂyer programs. as a part of the new arrangement, both carriers will code on each other’s services between india and mexico via common gates in europe – london heathrow, paris charles de gaulle and amsterdam. to begin with, jet airways will place its mar- keting code “9w” on aeromexico ﬂights from london heathrow to mexico city. in turn, aeromexico will place its marketing code on jet airways’ direct services from london heathrow to mumbai and delhi. the freshly inked codeshare agree- naresh goyal, chairman, jet airways and andrés conesa , ceo of aeromexico sign the memorandum of understanding between the two airlines ment is expected to enhance connectivity and seamless access to the combined networks of both airlines, with convenient connections via jet airways’ european gateways, providing ample connections to south american destinations. the mou also includes understanding on cooperation in the area of reciprocal frequent flyer beneﬁts for members. 7 cross currents 8 aviation 12 hotels + resorts 36 outbound eyeing a larger global market share, goi to unveil medical and wellness tourism policies airasia’s connecting bhubaneshwar to kl has opened up odisha to apac: suresh nair budget lodging segment is an interesting sector for quality rois, says rahul pandit one&only reviewing growth opportunities in india and world over: philippe zuber h.e. kenji hiramatsu i expect drastic improvement in air-connectivity between major airports in india and japan, creating more air trafﬁc options between the two countries. patrick santillo travel and tourism in the united states is a huge industry for us. it represents some 2.6% of the us gdp and we have some 7.6 million full time jobs dedicated to the industry. andrew caruana galizia this is an exciting market for us and we have discovered that indian tourists, in general, have an appetite for adventure, for discovering something new and for travelling very far. deepak joshi if we can do a few things, moving ahead, we can see positive results in tourism in this region.
this issue : june 2017 5 national carrier, private or not, must carry the ethos of india credible reports suggest that the government is planning privatization of air india. with the debate surrounding the plan, several issues are getting mixed up. whether india needs a ﬂag carrier or not, need not be mixed with it must remain indian, truly so, in every sense of the word. for one, the the subject of privatization. to our mind, these are two separate issues. that air india should be privatised is largely on the assumption that aviation and much of tourism are best driven as private enterprises, and not as government’s concerns. this is a well-founded argument and deserves full credit. over the years, hci properties which were owned by air india were liquidated. a number of itdc properties too went under the hammer. some of them, perhaps, were sold cheap; perhaps the timing was not right. we needed to sell them at a time when the markets were more vibrant. having said that, it is generally conceded that governments have no business to run services and it would be good to make air india run as a private enterprise. the question is: who should acquire air india and to whom should it be sold? to our mind, this in more important. many instances are being sighted and most of them, with the exception of the uk, are smaller countries. in fact, uk too is a much smaller country compared to the size and proportions of india. its self-generating capacity for travel and tourism is much smaller than what india can provide. we are a 100 million domestic air-passengers; a middle-class of 400 million. the combined strength of an air india – which includes the erstwhile indian airlines, is unparalleled. so if we are going to hive this off, it is a far bigger asset, with its potential and also the market it commands, the bilateral rights it has, used or not. it can only be hived keeping its assets in mind. majority holding much remain in indian hands. there is adequate expertise available within indian for a private sector driven air india to be managed by indians. there is no reason why they should not take recourse to any kind of foreign expertise needed, so long as the management and operations are handled by indians. the majority shareholding must also remain in visible indian hands. ‘visible’ is important because many a times, all that one sees may not be the end reality. there have also been questions of whether or not india should be ﬂying the ﬂag. we believe that it is clearly evident that, regardless of the country, an airline’s loyalty is ﬁrst to its domestic market. to imagine that any european, middle- eastern, or far-eastern carrier would base their operations with the assumption that india is their home market is a far-fetched conclusion. they will be more interested in deriving beneﬁts out of the indian market for their larger global gain. so ﬂying the ﬂag is very important, particularly, for a nation of india’s size. the trafﬁc potential for the world is so phenomenal that its value would go well into billions of us dollars. that capacity must remain in indian hands. furthermore, in the last twenty years, we have seen that whenever air india has gone weak, inbound tourism has always taken a beating. you need a strong carrier, national or other-wise, to promote tourism globally for a country. tourism is also taking a turn for good – with the fast-paced development of infrastructure. one expects healthy inbound tourism to happen, and for that to happen, air india, within government or as a private entity would be critical to its promotion. regardless, it must carry the ethos of india. it must carry with itself the association that every indian sees it as their own carrier. w e do need some airline to ﬂy our ﬂag, especially at a time when our contents cross currents 6. industry expresses disappointment over gst slab rates, seeks reconsideration 7. eyeing a larger global market share, goi to unveil wellness tourism policies aviation 8. airasia’s connecting bhubaneshwar to kl has opened up odisha to apac: suresh nair 9. favourable policies, economic growth fuelling airport business ecosystem 10. jet airways’ acquisition to soar india’s order book: capa report tourism in the news 11. government’s decision to tweak crz will set cruising industry in motion: ratna chadha hotels + resorts 12. budget lodging segment is an interesting sector for quality rois, says rahul pandit 13. popularity of international cuisines, eating out on the rise in india: varun chaudhary 14, control over pricing and inventory helps marriott maintain equilibrium: neeraj govil 15. the lemon tree to operate sandal suites, noida’s maiden luxury service apartments 16. of course, your hotel needs refinancing! india outbound summit review 17. outbound summit kicks off 18. japan will expand outreach with increased cultural and tourism events 19. joint promotion of experiences will muscle up regional tourism: nepal tourism ceo 20. infrastructure and high operational cost key challenges: senior aviation insiders. 23. govt. and tourism bodies need to come together to tap the outbound segment hotels + resorts 26. hotels leading a joint effort to put aerocity on the national map; f&b segment hits off 29. lg helping hotels create differentiated experience 30. reinvention has lent shangri la a unique niche: gm 31. we are known for ‘true value’; mid- segment driver of growth, notes rishi puri online 32. tax reform and marketing will muscle up the wedding segment: stakeholders 33. addressing connectivity piece to make india a competitive wedding destination market, says suman billa 34. with a new campaign, yatra aims to catre to travellers seeking experience outbound 36. one &only reviewing growth opportunities in india and world over: philippe zuber 37. indians taking a liking to real estate in dubai, says founder, danube group the last page 38. breakfast with everest: rediscover nepal narendra modi prime minister of india, during his spain visit spanish ﬁrms enjoy a worldwide reputation in various ﬁelds, such as infrastructure, defence, tourism and energy. these sectors have also been identiﬁed by my government as priority sectors. ,, ashok gajapathi raju civil aviation minister, speaking to moneycontrol.com on exercising the option of privatising air india there are hardly any bakras around so you can get one is difﬁcult and businessmen are businessmen. there are limitations. one thing is for sure, the taxpayer’s money cannot be committed for eternity. ,, n chandrababu naidu chief minister, andhra pradesh, on turning araku in to a tourism hub once the regions become popular among tourists, hotels and resorts will gradually come up leading to job creation.,, jaykumar rawal minister for tourism, maharashtra, on mtdc’s tie up with airbnb mtdc has 1400 bed and breakfast accommodations, which is the highest in the country but the 72 unique experiences which have been categorised under the 'mahabhraman' will need to be marketed, and this is a great opportunity. ,, mike mccormick executive director, global business travel association on america’s withdrawal from paris accord and its impact on country’s image as a destination it's just another example of how the collective set of these policies ... all of them add to that uncertainty, add to that feeling of distrust.,, editor: navin berry firstname.lastname@example.org senior writer: shashank shekhar email@example.com features editor: priyaanka berry firstname.lastname@example.org business development: saurabh shukla email@example.com tourismfirst is owned, published and printed by navin berry and printed at anupam art printers. 6/14, industrial area, kirti nagar, new delhi - 110 015. it is published from 36-37, 3rd floor, indra palace, h-block, connaught place, new delhi – 110 001. tel: 011-43784444. total pages 40
6 cross currents industry expresses disappointment over gst slab rates, seeks reconsideration it is too early to assess the impact of the soon to be rolled-out gst (goods and service tax). however, industry stakeholders have expressed concern over proposed slab rates for hotels, restaurants and travel. they fear that this move could make india an expensive destination for travel and tourism, further blunting its competitive edge in the market place. we are passing through a stage where the government is ahead of the industry. i will expect that the industry, or those sections which say they are not ready, should also fall in line because we are quite clear about the date. ,, as saying that levying 28 percent tax on luxury and ﬁve-star hotels was myopic. “hotels charging more than rupees 5,000 do not automati- cally mean they are a luxury hotel or catering to want based travel,” he said to a national daily. expressing disappointment, national restaurant associa- tion of india (nrai) president riyaaz amlani said “while we applaud the government’s ef- fort to keep gst at 5 per cent for restaurants below 50 lacs and 12 per cent for restaurants without ac. we are disappointed with the high gst slab of 18 per cent for organised restaurants and 28 per cent for 5 star restaurants. this will not go a long way to promote tour- ism and tourism related jobs.” ritesh agarwal, founder and ceo, oyo expressed satisfaction on beneﬁts of uniform taxation across the country to travellers. i would also like to thank the hundreds of people who worked behind- the-scenes to ensure that concerns and representations of budget hoteliers were heard at the highest levels of government. from ficci which activated regional chapters to sensitize stakeholders, to our partner hoteliers across 16 states, and friends in the media who championed this cause - this outcome wouldn’t have been possible without their tireless efforts,” said the ceo. sharing his insight on the move, alok tandon, ceo, inox leisure ltd was quoted as saying “the indian cinema industry has been taxed as a vice by a host of regulatory bodies including local, state and central authorities at extremely high rates which have stunted the growth of the industry.” hoping that subsuming all taxes under gst would ease the pressure on the industry and allow it to grow to its full potential, he remained optimistic. taxes in neighbouring southeast asian countries like malaysia, thailand are generally in the 5-10% bracket. travel and tourism into india will cost more. defence and finance minister, govt. of india arun jaitly by tf bureau t he much-anticipated gst (goods and services tax) is now tantalizingly close to roll-out. while the july deadline for switching to gst appears distant, for now, but the gst council has addressed crucial issues by ﬁxing rate slabs and levies for goods and service, making the new ﬁnance regime only a few steps away from its formal introduction in the economy. under the new rate regime, four tax slabs – 5%, 12%, 18% and 28% have been put in place for services, including insurance, hotels and restaurants. luxury travel and accommodation is expected to cost more as ﬁve-star hotels will be taxed at 28%. furthermore, those charging a per-day tariff of up to rupees 2000 will be shelling out 12% tax and hotels charging between rupees 2500 to 5000 will pay 18% tax. hotels and lodges charging a per-day tariff of rupees 1000 will be exempted from gst. while the actual impact of the long- awaited tax reform remains to be seen, there have been immediate reactions from the industry, demanding re-consideration by the government and the gst council. reacting to the development, achin khanna, managing director, consulting and valuation practice, hvs was quoted over the new rate slab, noting “we welcome this step by the government. a lower tax rate for budget hotels sector will ensure that the industry’s quality upgrade continues while delivering standardized accommodation to millions of middle-class travellers. this will also save and create thousands of new jobs which could have been impacted under higher tax-rates.” he added that hotels were the single biggest contributor to tourism industry which accounted for 7.5 per cent of the gdp. “the move will boost revenue from travel & tourism sector for the next many years. the industry is expected to contribute 280 billion dollars to the gdp by 2026 and will pass bird’s eye view of the likely impact ◗ makes going to ﬁve-star hotels expensive. ◗ india’s competitiveness in the hospitality and tourism could take a beating. taxes in neighbouring southeast asian countries like malaysia, thailand are generally in the 5-10% bracket. travel and tourism into india will cost more. ◗ experts feel that domestic consumption may go up which will be encouraged by more people coming into the tax net. ◗ domestic tourism could further strengthen. lower inﬂation rates and rising disposable incomes could fuel more travel. industry insiders react on the proposed rate slab under gst we were hop- ing for a more reformative gst that would have rationalised the tax structure and made india a more com- petitive tourism destination. unfortunately, the recently announced gst rate for hotels will do just the opposite. ,, we welcome this step by the government. a lower tax rate for budget hotels sector will ensure that the industry's quality upgrade continues while delivering standardized accommodation to millions of middle-class travellers. ,, rahul pandit md & ceo at roots corporation dilip datwani president, hrawi rishi puri vp, lords hotels & resorts ritesh agarwal founder and ceo, oyo if india has to really unleash the potential of the tourism to create jobs, attract its fair share of visitors and encourage widening of the tax base, it has to be enabled by a favourable single digit gst. ,, ck baljee chairman & md, royal orchid hotels staying in luxury hotels will get more expensive as it got the highest tax incidence of 28%. this will bring additional burden. even the restaurants in these hotels will attract 28% rate which i personally feel little unfair. ,, the government should realise that while neighbouring countries levy taxes ranging from 5 to 10 per cent, we cannot afford to have these kind of complex and high gst. this is simply not viable. tourists will simply skip india. ,, levying 28% on luxury and five-star hotels is myopic. hotels charging more than rupees 5000 do not automatically mean they are a luxury hotel or catering to want based travel. ,, achin khanna md, consulting & valuation, hvs
cross currents 7 eyeing a larger global market share, goi to unveil medical and wellness tourism policies the government is set to unveil medical and wellness tourism policies on the international day of yoga. the development comes as a welcome news for the industry which has been long advocating standardization and strict implementation of accreditation to ensure maintaining a competitive edge in the market place. the government has identified medical travel as one of the major growth drivers and a key source of foreign exchange earnings for the exchequer. by tf bureau buoyed by the recent spurt in international footfalls, catalysed by medical and wellness tourism in to india, the nda government is all set to roll out india’s ﬁrst ever medical tourism and wellness policies. it is to be noted that there has been an increase of 25 percent in footfalls compared to the previous year, adding weight to the rationale behind the move. the related polices will be announced on 21 june, on the national yoga day and the guidelines for wellness tourism has already been drafted by the mot. the guidelines address pertinent issues related to training and capacity building for service providers, participation in international and domestic wellness related events, and making avail- able quality publicity material, among others. the aim of the project is to amalgam- ate yoga, ayurveda and other such related medical systems under one umbrella. as per reports, a web portal containing names of institutions and services offered and their fares will be launched soon to enable more transparency in the system. the policy is being drafted by the recently constituted national medical and wellness tourism promotion board and aims at incen- tivising medical tourism as well as promotion of traditional indian wellness programs. the board includes noted cardiac surgeon naresh trehan and yoga guru baba ramdev among others and work has already begun to get hospitals and wellness cen- tres to register with the ministry’s website. discussions were held with various industry associations and stakeholders to setup the framework of the draft policy. speaking to a leading daily, mahesh sharma, union minister of tourism and culture shared that the chief highlights of the policy would be unveiled on the day of international yoga of day. "india has the ability to be a world leader in offering health services at very competitive prices. to bring in greater transparency, our aim, through this policy, is to get hospitals and wellness centres to register with us. they can then put out their rate charts, the details of the procedures they offer, and their success rates to allow tourists to choose what suits them best,” he said. india’s rankings in the world economic forum’s travel and tourism competitive index (ttci), which has been calculated from 14 parameters among 136 coun- tries, rose up 12 points to the 40th position this year, up from the 52nd position last year. the recently introduced medical e-visa has also been a great facilitator in giving the medical and wellness inbound numbers a big boost. apart from this, recent initiatives like regulated medical tourism agents, more co-ordinated facilities in cities and states etc. are also some factors which have notably contributed to the sector. the ministry of tourism is also said to be about to commission two tv commercials to promote india’s offerings in medical and wellness tourism. the minister also added that no institu- tion will be allowed to provide medical services to foreigners without being ac- credited by the government. “no foreigner mahesh sharma union minister of tourism and culture who has come to india for medical tourism should feel that they have been cheated in anyway,” sharma said. given the stature acquired by india, in the past few years, as an affordable and reliable medical treatment destination, government’s move will enable creating more transparency and instil conﬁdence in consumers there is so much more to darjeeling’s tourism than just darjeeling itself india has the ability to be a world leader in offering health services at very competitive prices. to bring in greater transparency, our aim, through this policy, is to get hospitals and wellness centres to register with us. they can then put out their rate charts, the details of the procedures they offer, and their success rates to allow tourists to choose what suits them best. no foreigner who has come to india for medical tourism should feel that they have been cheated in anyway.,, examining their options for treatment. lack of standardization and accreditation have been the achilles heel for wellness and medical tourism segments, in india, in its otherwise gallant strides in the international marketplace. this lacunae had led to sprouting of a number of phoney institutions, denting country’s reputation and business opportunity. according to several industry reports, india’s medical tourism market is set to touch 8 billion dollars mark by 2020. with the expected launch of guidelines, these ﬁgures are likely to be achieved sooner than previously predicted. at a time when darjeeling is in news for not so good reasons, peshwa acharya, cmo, sterling holidays resorts explores all that darjeeling has to offer and has remained off the radar for most travellers. snippets a lot has been said about the beauty of darjeeling itself, but darjeeling is an excellent base camp to explore interesting places at short distances. one such place is palmajua, nestled in the forests of singalia, in the eastern himala- yan ranges. its proximity to kanchenjunga make it a haven for photographers, trekkers and wildlife enthusiasts. singalia national park, close to the indo-nepal border park is home to the endangered red panda – known to us as ‘firefox’ (the logo of the internet service provider is said to be derived from the animal), armored pango- lins and more than 170 species of rainbow coloured birds. a kind of holy grail for trekkers is the trail from singalia ridge to sandakphu and phalut. this is on account of the grand sights of the kanchenjunga and everest ranges which offer spectacular views. trekking in the lap of the eternal, mighty himalayas really gives you perspective! you realize, at once, how small you are compared to the mountain and yet powerful enough to scale it. two hours’ drive from darjeeling, you ﬁnd the village whose hilltops look like three stoves or ‘tinchuley’ village. this quiet hamlet specializes in village tourism and offers organized village walks, nature hikes and tea garden visits for tourists. while that may not appeal to all, this place allows you to immerse yourself deep into village life, taking you to a different era where time was not a luxury and things moved at a leisurely pace. it’s a true get- away experience. of course, tinchuley has local attractions like the view of the teesta and himalays from gumbadara and the two hours’ drive from darjeeling, you find the village whose hilltops look like three stoves or ‘tinchuley’ village. this quiet hamlet specializes in village tourism and offers organized village walks, nature hikes and tea garden visits. ,, peshwa acharya cmo, sterling holidays resorts ‘lover’s meeting point’ or the sangam of the teesta and rangit rivers. half an hour from tinchuley is the ‘monk’s hermitage’ village or lamahatta (lama means monk (think dalai lama) and hatta means hut). lamahatta is a real honeymoon destination if the couple wants an idyllic time, among the trees of dhupi jungle and the orchids of takdah center. a quiet place, where visitors can learn the ways of local sherpas, yalmos, tamangs, bhutias and dukpas tribes. a short distance away lies peshoke view point from where you can see the triveni- the union of the teesta and rangeet rivers. 19 kms outside the town of darjeeling lies jorpokhri, named for its twin lakes which are home to rare himalayan salamanders. those visiting between october and march are assured of the view at its best and you might spend hours watching the mountain ranges change from gold to purple to red in the setting sun. the lakes mirror mt. kanchenjunga. so you see, there’s a lot more to darjeeling than just darjeeling! foreign exchange earnings from tourism on the rise foreign exchange earnings generated from tourism has grown considerably in the past three years. as per the data released by the ministry of tourism, foreign exchange earnings (fees) have shot up to `14,692 crores in april this year, compared to `11,495 crores in april 2016 and `10,091 crores in april 2015. in terms of footfalls, foreign tourist arrival during january-april 2017 were 35.85 lakh, registering a growth of 15.4%, as compared to 31.08 lakh with a growth of 10.1% in january- april 2016 over january-april 2015. according to the union ministry, the rate of growth in terms of rupee in foreign exchange earnings this year in april 2017 was 27.8%, compared to positive growth of 13.9% in april 2016. experts attribute this development to measures taken by the government to create more ease of travel. e-visa scheme, development of infrastructure and growing business interest in india have all been sighted as important reasons behind spurt in revenue. increase in fees coincides with india’s steady rise in rank in the world travel and tourism competitive index (wttc). here, too, india has climbed from 68th rank in 2011, to 65 in 2013, to 40th place in 2017.
8 aviation: air asia airasia’s connecting bhubaneshwar to kl has opened up odisha to apac: suresh nair airasia recently announced flights into kl from bhubaneshwar, making it the first carrier to regularly operate flights out of the eastern state. the development is likely to push the malaysian carrier towards pole-position in a vastly untapped market. tourismfirst speaks to suresh nair to understand the growth story so far and what lies ahead for the lcc. excerpts from the interview follows: by shashank shekhar tell us a little bit about your growth strategy. how did it unfold? the airasia story started with operations in trichy in december 2008, with daily ﬂights to trichy from kuala lumpur. in 2009, we began to expand our network into india. we started ﬂights into kochi, trivandrum and kolkata in the same week in november 2009; all of them were from kuala lumpur. we started with smaller towns, really. from there, we start to connect to chennai, bengaluru, hyderabad and more. was this a conscious decision? it was a conscious decision because we always had a knack of looking at smaller cities and connecting them. what we call ‘unique routes’ has always been our focus. then in the end of 2010, our sister airline, thai airasia started ﬂights from bangkok to kolkata and bangkok to delhi. so, we had two airlines ﬂying in. delhi was being operated by our long-haul carrier, airasia x. as a low cost airline, we use the airbus a-320s which is the most ideal aircraft to facilitate our business model. these are short-haul ﬂights, ranging around four hours – that is the maximum an airbus 320 can operate with optimum capacity and performance. all of our afﬁliate airlines operate the same type of aircraft, whereas airasia x use the airbus a330 for their long haul operations. so, airasia x started with ﬂights to kuala lumpur to gold coast; kuala lumpur to beijing. we also have ﬂights to australian sectors; sydney, perth and gold coast, auckland. all are more than four-hour ﬂights. and kuala lumpur-delhi are also more than four-hour ﬂight. so, delhi is operated by air asia x. that is how we grew. in-between, for some time, we pulled out of delhi and bombay from kuala lumpur because of some strategic reason. we have come back to delhi and mumbai with suresh nair receiving a momento from odisha tourism minister for his contribution to bringing airasia flights to bhubaneswar.on his right is aireen omar, ceo, airasia berhad how do you choose these fly-thru sectors? is it based on load factors? it is based on demand. if we see a trend, for instance, from delhi to bangkok, or singapore would have a good demand that people do not want to get down at kuala lumpur and go through the hassle. so, we have some 10-15 passengers who would prefer to fly-thru. airasia became the first airline to operate internationally from odisha. you have a flight now from bhubaneshwar to kuala lumpur. see, bhubaneshwar was declared to have an international airport. since then the government of odisha has really been trying to get international ﬂights into bhubaneshwar. i have been interested in bhubaneshwar for the last three years or so. we worked the market was there for anybody to take. nobody looked at the market and realised its potential; it was open to any carrier. for me, i wanted airasia to be the first airline flying into bhubaneshwar. i was very committed and worked hard for it. sometime in 2016, we had looked at it, but did not have sufficient aircraft to operate. we held on for some time, but, eventually, everything fell into place nicely. ,, with airasia starting its international operations, it has opened up bhubaneshwar and the state to, at least, the asia pacific region of the world and 120 destinations across our network through kl. the launch of denpasar-mumbai ﬂight by indonesia airasia x recently. airasia operates on hub-and-spoke model. the hub-and-spoke model increases cost, creating the need for more manpower and systems in place. how does a lcc manage to use this model effectively? in aviation, the one thing that remains constant is change and innovation. and with airasia, we pride ourselves to be the pioneer in many forms. we revolutionized air travel and introduced new, simple processes. however, such strategies are only successful if they are supported by partners such as airport authorities. we constantly invite them to work as a team and help us to make air travel affordable for everyone. the low-cost model, normally, operates point-to-point. while we stay true to the lcc model, we did not limit ourselves from being innovative, and one of it is called ‘fly-thru’, where passengers can connect from one ﬂight to another seamlessly without the hassle of collecting their baggages, and re-check in. we have done this on various destinations. we are able to connect selected between 25-30 destinations from each city. for instance, there are some 25-30 destinations that you fly-thru from delhi. very closely with the government of the state and they were very supportive, especially odisha tourism. ultimately, on 26 april, dreams of many people, including cm navin patnaik and tourism minister ashok chandra panda came true with airasia starting its international operations. it has opened up bhubaneshwar and the state to, at least, the asia paciﬁc region of the world and 120 destinations across our network through kl. is the move of entering the odisha market aimed at acquiring pole-position in an untapped market, or is it more in line with your ideology of taking to the unique routes? the market was there for anybody to take. nobody looked at the market and realised its potential; it was open to any carrier. for me, i wanted airasia to be the ﬁrst airline ﬂying into bhubaneshwar. i was very committed and worked hard for it. sometime in 2016, we had looked at it, but did not have sufﬁcient aircrafts to operate. we held on for some time, but, eventually, everything fell into place nicely. what kind of load factors do you get when you fly four times a day? we do not operate anything less than 80% load factor. gm, india, sri lanka bangladesh and nepal, airasia suresh nair internationally, how many points do you touch from india? starting from south, we have kochi, trichy, chennai, bengaluru, vizag, bhubaneshwar, kolkata, delhi, mumbai and goa. we have ten points. any plans after bhubaneshwar. what are some new destinations that you are looking at? we are always looking for more unique routes. if we can get a little bit more trafﬁc rights and bilaterals, we will deﬁnitely ﬂy new routes. are you looking at more bilaterals? we are always looking for more bilaterals. i would like to make a point that we really are a leisure travel focussed airline. our focus is not actually business travel. if you see our big routes, they are all tourist destinations. we are actually bringing in a lot of international tourists into india, though it is not recognized as much as it ought to. we have really opened up a lot of destinations and sell them all over our network. we are introducing destinations to people sitting in australia, in japan. as a part of the aviation industry, what are some of the trends that you see viz- a-viz inbound and outbound travel? we have a long way to go, as far as inbound is concerned. i do not think we are doing enough on that front. whichever way we look at it, our number are very low. if malaysia, singapore and thailand can get 1 to 1.5 million passengers from india alone, and we are doing 6 million, which includes nris and pois, there is a problem. we have such a wide range of things to offer. the only way is to enhance connectivity so that people can come and see these places at a comparatively lesser cost. with regards to outbound, indians have become very adventurous. they are looking for new places and experiences. japan, korea, thailand, all these countries, you can see the activities that tourism bodies of these countries are doing, that itself shows the kind of demand available in the indian market. i have never seen taiwan advertise so much about its destinations in india. don’t you think that this is an opportune time of you, as a major part of the world is going into protectionism mode, creating more opportunities for travel in south and southeast asia, and airasia could be a natural beneficiary of the process? southeast asia will remain the destination of choice for indian tourist, especially the ﬁrst-time international traveller. only after southeast asia will they go somewhere else. it has also got to do with the feeling that they are in a safer, conducive and a more homogenous environment. countries, too, are shaping themselves in such a way that they can receive tourists. all of tourism bodies are extremely active.
