bitb annual tourism conference 1st & expo r e v i e w 4 - 5 o c t o b e r 2 0 1 6
b itb 20 1 6: hospitalit y concl ave with the top brass of the hospitality industry under one roof, the conclave anchored by hvs turned out to be a unique platform to discuss critical issues impacting businesses, across the board. the conclave hosted insightful sessions, where hospitality practitioners debated on a host of issues including the recent rise of aggregators, impact of sluggish international inbound on revenue generation and how hotels could chip in to market a destination for travel and tourism. kapil chopra, president, oberoi hotels & resorts i am intrinsically ingrained in the culture and philosophy at the oberoi: kapil chopra kapil chopra opened up about his formative years, his decision to take up the president’s job and on being labelled a hard taskmaster. he talked about a plethora of issues including his retirement plan. he was interviewed by manav thadani, chairman, hvs as hard talk session in the conclave. by shashank shekhar mt: what inspired you to get into the hospitality industry in the first place? were you a bad student? that is a question that comes up to me every time? kc: life comes to a full circle, i guess. if you look at it, and i will answer this question in reverse. today, everybody is coming from iits and iims and starting a food- delivery startup. i think people who did hotel management twenty years back were smarter guys. there was no point in going to iim kolkata and then starting a food business in gurgaon. look at all the startups that have been started and shut down, these are all iit and iim guys and i do not under- stand why they went and studied engineering. coming back to me, i only realised i wanted to be a hotelier when i actually entered the ﬁrst day of my hotel management at ihm bangalore. till that time, i remember my father was a doctor and i always wanted to be a doctor. i realised that if you wanted to be a doctor, it takes you ten years to get anywhere. so, i thought let me try hotel management. on my ﬁrst day in bangalore, i realised i was always going to be in hotels. mt: first from the family in the hotel business? kc: yes, i was the ﬁrst from my fam- ily in the hotel business. my father at home was a phenomenal cook, so even when i was growing up… you know, today i always lament the fact that indians have actually started eating out now. when you look at global statistics, indonesians eat out 15 times a month while indians only eat out twice a month. i remember as a family 20-30 years back, we used to eat out in restaurants 2 to 3 times a month. mt: and would you be the last? may be, your children will follow you? kc: i think the choice is there. i love the way things evolve. we had a manger with us who quit and then joined us back again. why i am telling you this is that he was a gold medallist from ocld (oberoi centre for learning and development) and he quit to start a food truck. when i was in the hotel management college, it was a dream to get into ocld. this guy went to ocld, passed out from there and started a food truck, and came back to the oberoi hotels six months back. why i am giving you this example is very clear. i think trends are changing. it is about entrepreneurship and i do not know what they decide to choose. maybe, they will be entrepreneurs, but i do think there will an element of hotels. i cannot be sure. mt: from there on, you have always worked with the upscale segment like the hyatt, taj and oberoi. have you ever worked with budget or mid- market hotels? kc: no, i have never worked with budget or mid-market hotels, but i have a lot of respect for the real budget. i have a lot of respect for what ibis is doing globally. i can tell you that i stay at, because i have a lot of love for art, art hotel. art hotel is a brand, i think, owned by the park plaza group in berlin and it is fantastic. it is priced around 70 euros or something like that. so i think i have a lot of respect for real budget, but from my perspective, i personally do not see a career in the budget market. if that is the question. mt: tell me a one time when you failed as a young employee kc: failed as a young employee? oh, that is easy and it comes to me now. i remember, i was a manage- ment trainee at ocld and a lot of my people in the audience would recall this. we were management trainees and were all posted at the oberoi grand in kolkata. oberoi grand had very strong unions at that time. it was eid – and a lot of people celebrated eid there, there was nobody at the hotel. so it was pretty much the managers and management trainees there. it was a very tough breakfast and then a member said to me that as you have been up since six in the morning, working so hard, why do not you take a 30-minute break, go have lunch, rest for 15 minutes and come, because we are going to be on till mid-night. i said, no i am ok. i remember the name of the manager very well, jai deep singh. i took a break and after eating my lunch, i slept off. ok. and when i woke up it was 2.30. i had gone for the lunch at somewhere around 12.30. that thing sometime still comes back to me. it has been over two and a half decades and i just cannot get it out of my system that i over slept. mt: i had to research a lot, right. so, i started talking to your existing employers, of course i will not name them. but you have a reputation of being pretty curt, crude in the way you run organisations. you can get very colourful with your words, behind the scene. and it all a fair game. what do you have to say to that? kc: i think it is not about being curt or colour- ful. i think something is very clear. i believe a lot in competency and a higher level of delivery. i think when people have a higher level of com- petency and a higher level of delivery, they are able to bring around exceptional results. that is way i have worked in the hotels i have worked in and that is the way today i oper