aviation 9 favourable policies, economic growth fuelling airport business ecosystem while the airport lounge management is in a nascent stage in the country, it is poised to become a major industry in its own right in not so distant future, says liberatha kallat. excerpts from the interview. by shashank shekhar in terms of maturity of the marketplace, what is the stage at which lounge management segment stands in india? dreamfolks’ assessment is that there is low level of awareness amongst civil aviation travellers with respect to lounge facilities available at the airports. in cy 2016, there were 100 million transactions in the domestic airline market and about 60 million in the international airlines market. the current servicing levels for lounge access are just 3 percent of the domestic air-traffic is at a record high, making india the third largest aviation market in the world. is that momentum reflecting in the lounge management business as well? how has been the business like? where do you see it heading in the coming months? the indian civil aviation is experiencing robust growth as reported by dgca. passengers carried by domestic airlines during jan-april 2017 were 364.13 lakhs as against 309.35 lakhs during the corresponding period of previous year, thereby registering a growth of 17.71%. there have been many campaigns and middle class constitutes to be 20% of the total indian population. when this segment will explore the unexplored services of airport, business is expected to grow with a ballistic momentum. total addressable market. we see this percentage growing to double digits by 2020. so, in the short term, we hope to service more than 2.5 million customers. in 5 years from now, we see dreamfolks as a major player across the full spectrum of airport ecosystem and that would cover both b2b and b2c offerings. indian aviation sector is looking up. schemes which have been initiated from prime minister’s ofﬁce like “make in india”, “udan”. additional growth is expected from these regional connectivity schemes. as the name suggests “udan - udhe desh ka aam nagrik”, the prime aim of this speciﬁc scheme is to make an air travel easy, pocket friendly and convenient for the middle-class segment of the society as well. middle class which constitutes to be 20% of the total liberatha kallat managing director, dreamfolks indian population, when this segment will explore the unexplored services of airport; business is expected to grow with a ballistic momentum. for dreamfolks, all these economics trend, government schemes and more purchasing power to common man implies a lucrative era ahead with more business and growth opportunities in the airport ecosystem space. tell us about the customer segmentation? who are your government to give udan more ‘wings’ as per a media report, the recent success of the ambitious regional connectivity scheme (rcs) has emboldened the government to expand the ambit of the scheme, roping in new airlines as well as integrating new routes in to the scheme. by anagat choudhary according to a report in the hindu, the central government is contemplating widening the scope of the udan scheme by integrating all routes which are lacking ﬂight services in to the scheme and also by making more ﬂight operations eligible for concessions. the concessions are said to include viability gap funding as well. as per the report, the government plans to include routes from airports which have ﬂights to other destinations but not between them and may also allow routes under 150 kms to be eligible for the scheme. for example, the lucknow airport is in service but has no ﬂights to varanasi, and hence this route becomes eligible for the scheme. “if there is no ﬂight between two destinations even though both the airports have ﬂight operations on separate routes, then it will be an unserved route falling under the regional connectivity scheme (rcs),” civil aviation secretary r.n. choubey was quoted as having said. the aviation ministry has also proposed decreasing exclusivity on ﬂight operations from the stipulated time of three years to one year but continuing the subsidy provided to the airlines for the entire period. the government will be lifting the restriction of operating a maximum of seven ﬂights a week and instead have a ‘seat cap’ to provide some more operating space to the airlines and allow them to operate multiple ﬂights a day. explaining the idea behind the move, choubey is quoted to have said that “the chief minister of maharashtra suggested us informally that it may become difﬁcult to put shirdi airport, which will commence operations soon, under rcs since only one airline will get to ﬂy from shirdi airport whereas it has greater potential as per the state government’s assessment and the freedom to operate more ﬂights under the scheme will be lost.” new airlines looking to become a part of the initiative will have to participate in a fresh round of bidding which are set to be held in july and the results for which are expected by august this year. the proposals are expected to be incorporated just before this second round of bidding and the government has invited comments from the stakeholders on the same. recently, indigo, which is the country’s largest airline in terms of market share, also announced its plans to participate in the second round of bidding under udan. there is low level of awareness amongst civil aviation travellers with respect to lounge facilities available at the airports. in cy 2016, there were 100 million transactions in the domestic airline market and about 60 million in the ,, international airlines market. the current servicing levels for lounge access are just 3 percent of the total addressable market. consumers? what are some trends therein? providing a loyalty beneﬁt to a customer is what our business speaks about. dreamfolks consumers are mainly dreamfolks’s client’s customers primarily the customers of the card network companies, issuer banks, cabs and airline customers. for us as an organization, any organization who wishes to introduce loyalty program to retain their client is our consumer be it airlines, banks, ﬁnancial institutions etc. talking about the current trend, organizations on a whole value such services that can help them retain their client and help them grow their numbers. hence, we are doing that and our numbers are expected to grow by helping other businesses grow. you are currently in airport lounge management, and do so internationally with dragonpass, but do you see the possibility of managing railway lounges, or bus-stand lounges? there seem some opportunities in that segment, especially with the government’s thrust on railway modernization. airport lounge access program has been dreamfolks’s signature program from last 5 years. with dragonpass in picture now, dreamfolks has extended its services to international lounges along with other services like meet & assist, wellness services, gourmet dining etc. to its domestic and international clients. given a chance; dreamfolks, would certainly wish to explore the opportunity of managing a lounge at railway as well as bus stands. also, central government is already in the process of setting up a strategy for railway station ecosystem wherein it has issued rfqs to the private players to ﬁll in the tender for partnering and managing the lounges at railway stations. dreamfolks would be an enthusiastic participant in the above process and looks forward to successfully managing the railway station lounges in the near future.
10 aviation: capa report jet airways’ acquisition to soar india’s order book beyond 1000 aircraft: capa report with jet airways looking at acquiring 100 narrow-bodied aircraft, india's order-book is expected to reach 1080 aircrafts, making india the third largest aviation market and in terms of planned acquisition, reads the latest capa report. excerpts: low cost carriers account for 85% of india's current order book of 880 aircraft, but in the coming weeks, two of its full-service airlines will add to the tally. jet airways is expected to place an order for a further 100 narrow body aircraft- taking its total of the type to 175, while vistara is likely to order 50 narrow bodies and 50 wide bodies, as per capa's earlier research. with these planned acquisitions, india's order book will reach 1080 aircraft, the third largest in the world after the usa and china. and its ratio of 2.2 aircraft on order for every aircraft in service would be the highest of any major aviation market. the order book is dominated by narrow bodies, which account for 85% of the total. there are only a limited number of wide body and regional aircraft in the pipeline. jet’s existing order for 75 737 max aircraft,which are scheduled for delivery between 2018 and 2023, will mostly be used for replacement. at present half of its narrow body ﬂeet is aged 9 years or older. meanwhile the new order for 100 aircraft is intended for expansion. the carrier also has 5 a330s and 10 787-900s on order, although it continues to defer deliveries. nevertheless, a large wide body order will be necessary in the near term, both for replacement and expansion. vistara, india’s youngest full-service airline currently has a ﬂeet of 14 a320s- the most recent of which is a neo variant- with a further six neos on order. the carrier plans to induct wide bodies once it becomes eligible to operate international services upon reaching a domestic ﬂeet size of 20 aircraft. the ﬁrst international route is expected to launch from the winter schedule 2018/19. for its 50 narrow body and 50 wide body order, vistara is expected to be opt either for a combination of a320s and a350s, or 737s and 777s. the carrier is reportedly interested in the 777x, but with the ﬁrst deliveries of the type not expected until 2020 and given current fuel prices, vistara may alternatively consider the 777-300er. taking wide bodies, including 787s, on short-term lease from singapore airlines- a 49% shareholder in vistara- is also a possibility. its single aircraft type model and launch a regional operating division. in may- 2017 the carrier announced an order for 50 atr-72s,and we see that this is likely to expand further in the near term. however, in terms of regional equipment this simply replaces the 50 embraer jets that were on order to air costa,until the airline suspended operations in feb-2017. as per capa's earlier research reports,we do not rule out the possibility of indigo ordering a330neos to launch long haul low cost services. unprecedented expansion will place immense pressure on the aviation system. the industry currently appears to be under- estimating the challenges ahead. of the expected 1080 aircraft on order, more than 700 are scheduled for delivery with capa's profit forecast in dec-2016. with deteriorating financials, rising over supply and higher competitive risks, raising strategic and retail capital may be challenging in fy2016, at an industry level india’s airlines posted the lowest losses in a decade. but this may prove to be a high-water mark. losses increased from `5.7 billion to an estimated in20.9 billion in fy2017. capa projects that airline ﬁnancials will deteriorate further to a loss of `25-30 billion in fy2018. these market conditions and the associated risks may subdue investor interest- strategic,institutional and retail- in indian airlines and the window may close by fy2018 for carries to raise capital. consolidation is inevitable in the next 1-2 years due to likely ﬁnancial challenges and an expensive solution, it is also creating resentment amongst indian pilots and could evolve into a more serious industrial relations issue. agreeing to the indian pilots’ demand for pay parity would further increase unit costs. however, there does not appear to be any near-term solution to addressing the supply side constraints. capa reiterates that airport infrastructure challenges could constrain growth and lead to sub- optimal operations and network economics parking bays and runway slots will become increasingly scarce over the next few years, especially at metro airports. signs of congestion are already emerging at mumbai, chennai and delhi and the situation will become more acute unless airports are able to construct 400 parking bays and enhance airside capacity within ﬁve years. otherwise airlines will face challenges in implementing their base and network plans. capa has long maintained that the projected industry growth rates will heighten safety risks due to the regulator being over-stretched. institutional strengthening of the dgca is a national interest issue. if unaddressed, another downgrade by the faa cannot be ruled out. india's regulator, the dgca will struggle to provide adequate regulatory oversight for the projected size of the market. it is already under-resourced and short of expertise to meet current requirements, let alone future growth. the increase in airprox incidents in the last 12 months is a concern. in addition, it will be stretched by the entry of new operators and ﬁrst of type equipment as a result of the launch of the regional connectivity scheme. if oversight within the next decade and 400 within the next ﬁve years. this excludes orders yet to be placed and equipment to be taken on lease. in addition to the incumbent carriers, it is possible that india might see the entry of 1-2 new large start-ups, including qatar airways' proposed venture. india’s regulator, the dgca will struggle to provide adequate regulatory oversight for the projected size of the market. indigo’s increasingly aggressive and aircraft induction on this scale will unprecedented growth is creating a strategic compulsion for others to expand to remain relevant in the market. this is driving over- capacity and increasing industry risks for most carriers. indigo has the largest in-service ﬂeet in india at 135 aircraft, and the largest order book of any airline in the world at 458 aircraft. its ﬂeet could expand by up to 46 aircraft during this ﬁnancial year,a net addition of almost one aircraft a week. other carriers are responding by accelerating their own expansion in order to hold on to market share and to prevent indigo from securing a dominant position with over 50% of the market. as of apr-2017 its share had already reached 41%. despite indigo’s market-leading performance to date, this scorching pace will undoubtedly test the capabilities of its management team, increasing the risk of a negative on the carrier's proﬁtability and operational performance. and to add to the complexity of its operations, indigo recently surprised the market by announcing plans to diverge from require massive infrastructure development, skilled resources and aircraft ﬁnancing at a pace that has not been seen before in india. competitive dynamics. we may see a repeat of the conditions seen after the euphoric growth during 2004-2008. capabilities are left unaddressed, another faa downgrade to category 2 is not out of the question. despite strong than expected yields since jan-2017, overcapacity will push airlines towards reduced profits and larger losses in fy2018 since demonetization took plan in nov-2016, the market has deﬁed expectations of a slowdown in demand for air travel. instead, trafﬁc growth has remained robust and yields have been surprisingly strong for the last ﬁve months, ﬁrming by 6-8% year-on-year in apr-may-2018. but despite the strength of the indian economy, the market will not be able to soak up all of the additional supply without stimulatory pricing. excess capacity will place downward pressure on yields, pushing airlines towards lower proﬁts and increased losses. financial results in 4q17 and for the full year fy17 was lower than what most operators expected, but were in line excess capacity will make the weaker operators particularly vulnerable and consolidation is inevitable. deferral and cancellation of aircraft orders is also likely. poaching of pilots is becoming a serious challenge, and the regulator is likely to increase the notice period for pilots to exit from six to 12 months. capa views this as a major barrier to growth with its insatiable demand for crew to support its rapidly expanding ﬂeet, and its strong ﬁnancial reserves to be able to fund a hold pool of pilots, indigo is leading the way in poaching crew. the carrier could require 500-600 additional pilots in fy2018, creating a shortage across the industry. relying on expat commanders to address the shortage is fueling a potential industrial relations challenge the strategy of employing expat captains, on higher salaries than locals, is not only large aircraft orders are being driven by expectations of sale-and-leaseback profits,but may exceed the financing available indian airlines are planning to ﬁnance most of the aircraft orders through sale-and- leaseback transactions. by placing large orders, they are able to achieve a lower purchase price from the manufacturers and a higher proﬁt on selling the aircraft to a lessor, generating valuable cash for working capital. they have seen how effective this strategy has been for indigo and intend to follow suit. whether there is sufﬁcient lessor interest to ﬁnance all of these aircraft, including pre-delivery payments, and what impact the volumes will have on sale-and-leaseback margins, is yet to be seen. airlines that are banking on proﬁts on the sale of aircraft may ﬁnd that they are unable to raise as much cash as projected.
tourism in the news 11 government’s decision to tweak crz will set cruising industry in motion: ratna chadha following several changes that it made to the coastal regulation zone(crz) notification last year, the government is about to further bring in prominent changes to the current crz notification this year as well. as per media reports, the ban on reclamation of land in coastal areas for entertainment and commercial purposes has been revoked as a part of these changes and tourism activities in ecologically sensitive areas along the shores have been allowed as well. this information was revealed after an rti was filed on the matter by a member of an ngo, centre for policy research. eco-sensitive areas, which fall under the crz-1 category, including coral reefs, sand dunes, mangroves etc. and the draft states that “temporary tourism facilities such as rain shelters, sitting or resting places, walkways on stilts, public toilets, and drinking water facilities as part of eco-tourism strategy without troubling the habitat shall be recommended.” the new order which is to be called ‘marine and coastal regulation zone’ (mcrz) will also allow setting up of fish processing units, do away with the need for obtaining clearances for construction purposes and related infrastructure for local fisherman, and also remove hindrances to facilities meant for security purposes like vigilance activities conducted by the marine police or patrolling by the coastal police. another key change in the drafts proposes that the growth in the urban areas (crz ii) should be regulated as per the local laws. it states that “the state governments shall make marine coastal zone management plans based on land use or regional plans incorporating adequate environmental safeguards.” there is, however, no mention of any change in the definition of areas that would be come under the regulation zone and the mcrz is to be extended to at least 500m towards the landward side from the high- tide line decided by the government. industry experts have hailed this move as the potential trigger to boom in real estate, ports and tourism development in the ecologically sensitive coastal zones. we spoke to ratna chadha, chief executive, tirun on the possible impact of the proposed changes on the industry, and the future of business. by anagat choudhary the recently proposed changes in the crz regulations has suggested lifting of the ban on reclamation on land in coastal areas for commercial or entertainment purposes. are the current regulations a bottle neck to the industry’s growth? what impact will these changes have on the cruise tourism industry? first of all, let me clarify that there is no cruise tourism happening at the moment. this move will give an impetus to the industry to start. cruise tourism at the moment is non-existent in the country. we do not have turn around ports, we do not have cruises that ply for the indian nationals at all, at the moment. currently india is only used as a port of call, and is not a turn-around destination. for any cruise tourism to develop along the coast, we have got to have ancillaries also in terms of infrastructure, shops, facilities etc. anywhere in the world, when you touch a port you ﬁnd that all of this is available to the passengers and tourists as soon as they disembark. but in india, at the moment, because we are still developing this segment, there is nothing. if the ban had continued, there would have been no development at all on the coastline. the coastline is not just for cruise passengers to come and go. it can also be developed for the locals living there. it can have mice, restaurants, bars, facilities, shops etc. which everybody in the world does because it is a very pleasant place to come and relax. why does everything have to be inland? so, once that infrastructure develops, the economy will get a boost as well. i think this is a very welcome decision and it will allow people to get to the water’s edge, so to speak and enjoy the ambience the way it should be. but having said that, the onus is on the people as individuals to keep these places clean. today, you ﬁnd so much muck on some of the popular indian beaches; there is litter coming in from the water bodies as well. all this has to stop. we have to know how to respect our own environment. this, probably, is the reason for the ban in the ﬁrst place. speaking about the environment, another proposed change in the regulation is allowing tourism activities even in ecologically sensitive areas along the shores. what impact do you think will this have on ecology? given that climate change is a central point of conversation throughout the world right now, do you think this is the right time for this proposed change in terms of its viability and sustainability? see, you cannot standardise a ban and say ok now this is going to be for everything that is 500 metres from the ocean. you if the ban had continued, there would have been no development at all on the coastline. the coastline is not just for cruise passengers to come and go. it can also be developed for the locals living there. it can have mice, restaurants, bars, facilities, shops etc. which everybody in the world does because it is a very pleasant place to come and relax. why does everything have to be inland? so, once that infrastructure develops, the economy will get a boost as well. ,, ratna chadha chief executive, tirun travel marketing can protect areas where protection is required as it is the government’s right and is meant for citizens, so that they may enjoy nature’s gifts to us. we have to government moots making in-flight wi-fi accessible over indian airspace according to media reports, taking heed from some of the major international airlines, the government is mooting making wi-fi accessible over indian airspace, a move much awaited by the industry as it is set to have substantial security, quality as well as monetary outcomes. by anagat choudhary as per media reports, the department of telecommunications (dot) has recently sent a revised proposal to enable in-ﬂight access to data, video and voice services. according to reports, the proposal is awaiting clearance from the union cabinet which is expected by the end of august 2017. flights will now reportedly be using the ‘ka band’ satellite communications system instead of the previously used ‘ku band’ system as it is said to be faster and more cost effective. a lot of international airlines offer paid wi-ﬁ as a part of their service so that ﬂyers stay connected with the world throughout the ﬂight but the use of the same is banned over indian airspace and this move is set to beneﬁt the international ﬂyers ﬂying over india or using indian airspace. “the dot has sent a revised proposal for the consideration of the committee of secretaries (home, communication and civil aviation ministries) after re-examining its earlier proposal related to interception by security agencies when required,” civil aviation secretary r.n. choubey was reported as having said. he went on to add that “the proposal will be taken up at the next meeting of the secretaries.” a study recently conducted by roland bergers, a global consultant suggested that more people are looking for in-ﬂight access to the internet and would readily choose ﬂight which offer these services over ﬂights which do not. the study goes on to point out that this could be a win-win situation for both the parties as airlines could monetise the demand for these services and even use them for advertising, sponsorship and even targeted selling. but, security is a big concern as indian security agencies do not yet have the technology to monitor data transmissions over indian airspace although, media reports have suggested that the issue has now been resolved. in order to see this project through, the government will have to amend the concerned indian telegraphy rules as well as amend the telegraph act, 1885, itself. currently, the rules are such that airlines are unable to provide wi-ﬁ accessibility, be it a domestic or international ﬂight. international airlines such as air france, lufthansa, emirates etc. which allow wi-ﬁ access on-board, are unable to do so while ﬂying over indian airspace. the hindu reported that the associated chambers of commerce and industry of india had addressed a letter to prime minister narendra modi last year regarding the issue in which it had pointed that, “in-flight connectivity (ifc) promises to substantially improve safety of airlines as it enables ﬂight tracking in respect of aircraft in near real time reporting latitude, longitude, altitude, true heading and ground speed; streaming of ﬂight data recorder of the aircraft in real-time; and facilitating real time intervention for safety and security based on ﬂight data monitoring.” all in all, the proposal ﬂoated by the dot should have a consequential impact as a whole at a time where the airline industry of the country is looking to refurbish and expand in a consistently growing market. hopefully, going forward, if not in 2017, at least by 2020 we should have everything in place that is required for cruise tourism to realise its complete potential. make sure we do not go there and degrade the place and then have a blanket ban. the world over, the practice is to protect what needs to be protected and open up the rest. what is the point of having a heritage which people cannot see or enjoy? should the taj mahal be wrapped up and closed to the public because of the harm its marble is facing from industrial pollution, or do we concentrate on how to preserve it and keep it open? there needs to be a balance of responsibility. it is not only the government or only tourists that need to take this up but both parties have an equal role to play in the preservation and upkeep of our eco-sensitive tourism spots. there are so many examples of this throughout the world. there are ways and means of preserving your heritage and yet allowing people to experience it as well. if we are to open up these areas then people need to be educated simultaneously, and i am sure as a human race, we will have a sense of balance. so, if action is taken on these proposed changes, as expected, how would you say is 2017 shaping up for the industry? i think the country has a very buoyant future because we still have segments that are untapped. i know the government is working hard at it and if india can be put on the cruise tourism map, it will be a huge boost to our tourism industry as well as the economy. hopefully, going forward, if not in 2017, at least by 2020 we should have everything in place that is required for cruise tourism to realise its complete potential.
12 hote ls + resorts budget lodging segment is an interesting sector for quality rois, says rahul pandit balanced development costs and average rates in the budget accommodation segment is helping investors leverage quality return on their investments, says rahul pandit. in an exclusive interview, he shared his opinion on a wide range of issues. talking about the future course of action for ginger hotels, he noted that the idea was to make ginger the dominant budget lodging brand in the coming years. excerpts from the interview. by shashank shekhar how is the budget segment unfolding on a national level? do you see some trends in the development? budget is the most fascinating and rapidly evolving lodging segment in india where a lot of action is happening. whether one looks at the entry of new players in the segment, the change in consumer mindset or the outlook of investors – it would quickly become apparent that this segment is the poster-child of the hospitality industry. consumers are seeing real value in budget hotels as they are realising that with quality hotel partners, they get an excellent lodging experience – from booking the rooms, to check in, to sleep, shower, dining and the check-out experience. on the other hand, this segment is seeing the active interest and participation not only of traditional hospitality companies but also the new-tech aggregators and travel booking companies. there is currently a lot of capital being burnt by earnest investors and while this hurts the business in the short term, as the sector matures we shall see those with ﬁrm roots still being around while others will go for a trip. most importantly, this sector is the most interesting for those who are looking for quality returns on their investments. the budget category of hotels are the ones which are rationally priced in both development costs and average rates and therefore qualify to give great returns for investors. we are seeing ﬁrst time owners as well as large developers and institutions looking at investing into this sector. demonetisation has surely dampened the investment sentiment but it seems like a short-term phenomenon. as revpars increase, we expect to witness more investment ﬂowing through into the sector. we see the mobile phone and internet become the most important channel for distribution for our segment of hotels. the internet users in india have increased by 40% over last year and at 355 million users, it is second only to china. with the government buy and sell b2b and b2c. ready to use packages 21-23 september call: +91 9899521421 email: firstname.lastname@example.org pushing for digital-focused policies such as jan dhan yojana, gst, demonetisation and others this will only accelerate. we are seeing leisure hold renewed development interest on the back of superior, sustained margins across the country. the gst is likely to be rolled out soon. what are your first reactions on the govt.’s decision of differential tax slab rates? how do you see it impacting your business? some industry insiders have voiced their concerns, demanding a fixed slab of 18%. do you agree with the idea? any policy for the sector should contribute to increased employment, higher foreign exchange earnings and widening of the structured market besides increasing the tax kitty. while india received only 9 million visitors last year, the city state of singapore received 16 million, hong kong 26 million, thailand 33 million and malaysia is targeting 31 million visitors this year. all these neighbours use tourism as a key policy tool to create jobs and promote the industry and the economy. the gst in these countries is in single digits with hong kong at 0%. most progressive economies treat the hotel sector as an essential item of the economic infrastructure – important for business. if india has to really unleash the potential of the tourism to create jobs, attract its fair share of visitors and encourage widening of the tax base, it has to be enabled by a favourable single digit gst and according lending to hotel projects at infrastructure rates. we understand that you are going to add 10000 rooms in the next five years. where will this expansion happen? in leisure segment or mice and corporate travel? in terms of destinations, which region will be your focus area? ginger pioneered budget lodging in india. our strategy is very simple - we want to proﬁtably expand to all pin codes in india where our customers are. we aim to make ginger the dominant budget lodging brand of choice for customers, developers and employees that delivers superior returns to shareholders and positively impacts society. we want to fan out across the country to serve both business and leisure demand, including being present at pilgrimage destinations. the majority of our current portfolio is in business cites, however leisure would now feature prominently in bulk of new supply additions to the brand. besides the key metros and leisure locations, we have identiﬁed 12 domestic demand dense regional circuits for ginger to cater to. ginger pioneered budget lodging in india. our strategy is very simple - we want to profitably expand to all pin codes in india where our customers are. we aim to make ginger the dominant budget lodging brand of choice for customers, developers and employees that delivers superior returns to shareholders and positively impacts society.,, managing director & ceo at roots corporation limited rahul pandit the budget category of hotels are the ones which are rationally priced in both development costs and average rates. how well are your hotels doing in leisure destinations? what are some trends there in? the leisure demand across the country is rising with goa being the most popular destination. the demand for our leisure hotels portfolio has grown by 11% in comparison to ly for the ﬁrst 2 months of the fy. with the ensuing holiday season, we expect the same pick-up further. also, given a much higher b2c share and contribution from proprietary channels, leisure is much more margin accretive. at a time when home-grown and international otas are trying to bring in standardization, offering rooms at heavily-discounted prices, how do you see the competition on the rate front? the indian consumer is smart and values the brand’s ability to consistently deliver a reliable experience, with the table stakes of safety and hygiene in place. besides these table stakes, ginger delivers on the assured essentials of bed – a relaxing sleep experience, bath – a rejuvenating shower, breakfast – a hearty breakfast and broadband – seamless wifi. we want to deliver and retain customers for value, not use discounts as a one size ﬁts all tactic for acquisition. besides being margin decretive, such tactics can also lead to dissonance with the target psychographic. subsidizing customer acquisition by discounts is a temporary phenomenon, not sustainable in the long run. this is pertaining to the noida market. it has been one of the worst performing markets in india, with low occupancy rates. you have a sizable inventory in noida. perhaps, one of the most formidable. why is the noida market in shambles? how will the noida market improve? what is holding it back? noida has recently witnessed addition of 300 new rooms to the existing supply. the market has witnessed a decline in the share of business from the it and ites segments. though the rates reﬂect this stress, we have however seen a demand recovery on the back of demand growth from both manufacturing and energy. noida has been an attractive market, since the past 5-6 years, and we expect it to continue being attractive in the foreseeable future too. the greater noida market however continues to be in turmoil. this is a combination of the market not developing into a large commercial hub like gurgaon, while the supply quickly outpaced demand. we hope that with the new government in power, the development of the proposed international airport at jewar will bring balance back into the market.
hote ls + resorts 13 popularity of international cuisines, eating out on the rise in india: varun chaudhary wai wai noodles recently launched wai wai city, a one of its kind chain of quick service restaurants in the country. tourismfirst spoke to varun chaudhary about his brainchild – the re-emergence of the noodle kiosk – and the gradual shift in the indian palate. by anagat choudhary what is the larger india strategy of the cg corp global group for wai wai, considering it has already acquired 30% of the instant noodle market share in india? wai wai is synonymous with instant noodles in south asia. it is the market leader in nepal and in northeast india. it is truly an instant noodle which can be consumed straight from the pack as it is a pre-cooked soup sprayed and fried noodle with three additional taste enhancer sachets inside. it is exported to over 30 countries, and is spread- ing its manufacturing base to europe, middle east, africa and south asia. beginning with two ﬂavours, vegetarian masala and chicken, it has expanded to 20 ﬂavours and more. what are some of the current f&b trends that you see in india? where would you say this story is heading? on a larger platform, are we going international or indigenous in terms of palate? in india, people are keen to try new tastes and ﬂavours. they enjoy taking time out for specialised meals and also having a quick snack on the go, when they are busy. the palate is quite differentiated: the popularity of international cuisine has been on the rise while indigenous ﬂavours continue to ﬁnd favour too. the mind and mood are key to making food related decisions and who you are eating with: family, friends or individuals. this deﬁnes our choices too. mumbai can- not live without its vada pav, delhi without its chhole bhature and the south without a crispy medu vada – there is a growing ap- petite for novel tastes. metro cities have led this change with mumbai at the forefront with its bespoke res- taurant experiences. the rise of tv networks with food courts at swish malls further reﬁned this experience which brought new tastes for people to try. this is a great trend as it allows people to go out and try something new. eat- ing out is no longer an occasional activity as busy schedules prevent people from spending quality time at home with family so an outing with a focus on food is the next best thing. what is the noodle bar concept and what is the india plan therein? for years, wai wai’s instant noodles have had a popular and committed following amongst youth and college goers for ages. now, wai wai is taking the next step in its evolution as a ready to eat noodle bar where this special treat will be available in various ﬂavours. this brings the brand closer to the consumer, giving them multiple options, and be a social hangout for friends to enjoy their favourite snack and have the time of their lives. how did you come about the idea of wai wai city and what are the plans for expansion in the local market? the idea of wai wai city emanated from the social interaction that is facilitates amongst college goers and young people. also, it is a ubiquitous meal option. wai wai city allows our committed and devoted customers to take their preference of wai wai to the next level where they can meet their friends over a meal of wai wai. this accords us with the opportu- nity to offer wai wai in myriad forms which go beyond the ready to eat concept. this way, many choices are available in an easy setting marked with camaraderie. as they are competitively priced, such an outing be- comes a delight for our customers. we will be looking to have 100 new outlets over the next few months and we are ambitious enough to contemplate 1000 wai wai city outlets. the noodle kiosk concept is not a new one in india. what do you think you can do differently this time around that will work? how big a factor will the advent of e-commerce and digitalisation be in this regard? the secret lies in the way the brand is projected in a restaurant setting. it is youthful and colourful and it gives a sense of the very city in which the new noodle bar is going to be located. it is customised for taste and brings high quality and quick food experience marked with great service and hospitality. it is a cut above the rest of the noodle bars as wai wai city is based on one of the most popular brands and we will leverage that familiar taste and ﬂavour which needs no new introduction. this way we aim to strengthen the relationship between our consumer and our product, and we are one of the largest hospitality groups in asia and many of our properties have won international travel awards. cg hotels and resorts brings cutting edge concepts to life in hotels, resorts, residences and spas across asia, middle east and africa with a portfolio of bold, desired and innovative products that cross all frontiers and redefine standards.,, varun chaudhary executive director, cg corp global wai wai city encourages them to step out and give themselves a treat. digital and e-com- merce will be essential in reaching out to new customers, many of whom are students, col- lege goers and young professionals. this is the digital generation who live and work online, conducting all their business and leisure ac- tivities on the internet. so, our marketing and promotional strategy will be keenly focussed on this medium. talk to us about your hospitality ventures in india. are you looking at any partnership opportunity with an indian hotel brand? where do you see the possibility of growth in indian market as a brand? which segment shows most promise? cg hotels and resorts represent the hospital- ity arm of the cg corp global. we are one of the largest hospitality groups in asia and many of our properties have won interna- tional travel awards. cg hotels and resorts brings cutting edge concepts to life in hotels, resorts, residences and spas across asia, mid- dle east and africa with a portfolio of bold, desired and innovative products that cross all frontiers and redeﬁne standards. there are nearly 100 hotels with more than 5000 rooms under its various brands and categories. we have joined hands with taj group and & beyond (world’s leading luxury travel and ecotourism company) to provide unparal- leled experience of the jungle in central india and nepal and in luxury destinations in maldives, and sri lanka. alila offers innovative design and luxury in unique locations, set apart by an unprecedented level of private space, personalized hospitality and destination ex- periences. chc bungalows is a collection of 11 bungalows located in excellent locations throughout sri lanka. jetwing zinc journey, a joint venture between cg hotels and jw hotels, operates luxury resorts in sigiriya and negombo. ihop enters india with a vegetarian twist! dineequity inc. the franchisor of ihop® restaurants, under franchisee kwal’s catering private ltd. opens first of 20 ihop planned restaurants in gurugram, haryana. this move is a part of the company’s plans to substantially expand its presence in the south asian region. in latest addition to the in- dian food palette, gurugram – dineequity, one of the world’s largest full-service restaurant companies and the franchisor of two category leading brands, applebee’s grill + bar and ihop restaurants, recently announced the opening of international house of pancake’s (ihop) ﬁrst restaurant in india. india is the nineteenth country in which dineequity is set- ting up presence and the restaurant is spread across the area of 2,100 sq.ft. “with the ongoing growth of ihop and the introduction of this world-famous dining experience in india, this is a proud moment for us,” said gary moore, vp, interna- tional, dineequity, inc. the ﬁrm, in tandem with its local partner, is expected to invest around `100 crore in to the country and will go on to set up shop in 19 more loca- tions in multiple states of northern and southern india over the next decade with two more outlets scheduled to open in delhi by the end of the year. along with some of the re- nowned american favourites, the outlet will also feature numerous variations in its menu in order to cater to the local dietary and palate preferences. the menu will be 50% vegetarian, will contain eggless pancakes and will also have lunch and dinner options, including lamb. sameer lamba, md of kwal’s group said, “since becoming an ihop franchisee and getting to know the restaurant culture even better, my belief in the brand has been strengthened due to the high-quality standards and exceptional friendli- ness i’ve experienced at every ihop. we look forward to bringing this unique experience to the guests of our ﬁrst india restaurant, and the many others to come throughout the country,” he added.
14 hote ls + resorts courtyard by marriott mumbai international lobby, airport jw marriott chandigarh control over pricing and inventory helps marriott maintain equilibrium: neeraj govil at a time when otas are going all-out to woo discerning travelers, hotels are finding it increasingly difficult to maintain a balance between suppliers and consumers. marriott has struck this intricate balance by keeping control over pricing and inventory, ensuring complete control over room rates, says neeraj govil. in exclusive interview with tf, he talks about the brand’s engagement with technology and innovation, trends and much more. by tf bureau how do you ensure ‘best rate guarantee’ on your hotel’s website, especially at a time when you have also offered it to otas, many of whom are subsidizing room rates by paying out of their own pocket to garner a bigger market share? at marriott, “best rate guarantee” is commonly known as the “look no further” (lnf) guarantee. marriott’s look no further best rate guarantee (lnf brg) enhances marriott’s long-standing commitment to sell the way the customer wants to buy by offering the same rates on all marriott reservations channels. the guarantee states that the customer will receive the best publicly-available room rate by going direct to marriott - whether calling our worldwide reservations center, visiting marriott.com, or contacting a hotel directly. this guarantee means that customers will know that if they come to marriott ﬁrst, they will receive the best rate available and won’t waste time searching other sources trying to get a better one, thus strengthening customer conﬁdence in marriott. should the customer ﬁnd a lower rate elsewhere, he/she can ﬁle a look no further best rate guarantee claim. should the claim be valid, the hotel must then honor the lower rate, as well as take an additional 25% off the lower rate. to encourage hotels to keep control on their lnf claims, we have a process in place to have all hotels review their rates across channels and work towards maintaining parity and uniformity to help reduce the number of claims. do you reckon that your own website would be able to match the might of otas ever in terms of outreach? area vp - south asia, marriott international neeraj govil otas contribute to high single digit mix of our room nights share whereas marriott. com is trending in a double digit share. while our aim is to work collaboratively with each of channel partners to drive incremental bookings and reach new consumers, we maintain complete control over the pricing and inventory, adherence to marriott brand policies is a given. this helps us maintain an equilibrium to provide value to both our customers and channel partners. otas contribute to high single digit mix of our room nights share whereas marriott. com is trending in a double digit share. while our aim is to work collaboratively with each of channel partners to drive incremental bookings and reach new consumers, we maintain complete control over the pricing and inventory, adherence to marriott brand policies is a given. this helps us maintain an equilibrium to provide value to both our customers and channel partners. ,, travel, in transit, or enjoying their hotel stay, the app will display content and features based on what services members are most likely to need in that moment of their travel journey. according to google, 74 percent of people have at least one travel app on their device. therein lies the opportunity for marriott to engage with travelers on the platforms where they are most active. over 12 million members have taken advantage of our mobile check-in/checkout and mobile room ready alerts that launched in 2014. with the app’s innovative new navigation, members will ﬁnd it even easier to customize their stay with mobile requests. guests can use the app to chat directly with hotel staff before, during and after their stays for special requests that require personal attention. our next step is to launch real-time app messaging called mplaces with travel and hotel information, recognition and offers at the right time and place for marriott rewards members throughout their stays. other future app features will enable members to order restaurant and room service menu items delivered wherever they are, such as lounging by the pool. the new app is bringing marriott’s ﬁne-tuned reputation for customer service to mobile and in years to travellers are seeking more authentic destination information from local experts whether they’re choosing where to go or looking for tips for what to do once they get there. for this reason and to the easy access and simplified booking mechanism has encouraged user to book their leisure travels themselves. buy and sell b2b and b2c. ready to use packages 21-23 september call: +91 9899521421 email: email@example.com innovation is a critical component to technological growth. how are you going about enhancing the online experience of the consumer? what is the share of the business coming from the cumulative online space, including your own website, domestic and foreign otas, and how do you intend to take this forward? what is your business plan for the next couple of years? our website, marriott.com, is evolving every day - from improving user experience to reducing the number of clicks and time taken for a customer to convert from a looker to booker. likewise, extensive customer research and member feedback is driving the new mobile app experience and will continue to do so as part of marriott’s ongoing service innovation strategy. as of december 2016, our cumulative online share was one third excluding gds bookings, an annual growth of high double digit over last year. how is the transition from computers to hand-hand devices happening? how are you capturing the brilliance of your product on the mobile? how much of your online business has moved to app from computers? if you have not moved to the app then will you be taking to it? will that be the next logical step? marriott is one of the pioneers in mobile technology and experience. having created one of the most dynamic mobile app, personalized to each guest, we recently launched an updated version supporting 5 new languages for ios users. we understand that a mobile experience goes far beyond the one-size-ﬁts-all content. hence, the new marriott mobile app dynamically adjusts to personalize the user’s experience throughout their travel journey. whether members are in trip planning mode, getting ready to come will engage artiﬁcial intelligence to begin testing anticipatory service. is there any perceptible trend in bookings from overseas, in preference for fits against gits. like more individuals booking on the net for your leisure sector? increasingly, travellers are seeking more authentic destination information from local experts whether they’re choosing where to go or looking for tips for what to do once they get there. for this reason and to the easy access and simpliﬁed booking mechanism has encouraged user to book their leisure travels themselves. to cater to this and for the ﬁrst time, our app will deliver curated, original content from marriott’s digital magazine, traveler based on users’ previous hotel searches or upcoming travels. is web booking increasing your average realizations absolutely – it is on a strong positive growth trajectory and is projected to grow further simultaneously with an automation in the travel industry.
hote ls + resorts 15 the lemon tree to operate sandal suites, noida’s maiden luxury service apartments the steady growth in travel and tourism in india has created a need for a proportional infrastructural boost as well. this phenomenon has given birth to a host of new concepts and ideas to facilitate the smooth flow of traffic and experience. one such new concept is the sandal suits which was recently launched in noida. it is a welcome move for noida hospitality market which has been a difficult market to operate in. the new inclusion will lend more variety and option for travellers in the region. by anagat choudhary the lemon tree hotels, in a bid to expand its range of offerings and services, has signed an agreement with realty ﬁrm assotech realty’s service apartments’ subsidiary, sandal suites, to operate their service apartments in noida. the property, located near the noida-greater noida expressway, is all set to provide a well-suited accommodation option to people looking beyond rented accommodations. an extended dining area as well as cooking facilities in the kitchen. the crest suits, also known as the presidential suits, have a sumptuous bathroom, a dressing area as well as a study. in keeping with the lemon tree hotels inclusive policy, the space also features a suite for the differ- ently abled and in addition also boasts of an entire ﬂoor dedicated to women guest only. “sandal suites is a unique extended state the portfolio of carnation product and these suits are a little different from service apartments. people in europe, some parts of east-asia etc. are very familiar with this concept. the concept works on two or three premises. the most important being that there are a lot of guests and families that want to stay in hotels for an extended period and use it as their home. primarily because living in rented accommodation becomes expensive keeping in mind the added costs of living (getting help, food, elec. etc.), said rattan keswani, deputy managing direc- tor, the lemon tree hotel company and director, carnation hotels at the launch of the property. service apartments, which are best suited for business travellers or families looking for extended stays, features 195 well-appointed suites, dining options, banqueting facili- ties and a host of recreational activities, all placed in a comfortably contemporary setting. each of the furnished suites, which range from 225 sq. ft. to 515 sq. ft. depending on whether it is a studio, standard or deluxe, features an independent balcony, a separate living area, a work-station and a kitchenette featuring a tea/coffee maker, a microwave and a mini-bar. the deluxe suits, designed with keeping extended stays in mind, have hotels, which is the management arm of lemon tree hotels and was set up in 2012, currently contains eleven hotels across the economy, midscale, serviced apartments and upscale market segments. the parent company lemon tree hotels itself currently owns and operates 40 hotels in 24 cities with about 4,300 rooms and is planning to open four-ﬁve new hotels in the next two years. lemon tree hotels along with carnation hotels has 4,500 employees. “this occasion marks a few ‘ﬁrsts’ for lemon tree hotels – it is the ﬁrst lemon tree hotels propert (through our management arm, carnation hotels) which will be operating in noida, and our ﬁrst foray in to the upscale serviced suits space. this is also our ﬁrst partnership with sandal suites pvt. ltd., one that we hope to see grow in strength in the coming years,” keswani said at the launch event. “the launch of sandal suites is in response to the growing demand for comfortable and convenient extended stay accommodation options for business and the launch of sandal suites is in response to the growing demand for comfortable and convenient extended stay accommodation options for business and it professionals in our vicinity. it is the only upscale accommodation available within an 8-km catchment and is the perfect address for those looking for a ‘home away from home’ – be it business travellers, project teams or relocating families.,, rattan keswani deputy md, the lemon tree hotel company it professionals in our vicinity. it is the only upscale accommodation available within an 8-km catchment and is the perfect address for those looking for a ‘home away from home’ – be it business travellers, project teams or relocating families,” keswani added. when the assotech-carnation hotels partnership was announced some years back, neeraj gulati, managing director, assotech realty had indicated an invest- ment of 800 cr. for setting up similar projects. ahmedabad, pune and regional international countries like colombo in sri lanka. the latest move is expected to add more diversity and footfalls to the hospitality land- scape of noida – which, on the occupancy front, has been one of the most under-per- forming markets in the country. goi needs to provide clarity on the modus operandi involving gst: shwetank singh while the gst (goods and services tax) is an extraordinary initiative on the policy front, the government needs to bring in more clarity on the nuances of the to be imposed tax regime, says shwetank singh. he adds that the implementation could have some impact on the industry. excerpts from his interview. the gst regime is an extraordinary step for the economy; industry. ,, however, with change, we do foresee teething issues in implementation and it might have some impact on by shashank shekhar what is your take on the government’s proposed slabs for hotels, ranging from 18-28% for mid-segment and luxury hotels respectively? how do you think it will impact hotel business? the goods and services tax (gst) is a great move by the government to make the tax base transparent and inclusive. it will bring in a lot of simplicity in the current taxation structure that comprises various levies and is complex for the end consumer. as per the proposed structure, the hotels that have room rates above `5,000 will fall in the higher tax bracket whereas, for the mid-market and economy range, the business continues unwavering in the 18% bracket. we need to wait and watch the space for f&b as the classiﬁcation is a bit complicated owing to divisions based on air-conditioning. i feel, there is a further need for the government to simplify this to curb any inﬂationary trends due to the new tax regime. the gst regime is an extraordinary step for the economy; however, with change, we do foresee teething issues in implementation and it might have some impact on industry. for effective implementation of gst, the government should provide absolute clarity on modus operandi of the application. furthermore, there is likely to be it and system costs by organisations to modify erp systems to account for gst. a number of industry experts have called for a consistent rate of tax, 18% across the board. do you agree with the idea? recently, fhrai sought a uniform gst at 12% for the hospitality industry. the entire premise of gst was to bring uniformity and therefore, it should be consistent across an industry or service. while the hospitality industry is poised for growth, high taxation especially in the luxury segment will like curb expenditure for guests and consequently lower pricing of hotels will continue to impact bottom-lines. shwetank singh vp – development & asset management- interglobe hotels
16 hote ls + resorts of course, your hotel needs refinancing! hotelivate is the new kid on the block that provides end-to-end solutions for hotels, ensuring project viability. in this editorial, saurabh gupta, md, debt advisory, hotelivate & ca ashwin mehta, md, pankti group explain why refinancing existing loans is a smart move to make. optimism surrounding hotels in india and are willing to listen to your point of view and win your business. the hotel might not have sufﬁcient cash ﬂows to honour those; ◗ the borrower might be looking for a cash- much has been said and written about the negativity around stressed hotel assets and delinquent term loans for the hospitality sector in india. hindsight has made developers reduce exposure to hotels as an investment class while lenders are careful to the point of being comatose. but what about existing hotel investors who have already weathered the turmoil of construction and now have operating hotels with delinquency? this article suggest ways in which re-ﬁnancing of existing debt can help an investor manage the systemic issues of hotel debt-capital structure in india. the imperfect past hotels today are associated with unmanageable levels of debt, often leading to an npa (nonperforming asset) classiﬁcation. the following causes stand out: ◗ supply glut – over the last ten years, branded hotel supply in india grew from 39,285 rooms in 2006/07 to 1,13,622 rooms in 2015/16; at a cagr of 12.5%; ◗ weak demand patterns – for the same period, revpar saw a de-growth from rs. 5,049 in 2006/07 to rs. 3,512 in 2015/16; at a cagr of -3.95%; ◗ project cost overruns – while the ﬁrst two are macro factors, there are a signiﬁcant number of loans that have turned bad because of internal issues like inadequate planning and inefﬁcient project execution, leading to project delays and cost overruns. the future: a perfect antidote increased scrutiny and tighter lending norms have brought the focus to merit- based lending for hotel projects. our interaction with investors and lenders that are currently active in the hospitality space points to the following factors fueling their interest: ◗ business risk has replaced construction risk; ◗ muted supply growth in most markets; ◗ perceived upcycle for hotel industry. essentially, what this means is that selected lenders do share the general why should one refinance existing loans? simply put, reﬁnancing can help correct the dichotomy of ﬁnancing a high capital, high gestation business (like hotels) with a short loan term. the reﬁnancing exercise can improve cash ﬂows and push back the cost of capital as well as principal repayment to a time when the business has stabilised. it can also free up valuable equity for investors who want to deploy funds into other uses rather than ﬁlling up the gap in debt service. i. to claim benefits without re- structuring: according to the circular released by rbi in 2014 on ‘framework for revitalising distressed assets in the economy - reﬁnancing of project loans, sale of npa and other regulatory measures’, the holder of an existing loan can apply for seeking a longer repayment tenure with certain caveats. however, the exercise will be termed as reﬁnancing and not as a restructuring exercise only if: ◗ it is standard loan on the books of the bank; ◗ 50% or more of the loan has been taken over by a new ﬁnancial institution; ◗ the repayment period is in congruence with the project life cycle. clearly, this means that the promoter/ borrower must approach a new bank to reﬁnance the transaction and the existing lender cannot be of much assistance. ii. for additional leveraging of assets: as explained above, reduced risk on existing hotel brings in additional bargaining power for the borrower. based on the payment history, the borrower can enhance her/his existing loan. the reasons to seek this additional leveraging might be numerous: ◗ funds could be used for general corporate purposes, as permitted by the lender; ◗ there might be bullet payments due and out reﬁnance to free up some funds for repair or renovation. the key is to put together a case which presents to the lender a transaction with high ﬁnancial potential and relatively lower investment risk. iii. for reduction in the cost of borrowing: the existing lender may not be willing to reduce the rate of interest (roi) by lowering the spread on the prime lending rate (plr). however, another lender might value the diminished risk on the asset and offer a reduced roi. case study a project loan was sanctioned in the year 2012 on the following basis: tenure: 15 years roi = prime lending rate (plr) + applicable spread roi = 10.0% + 3.5% = 13.5% if we assume that the hotel became operational in 2015 and the plr also dropped to 9.0%, the new roi would be set to 12.5%. the borrower requests the existing lender to reduce the roi by lowering the spread. on being denied that advantage, the borrower may approach another bank which might be more than willing to reﬁnance the loan at plr + 2.0%, i.e. at 11.0%. bank spread total plr roi % old bank – year 2012 10.0 old bank – year 2015 9.0 new bank – year 2016 9.0 % 3.5 3.5 2.0 % 13.5 12.5 11.0 iv. for increasing the loan tenure: a stabilized hotel with consistent cash- ﬂows may also be in the risk of defaulting on existing loan repayment. the key issue here is the relatively shorter amortization tenure for an industry that is characterized by high capital stock and the cyclicality of business. hotels in india have historically seen a door-to-door lending period of 10-12 years. of this time period, 30% is typically spent in construction and another 30% in the ramping-up phase. a balance of 5-6 years is just not sufﬁcient for interest and principal repayment. a stable hotel is a superior candidate for reﬁnancing loans for a longer tenure. the dynamics of lending to an operational hotel are different because of its proven track record, which in turn reduces the risk outlook and makes the entire reﬁnancing exercise possible. a twelve-to-ﬁfteen- year reﬁnance programme along with an additional disbursement (at higher ltv) can be procured at a reasonable rate of interest. this exercise may provide huge relief to the promoters who are not keen to infuse more equity to service shortfall in repayment. the following exhibit illustrates two scenarios for a 300-room hotel. this is the actual example of a reﬁnance assignment recently undertaken by us. in the ﬁrst case, the hotel may service the debt for the balance ﬁve years (from the original ten-year sanction) but, with a gross deﬁcit of inr 176 crore, would need equity infusion by the promoter. in the second case, the promoter opted for a reﬁnancing scenario with a longer tenure (15 years). we have illustrated the impact of this exercise without changing roi or any key commercial term. though the net outﬂow is refinancing can help correct the dichotomy of financing a high capital, high gestation business (like hotels) with a short loan term. it can also free up valuable equity for investors who want to deploy funds into other uses. higher to the bank, it frees up equity for the promoter and makes the asset debt-free in a reasonable time frame. (see scenario 1 - revenue projections as per existing repayment schedule) (see scenario 2 - revenue projections as per revised repayment schedule) v. changes in the scope or specification of the project: there are cases when, after receiving debt capital, the scale or quality of the hotel project had to be altered. clearly, a higher project cost will most often necessitate a larger debt capital outlay. in most cases, existing lenders are averse to enhancing loan amounts and, therefore, the need to approach a new lender for take-over and enhancement of the loan amount. existing relationships with banks are a huge support system. yet your regular banking network with years of relationships might be falling short of your expectations. they may be unable to lend enough or offer satisfactory terms. at the same time, many hotel projects are vying for the attention of a few willing lenders. in this rather unique credit market, three factors are essential to get ahead in the queue: ◗ a worthy project with rational cash ﬂow projections; ◗ excellent relationship with banks, based on mutual respect; ◗ high quality data presented proﬁciently. hotelivate believes that hotel development and acquisition ﬁnancing needs specialised solutions and good projects certainly beneﬁt from expert guidance. over the next two years, we anticipate laws related to bankruptcy getting strengthened to penalise the laggards. if you are still deciding on the ‘hows’ and ‘whens’ of reﬁnancing your existing loans, you are leaving money on the table and also treading on thin ice.
re view re view 17 outbound summit breaks new ground for industry verticals kenji hiramatsu patrick santillo andrew caruana galizia deepak joshi subhash goyal pankaj kumar wolfgang will ratna chadha harvinder singh david lim yasua taki suresh nair karan anand sulaiman suip carl vaz hanneli slabber nikhil dhodhapkar raja natesan yeishan goel bitb continued its drive to bring senior leadership on what is trending at industry conclaves. this time, the focus was on the india outbound, a ﬁrst-time summit that brought convergence of leadership across diverse verticals of the outbound tourism industry. the summit was attended by industry consisting of agents, airlines, hotels, ntos and diplomats. japanese ambassador to india h.e kenji hiramatsu delivered the keynote address, with a session on governments, chaired by suhash goyal, chairman, stic group featuring, among others, andrew caruana galizia, deputy head of mission, embassy of malta and patrick santillo, minister counsellor for commercial affairs, usa. in another session titled “trends in indian outbound air travel”, examining the churning in the aviation industry and several prominent aviation industry insiders, including wolfgang will, senior director, lufthansa – south asia; pankaj kumar, ed, air india; suresh nair, country head, air asia, harvinder singh, country head, united airlines and david lim, country manager, singapore airlines, among others shared their insight on the aviation market. larger trends emanating in the indian marketplace were put under the scanner in the session titled “trends in the indian marketplace’’. spokespersons representing a gamut of verticals – cruise, luxury, dmcs, and travel company – gave a bird’s eye view of the challenges and opportunities in the marketplace. in another keynote, nepal tourism’s ceo deepak joshi spoke on “perspective for regional tourism”, batting for integration of communities and region through tourism. in his inaugural address at the india outbound summit, navin berry, executive director, bitb spoke on the fragmentation in the outbound segment and how the first of its kind conclave was an attempt to address that anomaly. excerpts from his speech: his excellency ambassador of japan in india, diplomats, industry stalwarts, heads of ntos and friends, thank you for being with us here. just to give a short recap to what bitb conclave is all about, and also the mission before us, some of you may be aware that i took a little long sabbatical of ﬁve to six years from the busi- ness of tourism industry shows, and we came back last october with the ﬁrst edition of bitb – bharat international tourism bazaar. the idea was to have a bazaar focussed on tourism, international in nature, but steeped in bharat. most of you would know that bharat is the more ethnic name for india. so, bitb comes from bharat international tourism bazaar. we thought we are going to do something different than what we have done earlier and what the trend is in the marketplace, so we focussed on 2-3 different areas. one was to focus on tourism and take a serious look at what tourism is all about, between agents and hotels, between suppliers and producers, between governments – between themselves – ntos, state governments and others. so, that is a serious look at tourism per se. second, was to look at power conclaves, where last year in october we navin berry executive director, bitb we partnered with intach, a leading ngo to talk about heritage tour- ism and how tourism and heritage are, really, two sides of the same coin. continuing the same mission of bitb conclaves, we ran an india tourism summit this march – which again was the ﬁrst of its kind. we had very pio- neering sessions, if i may say so myself. we had one session called “joining the dots in government” where we said that every ministry in the central government is doing something or the other about tourism, but they are not connecting each other. so, we brought eight ministries to say, how can we join the dots. how can we bring a connect? you are doing infrastructural de- velopment; you are promoting cultural destinations, improving monuments, but not connecting them all to the ‘t’ word, which is tourism. again now, this india outbound summit, conceived on a very modest assumption, because i think it is the ﬁrst of its kind. outbound is a major area. we are talking, approximately, over 20 million indian outbound. our outbound is growing more than the inbound. of course, our domes- tic is also growing signiﬁcantly. our air movements last year were almost a 100 million. so, we are talking about really rapid jumps. ran six power conclaves and all of them, if i may say so, were possibly ﬁrst of their kind in the country. we partnered with dipp – which is the department of industrial policy and promo- tion in the ministry of commerce. as you know, we have a ‘make in india’ as a concept across the country. so, we engineered to talk about ‘make in india in tourism’ and dipp promoted and partnered the event. we had brought in one of the biggest technology players last year, in the area of online travel and technology, namely phocuswright – and phocuswright did a conclave with us last year. with that in mind, the idea was that the outbound sector remains largely, to my mind, frag- mented because i think there is also a fear of cartelization amongst foreign companies. so, people do not want to be seen together, debating trends and strategies. possibly, everybody is doing their own thing and not getting together. today’s agenda is simply to give some coherence to what is happening in the outbound space. with these few words, i would like to welcome each one of you again and thank you for your support in making this event happen.
18 re view re view japan will expand outreach in india with increased cultural and tourism events in his keynote address titled “tourism as a two-way business for mutual economic and social cooperation” to a packed house of industry leaders, his excellency kenji hiramatsu underscored the importance of tourism in driving cultural, political and diplomatic ties between the two nations. he expressed hope that with more direct air-connectivity between indian and japanese airports and pronounced outreach in the indian market, aided by more cultural and tourism events, larger numbers of indians will find japan as a desirable tourist destination. excerpts from his address. tourism destination by indian travellers, but japan certainly comes as one of the most popular tourism destinations in the world. in fact, the number of tourists to japan has been steadily rising in the last few decades, and last year we received a total of 24 million visi- tors to japan – which amounts to an increase of 21% in comparison to the previous year – out of which more than 21 million were tourists. furthermore, popular and attractive tourist cities, such as tokyo and kyoto have always enjoyed high ranking as desirable cities to live and visit in the world’s renowned magazines and newspapers. japan: a unique land with diverse experiences japan offers a vast array of unique and di- verse geographical and cultural experiences in a compact territory. the distinct change of four seasons over here inﬂuences japanese aesthetics and sensibilities, and this perme- ates all the layers of japan’s life. from the appreciation of nature, most famously, the a foreign country, but you may also learn a new way of seeing and perceiving life. like- wise, when japanese people visit india, they come in contact with the indian culture in direct and candid manner, and these experi- ences are what make travel and tourism such an attractive industry and a two-way business for mutual economic and social cooperation. direct air-connectivity between airports will improve numbers having said that, i believe there is still much to do to enhance awareness of japan as a tourist destination among the people of india. therefore, the japanese government is now planning to expand tourist promotion of japan through television, social media and movies. especially 2017 is dedicated as the india-japan friendly exchanges, and the embassy of japan is organising many cultural and tourism events. i hope indian people will enjoy many aspects of the japanese culture, throughout india this year. i also think that it is necessary to expand beside the economic aspect, the strategic importance of japan-india relationship has been certainly becoming more and more relevant in the past few years. on the other hand, actual people-to-people interaction between japan and india through tourism has not been as active as we would have expected. his excellency kenji hiramatsu japanese ambassador by shashank shekhar there is plenty of room for growth in travel and tourism “first of all, i would like to offer my congratulations to all of you on the opening of this india outbound summit. india is one of the fastest growing travel markets in the world. india achieved the milestone of 10 million outbound travellers, for the ﬁrst time, in 2008 – and reached the level of more than 20 million outbound travellers in 2015. united nation’s tourism organisation, unwto pro- ject predicts that india will account for more than 50 million outbound by 2020. tourism is an extremely signiﬁcant indus- try. regardless of the purpose of visit, whether it is for business, or sight-seeing, tourism creates positive economic activities, connect- ing people and enhancing political, cultural and social understanding in each country. japan and india have enjoyed strong cultural ties since ancient times. in recent years, the co-operation between japan and india has been rapidly developing in many ﬁelds, such as manufacturing industries and major infra- structure projects like mumbai-ahmedabad high speed rail project and dedicated freight corridor project between mumbai and delhi. beside the economic aspect, the strategic importance of japan-india relationship has been certainly becoming more and more relevant in the past few years. on the other hand, actual people-to-people interaction between japan and india through tourism has not been as active as we would have ex- pected. the total number of visitors to japan from india was 1,23,000 in 2016, and out of these visitors, only 49,700 were tourists. i ﬁrmly believe that there is plenty of room for expansion in travel and tourism between japan and india, considering the strong diplomatic and business relation- ships between the two countries. japan may yet not be perceived as a very well-known cherry blossoms in spring, to architecture, design, art, fashion and cuisine. japan’s dis- tinct geography and culture has something for everybody. a list of japan’s unique and special features is known, but if you allow me, i would like to highlight a few. we have snow-capped volcanoes, like, representative, mt. fuji; lush tropical reefs and beautiful beach in okinawa; the hustle and bustle of mega cities like tokyo which is one of the most populous metropolis; aes- thetic zen garden in kyoto – japan’s cultural capital for thousand years; sad memories in hiroshima; buddhist temples, colourful summers and autumn festivals, folk villages, high-speed trains, and many more. wherever our visitors come to japan, they can experience a particular japanese way of life. japan has an advanced society where tradition blends with modernity, in a manner that has no parallel with any other country in the world. this is the reason why japan is not only an interesting tourism destination as the civil aviation network between japan and india. currently, japan airlines and all nippon airways operates 21 ﬂights weekly and air india operates 7 ﬂights a week. although, there are direct ﬂights from delhi and mumbai to japan, passengers from major metropolitan cities, such as bengaluru, hyderabad, chennai and kolkata mostly use in-direct ﬂights to japan via singapore, bangkok and kuala lumpur. i expect drastic improvement in air-connectivity between ma- jor airports in india and japan, creating more air trafﬁc options between the two countries. i am delighted to be here with inﬂuential leaders in the indian tourism industry to have a serious discussion on the indian outbound tourism market and i wish to express my sincere gratitude to all the people who are working for this very important summit. i strongly believe that this summit will be a signiﬁcant step forward in indian tourism, leading to a much higher level of japan-india tourism exchange.”
re view re view 19 joint promotion of experiences will muscle up regional tourism: nepal tourism ceo the south asian region, despite home to some of the most unique products and experiences, has failed to attract tourists in numbers it ought to have. the way forward is a cumulative strategy of promotion of destinations, in a joint effort, by nations involved in the fray, suggests deepak joshi, ceo, nepal tourism. excerpts from his keynote address on “perspective for regional tourism”. by tf bureau “we all know that tourism is one of the few sectors in the world which is ever-increasing, in terms of numbers and employment creation. so, in that term we are going through a very strong context. last year, we know that our number crossed a billion, globally. over 1.2 billion travellers visited all over the world in 2015 it- self – which means one in every sixth person, on an average, is a tourist. i think that ratio is coming down every day. i would like to share some talk my friend shared some 6-7 days ago. he was telling me that kids are becom- ing independent traveller now, because 50-60 years ago our schools used to be typical schools only. kids used to take food from home and study in the school. some 20 years ago, schools started boarding facility and then serving food – and schools ventured into a new business; we can call it accommo- dation and restaurant also. now, students are taking foreign internships in these schools, so schools are now in to the tour business, as well. so, i mean everyone is going to become a tourist. that is the future and we have to be prepared for that. another issue, when we talk about the region is that no other region has that kind of potential, looking at the products that we have. we all are experienced people and therefore, i would not like to explain these. being the himalaya region, there are over 14 peaks with height of over 8,000 meters in the world, and all of those are in this region – in the south asian region. not only that, thousands of languages are spoken in this region. when we talk about nepal, for instance, the lowest point of earth is at 50 meters and highest is at 8848 metres, and that is just between 100 kilometres of distance. that kind of diversity, i think, we can hardly get anywhere in the world. such is the product strength that we have. another thing in the business that we are told is that there must be a market for the product. we do have such a market and an emerging economy, all of it is there. timing is right, too. so, product, timing and market, all of it is perfect in this region. despite hav- ing so much of strength and good timing, we have not been able to reap the beneﬁts that our destinations deserve, or the kind of expectations that we have in this region. may be, it is because we are ignoring the changing trends in the world, what we very rightly discussed. in this part of the world, we take more time in discussing, rather than understanding things and changes in trends. so, i think, in this region, we need to focus seriously on what the changes are and how we can address them. there are many things that are changing in my observation. from 1960s to 2010, there was a particular trend in tourism – ﬁxed itineraries, packages – but since the last 6-7 years, it has really changed. i think we have already realised that fact. earlier, segment wise, we talked of new segments, millennials, who are digitally connected more than ever. we are phono-sapiens more than homo- sapiens. there have been changes on the product side, too. earlier, we used to debate on otas vs. tour operators. these days, yes, custom- ers are looking for customised packages, rather than traditional packages. they are going for, for instance in kathmandu, we have kathmandu-pokhra-chitwan triangle, and in india, too, we have the golden triangle, but now tourists, instead of opting of the red fort are going for streets in old delhi. so, that kind of openness is also there, in terms of queries. i believe it is an opportunity of us, but we need to understand what kind of trends are there for us. there is also a change in the trend of looking for local destinations. earlier, people used to look for very sophisticated destinations, but now we can see, in malaysia, cambodia and sri lanka, rapid growth of tourism, because tourists are looking for very undiscovered places where their parents or friends have not been to. earlier, the industry used to look for com- fort and luxury, but now, people are looking for experiences, and the strength of product that we have in this region is the future of tourism. that is a perfect match, that is why i was highlighting the perfect timing. this is the land where thousands of au- thentic stories are. so, these are these things that when we talk about regional tourism per- spective. i would also like to highlight some of the issues pertaining to regional tourism. we are very connected countries and yet disconnected when it comes to selling our products jointly. everything is becoming easy these days. hotel booking, travel and ticket booking, but people are looking for easy travel in terms of getting visas or cross-border entries. when we talk about regional tourism, we must look at jointly lobbying for these kinds of things. another change in the trend is that 200-300 years ago, our political governance and leadership used to be of religious in nature. after that, we experienced military leadership all over the world, followed by democratic leadership, but now we are seeing everywhere the growth of business leadership. so, for sustainable development of tourism, we have to look at the balance a thing about tourism is that while other manufacturing segments and ,, industries dislocate communities, tourism industry, probably, is the only industry which interlinks and integrates communities. where tourism integrates communities, why cannot it integrate a region? so, i would like to request all of my friends in our fraternity to work jointly for this. deepak joshi ceo, nepal tourism if we can do a few things, moving ahead, we can see positive result in tourism in this region. we need not create many new products, because there is so much here already, but we need to curate, communicate and collaborate more. i would like to request all to go together, grow together and gain together. of bringing our religious and spiritual values into our business values. if we can do a few things, moving ahead, we can see positive result in tourism in this region. we need not create many new prod- ucts, because there is so much here already, but we need to curate, communicate and collaborate more. we, very recently, organised the hima- layan travel mart, presenting nepal as a gateway to the himalayas. like navin ji is organising very soon, bitb, and other travel fairs…may be, different regions can curate different kinds of activities. may be, there could be a yoga travel mart, or something like that. so, more such kinds of events can beneﬁt this region. a thing about tourism is that while other manufacturing segments and industries dislocate communities, tourism industry, probably, is the only industry which inter- links and integrates communities. where tourism integrates communities, why cannot it integrate a region? so, i would like to request all of my friends in our fraternity to work jointly for this. earlier, we discussed about common visas in african countries, or other regions. it is something that we can also develop, because sometimes i feel that we have undermined our brand-value, in terms of our destinations. for example, ne- pal, bhutan, tibet, and some of the regions of india have a very strong brand-value. we should capitalise on these, rather than undermining them. at last, i would like to request all to go together, grow together and gain together. tourism is ours and we are for tourism.”
20 re view re view india one of the biggest opportunity in the global aviation market, but infrastructure and high operational cost key challenges, say senior aviation insiders it was a gathering of senior leaders, representing a range of carriers, from lccs to full-service, domestic t “trends in indian outbound air travel”, panellists listed out steep operational cost as a major challenge predicted rise in air passengers in india, domestic and o by anagat choudhary subhash goyal, chairman, stic group indian civil aviation is on a high growth trajectory. it is going to become the third largest market in the world by 2020 and the biggest one by 2030. these are the statistics. the civil aviation industry has ushered a new era of expansion, driven by factors such as low-cost carriers, modern airports, foreign direct investment (fdi), domestic airlines, advanced it, interventions and growing emphasis on regional connectivity. the new aviation policy has talked about regional connec- tivity. india is the ninth largest civil aviation market in the world. with a market size of $16 billion, india is expected to become the third largest aviation market by 2020. the world is focussed on indian aviation, from manufacturers, tour- ism boards, airlines, global business to individual travellers, shippers and businessmen. if we can ﬁnd common purpose among all stakeholders in india, in aviation, a bright future is in hand. according to tony tyler, director general and ceo, iata, india has a very bright future. during january to august 2016, domestic air passenger trafﬁc rose by 23.14% to 64.47 million from 52.36 million. during the same period in 2015, passenger trafﬁc increased by 21.3% to 85.57 million from 70.54 million. in july 2016, total aircraft movement at all indian airports stood at 1,68,400, which is a huge number. this was 14.3% higher than july 2015. international aircraft movement increased by 8.2% to 32,830 from 30,330 in the same period. domestic aircraft move- ment increased by 15.8% to 1,35,570 in july 2016. india is among the ﬁve fastest growing aviation markets, globally, with 275 million new passengers. the airlines opera- tion in india have projected a record collective operating proﬁt of `8100 crores for the ﬁscal year 2016 according to crisil. government agencies project that around 500 brownﬁeld airports and greenﬁeld airports would be required by 2020. the private sector is being encouraged to actively involve in construction of airports through different public private part- nership (ppp) models, with substantial state support in terms of ﬁnancing, concessional land, allotment, tax holidays and other incentives. in the union budget 2016-17, the government introduced various proposals for maintenance, repair and overall mro operations for airplanes. these include custom and excise duty exemptions for tools and tool-kits used in mro works. the government has also scrapped the one year restric- tion on utilisation of duty free parts apart from allowing import of unserviceable parts by mros for providing exchange as per revised norms. the foreign aircrafts bought in india by mro work would now be permitted to stay up to 6 months. such foreign aircrafts would also henceforth be permitted to carry passengers in ﬂights at the start and end of the stay. instead of the aircrafts coming in empty they can pick up and take pas- sengers. some major initiatives undertaken by the government are as follows – the ministry of civil aviation has ﬁnalised and put forward for approval to the union cabinet a new aviation policy which has now been approved allowing foreign airlines to ﬂy abroad; introduction of more regional ﬂights and a new formula for granting bi-lateral rights. the restriction which was there earlier on domestic airlines for a three-year period has been scrapped in the new policy. the indian space research organisation (isro) has signed an mou with the airport authority of india (aai) aimed at pro- viding space technology for the construction of airports and also help in navigation. the government of india is planning to boost regional connectivity by setting up ﬁfty new airports over the next three years, out of which at least ten will be opera- tional by 2017. aai plans to develop city side infrastructure at thirteen regional airports across india with the help of private players in building hotels, car parks and other facilities, thereby boosting non-aeronautical revenues. what we as an industry have been trying to tell the government is that instead of in- creasing landing charges or increasing charges for the airlines, we need to have more commercial activity at the airports so that the airport authorities or the various private airports may earn money through other avenues, rather than making it more expensive for airlines to operate. subhash goyal: amidst global uncertainty, how is travel and tourism demand for services panning out? how is it impacting global sentiment? what is your company’s assessment? wolfgang will senior director, south asia, lufthansa our focus has now shifted to the outbound from inbound. this is where we see the growth much more than in the stagnating markets in europe or america. deﬁnitely the focus must be on outbound when we are talking about india with its spectacular growth rates not only when it comes to domestic travel but when it comes to international travel as well. we are in a market where we see a lot of opportunity and i would just like to begin by making some statements. everybody knows about the power of india and all the airlines would agree that there is a lot of business for all the players. yes, we have seen continuous growth and that is the reason why, as an airline, we are really focussing on india and introducing the very best of our products and services in this market. we are trying to put some more capacity in to the market because it is needed. all the airlines are trying to really buy larger aircrafts or increase frequency to enhance offers etc. in the market for good reasons because there is continuous growth. this growth could be much more if we would have a better environmental situation. for example, as far as the high airport fees for airlines is concerned, i would very bluntly say that it is the airlines that get the passengers to the airport, from which the airports get good business with their shopping centres and food courts, and i think we should be rewarded for that and actually ask for money instead of the other way around. today, airports resemble huge malls. i was recently in manchester and i hardly could get to the gate. you have to get through so many shops to get to the gate. this is not the case in india. the terminals here are much more beautiful and we can be proud of those terminals be it in delhi or mumbai. the only thing i want to say that it is the airlines that have ended up paying for all that. we have seen dramatic rises in our operational costs and because of that it could be much easier if these costs could be lower and that would encourage many more airlines to come. infrastructure is something we are very happy with at the moment, especially when it comes to the big metros but do not forget that in ﬁve years, with the growth rates that we are looking at, there could be much more problems than the ones that we are already facing. for example, in mumbai, where the slot situation is already quite tight. there has to be much more investment in terms of infrastructure. what is important for us airlines is that we are in the business of moving passengers around the world and what we are worried about is that in a certain way we see that there are trends to limit this free movement. we are not happy about this. safety and security is paramount for sure and there is no compromise. we also in favour of regulations for safety and security but it needs to be co-ordinated and not sporadic. but when it comes to com- mercial aspects less is better and more. i totally agree that we should go for open skies and fair and competitive levels where the best can do good business along with all the players as well. i think there is a lot of business here and so this trend that we see today to close borders and to move towards more protectionism is not good for the industry and is not good for growth. i see a huge opportunity for airlines who are operat- ing in india to grow the business if we could have a little bit more support from all stakeholders in the industry. talking about the environment, i just wanted to talk a little bit about the gst rollout. we are aware that there are some percentages but we do not know how it will applicable or what kind of concept we are looking at. this will come later in a couple of days, hopefully, and then we will be able to react. but when it comes to the mere percentage, we have seen that it is actually
re view re view 21 india one of the biggest opportunity in the global aviation market, but infrastructure and high operational cost key challenges, say senior aviation insiders stic to multi-national, who examined trends in the aviation industry marketplace in india. in session titled ge. they also reflected on the need for creation of adequate airport infrastructure, especially given the c and outbound. we bring you excerpts from the session: not that much more than the actual percentage for the service tax. that for us was already a relief that thank god, it has not doubled or anything. that would have ended up burdening both the passenger and the airline. we are waiting for the ﬁnal application to roll out and to adjust our systems to that. david lim country manager, singapore airlines for singapore airlines, amongst this global uncertainty, there are so many things coming along. we still see a lot of growth in the market and especially in india. for us, india is a priority market. we have put in a lot of resources here and have four airlines ﬂying here to ﬁfteen points in india – and we have more than one hundred and ﬁfty weekly services. we are optimistic that the growth will continue despite all the challenges that the airline and the travel industry is facing. you may also know that we have placed a very large order for aircrafts recently and are very optimistic about the travel industry and india too. harvinder singh country head, united airlines nippon means japan in japanese. ana has more than a thousand daily ﬂights to forty one international cities as well as more of japanese domestic cities. we carry about ﬁfty million passengers per year and have a sixty-ﬁve years of history. we joined the star alliance in 1999 and have been rated a ﬁve-star airline by skytrax for ﬁve consecutive years. for india, this year is the tenth anniversary for the mumbai-tokyo route as well as the ﬁfth anniversary year for the delhi-tokyo route. our ﬂight from delhi makes the perfect connection to the us west coast cities like san- francisco every day. india is a huge potential country. on the other hand, it is a difﬁcult country to make proﬁt in as an airline too. we have been offering ﬁve-star quality service in the air at reasonable prices between to and from both mumbai and delhi. we are now working very closely with the embassy of japan and the japanese government bodies as well as the tourism industry to promote japan as a destination. as you would agree, japan has plenty of travel products but i think perception among indians is not enough. we have lots of things to do to promote japan but we are from the private sector. tourism is one of the most important challenges for the country of japan as we are planning to host the 2020 olym- pics here. japan national tourism organisation has opened its ﬁrst ofﬁce in india and our country agreed to designate this year as an india-japan friendly exchange year. so, i think this year is the perfect time to be a trigger for tourism in both the countries. suresh nair country head, air asia bhd have done ten years in delhi and will be celebrating ten years in mumbai, this year. we stay committed to this market and not just as an individual airline but also with our joint venture partners. as joint venture partners, there is a lot of strength that we offer to the market, adding a lot of beneﬁts to your customers whenever you are dealing with them directly. they see a lot of strength and permutations and combinations which are available when they travel out to the us. talking about educating the market, i feel that over the last so many years that i have worked in this industry, the integration between aviation and tourism has grown. the industry has to realise that we from the aviation industry are the facilitators to get people from a to b. it has grown but i think we have a long way to go and i feel that personally. we have taken a lot of initiatives and when i talk to some of our distribution partners about where we are lack- ing their point of view is that we need to educate them more in terms of our products and offerings, so that they may in turn educate their customers. obviously, there are other areas from where they can get their information, like the internet, but i think since we are playing a major role, face to face, we still need to educate our customers and our distribution is still about 96% through our travel partners and not online. we stay committed to that and we are running a lot of education programmes to make sure we educate you more on what we offer as a product so that you may further educate the cus- tomers. i think in terms of our direct education, we are trying to that as much as possible. we are an airline and there are different kinds of market segments we are catering to, so a customer who is travelling for business travel is a corporate customer and one travelling with the family is a leisure one. at the end of the day, we are more or less targeting the same person and we should be able to make sure that we do not isolate them so much, on the basis of market segment, that we do not really understand that are we focussing on one of the segments or the other. we have to try and reach out to those customers at our level as well to make sure that they do understand what we as an airline offer in the wholistic point of view when it comes to our services. yasuo taki country manager, all nippon airways i would like to divide my discussion in to a couple of impor- tant points. first the potential. in terms of the us, we have 1.5 million travellers travelling in and out. india’s participation to the us is about 1.5% of their arrivals and the us participa- tion is about 15%. having said that, i feel the kind of growth we are looking at in our outbound, there is a huge potential. in terms of united airlines’ commitment to the market, we let me begin by telling you a little bit about us. we are the largest airline in japan. all nippon airways (ana), no airline like air-asia is so focussed on the outbound traveller and the leisure travel segment which we have shown in the indian market since 2008. we started our ﬂights in to a small town called trichy which not a lot of people may have even heard about. now we ﬂy four times a day in to trichy. we have really opened up india and many of the indian cities, wherever a320s can ﬂy from, offering very low fares and living by our founder’s slogan, ‘now everyone can ﬂy.’ we have shown how it can be done and created markets in these places, especially for outbound. also, in turn, we offer these low fares all across our network so that we equally bring inbound passengers in to india. the latest destination that we started was from mumbai to bali,
22 re view re view industry leaders divided on the concept of a ‘national carrier’ and we opened up ﬂights on the 3rd of may and our ﬁrst ﬂight went with three hundred and thirty passengers on a three hundred and seventy-seven capacity plane. we started with a return fare of `2550 and i think half of mumbai has ﬂown to bali and the rest of them are waiting to ﬂy because the seats are booked. just before that we started bhubaneshwar to delhi and are the ﬁrst airline to ﬂy in to bhubaneshwar and have really opened up orrisa to south- east asia. we ﬂy in to a hundred and twenty destinations in the asia paciﬁc region. we have one hundred and ﬁfty- seven aircrafts now and ﬂy in to ten cities in india with one hundred and thirty planes in a week and are continuously looking for more destinations to ﬂy to. we have been pioneers in opening up what we call ‘virgin routes’. for the indian outbound traveller, the ﬁrst three cities that they ﬂy to is kuala lumpur, singapore and bangkok and we are maybe the only carrier which can take you to all these three places. the indian traveller has also become extremely adventurous, i must say. people are now looking for destinations like vietnam, cambodia, places where we never expected our people to really travel. we have really opened up these new destinations for the indian traveller. pankaj kumar executive director, air india berry: suresh, are your international operations profitable in india? suresh nair: normally we would not operate a ﬂight without at least breaking even. the airline was started in 1953 and has been contributing signiﬁcantly in the development of tourism. over a period of time, the indian economy has been growing and we have been witnessing a very strong gdp growth. disposable incomes are increasing; there is aggressive marketing by tourism boards of various countries and ﬁnancing for travel is becoming easier. indians are now travelling to various countries for education, employment, business and foreign companies are coming in to india as well as vice versa. the bilateral regime has been liberalised to a large extent and getting a passport has now become so much easier. there is internet which gives passengers facilities like deciding their own itineraries and hence air connectivity is the most important thing which i would say is a key driver for the growth of outbound tourism today. if you have seen, air india in the last few years has really expanded its international network. today, i am happy to say that we are a truly global airline covering 11 destinations in europe, 4 destinations in us, destinations in asia-paciﬁc, south asia, gulf etc. so, we have a very vast network and some of these destinations, particularly with latest destinations in europe, you will see that they are very tourism centric destinations. all these destinations are such that the tourism both outbound and inbound will grow. when we started our ﬂights to vienna last year, inbound tourism from india in austria rose by 25%. that is the growth that this connection brought to that country. so, the airline is going to be offering more opportunities for both inbound and outbound tourism. you are aware that most of these destinations in europe, usa and asia paciﬁc, we are operating with boeing 787s, which is the dreamliner, having ﬂat beds in business class. the services are by in large appreciated by our customers and our business has really grown due to that. buy and sell b2b and b2c. ready to use packages 21-23 september call: +91 9899521421 email: firstname.lastname@example.org berry: there was a recent report that spicejet is planning a low- cost operation to london with a dreamliner and will be charging rupees twenty-five thousand return fare. any comments? nair: see, we are the pioneers in low-cost long-haul operations with airasia x. so far, we have really expanded and now a few of these low-cost long-haul carriers have come up. i think we really need to wait and see how it works. berry: will, we have an asian low-cost carrier. we have one from the middle east, from singapore but we have no low-cost carrier coming from the european side yet. do you see any advent of low-cost from europe coming in to india or our region? will: well, the european low-cost airlines do not have long haul equipment. so, they are really focussed on the continental routes, business and trafﬁc, which there is a lot of. there is still a lot which they can cover. i do not think that this is on the european low-cost airlines’ agenda at the moment. do not forget that even low-cost in europe is still quite high cost when you compare it to the cost levels when you are operating out of asia. south-east asia, specially, has been very active and dynamic in the low-cost segment because you have here in these countries a very good cost level which europeans cannot match. in the near future, i do not see any european activities in this particular segment. berry: singapore airlines and lufthansa, you are bringing multi-products in to india. you are both bringing in four airlines. how do you have a policy between four different airlines coming to india? lim: i think for singapore airlines group, we are very clear. we have the low-cost carrier as well as full service carriers. so, we provide different price points for our customers. it is for the customer to choose. will: the lufthansa group is a little different. for us it is all full-service carriers in the premium segment. it is the portfolio that makes sense for us because it is not that we are operating to one hub only or from one gateway out of india. we are operating from ﬁve gateways to ﬁve hubs which is really something unique. this gives our customers a broad range of opportunities to combine, to really use all the services and also, because we have deﬁned very well the different brands with different products and characteristics. the point is also to give a choice to the customer and enable their decision making in whatever they expect from an airline. all the airlines have different ways of how to be perceived in their services. berry: is going to smaller, new niche destinations the answer for the future? will the concentration in the metros reduce in the years to come? will: i think it is going to be ad- ditional. the metros are going to be there and there will not be a shift as such but additional business will also go to secondary places. today, you have more modern aircrafts with better proﬁtability and productivity which has made these destinations really viable. i have seen in the recent years that there is a shift in the business away from looking only at the hubs. there is more point to point travel now. goyal: in secondary cities, there is no restriction on bilaterals. the government is very open to any airline operating to secondary cities or any of the new airports. even if it is not a part of the bilaterals, they are available very easily. berry: harvinder, any comments? united just has fourteen flights and is doing very well. what next from united? singh: honestly, as an airline we keep looking at this market. we look at additional destinations, we also look at adding capacity with a different aircraft. that is something that we are constantly looking at. our synergies with our jb partners and on a larger level with star alliance is what we are planning to intensify a little bit more in terms of offering services and making it more viable for the indian audience. berry: how relevant is the concept of a national carrier today? just your personal opinions. singh: personally, i think it is impor- tant to have a national carrier. in a lot of ways, it does reﬂect the strength of a country, it reﬂects the countries commitment to aviation. it is very important to have a national carrier which is doing well. lim: when we started in 1972, we were told that we will either swim or sink because we were to be on our own. we were also told by our then prime minister, lee kuan yew that singapore can afford not to have a national airline. the singapore interest was more than the national airline. so, for us, every year we slog to make sure we survive and continue to make proﬁt so that we may continue to be the national carrier. will: i would say that lufthansa is not the national carrier of germany. it is the largest carrier in germany and we have gone in a way where we are creating a multi-national carrier with the lufthansa group. we do not consider germany as our home market but more what is the central europe. that is why in the system we have a swiss airline, a brussel airline etc. it is a wider concept and i think in europe, the concept is going away from national airline because our customer base is different than what it was ﬁfty years ago. goyal: i have always advocated that india is more important than air india and so is india more important than the indian ﬂag but the indian ﬂag is equally important. and i think to have a national carrier for india is very important. the ﬁrst ceo of singapore airline was ex-air india. the main people who built emirates were from air india as well. it is unfortunate that air india has been through a bad patch but now with the turnaround that air india is making and with the current transparent approach you know two things. i am conﬁdent that if the past debts of the airline are absorbed, air india can become an airline that every indian can be proud of. i believe that india should have a national carrier but at the same time it should be answerable to shareholders and not members of parliament or government bureaucrats. there has to be a change in the ownership of air india and there has to be a private investment in the airline. taki: ana is a purely private company. we started our operations sixty-ﬁve years ago with just two helicopters. now, we have become the biggest airline with our own ef- forts. i do not think i am in the right position to answer that question but for sure air india is a very important carrier as we are members of the star alliance. nair: it is just a combination of fac- tors, maybe too much of government interference, if you ask me, which has really brought down air india. i think the concept is extremely relevant and we could have really taken the market. a lot of the interna- tional airlines that you see doing well these days are doing well because of indian passengers. kumar: a national carrier, be it united, lufthansa, ana or anyone is an airline which the people of that land can relate to. for example, lufthansa may not be the ofﬁcial national carrier of germany but as soon as you mention lufthansa, people think of germany. that is what is a national airline. air india has had this status since 1953, we can say. what is important is that this carrier which has gone through a very lean patch should come back to the helm of this position. whatever is required to be done to keep it healthy is to be done by the people who own this airline. you need to have one airline with which the people of the country associate.
re view re view 23 government and tourism bodies need to come together to tap the outbound segment it was a session equally represented by the top echelons of government representatives and tourism industry professionals who deliberated, at length, on the intricacies of the indian outbound. one of the most important outcomes of the discussion was that the tourism industry needed to consolidate, come together and create viable outreach strategies to make the most of the opportunity at hand. indian market is one of the best opportunity for international tourism industry: subhash goyal, chairman, stic group need to evolve with changing trends; bullish on outbound, says karan anand, head relationships, cox & kings the indian outbound is at its nascent stages, because most of us are aware that we have had restrictions where you could take 500 us dollars out, every three years till 1996-97. so, if you look at it, afterwards, it became 2000 usd per person is when the birth of outbound travel, technically, took place in india. and, if you then take the graph from 1997 to 2017, it is amaz- ing that we have 20 million already. wttc is projecting it at 50 million usd by 2020. keeping that in mind, the other great thing that happened recently is that for the ﬁrst time we have a pm who accepted the importance of tourism and built it into his national agenda, and we have been seeing is gradual progress, because we have been highlighting on various fora’s that please do not focus only on foreigners coming into india. indians going abroad are the soft diplomatic power that needs to be harnessed. as other panellists will tell you, indians are wanted, respected, and we are shoppers. we buy a lot of activities and, more importantly, are a growing market. most importantly, people will have to remember that indians live with terrorism, pestilence and all other problems, and still travel. if you get a deal, everybody is up in the air. 3cs to successful indian outbound: communication, connection and consular service to come to the important point that affects all of us here in this room is that the indian traveller keeps changing, keeps evolving, but the countries that have managed to make a huge impression on the indian market is what i call 3 cs which they do successfully. they have a very strong com- munication strategy. they have great consular services that not only support, but encourage tourism – and connectivity, ﬂights. if you get these cs aligned, you have a successful strategy. in india, every single segment, fits, gits, mice, marriages, weddings, adventure and sports, everything gets aligned, once this strategy is in place. we need to organise as an industry for governments to take tourism seriously: hanneli slabber, country manager, south africa tourism tourism is a major job creator a couple of years ago, south africa tourism did a global competitiveness project and what we wanted to know that, indian outbound is one of the best shoppers, highest spenders india is one of the fastest growing outbound markets in the world with more than 20 million indians travelling all over the world. the point is that it is not just the twenty million, but they are the largest spenders. no other nationals of any country are spending so much as indian nationals. according to the singapore tourism board, they are the number one shoppers in singapore. they are the number one shoppers in malaysia; they are the number one shoppers in switzerland. in thailand, we are on the second position, because there are some 38,000 japanese who live in thailand, so even if they buy ﬁsh, it is counted as shopping. so, the japanese beat us there. but even in london, we are not only the number one shoppers, but we are today the biggest investors. we have overtaken germans, americans, japanese, and the chinese as far as investments in the uk is concerned. i am very happy and i compliment navin berry and his team for having focussed on outbound tourism, because we are having so many seminars on inbound tourism, but outbound tourism is a big strength, because when indians go abroad, they are the real ambassadors. it is because of the indians travelling abroad that every city, now, has indian restaurants and indian cuisines. indians seeking new destinations; tourism key to driving the economy it is a great opportunity and that is why what we are seeing is that whether it is the british tourist authority, or the visitor’s boards of the various states of the usa, or it is singapore or japan tourism promotion board, you name the country which is interested in tourism, is putting its marketing dollars in this country, because we are a growing market. as it has been rightly mentioned, if you see about 12-15 years back, the total number of people who travelled within india by air was about 5 million. now, we have close to 100 million domestic air passengers – and these are all potential outbound travellers. so, it is not just the twenty million. we are growing at such a fast rate that within the next one or two years, it will become thirty million and so on. when these people come back, they really move the economy. they come back with fresh ideas and investment, and, there, the indian tourism is really helping the economy. tourism can curb terrorism it is rightly said that the greatest need today is world peace and the more tourism we have, we will have lesser terrorism and conﬂicts. wherever people-to-people relationship is there, it helps peace and prosperity, but wherever there is suspicion, there is conﬂict. tourism is one industry that creates peace, creates trade and moves the wheels of the economy. that is why i compliment cross section media and navin berry for having organised this event, because it gives us all an opportunity to see and understand what the various tourism boards are offering. as government, if we invest in tourism and the reason we say we invest in tourism is because of the job creation, then what is it that creates jobs? do we need more arrivals? must they (tourists) spend more, or stay longer? what is it that these people need to do? what exactly are we chasing? it was a really interesting study. we looked at the southwest, australia, kenya; we looked at the usa, because we wanted an international benchmark. we looked at a whole lot of things, everything from education, to everything else. and what we found for south africa was that in order to create job, it is not your luxury tourism. they are great for the brand, but they are not the job creation leaders. it is the combination of packages. we have already heard that indians love adventure. we are at a great position in south africa; we have over 3000 different adventure products, but how do you pull those levers to ensure that they create jobs? what is the combinations that you have to put together? when we say indians are great shoppers, it is not only shopping. it is the nation that buys more pre-paid activities and experiences than any other nation, when it comes to south africa, but more than that, indians do not do free time. our indian travellers will do 5 or 6 experi- ences a day. when we go to europe, we are slowing down. indian outbound creates more jobs in south africa than other travellers in south africa, we have leisure activities that we call ‘the indian express’. it is done by indians. it normally takes 3 hours, but indians come and in an hour and a half, it is done. so, your tipping point in job creation is a lot lower than when you look at a really big meridien group, where you really need to put a lot of volume before you can create a job. i think, for me, there is a challenge that all the destinations have in selling. it is also how bad we are as an industry on providing the intelligence behind why we do what we do. as an industry, we do not come out of that consolidated stance. and you know what, yes india gets more money than destination x for same number of people into south africa than indians. india has had just under one lakh tourist arrivals, but then you know that one lakh tour- ist arrivals creates so many jobs in south africa. so, i need less indians to create jobs in south africa than i need brits – and therefore, that is where the money is going. that quantiﬁcation from a scientiﬁc point of view where we say, this is this is how is works and that is how we spend the budget. industry is fragmented, needs consolidation for me, that sometimes is missing from our tourism space. we do not argue that way mining, agriculture and mining argues. then when we have to go and speak to the government and have to say that we need. we are so fragmented that it is easy to ignore us. it is easy to ignore us as because we do not have the backup documentation ready and available where we go and say, there you go. for me, i think that is the big jump that as an industry we need to make. we need to stand up and say, this is it. this is what we do and how we do. this is what we deliver and you have to take us seriously. tourism an important industry for improving people to people ties: patrick santillo, minister counsellor for commercial affairs, usa in my opening remarks, i just want to share with you three observations that i have from events like this. the
24 re view re view ﬁrst observation is that we know that all of you are very busy and had other choices of what you could do with your afternoon. so, we very much appreciate you taking the time to come here and hear our thoughts about these issues, and, indeed, the support that you lend to the industry, because you are the people that make it happen. the second thought is that as the senior commercial ofﬁcer in the usa embassy here in new delhi, i am a generalist by training. i cover many industry sectors, because the people in my organisations work on these sectors, and some of these sectors, to be honest with you, are more interesting and enjoyable than other sectors. now, just because i am at a tourism event, it does not mean that it is the only event that is enjoyable and interesting – and i would not say which sectors are, may be, less interesting, but i think you can draw those conclusions. the other thing that i want to say is that i think tourism, honestly, as subhash goyal said, more so than any of the other sectors is really about bringing people together. so, the work that you do is every bit more than, i believe diplomats and many of us are here…because your day-in and day-out life really is bringing people together. and, especially, those of you who are focussed on the outbound are really bringing people to us. that is developing that understanding. so, we really do appreciate that. and, third observation about this is that travel and tourism in the united states is a huge industry for us. it represents some 2.6% of the us gdp and we have some 7.6 million full time jobs dedicated to the industry. the industry churns out 1.6 trillion dollars in total output with 906 billion usd being direct and 656 billion dollars as indirect. indian outbound growing in stature in malta: andrew caruana galizia, deputy head of mission, embassy of malta i think europe is one of the ﬁrst long haul trips that indians make. it is a huge part of indian outbound. malta is still a niche market within europe. it is not normally the ﬁrst european country that an indian traveller will visit. but keeping in line with trends that we are currently experiencing between indian and europe, there has been a huge increase in the number of visitors to europe in general and malta in particular. indian are now looking for different destinations. most of the people who have been to switzerland, france, italy etc. are looking for something with added value, something they can discuss with their friends and families. new-age travellers buying differently, changing set trends a heavy-weight panel consisting of who’s who of the outbound industry engaged in a free and frank discussion on the latest trends, changing ways of interaction with consumers and the growing enthusiasm for unexplored destinations. panelists concurred that new-age travellers with higher purchasing power are changing the way travel is purchased in the market place. we bring you edited excerpts from the session which also saw exchange of ideas among panelists and the audience. navin berry: what is the one single most important trend in your respective businesses as far as indian outbound is concerned? ratna chadha: i think indians are getting more adventurous and the aspirations are now converting to desire and action. as indians, we take a little time getting in to a trend and once something starts trending then what happens is that the world opens up. we have people based in the mini-metros and smaller cities who have aspirations like any of us and i think those guys are really fuelling aspirations. i keep saying that do not put a product or an experience in to a niche. what has happened unfortunately for us is that cruising has been put in to a niche and i think we are just stuck in that outlook. cruising is not the prerogative of the rich only. the common person has as many aspirations as the afﬂuent and i think we as an industry need to realise that and make sure we provide for that aspiration in an appropriate manner. i think we are coming to that fore. we need to get out of that niche situation because everything is not luxury. there are products as well as brands which are luxurious, if that is something that someone is looking for but like every hotel is not a hotel is not a hotel, every cruise is not a cruise is not a cruise. carl vaz: the way i look at it is the rising purchasing power of the millennial. that is something that we need to accept and that will drive future businesses because millennials are the youngest population on earth today. the future travellers are the millennials and we have to cater to them. raja natesan: the single trend that i can see these days, and it is not a positive one, that there seem to be more followers than leaders. it is more of a herd mentality than somebody who is coming up with a niche. if you look at the indian outbound travel, if somebody says that i have found a ticket which is cheap in xyz.com, a hundred people will go and buy that ticket. i ﬁnd there is a lack of new thinking and ideas. yeishan goel: i can say with a fair amount of certainty that the biggest trend that we are seeing is that the indian consumer is now a signiﬁcantly bold decision maker. that is largely because travel has now become a part of the urban consumers lifestyle to a certain degree. for us that directly reﬂects in to frequency of bookings, repeat travellers etc. there is no apprehension in packing your bags and getting out, repeatedly in a year. i think that is the biggest trend of the times and one which will continue to grow. i think the 35-50 years old age segment is really the richest travelling segment, especially for luxury travel. the millennials while are travel hungry, and there is distinctively more purchasing power there than used to be, but are still very careful in their travel buying behaviour. ratna chadha nikhil dhodhapkar buying happens is completely different for us and is deﬁnitely driven by the millennials. karan anand: the one big trend that we have noticed is that there is a huge migration from the disorganised sector of travel to the organised sector as we see consolidation of large companies, in the indian space, demonetisation, gst, service tax issues and the complexity. there deﬁnitely is a trend that we see a lot of small agents who used to be independent, now want to become our franchisees. that is one major trend on the macro level. we at cox and kings love complexity, it is where we make our money. simplicity is where everybody just logs on and buys a cheap ﬂight or hotel and nobody makes money. the more complex it is, the more relevant we are. we have noticed that now there are a lot more last- minute bookings. these are a big challenge for everybody because the one thing that they do not take in to account is the visa process. sulaiman suip: a trend that i would see in the indian market at the moment is the growth of the tier ii & iii cities. this has a huge potential with the infrastructure development being undertaken by the indian government. i can see we found out that word of mouth, when it comes to malta, has been one of the key drivers for the growth in numbers for us. almost one third of all tourists that come to malta found out about it through word of mouth. we do not have a national strategy for india, as it is not as of yet considered an important enough market for that. we have a tourism ministry and we have been trying to convince them to give us more resources for promotion in this market but the focus is still on the big european countries and now, increasingly, on china. but with growing ﬁgures and the newly coming up, high budget, indian wedding and ﬁlm shoot segments, the proﬁle of india as an inbound tourism market for us has really sky-rocketed in the last couple of years. we are yet to see the results but somehow, we are managing to get word out there that malta is an interesting place to visit. this is an exciting market for us and we have discovered that indian tourists, in general, have an appetite for adventure, for discovering something new and for travelling very far, so it is a market that we are going to keep working on and i am quite certain and conﬁdent that we are going to see more results shifting towards this market. also, speaking from national experience, if we were to talk about the growth story of india as compared to say other regional destinations like china, we ﬁnd that indian tourists are quite demanding. the standards of hotels in india are exceptional and it is very difﬁcult for european hotels to compete. one of the frequent complaints we receive is about the services at the hotels, not enough staff, small rooms etc. another challenge is that often with the advance of weddings, everyone wants to stay in the same hotel. this is not always possible, as we in malta just have a handful of 5-star hotels which get booked up very early on. we get requests for weddings with six hundred guests and they all want to stay in the best hotel on the island. this is something which is quite difﬁcult to explain. it is very different with china as there is a lot more government control, bilateral agreements, caps on arrivals etc. they are normally focussed on shopping whereas indian also want to take part in activities. the one big trend that we have noticed is that there is a huge migration from the disorganised sector of travel to the organised sector as we see consolidation of large companies, in the indian space, demonetisation, gst, service tax issues and the complexity. nikhil dhodhapkar: we are ﬁnding, especially within our company, that there are more and more travellers coming in to the space. i think today more and more people want to take a break or a vacation. i think this is a very interesting trend. this has resulted in more opportunities and looks positive. the only question is that when you look at outbound, i think you have to look at connectivity in terms of catering to demands at the right prices. hanneli slabber: what we have found out that our travel market is deﬁnitely getting younger and that they buy differently. thirty years ago, when we were selling travel, we were talking airlines and we were talking accommodation and we built around the package. today, we bring in a learning aid to india in seventeen cities, there is not a single conversation about airlines and accommodations. it is all about the experiences. we are seeing the millennials, speciﬁcally of the otas and the internet, getting smarter because they are now saying ‘i am not paying for a 5-star hotel because i do not want thirty different kinds of cereals or four hundred tv channels.’ clean, neat and safe is all that they are looking for. after that they want that money going in to experiences. we have now customers coming in and telling us the exact amount of money and time that they have to invest in travel. that makes it incredibly difﬁcult for people like me because it is an easy sell for us but where do you make your money? you make your money on accommodations, the airlines and, suddenly, the traveller is saying they are not important any more. the whole way the more people coming up from these areas going outbound. although not new, this shift from the metros to the tier ii & iii cities is the trend i see as of now. navin berry: what is the kind of alignment that you are seeing as a tourism board with the airline sector? are you looking to improve connectivity by working closely with airlines? sulaiman suip: we are not obliged to work with any airline. we want to work with an airline which can give us beneﬁts and inﬂows of tourism to malaysia. in fact, we have signed an mou with singapore airlines to promote long haul markets. we have also signed an agreement with airasia to jointly promote malaysia all over the world. so, we can see that by working not only with one airline but multiple ones, we can provide more choices and beneﬁts to the consumer karan anand: as a large company having a pan-india spread, i believe in the three cs and not just connectivity. communication and counsellor access are equally important as well. what we have noticed is that there are basically three broad travellers – short, mid and long haul. to us it is very important that when we crystal ball gaze, because we have to be the creators and look ahead, we really see where the alignment is between connectivity, counsellor services and the communication that we jointly participate in. hanneli slabber: we do not have connectivity. we have all of it indirect. we have no alliance with anybody speciﬁcally
re view re view 25 and we will work with anybody that will give us a good fare. apart from having connectivity and late cycle booking issues that we already have, we also have a major capacity constraint. what we are doing now is that we are looking at our airlift strategy. our peak travel period out of india, april-july, it is winter in south africa. give us direct lift over those four months and we will push 80% of our business out of india in to those four months because have the inventory. it does not help us to have direct ﬂights in november or december when we wake up too late to make use of the land. from an airlift point of view, we are now seriously re-looking how we align it. we are getting massive business out of tier ii and iii cities and that shift is deﬁnitely happening. carl vaz: the delta between connectivity and destinations, dealing with varying types of pricing because there are different regions with their own compulsions. in order for us to make sure that our indian passengers have transparency and get the value and also there is no ﬂight of business out of our country, which then impacts our travel partners, we have come to a place where even to the last dollar spent, there are comparisons available and we tell you exactly what is available vis-à-vis any other region, if there is a doubt. so, a client cannot turn around and tell our travel partners that we do not know what we are paying for. we give everything to our customers in black and white and this has really fuelled our business. hanneli slabber: just from a tourism point of view, what we are going to see now is that the packaging is going to change. you have only one or two, here we have more than ﬁfteen different types of associations. so, even the associations cannot give you any relevant data. to me, when you are working for tourism boards, you have to also understand that from an international perspective, transparency is a question mark in india. navin: there have been discussions on how airlines have not been effected by gst. any reflections on the gst roll out for the package tour business and tourism as a whole? hanneli slabber: actually, most of the airlines have left the route. i am seriously unhappy. this is a chain and they need us as much as we need them. for them to sit on a dais and carl vaz raja natesan yeishan goel hanneli slabber karan anand sulaiman suip or tourism boards is your counsellor services. having said that, i would also add that in addition to the dilemma of connectivity versus tier ii and tier iii cities, you have to understand that there are destinations in india, like italy, that sell without connectivity. greece sells without any connectivity. so, whilst you do say that the delta between the connectivity and tourism boards is a visa, there are destinations which are selling without connectivity. that is the dilemma of what we are faced with in the tourism industry. i think that there is a lot of dynamism that goes on in the indian industry and it cannot be categorised only in to one particular aspect. navin berry: if we look at today in context to about fifteen years back, the entire travel and tourism business has become transparent from end to end. how has that impacted growth? nikhil dhodhapkar: i think the entire thing about transparency is making our jobs that much more difﬁcult. for example, if you look at the entire outbound travel and how it happens, right from the time when you decide a destination, decide you need a visa, a customer has started to expect that these things happen overnight. i think the entire complexity in terms of what we believe today is transparency is changing the game. karan anand: transparency to us is value. if i tell you that i will send you to a european tour for a 1000 dollars, you are going to say but that is my ticket price. so, what we have done is we have created scale. scale gives us the ability to handle large number of passenger during off-seasons. the ability to go to our airline partners and say we want to buy these tickets upfront, go to tourism boards to propose joint campaigns and the visa side says ok, i would rather work with a listed company that understands compliances, and says i will give you an advantage in terms of block bookings for visa. when you talk about transparency, the irony is that as technology became transparent on many of our products, the package market on holidays has shrunk in terms of companies. transparency in a way, to me, is more scale and value and has worked against the whole industry except for the big boys. raja natesan: i just want to take this in two aspects. one is transparency as it should be and the other is transparency as it is perceived. for some reason in india, and i can say this in absolute conﬁdence at least looking at numbers and statistics, that the people who are wanting to go outbound or even those looking to buy an airline ticket assume that there is transparency on an online travel agent space. this is one of the biggest fallacies and because of herd mentality it is presumed as transparent. it really is not and when you go to corporates and say if you want transparency why not go directly to the airlines’ platforms, nine out of times they do not want to. somewhere from the top decision maker to the person who is actually booking the ticket, there is someone who does not want transparency. we might say that we are moving towards transparency but that is just the surface. ratna chadha: transparency has been really helpful for us. it has helped our travel partners and there is complete transparency for them as well as our clients. in our business, which is really dynamic, what happens is that we are when a client wants transparency, they do not want it across the whole chain. it is the big-ticket items that people want to see transparency in. the moment you have mystery, you have margin. for us as a tourism board, transparency is great because you are now going to package better, you are going to put things together that are too impossible to break and have transparency on every single item. the customer is going to look at the basket and feel that the value is there. carl vaz: from eight or nine destinations in europe, south east asia and middle east that i have worked with, the one typical question that i get asked by the heads of various tourism related organisations is ‘where can i get reliable numbers as to the number of indian travellers coming in to my country?’ the problem is that the airlines do not have it, our immigration services do not have it and of course the travel fraternity. we are all to blame in this as we hype up our ﬁgures. there are only a few listed companies that have a balance sheet which can be scrutinised. the rest are all privately held. so, you tend to rely on word of mouth and there is no association because we are really fragmented in india as associations. unlike certain countries where say that when we look at gst, we are all right because it is service charge and is the same level, what are the people sitting on the seats going to do when they get on the other side? where are they going to stay? what is the role of the ground handler there? big picture argument, if we do not have the airlines backing us up and saying that this does our partners, who ﬁll the seats, a disfavour and the chain needs feeding, they are really doing in the partners on this one. i think it is irresponsible to say that if this works for one section of the chain, then we are stepping out of the ﬁght. it does not work like that. karan anand: the whole gst picture is evolving. my fear is more towards compliance. airlines are a very critical component as about all of india, be it inbound or outbound, is travelling by air. i just hope and pray that a holistic view to the whole industry is taken with pragmatism and seen as the low hanging fruit that it is. my take is that gst is going to affect us all and i do not know at the moment how positive or challenging it is going to be. there will be challenges going forward in any new change in process and i only hope that better sense prevails. aeroflot recently organized a familiarization trip for trade partners to moscow and sochi during 15th and 19th may. here is a picture of the delegation with a member of aeroflot posing for shutterbags.
26 hote ls + resorts hotels leading a joint effort to put aerocity on the national map; f&b segment hits off aerocity is fast emerging as a formidable micro-market in the ncr hospitality landscape. a unique idea, it was conceived to cater to through traffic and become a centre for mice activities. some of those long- standing aspirations are likely to be fulfilled, as hotels in the vicinity are coming up with ingenious methods of marketing outreach – which include joint promotion in trade fair and other online means of expanding footprints. it is likely that these efforts will boost aerocity’s stature as a premium centre for mice activities. with the idea of understanding the current business climate and promotional strategies of hotels, we engaged a number of senior representatives of hotels in aerocity. we bring you an extensive report on one of the busiest hotel market in delhi/ncr. holiday inn catering to a mix of transit, mice and leisure segment; awareness driving repeat business despite a stiff competition, holiday inn aerocity has maintained pole-position in terms of revpar, says ranjan malakar. he attributes this success to a combination of robust sales channels and the world’s largest loyalty rewards program in attracting patrons from diverse travel segments. he shares that a combined effort to pitch aerocity as a destination from hotels in the vicinity is already underway and should yield dividends in the imminent future. excerpts from his interview: by shashank shekhar how is the overall business doing? what about room rates? is there any pressure on that front? the continuous addition of inventory at aerocity has been absorbed very well thanks to the growth in demand into delhi ncr (and india in general as delhi is a key gateway city) and the increased acceptance of aerocity as a corporate, mice, transit and leisure hub. our hotel has been able to increase occupancy year on year despite 2016 already being a stellar year. we continue to be number 1 as a hotel across all categories of hotels in terms of revpar performance as per str data and have the added advantage of the familiarity of the holiday inn brand globally, and the system contribution from our ihg channels such as the ihg website, global sales and reservations ofﬁces and our newly launched national sales ofﬁce in south west asia. i am aware that some hotels in the vicinity have however witnessed drop in occupan- cies due to the increase in inventory but we ranjan malakar area general manager, central india & holiday inn express we have seen demand growing thanks to increased penetration into the source markets, growth in arrivals into delhi and increased awareness of our hotel leading to repeat visits. ,, we are one of the most recognized brands globally and are known for being a hotel that offers you all the services and facilities that one expects from a 5-star hotel at a very competitive price point. our contemporary rooms are larger than many of the older luxury hotels in the city and our three dining outlets offer a wide range of cuisines backed by the safety of an iso 22000 operation. free wi-fi and airport transfers for most rates was a strategy we had from day one and has won us many loyal guests as well. we currently enjoy a repeat guest ratio of nearly 30% despite the lower priced aerocity hotels have started to come together to work towards attracting major mice events into the area as we have several large and medium-sized event venues. have been able to buck the trend, thanks the factors mentioned earlier. there has however deﬁnitely been pressure on rates especially during the off-peak period which we have re- sponded to by strategies in business mix and inventory management, allowing us to in- crease our average rates for the hotel despite some retail segment rates coming down due to competitive pressure. post the opening of the last hotel in aerocity sometime early next year, we expect to see an increase in room rates across aerocity and delhi ncr as all hotels will focus on driving rates. what is your usp within aerocity hotels as a block? it is a competitive marketplace you operate in. what is the product positioning within the fraternity? our usp is the mix of the brand awareness, product, service, and pricing which suits our key market segments of business, transit, mice & leisure travelers very well. competition that has come up. this has been possible due to the continuous upkeep to keep the hotel fresh and also due to our ihg loyalty program (ihg rewards club) which is the largest in the world with over 100 million members globally. in terms of our market positioning, we are positioned right in the middle, below the three luxury hotels and above the remaining local and international hotels in the area. given that we offer almost all the services that the luxury hotels do, such as multiple dining outlets with authentic food, spacious rooms and extensive leisure facilities, we are able to attract travelers from the luxury hotels. it also becomes very tempting for the traveller to pay a few thousand more to upgrade from the lower end budget/midscale hotels with smaller rooms and limited services into a more luxurious hotel. in today's world, social media plays a very important role and our focus on delivering great guest experience pool-side view of the hotel with the aerocity in the backdrop means that we have been able to receive very favourable ratings from guests on all key channels such as tripadvisor, our own brand website and key booking sites which combined with our sensible pricing makes us a very popular choice for guests. our highly engaged and well-trained team has been crucial in helping us achieve this. what are some recent trends in terms of footfalls? where is it coming from? how much of it is domestic and how much international? we have seen demand growing thanks to increased penetration into the source markets, growth in arrivals into delhi and increased awareness of our hotel leading to repeat visits. we are also beneﬁting from the increase in business travel to india and higher travel by domestic business and leisure travelers with delhi airport reporting increase in trafﬁc as well. the key segments growing for us are business, transit and mice, thanks to aerocity's proximity to the airport, cyber city, udyog vihar and south delhi. a lot of our business guests have to travel to both gurgaon and delhi which makes our location ideal for them. our current mix between domestic and international travellers is about 60:40. aerocity is also growing to becoming a f&b hub with stand-alone food courts, apart from numerous restaurants operated by hotels. do you see the rise of stand-alone f&b outlets as a challenge for hotels in the coming years in terms of their f&b revenue, or do you see them complimenting your efforts in destination promotion? aerocity is certainly becoming an f&b hub and it is something that we welcome as we are seeing it become a destination like cyber hub with increase footfalls on weekends and holidays from gurgaon, south delhi and dwarka. the increase in options certainly means that a few travellers staying at our hotel try out some of the newer stand-alone options for a change but an overwhelming majority prefer the convenience and quality of our in-house f&b offerings. additionally, there are always guests from other hotels who walk into our restaurants as well which balances things out! the food court primarily caters to the people working in the nearby ofﬁces and retail complexes. our capture ratio of in-house guests is one of the highest that i have seen of the several hotels i have worked in. lastly a year-round activity calendar and a robust dining rewards program means we are also able to get a signiﬁcant increase in footfalls from guests who are not staying in the hotel coming from various parts of delhi/ncr. how is the mice business doing? how significant a factor is the segment in revenue generation for your hotel? mice business is doing very well and plays a very important role in not only driving room revenue but also our conference and banqueting revenue as well as spa sales. some of the days that we have recorded our highest average rates and daily revenues have been due to international mice movement at the hotel. it is also a growing segment, thanks to the increase in supply of large meeting venues in the area at the luxury hotels. many a times these events require more rooms than these hotels can handle causing a positive ripple effect in aerocity hotels. our own mice business is positioned to target the medium-sized events and smaller meetings that keep our ballroom and meeting rooms occupied throughout the week. in the evenings, central location, accessible to both delhi and gurgaon, along with ample car parking facility mean that we are also a popular venue for social events. at our hotel, mice revenues (rooms and non-rooms) would account for over 20% of our total revenues. there has been considerable thought on marketing of aerocity hotels as a block, as a single product offering to the world? who can do this, and how? aerocity hotels have started to come together to work towards attracting major mice events into the area as we have several large and medium-sized event venues and over 3000 rooms available in a very convenient location close to the airport and all key destinations in delhi/ncr. the process has already begun with the ﬁrst few hotels coming together and we would be joining this initiative that is being led by larger mice hotels in aerocity. the combined entity then receives funds from all participating hotels to participate in key international and domestic trade fairs representing aerocity as a destination and the participating hotels allowing for large and high-proﬁle events to be held at aerocity. we have already had the ﬁrst success from this initiative in march this year with a major medical conference that used several aerocity hotels.
hote ls + resorts 27 despite healthy occupancy numbers, rates continue to be under pressure in aerocity, says gm, pride plaza despite the growth in occupancy in every quarter, room rates have not risen as expected in the aerocity, says pankaj mathur. he noted the independent f&b outlets were not a cause of concern for the hotel on the revenue front as both segments were equally keen on driving traffic to the aerocity. excerpts from the interview: how is the overall business doing? what about room rates? is there any pressure on that front? the aerocity’s easy connectivity with south delhi and gurugram by road as well as the delhi metro has made it popular with travellers. its proximity to the igi airport makes it an ideal spot for business and leisure travellers. overall, all the brands in this vicinity are doing well and the business is growing year by year. the occupancy is growing every quarter, but the rates are not increasing as expected because the city hotels have started offering better and lower rates to get their fair share. as mentioned, the occupancy levels are high but the rates expected are not getting matched which makes it tough for all the hotels to justify their numbers. what is your usp within aerocity hotels as a block ? it is a competitive marketplace you operate in. what is the product positioning within the fraternity? the pride plaza hotel, is itself a unique property by pride group of hotels, as it stands tall in the heart of aerocity, resonating true indian hospitality, by following the ideology of " truly indian, traditionally luxurious and purely pride ". the intoxicating fragrance of tuberose, along with the soothing time honored indian instrumental music and the humble “namaskar” greetings of the staff welcomes the guests benevolently to the beautiful vicinity of the pride plaza. the stunning paintings by krsnaa mehta, renowned as a designer to the stars, placed all over the hotel, gives a resplendent, luxurious touch to the ﬁrst impression of the plaza. retaining the essence of being the ﬁrst traditional hotel in aerocity, new delhi, pride plaza proudly hoists the tricolor ﬂag of our nation. the palatial rooms are decorated with the magniﬁcent monumental images of india. being a quintessential traditional hotel, the pride plaza offers it’s guests a host of opportunities to feel at home and relish to get bigger and international mice, most of the hotels in aerocity have got themselves registered under an organisation called aerocity.events to promote aerocity as a mice hub and also to compete with bigger mice hubs. ,, pankaj mathur general manager, pride plaza hotel aerocity, new delhi the true indian treat in the form of home- made jams, pickles, conventional chaats in buffet, the relaxing welcome drink, tamarind candies, hot water bottles amongst many others. all these features are a part of the fabulous five senses programme to ensure that the plaza marks an everlasting impression in the lives of their guests. moreover, we are always focused on “give the guest what he wants not what we want to give”. what are some recent trends in terms of footfalls? where is it coming from? how much of it is domestic and how much international? from may till september, the footfall is low and the business is almost stagnant. however, from october till april, the business is at it’s peak because of various segments operates in our vicinity such as; ibt, mice, weddings & corporate transcend. all the hotels in and around does very good numbers during this peak season. we also get beneﬁts from the inbound series that operates in the golden triangle. aerocity is also growing to becoming a f&b hub with stand-alone food courts, apart from numerous restaurants operated by hotels. do you see the rise of stand-alone f&b outlets as a challenge for hotels in the coming years in terms of their f&b revenue, or do you see them complimenting your efforts in destination promotion? we see it as complementing as these stand- alone food courts and popular restaurants will attract the customers from entire delhi/ ncr which will automatically increase the footfall in the aerocity and hence, the visibility of the hotels will up without much effort. also, these eateries will hardly affect the hotel’s f&b revenue as it majorly depends on the occupancy and the events happening in a hotel. as far as i can visualise, both the hotels and the restaurants will support each other in the terms of promoting the aerocity as a f&b destination for entertainment and stay closer to the airport. how is the mice business doing? how significant a factor is the segment in revenue generation for your hotel? mice is a very signiﬁcant segment as far as aerocity is concerned. we get national and international mice both because of the ease we provide to the companies by giving them enough supplies of room and meeting space in close proximity. being closer to the airport, the companies save their time and money on travelling and transportation which makes it very convenient for them to choose aerocity for all their requirements. there has been considerable thought on marketing of aerocity hotels as a block, as a single product offering to the world? who can do this, and how? to get bigger and international mice, most of the hotels in aerocity have got themselves registered under an organisation called aerocity.events to promote aerocity as a mice hub and also to compete with bigger mice hubs like hyderabad international convention centre, jaipur international convention and exhibition centre and greater noida expo centre. we are now promoting and positioning aerocity as a viable mice hub and for that we have also represented ourselves at imex 2017 where all the hotels participated and did meetings to get the bigger mice event in future. andaz is participating in international trade shows to showcase the aerocity as a larger product: heddo siebs the larger product of aerocity has not been promoted in international market and some hotels have come together to address this glaring shortfall. the idea is to participate in international trade shows to showcase aerocity as a larger hotel product with a wide range of product offerings at varied price-points, says heddo siebs. excerpts from the interview: how is the overall business doing? what about room rates? is there any pressure on that front? we are optimistic about the overall business and we do not feel pressure on that front. on the contrary, the location has a decided advantage, and with the new gst coming in july, we will also be more competitive than gurgaon as their tax component will go up. with over 37,500 sq. ft. of event space, mice is definitely going to be a huge driving factor for us. and, even though we only opened a few months back, we are extremely positive about the response and the opportunities within this segment. ,, heddo siebs general manager, andaz dehi what is your usp within aerocity hotels as a block ? it is a competitive marketplace you operate in. what is the product positioning within the fraternity ? there is no place in india with so many hotel rooms in different categories available within walking distance of each other. aerocity also has the advantage of having 100,000 sq ft of newly built events space. what are some recent trends in terms of footfalls? where is it coming from? how much of it is domestic and how much international? we cater to both the domestic and inter- national markets almost equally. we are also conﬁdent that with the airport next to us, the gains from both segments will be maximized. aerocity is also growing to becoming a f&b hub with stand-alone food courts, apart from numerous restaurants operated by hotels. do you see the rise of stand-alone f&b outlets as a challenge for hotels in the coming years in terms of their f&b revenue, or do you see them complimenting your efforts in destination promotion? we see these new standalone f&b outlets as healthy completion that will help us to keep up the momentum and work harder on our own products. they will also help to drive business to the area and this will have a positive impact for all of us in aerocity. their presence will also make aerocity a popular destination for local diners and offer a wider range of dining options to our in-house guests when they feel the need to eat out of the hotel. with our annamaya food hall, i believe we have the best example of a successful new hotel restaurant concept which has been fully accepted by the local community. it is com- mendable that we are not dependent on just our in-house guests for business in annamaya. how is the mice business doing? how significant a factor is the segment in revenue generation for your hotel? with over 37,500 sq. ft. of event space, mice is deﬁnitely going to be a huge driving factor for us. and, even though we only opened a few months back, we are extremely positive about the response and the opportunities within this segment. there has been considerable thought on marketing of aerocity hotels as a block, as a single product offering to the world? who can do this, and how? four aerocity hotels have been participating at international trade shows, such as imex, as one unit – aerocity events. this will help to put aerocity on the global map as most international associations were not aware of a facility such as this with a combination of different-branded hotel rooms and events space existing in india. we do hope that other hotels also see advantage from it and participate.
28 hote ls + resorts eyeing trade shows to put aerocity on the mice map: pierre-etienne de montgrand, accorhotels aerocity has seen steady climb in room rates in the past three years. much of can be attributed to right pricing strategy to tap the right clientele set, argues pierre-etienne de montgrand. he shares that the hotel group will participate in trade shows to put aerocity on the national map in the mice segment. how is the overall business doing? what about room rates? is there any pressure on that front? we are located within the delhi ncr’s most sought- after mice hub with close proximity to the domestic and international airports, and with such a massive location advantage, business has grown incrementally year on year. this is clearly evident since we have opened 129 more keys and are selling more as compared to our earlier inventory of 316 keys. room rates have also pierre-etienne de montgrand director of operations - ibis & ibis styles india, accorhotels the guest is the center of attention, with dedicated and efficient service to back up their stay experience. ibis new delhi aerocity now boasts of an enhanced inventory of 445 rooms, amongst the largest in the hospitality precinct. ,, improved over the last three years since the inception of hotels within aerocity. the pricing strategy of targeting the right customer with the right price is the key to success for all the hotels within the hospitality precinct so that each hotel achieves its due market share. what is your usp within aerocity hotels as a block? it is a competitive marketplace you operate in. what is the product positioning within the fraternity? “well-being at the best price” – this sets ibis new delhi aerocity apart in its segment. the guest is the center of attention, with dedicated and efﬁcient service to back up their stay experience. with its recent expansion, ibis new delhi aerocity now boasts of an enhanced inventory of 445 rooms, amongst the largest in the hospitality precinct. as part of the extension, our meetings space is now complemented with enhanced areas. this includes the addition of four new meeting rooms with two dedicated board rooms, to our current portfolio of three meeting rooms. together, the seven meeting rooms can accommodate up to 185 attendees giving the ibis new delhi aerocity the ability to meet a broad range of meeting event requirements. combined with expansive mice facilities at pullman and novotel new delhi aerocity, the other two co-located accorhotels’ properties located in the hospitality precinct, guests now have the ﬂexibility to choose from a range of venues and services depending on the nature and scale of their event. the three locations offer an unrivalled 2,406 square feet of combined mice space to event organisers. the introduction of an all-new exclusive crew lounge for the hotel’s airline crew guests is also a unique selling point to airline partners. what are some recent trends in terms of footfalls? where is it coming from? how much of it is domestic and how much international? asia and europe are amongst the largest contributors towards the nationality residing at the hotel. the latter being evident since we are part of a leading french hotel group – accorhotels and its presence is immense in europe. non-residential footfalls are fewer in number yet signiﬁcant and growing steadily – primarily towards f&b as well as meeting rooms (mice). the hotel’s strategic location and seamless connectivity to the delhi airport perfectly caters to transiting passengers, while its proximity to the commercial hubs in the national capital region, especially the millennium city of gurgaon, makes it a preferred stay destination for business travellers. aerocity is also developing into a food and beverage hub with stand-alone food courts, apart from numerous restaurants operated by hotels. do you see the rise of stand- alone f&b outlets as a challenge for hotels in the coming years in terms of their f&b revenue, or do you see them complimenting your efforts in destination promotion? aerocity over the last couple of years has truly evolved as a preferred destination with offerings of hotels with a wide variety of f&b options, poolside activities and parties, mice and wedding venues, retail, comedy club theatre, food courts and proximity to travel into the city centre via convenient metro access. for the new millennial, these offerings at a single destination is a huge plus and overall encourages the feasibility of people to stay at this destination. since aerocity is still emerg- ing and yet to realise its full potential, any activity that promotes footfall is beneﬁcial to all players, and this includes opening of stand- alone f&b outlets and commercial hubs. the f&b proposition we have for our patrons is very unique – the ibis signature ‘spice it’ restaurant is a food concept tailor made for india. serving the choicest indian, oriental and european cuisine prepared from freshest locally sourced ingredients, ‘spice it’ offers well-priced, quality home style and healthy food and beverages – buffet and an a la-carte menu – including an eight-hour non-stop breakfast concept starting from four in the morning until noon. at ‘spice it’, the concept of “you create, we cook” comes to life with live cooking stations. the interactive cooking environment lets guests explore their culinary mighty combined strength of 1,115 keys with 16 meeting rooms, 8 food and beverage outlets and an unrivalled 2,406 square feet of combined mice space to mice guests, a clear advantage over other guests in the region. there has been considerable thought on marketing of aerocity hotels as a block, as a single product offering to the world? who can do this, and how? we are a proud member of aerocity. events which is a unique convention-bureau styled product from the indian market, run privately by an experienced professional organization with over 20 years of expertise in handling mice and association congress business. it is designed in association with the largest hospitality brands of new delhi aerocity to promote and drive business to the destination as an accessible and comprehensive events hub. aerocity, over the last couple of years, has truly evolved as a preferred destination with offerings of hotels with a wide variety of f&b options. skills whilst dining in one of the most vibrant and energetic restaurants in town. ‘the hub’, our hotel’s lobby bar, is truly a hub of social activity where guests can unwind and spend quality time enjoying a refreshing drink while snacking on their favourite light eats and play- ing fun board games. how is the mice business doing? how significant a factor is the segment in revenue generation for your hotel? as mentioned earlier, there has been a signiﬁcant growth in mice at aerocity and it plays a very important role in providing hotels with a steady ﬂow of business round the year, and primarily during the off season to ensure constant volume ﬂow. mice business in aerocity provides all hotels as well as the retail outlets either a direct or indirect impact on revenue. as i mentioned earlier, accorhotels in aerocity boasts of a aerocity.events is managed by tmf dialogue marketing india and they have been instrumental in participating for us at imex 2016 and 2017 at frankfurt along with the presence of general managers of the participating hotels so that they could meet clients and sell aerocity as the next preferred mice destination. imex 2016 generated key business for aerocity in february 2017 with 5,000+ room nights and meeting room business through a major event at the participating hotels and indirect displacement business to other non- participating hotels. we are now focussing on participating is many more key meetings industry trade show for the next two years to enhance this unique relationship and develop aerocity on the map of india as a mice venue with the largest offering of different brands and segments of hotels. indians taking to the wildlife segment at reni pani lodge with growing awareness reni pani jungle lodge is located on the fringes of the satpura national park and is a member hotel of privy – which is a collection of unique luxury boutique properties. aly rashid talks to tf about the challenges in operating in a relatively remote location and the churnings in the wildlife tourism in india. by shashank shekhar is your operation seasonal or year- round? what are some operational challenges in running a lodge inside a national park? we operate seasonally and are closed from 01 july to 30 september annually. we actually are located on the fringe of the satpura national park. in india, no private tourism units can be located inside a national park. although we are located on the fringe of the protected area, we are still in a remote area and procuring supplies can be challenging at times. we also have a policy of employing local staff to boost the local economy and sometimes having access to quality staff is a challenge. however, with correct systems and policies in place, operations become quite smooth. wildlife is a very niche segment. does that reflect on your clientele as well? do you get international travellers more than indian ones? we do have a healthy mix of inbound and domestic clientele. i would say around 55% foreign clients and 45% domestic. yes, wildlife is a niche clientele and foreigners coming into india especially british nationals were traditionally the primary target market. but now as awareness and disposable income amongst indians is increasing, so is the demand for such off-beat and different holidays. so, it is encouraging to see a sharp increase in the number of discerning domestic travelers who are keen on experiencing niche and high-end products. in the domestic segment, is there any specific region that drives your business? does proximity to some major cities help in getting incremental business? and how do you manage your marketing outreach? a large chunk of our domestic business comes from mumbai and delhi. these 2 major metropol- itans are well connected to a bhopal by air and rail therefore make traveling to satpura conveni- ent. bhopal, indore and to some extent nagpur are also good course markets for reni pani. the most effective marketing for us over the years has been word of mouth. although it takes time, good old word of mouth market- ing is still the most powerful for any niche and experiential property like reni pani. we also attend various trade shows and have been fea- tured in all major travel magazine publications in the past. aly rashid owner & manager, reni pani jungle lodge
hote ls + resorts 29 lg helping hotels create differentiated experience with cutting-edge technology televisions and displays are important elements in elevating the guest experience in a hotel setting. in an attempt to understand some trends in technology in the hospitality space and how lg is positioning itself in the marketplace, we interacted with hemendu sinha on the sidelines of grand tech seminar – an event held recently in the capital. excerpts from the interview. by shashank shekhar tell us a little bit about the event. what is the idea behind this? the event is called the grand tech seminar. we want to take our technology to our consumers and we interact with them on a day-to-day basis during a sales call. but this is purely a b2b initiative where we showcase what lg has to offer to the industry and enterprises. this is, typically, a three-city event at regional levels on an annual basis. our delhi event is aimed at north and east of india as region for our customers and partners. we have here showcased oled tvs. it is a revolutionary technology and it could change the display industry in the consumer and b2b segments. we are the world leaders, and far ahead of anybody as far as home appliances are concerned. there are a lot of products which we are not marketing in india. we have limited our offerings in india, in the b2b space, to display products and commercial air-conditioning. what are they? for example? for example, solar. lg is a very strong player in the solar segment in the european market. but why not india? india is set to become the solar capital of world and has the purchasing power. absolutely. i am trying to bring in those products here but, unfortunately the capacity that lg has is, may be, not enough to cater to european, north american and korean market, and india. the moment we expand and are ready to cater to the indian market, we will bring those products in india. i am trying my level best to do that. given that you cater to a lot of hotels, please share with us some trends in hotels ideally want products that are easy to maintain, centrally controllable, and do not add to the cost of segment.,, operations. we are bringing a product called pro: centric direct. it is going to make life of hotel professionals hassle-free and the cost of maintenance is going to come down drastically. that is what we are looking at in the premium business head – india b2b business solutions hemendu sinha the space. also, there is a lot of activity happening in the mid-segment market. is the momentum reflecting in your business as well? is there a rub-off? it is happening. one of the important trend is that the customer, today, not only in the mid-segment but also in premium hotels, is going for a differentiated experience. it is the differentiated experience which helps hotels retain guests. this is where we are pitching in oled tv. hotels are asking for this premium product, so that they can be one-up against the competition. the ease of maintenance is very important. hotels ideally want products that are easy to maintain, centrally controllable, and do not add to the cost of operations. we are bringing a product called pro: centric direct. it is going to make life of hotel professionals hassle-free and the cost of maintenance is going to come down drastically. that is what we are looking at in the premium segment. in the mid-segment, the way aggregators are coming in the market, they are basically getting into the opex (operating expenses) model. entrepreneurs are looking for business partners to ﬁnance their models. that is the upcoming trend but the market, unfortunately, is not ready. as and when that happens, how do you see that impacting your business? people are getting in to the back-end and you cannot ignore it. as you said, the mid- segment is growing in a big way. so, people are gearing up to that change. we are also working on the back-end where we can work on some kind of a ﬁnancial model and get into revenue sharing. we are deﬁnitely looking at that. it is a very emerging and visible trend. it is a competitive marketspace and every player is vying for a market share in the display space. what will make lg special? what would you say to the hospitality industry? for hotels, it is deﬁnitely a challenge to retain customers and look for repeat business. if they deploy lg products in their properties, the impact of displays will remain etched in the minds of consumers. they may come back just for the visual experience they get while visiting the hotel. these products cater to premium hotels and the mid-segment. are you considering a foray in the budget segment as well? are you looking at it as a revenue opportunity in the near future? we have only showcased some products here. these are the high-end ones; this may be only a 20% of the entire product range that we have. let us not look at the cost of the purchase, a one-time cost, of a product. we provide warrantee for ﬁve years, meaning we take care of it for ﬁve years. hotels do not have to spend any money for the next ﬁve years. therefore, the recurring cost is completely eliminated. so, they may look expensive on the face value, but turn-out to be extremely cost effective in the span of ﬁve years. i think every hotel can afford the total cost of ownership for ﬁve years. do not look at the mrp but the value and business it will bring in. industry needs to come together to push room rates in the bengaluru market: m balaji despite the green shoots in the hospitality space, bengaluru market continues to reel under the pressure of low room rates. the way forward for the industry is to take a collective stand on the front to save the hospitality space from further exacerbating business returns, says m balaji. edited excerpts from the interview. by tf bureau please elaborate on the current business climate in bengaluru and how the market is doing? could you please specifically talk about the resort market as well? currently, the bengaluru market is doing good and overall business is also good. but the overall bengaluru occupancy is somewhere between 50-52%. some of the properties are doing really very good whereas some of the properties have told us that they are about to start bleeding. they have the inventory but they do not have conferencing facilities. so, there is a mix and match but still compared to delhi, mumbai and chennai, we are not great in terms of occupancy. what sort of occupancies are you looking at with you own hotel? what is driving this occupancy? is it mice or leisure…? in our hotels, we are doing 80% occupancy. what has happened in bengaluru is that whereas the hospitality market is growing, the overall market is still the same. the market is not expanding unlike the other metros. the uniqueness of our property is that we cater to all four segments. some of the hotels are meant only for business or only for leisure but here we are catering to all four segments, i.e. the mice segment, which is big and contributes more in terms of revenue, the social segment, where we do weddings, anniversaries, birthdays etc., the leisure segment, where people come for a day or two to just relax, or have a day out, the fit segment, where people come for work and stay for 2-3 nights and, in fact, we even cater to the ‘crew’ segment, being located so close to the airport from where we have a huge demand but we are only restricted to one or two clients because of rates and other reasons. although we have a lot of opportunity in the crew segment, i believe we are not giving it the attention it deserves due to issues like established markets, timely payments etc. resorts have been doing good pan- india as far as rates are concerned and are in-fact at par with international standards so to speak. you yourself are priced really close to say the oberoi or the leela in the local market. the indian hospitality is now dominated by a lot of foreign players. indian companies like the oberoi, the taj and us, are all stuck to our roots. that way we are different is that we believe in our culture and heritage. we still cater to that and are unique as a property and we are able to serve all ﬁve segments while still being able to match the oberoi’s level of hospitality. you said there is a discrepancy in the growth of the overall market. do you reckon this as a demand and supply issue? in bengaluru, the arr is six to seven thousand rupees. there is a major rate disparity when one talks of bengaluru as compared to the other metros or even international rates. this needs to be a collective industry effort and there needs to be an understanding so that we may match up with other cities. there are projects which have seen crores in investments but are still shelling out rooms for six to seven thousand rupees a night. it is very sad to see this. ,, ceo, clarks exotica convention resorts & spa bengaluru m balaji yes, because now the thing is if you stay in any hotel in delhi or mumbai, the arr is anywhere between twelve to fourteen thousand rupees. wherein in bengaluru, the arr is six to seven thousand rupees. there is a major rate disparity when one talks of bengaluru as compared to other metros or even international rates. this needs to be a collective industry effort and there needs to be an understanding, so that we may match up with the other cities. there are projects which have seen crores in investments but are still shelling out rooms for six to seven thousand rupees a night. it is very sad to see this. so then would you say that this is a good time to buy in bengaluru? you could say that is true for someone with deep pockets but then again, they have to wait for another ten to ﬁfteen years for return on investment. i don’t think they will be able to recover the investment any time soon.
30 hote ls + resorts reinvention has lent shangri la a unique niche in delhi’s hospitality landscape: gm given the rise in disposable income, increase in aspirational travel and the appetite for experience, the luxury segment will continue to grow in strength in the country, says parmeet singh nayar. he exudes confidence that a unique and refurbished hotel product will give shangri la’s - eros hotel a distinct and niche positioning in the delhi hospitality market. excerpts from an exclusive interview. tamra is an upscale restaurant serving global buffet and cocktails by shashank shekhar talk to us about the product of shangri la. where would you position it in the pantheon of luxury hotels in the capital? you have a formidable inventory of rooms. what sort of occupancies have you been garnering? shangri-la’s - eros hotel, new delhi can be best described as a luxurious haven nestled in the heart of the capital. it is located in the heart of the premier business and commercial district, connaught place, within close proximity to parliament, central government and key corporate ofﬁces, the iconic india gate, janpath- the shopping helm of delhi city centre. with rich architecture, sprawling lawns, resplendent rooms and extravagant food and beverage offerings, it stands tall amongst the leading luxury hotels of delhi. we have changed the game in the market and have bought in authentic and trendy cuisine options with our new food and beverage options. it’s possible for everyone to explore a mélange right from the hands of the experts. the place has the right vibe which is reﬂective in our trip advisor position in the top 10 in delhi / ncr. the hotel has recently refurbished its accommodation facilities, which have been well received by guests. which segment is driving your business? is it primarily leisure, or mice, or a mix of both? what percentage of your footfalls is domestic? at shangri-la’s - eros hotel, new delhi, we believe in offering customized and personalized services to our guests. in constant pursuit of shangri-la’s essence of business to be the ﬁrst choice of our guests, colleagues, shareholders and business partners and to delight our guests every time by creating engaging experiences and offering hospitality from the heart. the team at the hotel aims at making the hotel the one stop hub for our guests. our commitment to providing guests with distinctive standards of hospitality and service enables us to stand out amongst our peers. the business is primarily corporate in nature. how much of a role does your f&b segment in the hotel play in driving revenue? what are some trends in f&b? are you getting local traffic as well? revenue from the food and beverage segment in the indian hotel industry has been constantly increasing. the rising cultural trend of eating out along with the as the aspirations along with the disposable income of consumers is on the rise, the purchasing power of women has improved, and men are fast emerging as a separate consumer category. our current indian market has become brand conscious with the advent of luxury brands with varying age groups including toddlers who are getting attracted towards brands. ,, the months post demonetization, how has it been business wise? central delhi is rapidly growing as the hub of some of delhi’s best in hospitality, food and lifestyle with an equally increasing footfall. keeping with the central delhi target, shangri-la’s - eros hotel, new delhi has been leading the industry with its newly revamped food and beverage offerings, refurbished rooms and the newly opened chi, the spa. its award-winning multi- cuisine restaurant, tamra, was launched as part of the unveiling of the ﬁrst phase of the new look of the hotel. tamra has introduced a high level of creativity to casual dining with an array of inspired offerings from across the globe. the hotel has also revamped the existing tea lounge and launched mister chai, the only lounge in the city to focus on regional indian street food in a modern and luxurious way with a focus on providing the best cup of indian chai to our guests. shangri-la’s very own signature restaurant, shang palace brings the best of yunnan, cantonese and sichuan cuisine to the food connoisseurs of new delhi. grappa, the alfresco bar, which creates a picturesque backdrop to the guest arrival experience at the two general manager, shangri-la’s - eros hotel, new delhi parmeet singh nayar rise in disposable income seems to be driving the growth in food and beverage not just here but world over. the emerging trends feature a focus on authenticity in the cuisine served along with theatrical ways of presentation to engage the consumers. there is also a focus on keeping it simple and going back to basics even while offering creativity and innovation. the average indian is now well travelled and exposed to a mélange of cultures and they enjoy eating out. about 60 percent of our restaurant business on weekends is localized. gst is expected to be rolled out soon and the industry has shown displeasure over proposed rate slabs, especially for luxury hotels that are to be pegged at 28%. what is you take on this move and how do you think it will impact your business? currently, the 28 percent is heavy on the luxury segment and would have more of a dent on the pockets of guests visiting luxury hotels. interestingly, india’s tax rate and structure is relatively the highest wherever leisure plays an important role. however, it is too early to comment on the impact of the gst keeping in view that its yet to be implemented. let’s wait and watch to see how guests react! what is your take on the future of the luxury segment in india? will the indian currently, the 28 percent is heavy on the luxury segment and would have more of a dent on the pockets of guests visiting luxury hotels. let’s wait and watch to see how guests react! market be able to pay rates that are globally accepted? what do you think on this? the luxury segment in the future would become a way of life, just the way it is in a majority of developed countries. as the aspirations along with the disposable income of consumers is on the rise, the purchasing power of women has improved, and men are fast emerging as a separate consumer category. our current indian market has become brand conscious with the advent of luxury brands with varying age groups including toddlers who are getting attracted towards brands. due to easy availability in metros, extensive advertising campaigns, marketing activations and the role of digital media and the extent to which it is being used as a tool to engage high-end consumers luxury is poised for a further rise. in terms of the micro-market of central delhi, how has the market been in the past few months? if you take stock of adjacent specialty restaurants is an ideal place to unwind, rejuvenate and revitalize after a day’s work and stress. sorrento, the new italian restaurant offers a unique neapolitan dining experience in lutyen’s delhi, which combines the freshest mediterranean seafood and handmade pastas for the culinary adventurers of new delhi. the newly opened chi, the spa is revamped into its global brand drawing inspiration from the origins of the shangri- la legend, a place of personal peace, enchantment and well-being. the hotel is also in the process of refurbishing its rooms and suites to enhance every area of hospitality for the guests. since demonetization, shangri-la’s - eros hotel, new delhi has not seen any unproﬁtable hit in its business owing to its higher share of international guests and the aforementioned highlights. the occupancy rate has been high despite the seemingly staggering process of demonetization.
hote ls + resorts 31 we are known for ‘true value’; mid-segment is the driver of growth, notes rishi puri in an extensive interview, rishi puri explained the rationale behind lords hotels having created such a formidable presence in the gujarat market, beside talking on the future course of action for the hotel group. having recently launched their first property in nepal, the group is eyeing expanded footprints with properties in several indian states, including madhya pradesh and uttar pradesh. excerpts: by shashank shekhar a number of industry experts have repeatedly indicated that the mid- segment is expected to drive the larger growth story of the hospitality industry in the country. given that you are a mid-segment player, has this assertion reflected in your revenue and business in the past years? there is a shortage of hotels in india and this shortage is the gap in demand-supply of the mid-market hotels segment. in line with the expectation, signiﬁcant inroads into this space have been made and today many domestic as well as international brands have entered this segment hoping to capture a bigger share of the pie. of the estimated 90,000 hotel rooms, almost 50 per cent rooms are in mid-market segment in india. so yes, the mid-market segment of hotels is emerging as the next big potential in the hospitality domain and in a few years may become a key driver for growth in the sector. a look at the inventory of hotels under your group shows an unusually strong presence in western india, more so in gujarat. what is the rationale behind this strategy? why this consolidation? both as a commercial hub and a tourism destination, gujarat has been one of the fastest growing regions in india. fortunately for lords, we were present in gujarat before the beginning of the boom, and had gained considerable market penetration and market understanding. so, we were poised to take advantage of the growth. interestingly, the group’s journey also began in gujarat in the year 1997 with silver plaza, a modest 40 room hotel property in surat. with our founder and cmd, pr bansal’s goodwill in the community and the brand’s success, the enterprise gained trust and traction in the region. gujarat served as a fertile ground for lords hotels & resorts to develop and manage hotels as we were the most equipped and experienced players and still are, in the booming hospitality market there. eventually, as we began to explore op- tions even outside of the region, for every one property that we set up outside of the state, we clicked two within it. today, lords hotels & resorts has sixteen hotel properties in gujarat alone and is one of the biggest hotel chains in the state. our expansion and presence in gujarat had been more organic earlier. however, as time progressed, we began consolidating based on the tourism trends of the region. we have clearly identiﬁed with the target rishi puri vp, lords hotels & resorts traveller groups and offer stays that are “true value” options. additionally, being located at close proximities to the points of interest, we have the advantage of accommodating travellers to suit their convenience. so gujarat has come to evolve as a strategic region for us and consolidating our position here provides a hedge or rather a cushion for our ventures outside. we understand that you have a few hotels in pipeline in up. however, what about central india? are you considering a foray in, say, madhya pradesh and even down south in tamil nadu? yes, we have a couple of potential properties in lucknow and kanpur in uttar pradesh and also one in rishikesh in uttarakhand in the north where lords hotels & resorts may establish its presence soon. we are in the ﬁnal round of talks with the owners of a property in indore that has 100+ keys and are very keen on debuting in madhya pradesh (mp). the mp state government is improving infrastructure and inviting investors and businesses. the state has a good tourism bandwidth and only a small percentage of its potential has been realized. other than this, several cities in the state have been earmarked for development into smart cities which too is a good sign for the hospitality sector, especially in the mid-market segment. in the south, too, we our expansion and presence in gujarat had been more organic earlier. however, as time progressed, we began consolidating based on the tourism trends of the region. the state receives a regular inflow of tourists from the pilgrimage and business sections and there is a dearth of hotels that offer customised and value offerings to such guests. we have clearly identified with the target traveller groups and offer stays that are “true value” options.,, only makes for a very interesting place to be in for us and we hope to make the most of it with the ﬁrst mover advantage. we have been open to expanding into our neighbouring countries, including southeast asia and even in africa. however, the tourism landscape within our country has become so interesting that often we feel we would do much better by concentrating our efforts in entrenching our brand here. we are extremely positive about the future of hospitality and tourism in the country. what are your thoughts on the gst proposal of the government? how do you think the proposed rate slabs will impact your business? we were hoping for a more reformative gst than the one the government has announced for the hospitality sector. the gst for hospitality should have rationalised the tax structure with a single point tax and made india a more competitive tourism destination. unfortunately, by spreading it over differential slabs, it will do just the opposite. by increasing the rate to 28 per cent for mid-to-high class hotels priced above `5000, which even a mid-market hotel chain like us falls under, it discourages tourists to save inbound tourism and to maintain growth, we are positive that a single tax structure at 12 per cent be considered for hospitality under gst. are very keen on expanding and in the recent past launched a premium resort property in thrissur, kerala. however, progress for us has been slower than expected in the southern region for zeroing down on any potential projects including tamil nadu. your first international expansion came recently with a property in kathmandu. what made you choose nepal? are you looking at southeast asia as a region as well? nepal and india share many similarities in cultures and beliefs. from the 729,550 number of foreign tourists that visited nepal in 2016, 118,249 were indians, which is a signiﬁcant 16 per cent of nepal’s tourist inﬂow. this is a demography we are very familiar with. moreover, the ftas to nepal registered a 24 per cent increase between 2015 and 2016 which is a very promising sign and as an adventure tourism destination nepal remains to be fully explored yet. summing it up, nepal who are moderate spenders. this section of tourists is very conscious of value for their money and this percentage of tourists is signiﬁcantly higher than the tourists who check in either 5 star hotels or even in extremely economic tariff hotels. we think this will affect inbound tourism by at least 10 per cent. more ironic is the zero tax on hotels with tariffs of `1,000 or below. the signal that is being sent out is, india would prefer only back-packers and for those with more money spends should look for other destinations. as it is, india as a destination is more expensive than countries like malaysia, thailand, vietnam, and cambodia among others. to save inbound tourism and to maintain growth, we are positive that a single tax structure at 12 per cent be considered for hospitality. this will help maintain parity in the industry and allow for a level playing ground for the indian hospitality to compete with the neighbouring tourism countries. dmcs need to highlight manali as a part of itinerary for the mice segment to do well the himalayan in manali is a member hotel of privy, a collection of finest boutique hotels. we speak with nishat mohi to understand how the manali market is unfolding. he notes that while the leisure segment has been going strong, dmcs need to keep manali as a part of their itinerary for realizing the untapped potential of mice segment. by shashank shekhar how is the manali market doing right now? how is the peak season unfolding? manali is experiencing and has experienced an upsurge in tourist movement over the last several years. besides the traditional families and honeymooners, a breed of younger and fashionable crowd is beginning to prefer manali over other hill/ mountain destinations. there are plethora of hotels to suit every pocket. this year the unrest in kashmir has also beneﬁtted manali with travellers ﬂocking spring onwards. nishat mohi director, the himalayan it is a niche, boutique property. what is the product positioning in the market? built in the victorian gothic revival style and perched at an elevation of 2003 metres, our castle & cottages are set in the midst of apple and cherry orchards in manali area of north western indian himalaya. we have found inspiration in the privileged backdrop, overlooking resplendent snow capped mountain peaks and waterfalls plunging down rock faces, whilst looking towards a vibrant and propitious future. here grandeur, elegance and style have conspired to create intimacy and warmth without pretension. the himalayan’s ﬁne blend of inimicability and characteristic eccentricity will ﬁnd appeal with connoisseurs of tradition, looking for a difference. like the gentleman who sports jaun- tily-coloured braces beneath his conservative tweed suit or harbours a penchant for embroi- dered silk pyjamas, the himalayan is proud of its individuality but doesn’t scream it. how much of your business is domestic and how much of it is international? do you get any corporate or mice business, or is it purely leisure driven? majority of the business comes from the do- mestic market. unfortunately, dmcs have not highlighted manali as part of their itineraries. typically, foreign visitors are transients, stop- ping for a night or two to acclimatize en route to leh. however, we can safely say that have found appeal with the majority of fits and have captured the top-end of the spectrum. there is room for improvement in the mice segment. we have hosted a few conferences, but few and far between. the last one we hosted spanned a week for a group of canadian yoga teachers here for a workshop.
32 online: ficci seminar infra, tax reform and marketing will muscle up the wedding segment: stakeholders in a first, ficci organised a wedding tourism summit in the capital. a one-off undertaking, exploring the churnings in the multi-billion dollar industry, brought together diverse stakeholders – who deliberated at length the untapped opportunities and existing hurdles in the way forward. industry insiders raised a number of concerns, mostly in the realm of policy making, ranging from policies pertaining to movement of international private charters, to strengthening overall infrastructure and last-mile connectivity in realising the potential of the segment in pushing country’s tourism numbers. while a number of destinations in certain states like goa and kerala have created a pull for themselves as premier wedding locales, given the intense competition faced by nations in southeast asia and other regions, stakeholders urged the government to make earnest efforts in creating robust last-mile connectivity for opening up newer destinations and settings. also, stakeholders concurred on the need for stronger marketing and outreach to present india in the right light. many panellists rued the fact that nations with immeasurably lesser to offer were garnering much larger chunk of travellers from this segment, and india’s inability to court them was a result of lacklustred outreach. mot joint secretary suman billa iterated the importance of wedding segment in attracting high-spending international travellers, bringing in foreign exchange for the exchequer. he also pointed out that wedding segment travellers spent more time and money, and travelled in larger contingents, making them an attractive segment to target. chaired by suman billa, joint secretary, ministry of tourism, government of india & chairman, icpb, the session also saw fair and frank exchange of ideas between panellists and audience. we bring us excerpts from the session’s proceedings on the way forward for the wedding industry in the country. by shashank shekhar rajeev jalnapurkar, director/chief executive officer, ramoji film city we do about 200 ﬁlms a year. we also do about 200 conferences each year. let me confess here that the business of weddings was taught to us by partners, decorators and other guests: to have a wedding at the blockbuster locations of ramoji film city. when i was watching the advertisement ﬁlm of rajasthan tourism, i realised that we help people get engaged at the ramoji film city, have sangeet at the railway station and, probably, have the grand ﬁnale at the mughal garden. that is the way we have offers for the wedding. we provide service, end-to-end solutions with our partners. i am not here promoting ramoji city, but i would like to convey to you that we will play the role of a good facilitator for weddings to happen at the ramoji film city. rajesh mohan, general manager, aamby valley city & hotel sahara star we have over 10,000 acres of destination wedding place. i have also been to ramoji film city, and it is really very nice. we at aamby valley look at providing everything to our guests, right from making their wedding cards, to having 37 different venues – what we are telling them is leave it to us. we indians have been able to come up with a destination where you can host a wedding for over a thousand people. that is a plus point. obviously, for us, it is good mileage because we get highest rates from weddings. if you compare it to conferences, rates are double and the host is there to spend it out. we host, at least, a wedding a week. it is good that a lot of weddings are happening at new destinations, but we see a lot of weddings going towards southeast asia – thailand, malaysia, and other destinations, because they are able to market it much better. they have good infrastructure. what india needs today is marketing of destinations, connectivity into remote areas; destinations where experience can be provided. given the potential we have for wedding destinations in india, we can do much better, so that it is not left to a goa, or a jaipur, or select few cities. i am sure there are many more destinations. i mean, you go to macau. what is there in macau? nothing. but a lot of weddings are happening there. it is just a photo-copy of a city, but the way they promote it matters. samit garg, ceo, e-factor entertainment infrastructure, in terms of air-connectivity, i am talking about scheduled carriers. i am talking about the rules in civil aviation that were crafted, when the meaning of civil aviation was also not well understood. in order to facilitate bigger movements, in terms of group sizes, i think dgca is still working on some very primitive guidelines when it comes to allowing private aircrafts moving 200-300 people. with the help of ministry of tourism, it is one issue that needs to be looked upon. we are not allowed to get charters from overseas which are available at one-fourth of the price of what indian companies offer. we have to ﬁrst go and get a noc (no objection certiﬁcate) stating that if they cannot do it then only the other players will be allowed. it is a major deterrent when we talk of promoting india internationally as a destination for wedding tourism. are saying. i think one of them is the need for weddings to be, predominantly, different. everybody comes to us saying that give us something that has never been done. most of us have seen the way rajasthan has showcased itself and are spellbound at what it has to offer. there are so many more states in india. there is meghalaya, shillong and assam, darjeeling and beaches in odisha. for if we really want to get weddings into our country, the markets to focus are markets where weddings are celebrated the way they are celebrated in india – which are azerbaijan, israel and the middle-east. the overall structure of taxation is very important. if i make a hundred rupees, i ﬁrst pay 35 rupees as income tax. if i go to a luxury hotel, i end up paying 35% taxation by using services in that hotel. i am, effectively, getting only 40% of my money’s worth. i think that really needs some working on. and with this in the background, we are curbing expenses on weddings, it is very demotivating and demoralizing. we are talking of this term ‘wedding tourism’, there really needs to be a charter deﬁned where privileges, if not privileges then certain incentives that provide us an environment to comfortably work with is the need of the hour. the third point which is very important is international weddings coming into india. let me tell you, as the ministry of tourism and as india at large, if we really want to get weddings into our country, the markets to focus are markets where weddings are celebrated the way they are celebrated in india – which are azerbaijan, israel and the middle-east. these are the places where weddings are even bigger, in terms of the size and scale of the celebration. the money spent is, probably, four-times more. if you want to go out and get business into our country, these are the areas to focus on. chetan vohra, founder, weddingline i am not going to repeat what other panellists those of us who have travelled and those of us who are scouting for new locations are invited for these fam trips to thailand. it breaks my heart to see that we are actually sitting on the other side of the same sea and wowing the fact that their beaches are so clean and waters are crystal clear. whereas, we are just two thousand nautical miles on the other side, and we have everything going for us, except the vision of someone. so, i think if mot and other bodies are looking at wedding tourism, india has great potential of great destinations, all across. if other states start coming together the way rajasthan has and show us venues that most of us are not aware of, i think that can do very well and give us great platforms to promote weddings. the other thing is that there is a big community of pios (person of indian origin) and nris who have very strong cultural roots in india. they also want to come back here and get married. they, again, go by the rule book. they come to an event management company, or they look at hotels in jaipur or goa. they are the people who have an appetite for being different; appetite for experimentation and the money to spend. so, if we can start looking at new destinations and start cataloguing them and promoting them, reaching out on mini fam trips. i think there is huge potential for us as well.
online: ficci seminar 33 addressing connectivity piece to make india a competitive wedding destination market, says suman billa suman billa, joint secretary, ministry of tourism was at his candid best. speaking to industry stakeholders at ficci seminar on wedding tourism, he detailed government’s measures on policy and infrastructure front to augment footfalls in the segment, beside taking stock of some of the bottlenecks that continue to stifle the growth of the sector. in a detailed interaction, he outlined the road ahead. on the need for not capping the proposed spending limit on weddings in india the point is well taken. we need to look at it. now we realise that domestic tourism is crucial. there was a time when we had to look towards foreign guests when came to hotels charging rates of 100 dollars or more. today, the indian consumer is willing to pay top dollar for a hotel room and perhaps, there is more revenue realised from f&b segment by these customers. we are fully aware that every wedding that is taken in the country, which does not go out, means so much money into the indian economy. that is so much more money that comes into the foreign exchange reserve and contributes to creating employment and so much more. that is something that we all realise. states need to take the lead what at happens at the level of policy making, and i am willing to bet my boots on it, if you look at the budget document of any state, there will always be something that goes against it (wedding segment). that is something that is not going to be resolved soon and needs to be worked on a long-term basis. what we can do, clearly, to see what are the other things that needs to be ﬁxed. gst comes as a blow; addressing connectivity woes top priority of the government the gst is a blow. there is absolutely no doubt about it. but all said and done, i think it will be around 18%. so, there are ways in which we need to look at it. one way is to look at is the forex if we can. we can pitch for a lower rate of tax on that. but i think the critical things mentioned during the discussion like connectivity is something that we will be working on a lot more. if you look at the aviation connectivity, much of them are around the trunk routes – delhi-mumbai, mumbai-chennai – these are the most taken routes. but stand-alone destinations like, let us say khajuraho has only one ﬂight and it is a great tourist destination. there is one airport and it is a dying destination, because there is simply not enough airlift capacity to be able to send enough people to ﬁll in rooms. so, on the aviation side, we have started the regional connectivity scheme (rcs) in which we are doing a reverse bidding process and we are saying that the government will pay the operator to operate routes – where the operator may not be able to operate otherwise. on the railway front, we are at a very advanced stage to look at facilities for tourist coaches. there are a lot of people out there to whom if you provide clean facility and comfortable journey with reasonable food and experience, they are not averse to paying more money. so, as a wedding planner, if you are able to do a coach which is state-of-the-art and luxurious, people will pay a premium. inter-state road tax to go online of course, on the road connectivity side, what people across the country rue is paying inter-state tax. every time one reaches a check-post, one has to pay money. i think today, the indian consumer is willing to pay top dollar for a hotel room and perhaps, there is more revenue realised from f&b segment by these customers. we are fully aware that every wedding that is taken in the country, which does not go out, means so much money into the indian economy. that is so much more money that comes into the foreign exchange reserve and contributes to creating employment and so much more. ,, suman billa joint secretary, ministry of tourism we are at the ﬁnal stages of (introducing) electronic payment where one can pay it online and there is a mechanism by which the payment will be credited to the account of the respective state. i think if we can do these three things and if we are able to crack the piece about the charter movement, we should be able to address the connectivity piece reasonably well. it is not that we have just started work on it. we have been working on it for the past couple of years and are reasonably close to it. the new civil aviation policy is ﬁnally progressing. one thing that we have constantly advocated and pushed for, and we have gotten away with it, was to remove the principle of reciprocity. earlier, the entire demand was determined by the fact that if germany allows to ﬂy 100 passengers, you will allow germany to ﬂy 100 passengers. we said that it was a short-sighted view of things. if india has to grow, not just as a tourist destination, but even for make in india, the airlift capacity is an enabler. if a thousand people are ﬂying, they are ﬂying for something. they do not come here to swat ﬂies! their coming here enables the economy in multiple ways than just having a narrow view of what is the revenue that we are generating. it is something that the pm, himself, has pushed for. so, we have done away with reciprocity. central europe, se asia emerging favourites for the outbound this summer: neelu singh beside malaysia, most of the se asian destinations are receiving ample indian outbound while a few untapped destinations like cambodia show tremendous promise, shares neelu singh. by tf bureau how is the southeast asian market doing? has the growth in numbers been on the predicted lines? south east asia is witnessing a churn in terms of arrivals. while singapore and thailand have continued to grow, malaysia has not grown to its full potential. i feel there needs to be more marketing effort. bali has beneﬁted with the launch of garuda airlines and air asia ﬂights from mumbai to bali via bangkok. this is a very popular destination for indians and air connectivity will play a crucial role. other destinations that are picking up is vietnam and cambodia. though the numbers are small, they have the potential to grow. what works to the advantage of south east asia is connections from metros and tier 2 cities. for example, airports such as jaipur, ahmedabad, lucknow, kochi and amritsar have direct air connectivity to singapore and kuala lumpur. two months ago, air asia started direct ﬂights from bhubaneshwar to kuala lumpur and this has opened new markets for people residing in orissa planning a visit to the far east. similarly, thai smile has connections to key tier 2 gateway points. how is the indian outbound doing? what are some top international picks in terms of destinations this summer? have you noticed a considerable change in the outbound to the usa post the new government’s diktat related to visa and emerging visa related hassles? the indian outbound market is on a growth trajectory and national tourism organisations are vying with one another for grabbing the attention of the indian traveller. according to our estimates, over 17 million indians have travelled overseas in 2016 and this number is increasing. according to the wttc estimates, by 2020, more than 50 million indians will travel overseas. travelling overseas for a vacation is aspirational for indians and we see a large number of indians from metros, and tier 2 and tier 3 cities travelling overseas. this has also been aided by an increase in ﬂight connectivity from these airports directly to international destinations. summer is traditionally a period when people opt for europe, due to its pleasant weather. this year we have observed that there is a demand for central european destinations such as poland, czech republic, hungary and austria, to name a few. these destinations have opened up to the indian tourists in a big way. similarly, there is demand for niche destinations such as south africa, kenya, seychelles and israel to name a few. with respect to the usa, the demand will never dim. one visit outside the us summer is traditionally a period when people opt for europe, due to its pleasant weather. this year we have observed that there is a demand for central european destinations such as poland, czech republic, hungary and austria, to name a few. these destinations have opened up to the indian tourists in a big way. similarly, there is demand for niche destinations such as south africa, kenya, seychelles and israel. ,, neelu singh ceo & director, ezeego1 consulate or embassy will give you a true picture with the number of indians planning to visit the usa increasing year-on-year. indians are very optimistic in getting visas to the usa. as an industry insider, what is your take on the proposed slabs for hotels and airlines under the soon-to-be- implemented gst? how do you think this new tax structure will impact your business in the coming days? what is your suggestion to the government on this front? i think it is fair to say that gst subsumes all other taxes and there is a give-and-take for all the destinations. i do not think that the rates will deﬁne where one travels for a vacation. in some time, things will quieten a bit and it will be business as usual. except for a few, i think that gst is good for the overall health of the indian industry.
34 online: trends with a new brand campaign, yatra aims to catre to travellers seeking experience one of india’s leading online travel portals, yatra.com recently launched a new ad campaign which comes close on the heels of the company having changed its logo to a more swanky one. tourismfirst spoke to vikrant mudaliar and discussed the importance of brand ambassadors, what makes a ‘smart’ traveller and the idea behind the brand repositioning exercise: yatra’s new marketplace model will help him customize his travel and allow him to make his arrangements in his own manner for his unique experience. the idea was also to convey the ever expanding portfolio of travel products which yatra has such as flights, hotels, holidays, cabs, homestays, activities, train, bus and the contrasting target audience which it caters to, thus, making it india’s travel planner.,, of travel and are ready to experiment and discover more. through the new ad campaign, yatra wanted to establish the fact that it caters to this traveller who is looking for this enriched experience. yatra’s new marketplace model will help him customize his travel and allow him to make his arrangements in his own manner for his unique experience. the idea was also to convey the ever expanding portfolio of travel products which yatra has such as ﬂights, hotels, holidays, cabs, homestays, activities, train, bus and the contrasting target audience which it caters to, thus, making it india’s travel planner. how relevant would you say is the idea of appointing brand ambassadors from a marketing perspective today as outreach continues to become more and more effective with technological progress? signing him as our endorser, we hope to break through the clutter and expand our reach beyond the metros and penetrate further to tier 2 cities. there has been a lot of talk in the industry about the ‘smart’ traveller. keeping that in mind, where would you say the focus lies, in terms of outreach, website or mobile apps? we have seen the mobile booking segment grow signiﬁcantly and the market is deﬁnitely headed in that direction. with the easy availability of cheaper smartphones and rising internet penetration via the mobile, an increasing number of travellers are researching and booking their travel on the mobile. yatra’s investment in its mobile platform has led to a rapid increase in mobile bookings with 72% of trafﬁc from mobile. though majority of these bookings are from we are aggressively using data analytics and artificial intelligence in marketing and to enhance customer service. the time for refreshment and a complete brand overhaul, thus, came the new brand identity which is more contemporary, evolved and clearly showcases the richness of our product. even with launch of the new campaign the idea is to create a brand connect with the new age indian traveller and position yatra as a versatile platform that has something to offer to everyone. could you give us a broader insight in to the idea behind the campaign theme and what is the target audience? yatra as a brand has evolved over the years and has learnt to adapt itself to the ever changing consumer behaviour. today, travellers are looking for more in terms over the years external associations have proved to work in favour of the brands as they signiﬁcantly impact the brand’s image. it helps in strengthening the brand appeal and recall amongst customers. having a brand ambassador also assists in marketing the brand through social media channels and create buzz for the brand. yatra has always been the pioneer in having a brand ambassador right from 2007, at a time, when none of the other players had one on board. the brand is, now, more contemporary, evolved and technologically advanced in nature. that’s why the decision to get ranbir kapoor on board as the brand ambassador. ranbir is a very popular youth icon who is experimental and bold and by the metro cities, tier ii cities are also not far behind. what has been the impact of big data and ai for your customer outreach? could you give us some insight in to the influence of personalisation on your market strategy? we are aggressively using data analytics and ai in marketing and to enhance customer service. we use data analytics to personalize the marketing messages (content, timing, etc.) so that they are more relevant and actionable for the users. we are using ai based chat systems that customers can use to get their queries answered without calling our call center. vikrant mudaliar chief marketing officer, yatra.com by anagat choudhary with the recent unveiling of the new logo and now this campaign, what is the positioning that yatra is trying to achieve in the market? the indian travel industry along with the indian traveller has changed and evolved over the years. we as a brand, too, have advanced manifolds since our inception. with our ever expanding portfolio of travel products, we wanted to position ourselves as one-stop travel solution. moreover, the yatra brand identity which was being followed was almost a decade old and with travel space evolving at the rate it is, we felt it is google report boost for goa’s hospitality industry, retains top slot as a destination google has recently released a report which has positioned goa, once again, as the numero uno destination for indian travellers. the results of this report is based on searches made between january to april this year on the search engine. this news is sweet music for the hospitality industry in goa which will be a natural beneficiary of this tourist influx. by tf bureau goa, yet again, has demonstrated its pole-position in the list of domestic destinations preferred by tourists, domestic and international. it registered more than 6 million tourist footfalls, both domestic and foreign, most of whom have been taking to its natural beauty, adventure activities, festival and cultural tourism and a lot more – 365 days of the year. driven by these numbers, a recently released report by tech-giant, google has called goa “the most preferred destination”. the result is based on searches conducted by indians between february and april 2017 on google. has found encouraging response from newer markets like middle-east and australia. reacting to the development, manohar ajgaonkar, minister for tourism, govt. of goa said that google india report had rightly positioned goa as the most preferred place in india for tourists. “goa’s natural beauty and bountiful avenues for leisure and relaxation is a very big draw for tourists all through the year. goa tourism will continue to make this state a hot spot for tourists in the coming months and years through new innovative products and services, tourism infrastructure projects and add more value to its offerings for tourists,” he said. calling it a “great news for the tourism one of the major reasons of goa’s success is the number of repeat clientele it receives through the year – both domestic and international. in recent years, goa tourism has been assiduously cultivating new tourism products and diversifying existing ones in a bid to maintain its traction. the development is also a reﬂection on the efforts put by the state machinery in aggressively promoting goa in distant shores. having maintained steady numbers from europe, the state department industry in the state”, savio messias, president of the travel and tourism association of goa (ttag) said “we hope that all stakeholders keep up the good work being done so that goa remains the top most tourism destination in the country.” one of the major reasons of goa’s tourism industry’s success is the number of repeat clientele it receives through the year – both domestic and international. similar sentiments were echoed by rajeev kale, president & country head - leisure travel, mice, thomas cook india, who said “at thomas cook india, we continue to see strong uptake for goa over last year, with an increase in bookings of up to 15%. goa is increasingly emerging as the preferred destination that is favoured by consumers all year round and has the highest number of repeat clients than any other destination in the domestic travel segment. with extensive business volumes and revenue coming from mice and leisure travel, goa continues to feature as the ideal tourist destination within india. at thomas cook india, goa has always been a top favourite for its local sight-seeing experiences, as also its famed goan cuisine- culture; and with a unique approach to hospitality, goa continues to attract tourists given its range of entertainment options, vibrant nightlife and adrenaline-infused water sports like yachting, diving, jet-skiing, para-sailing, dolphin tours, etc.”
outbound: trends 35 asian destinations and domestic travel gain as outbound into usa nosedives the recent spate of political diktats on movement, incidents of terrorism, political churnings and tightening of visa regulations have had a cumulative impact on the outbound into usa and europe, shares rajeev kale. however, asian countries and domestic travel, owing to ease of travel and significant air-connectivity have gained in the past months. excerpts from the exclusive interaction. by shashank shekhar what could be the impact of the recently imposed ban by arab nations on qatar and banning of airspace for aircrafts into and from qatar? fortunately, trafﬁc onto qatar within uae is very limited. there are two sectors which will have an impact. one is the trafﬁc ﬂying to egypt on qatar airways and other to dubai – which are tourist destinations. any which ways, trafﬁc to both the destinations, out of india, on qatar airways is quite limited. if one is ﬂying to egypt, egypt airways is the most preferred option and there are multiple options to dubai. the news has come very recently. we are also trying to analyse the overall impact. prima facie, the only major concern is that how much will it hit the oil prices, because if the oil price increases, it will have a direct impact on air fares. that is where the major concern is. united states has been one of the top destinations for the indian outbound. with the new administration’s measures and visa-related diktats, do you see the outbound looking for an alternate to it, a newer destination? has there been a change on the trend in the indian outbound to the us front? as far as the usa as a destination is concerned, we have certainly seen a signiﬁcant dip in numbers. there has been a sharp decline in the mice segment as well, compared to the last year. the decline is almost 30-40%. as we speak, the last year same time, between january to june, we had while our numbers have not shrunken significantly on the leisure side, the top- line has not seen any growth. so, the usa market has definitely seen impact, both in leisure and mice segments, but the impact on the mice segment has been significant. more importantly, there has been an increase in visa rejection which is not a very encouraging factor for, either, mice or leisure customer to opt for the usa as a destination for travel. ,, signiﬁcant growth. in the leisure segment itself, the growth has been close to 35% while we have grown close to 20% in mice segment. overall, in the mice segment, we have a seen a little slump this year as compared to the last year – and this is also mainly because of the average transaction value. indian currency has gained as well. all these factors have impacted the value of a tour. if you look at what happened recently in the uk, incidents like these have kept the passengers on tenterhooks. how is the domestic market doing? industry experts, especially, hoteliers have placed their wager on the domestic travellers segment. government, too, seems to be pushing it with the recent launch of the regional connectivity scheme (rcs). now, one can fly from delhi to shimla and other tier-2 and tier-3 cities at reasonable air fares. have you seen any incremental gain in numbers on the domestic front? our numbers till june, including the forward booking, pegs us at least 34% higher than what we were last year in the domestic rajeev kale president & country head - leisure travel, mice, thomas cook (india) almost 2500 passengers booked for travel in the h1 visa category. whereas in this year, we have had not even a thousand people. in the leisure segment business, we have seen retardation in atv (average transaction value). the rate of exchange as well… the rupee is stronger by 3-4% than what it was the year, compared to us dollar. both these factors have had an overall impact on turnover in business to the usa. while our numbers if you look at what happened recently in the uk, incidents like these have kept the passengers on tenterhooks. have not shrunken signiﬁcantly on the leisure side, the top-line has not seen any growth. so, the usa market has deﬁnitely seen impact, both in leisure and mice segments, but the impact on the mice segment has been signiﬁcant. more importantly, there has been an increase in visa rejection which is not a very encouraging factor for, either, mice or leisure customer to opt for the usa as a destination for travel. with all the pandemonium that has engulfed america and the europe – we have had brexit, followed by a bitterly fought french elections, followed by recently terror attack in manchester. do you see all these leading to tourists opting for completely new regions? what are some regions that are emerging as the natural beneficiary of the process and gaining on the indian outbound front? certainly. our numbers to asia, both, in leisure and mice segments have seen travel segment. in spite of having kashmir as a write-off destination in 2017, due to the unrest, we have seen such a growth which, i think, is a direct impact of various things. one is that people are opting for more holidays in india, compared to overseas. and what would you attribute this trend to? would you attribute this to better air-connectivity, or shorter and more frequented holidaying by younger travellers? it is certainly got to do with the budget. also, security factor is always the top priority. then there is ease of travel. travel within india is very easy, if one is looking for a short-haul holiday. there is no visa issue, air fares and connectivity is fantastic. except for bagdogra in assam, tickets to every destination is available under ten thousand rupees. holidays into leh/ladakh, andaman’s and the northeast is sold out. there are no quality hotel accommodations available at these places. bahrain looking to tap wedding outbound to drive numbers showcasing its unique tourism products, most of them niche and relatively new to the indian outbound, bahrain is seeking to expand its outbound numbers from the indian shores. we speak to sunil mathapati, country manager, bahrain tourism to understand what is driving numbers and the imminent plans ahead. by shashank shekhar what is it that you are offering to indian wedding outbound. you are operating in a very competitive marketplace and there are a number of players that are vying for a share of the outbound. what is the usp of the destination that you are pitching in the market? bahrain is always been known as an island wedding destination of the middle east. with international chain of hotels consisting of huge banquets and venues, the destination is perfect for any event and occasion. bahrain also has numerous options for breathtaking outdoor venues catering to all the segments, be it cuisine or decorations of the venue everything is easily accessible as per the requirements of the planners. the main usp would be its proximity to the indian cities. with under 4-hrs of ﬂying time from all the major cities of india, bahrain will become a good option for destination weddings in the future. the focus being on indian weddings, bahrain tourism & exhibition authority provides assistance and information in making an experience for the families who opts to have weddings in bahrain right from the start. all government approvals are looked at as a priority once the venue is ﬁnalized by the families. on the policy front, it has been a double-whammy for the wedding industry. demonetization, proposals of cap on wedding expense and proposed gst slab rates, with luxury segment pegged at 28%, with all these odds stacked up against you, how do you think all of this will impact your outreach? what are your expectations from the government in this regard? bahrain respects all policy framed by the india govt. bahrain is well aware of the indian wedding industry and the family’s aspirations and desires for having a destination wedding. the ministry has made a well thought strategy to attract indian wedding segment which will provide all assistance by giving unique experience in making a memorable wedding for the families. overall, how has been the outbound from india like there has been significant growth in past few months. we have seen increase in mice numbers and wedding segments is also looking very positive. in terms of numbers, q1 has been really good with 7.3% year on year. ,, sunil mathapati country manager, bahrain tourism in the past few months? how has q1 been in terms of numbers? there has been signiﬁcant growth in past few months. we have seen increase in mice numbers and wedding segments is also looking very positive. in terms of numbers, q1 has been really good with 7.3% year on year.
36 outbound:one&only resorts one &only reviewing growth opportunities in india and world over: philippe zuber one& only as a hotel group has punched well above its weight since its inception. having created a formidable niche for itself in the uber-luxury space with a select number of properties, the hotel group is now in midst of an aggressive expansion, and has recently unveiled new brands and properties in africa. we bring you an exclusive interview with philippe zuber who gives an insight into the rationale behind the move and plans for india and globally. we would also like to continue to develop in countries where we already have existing resorts so we can operate as a cluster, like we have planned for mexico with the opening of one&only mandarina and one&only santa maria de xala building are known.,, on the success of one&only palmilla, yet offering three very distinct experiences. throughout this expansion, we will be ensuring that we continue to provide the unrivalled level of service for which we part of a community. we will ensure that home owners are well looked after and the design celebrates the location, as in all one&only resorts. now you have footprints across china, africa, at multiple locations and many other destinations, but when will we see a one&only resort in india? what is stopping the management from making a foray into india? is it the market or something else? indian resort market is doing pretty well. it might just be the right time? one&only resorts is reviewing development opportunities across the world, and most certainly including india. a lot of factors go into any one&only location, not only does it have to be an incredible destination, which india absolutely is, but one&only has to be in the best location in the destination. what are some important trends in the luxury segment, globally? where do you see the segment heading in the coming months? is the ‘experience’ factor the most president and chief operating officer, one&only resorts philippe zuber by shashank shekhar one&only is a very niche brand with a unique positioning in the market. what led you to look at brand expansion and diversification? one&only resorts announced the expansion of its ultra-luxury portfolio creating one&only nature resorts, one&only urban resorts and one&only private homes. these new experiences will complement the existing resort collection, set in some of the most beautiful locations in the world, offering guests a distinctive style and personality borne of its local culture, a genuine hospitality and a lively energy that is unparalleled. our guests have been requesting for us to be in key cities, provide private homes and develop in new and yet to be explored locations and destinations. following the success of emirates one&only wolgan valley and the strong global interest in nature experiences, it was time for us to re-examine our current and future locations. this brand evolution is an opportunity to offer our guests new locations of nature’s paradise to create once-in-a-lifetime experiences. talk to us about each one of the new brand that you have unveiled. one&only nature resorts, one&only urban resorts and one&only private homes. is there an experience standardization? how will you maintain your usp? our current one&only nature resorts collection are emirates one&only wolgan valley in the blue mountains in australia, one&only nyungwe house (opening in a lot of factors go into any one&only location, not only does it have to be an incredible destination, which india absolutely is, but one&only has to be in the best location in the destination. 2017) and one&only gorilla’s nest (opening in 2018), both in rwanda. we are launching one&only nature resorts because our discerning guests are increasingly interested in incredible once-in-a lifetime experiences and this is exactly what these resorts will provide: immersive experiences full of adventure to allow for exploration and new discoveries. the two properties in rwanda will offer an ideal two-stop destination adventure, once one&only gorilla’s nest opens. across the distance of approximately a seven-hour scenic drive, guests will discover the natural and cultural uniqueness of rwanda. we plan on making further announcements this year. one&only urban resorts is the next evolution on the one&only journey. following the success of one&only cape town, one&only will deliver on the request of our loyal guests, to be in key cities across the globe. our private homes will be found in iconic locations, attached to a resort, the ﬁrst being at one&only le saint géran in mauritius. guests that stay or buy a one&only private home will receive all beneﬁts that resort offer, including access to a private chef, private butler, use the spa and restaurants. the private homes will form crucial element for consumers? it is no longer enough to provide luxurious accommodation and ﬂawless service – a luxury traveler expects personalization and understanding of their desires even before they set foot in the resort. our guests also look for those experiences that create memories that last a lifetime, those experiences that they cannot get anywhere else in the world, and that is what we look to offer our guests at all of our resorts. we are also seeing our guests want to meet and spend time with other guests. it is up to us to provide compelling locations within our resorts that our guests gravitate towards. as a luxury hotel group, what are your most critical markets and have you seen a change in trend in the recent past? has the european market softened up post brexit? how is the chinese outbound shaping up? the usa, europe and especially uk, have historically been top producing markets. despite the imminent election in the uk, uncertainly about brexit and increasing inﬂation, we still see that our target afﬂuent audience continues to travel. china’s success story is unquestionable. china isn’t a market that brands can afford to ignore – a key market for outbound travel for most one&only resorts and most certainly for domestic travel to the upcoming one&only sanya, our ﬁrst resort in china. we feel conﬁdent that we are bringing something new to the destination. we are seeing continued growth out of china. now you have several brands in your portfolio. will we see an aggressive expansion, or will the group’s philosophy of selective development continue? what are some new potential markets for you, if you are seeking an expansion? one&only is currently undergoing a period of accelerated growth and expansion to bring the brand to new destinations around the world. we would also like to continue to develop in countries where we already have existing resorts so we can operate as a cluster, like we have planned for mexico with the opening of one&only mandarina and one&only santa maria de xala building on the success of one&only palmilla, yet offering three very distinct experiences. throughout this expansion, we will be ensuring that we continue to provide the unrivalled level of service for which we are known. our strategic development is not just about new resorts however, but to continue to create unique and tailored one&only moments and experiences. snippets thailand clocks 17% growth from indian shores figures released by the thailand’s ministry of tourism and sports show that during the ﬁrst four months of this year, 12 million visitors came to thailand spending around 620 billion baht. this is an increase of 4.71 per cent when compared with the same period in 2016. the country attracted 12,021,617 international visits for the ﬁrst four months compared to 11,682,144 visits during the same period last year. the kingdom witnessed a growth of 17 percent from india compared to 2016. yuthasak supasorn, tat governor said, “thailand attracts many tourists because it offers experiences that are new and unique, no matter how many times you visit. in the ﬁrst few months of the year, the combination of lovely weather and amazing festivals; such as, songkran or the thai new year celebrations means there’s much to enjoy for travellers, not to mention locals. we are delighted to be doing so well in 2017 and will continue to offer a warm thai welcome to visitors yet to come.”
outbound:dubai 37 indians taking a liking to real estate in dubai, says founder, danube group rizwan sajan, founder and chairman of danube group has been one of the leaders of the real estate industry in dubai. vasujit kalia speaks with him to understand the churnings in the dubai market, beside deciphering the india connect and how dubai remains a lucrative market for investments. excerpts from the exclusive interview. dubai overtook london as the most preferred property investment location for 2017 in a regional survey by cluttons. this is testimony to the sector’s maturation and identity as a safe haven for investment, providing long-term returns. will 2017 be a good year for the construction industry? real estate transactions jumped to dh77 billion in about 20,000 real estate transactions in the ﬁrst quarter of 2017, a 45 per cent spike in value compared to the ﬁrst quarter of last year 2016, according the dld report. with dubai launching a series of mega projects, the emirate's property sector is projected to see ramp up in 2018, thanks to a growing demand for new apartments ahead of expo 2020. there is a total of 4,000 active projects worth an estimated $313.6 billion, setting the stagefor dubai’s solid growth in the construction sector. the uae construction sector is expected to grow 4% this year, driven by a rebound of construction activity. rizwan sajan founder and chairman of danube group real estate business is cyclical and the real estate cycles are shorter now from 5 years to just 2 years, whether it is a positive or negative cycle. by vasujit kalia dubai real estate market is considered to be one of the most celebrated markets in the world what are the reasons behind it? dubai has positioned itself as a cosmopolitan city which is very important part of the success of the real estate business in dubai. it is a commercial capital for three billion people out of the indian subcontinent, africa and the middle east – roughly 40 per cent of the global population. approx.3.5 billon people. the middle east has the most sustainable real estate in the middle east with beautiful weather ﬁve to six months. the quality of life here is high but not as expensive like europe. real estate business is cyclical and the real estate cycles are shorter now from 5 years to just 2 years, whether it is a positive or negative cycle. dubai in the united arab emirates (uae) is one of the most popular destinations for most nationalities, not just for vacationing and shopping, but for the overall aspirational lifestyle it offers. over the years, dubai has also emerged as a strong business hub offering various investment incentives and tax-free policies. to top it, the number of dubai expatriate residents now stands at 2.7 million, which forms a formidable part of the workface here. all these factors, coupled with the fact that dubai strategically located making connectivity very accessible, makes it easy to understand why so many investors of almost 200 nationalities are ﬂocking to invest in the dubai real estate market. the dubai land department's (dld's) annual report reveals a total of 60,595 real estate transactions in 2016, exceeding dh259 billion in value. the year saw foreign investment in the dubai real estate market approaching dh44 billion from 22,834 investors across 136 nationalities. you are the pioneer of real estate in dubai. if you can tell us more about unique payment option if at all you have to attract the middle-income group? danube properties, dubai’s pioneers in affordable housing, has launched a new project called bayz in dubai’s upcoming business bay neighborhood. the announcement of the aed 450 million project was made at a press conference, which was addressed by rizwan sajan, chairman and founder of danube group. buy and sell b2b and b2c. ready to use packages the 29-storey bayz tower comprises of 456 apartment units with magniﬁcent views of the iconic burjkhalifa and other structures such as the marriott marquee, the dubai canal, among others. moreover, the property boasts state-of-the-art amenities including swimming pool, a fully-equipped health club and a kid’s play area cum party hall. ranging from studios to three- bedroom luxury apartments, each apartment comes fully furnished with a modular kitchen, exquisite spanish tiles, and top-notch ﬁnishes. 21-23 september call: +91 9899521421 email: email@example.com dubai’s tax-free status makes rental income more profitable. purchasing a commercial or residential property will not include taxes. once the property is purchased, owners will not be obliged to pay additional taxes in the future. all this and much more perks like rera, lower sq ft rates and the option to own freehold property, makes dubai the tops property investment destination of 2017. ,, sending using this rbi quota each year. this ﬁts into our payment plans due to its diverse population and cosmopolitan lifestyle, dubai offers its residents and businesses a unique environment enriched with hundreds of cultures and a quality of life and work unrivalled in the middle east. this encourages potential and lucrative investment opportunities from around the world, especially india. in recent years, the trend of indians investing in dubai has surged due to exponentially increasing property prices in india – almost 25% of dubai real estate investments are contributed by indians. 2016 saw foreign investment in dubai real estate market approaching aed 44bn, from 22,834 investors of 136 nationalities. indians ranked ﬁrst in terms of transactional volumes and values, with 6,263 investors responsible for $3.27 billion- worth of property transactions, followed by pakistanis and britons. dubai offers 8.5% average yield, compared to maximum 4% in london and 3.5% in paris and mumbai. properties in dubai provide among the world’s best investor returns in terms of appreciation and rent (120% compared to 75% in london and 63% in new york). it also dubai enjoys 20 to 30 percent real estate appreciation annually. additionally, dubai’s tax-free status makes rental income more proﬁtable. purchasing a commercial or residential property will not include taxes. once the property is purchased, owners will not be obliged to pay additional taxes in the future. all this and much more perks like rera, lower sq ft rates and the option to own freehold property, makes dubai the tops property investment destination of 2017. furthermore, every home will include a european technology enabled convertible sofa that makes way for a bed- tucked into the wall. with this project danube properties will offer the lowest price in the business bay area and continue with their famous 1 percent payment plan, starting at aed 6490 per month. indians generally consider dubai as their second home how do you plan to attract the indian buyers who plan to buy real estate in dubai? dubai has traversed a long way from a local trading community into one of the most inspirational, exciting and successful cities in the world in less than four decades. it continues to make global headlines as an immensely attractive destination for tourists, investors and businesses alike. with recent economic changes in india& more importantly with the demonetizationand lack of returns in the real estate sector, indian investors are looking for alternate means of achieving higher returns on investments from different avenues. as such, they are setting their sights on dubai. rbi allows a couple to transfer upto 500,000 us$ per annum, via a bank legally to invest in property abroad. this has been very helpful as a person can buy a 2-bedroom apartment every year in sobha hartland. or even buy a villa in 3-4 years by
38 the l ast page ultralight flight from pokhara with a magnificent view of whole annapurna range dominated by mt. fishtail. breakfast with everest: rediscover nepal bijay amatya, founder, kora tours at kongde. hp incentive group at kongde, for breakfast with everest. breakfast with everest is a unique, one-off and a completely new experience in nepal, which is sure to leave a lingering memory in the traveller’s mind. it is an experience that every traveller would like to cherish in their life. the ride to the everest commences with a helicopter trip from kathmandu to lukla, the only airport for an everest experience, which is at the height of eight thousand feet, starting at 6:30 in the morning. after reaching lukla, the helicopter carries up to four passengers and takes them to experience the heli-mountain ﬂight, which is not only a spectacular visual treat, but also a thrilling prospect, perfect for adrenaline seekers. after touring the mountain, tourists are dropped at yeti mountain home at kongde (5250mt.) for breakfast, overlooking mt. everest, mt. lohtse, mt. nuntse and mt. pumori. the organisers, yeti mountain home, can serve breakfast up to ﬁfty people at a time or more, depending upon how many passengers can be taken to kongde by helicopter. needless to say, given the vagaries of the weather, this breakfast and the ﬂight are always dependant on the visibility and ﬂying conditions. the best time to undertake this ride is from mid-september to may. for details: contact- kora tours p.o.box no. 20764, bhattachan complex - 1st floor thir bam road, baluwatar, kathmandu, nepal. phone : ++9771 4434 733 & 4434 734 fax :+9771 4434 770 mobile : ++977 98010 32148 & +977 98510 32148
new-age drivers of travel best deals and packages on sale tourism under one roof not to be missed log on www.bitb.org 21-23 september 2017 • pragati maidan, new delhi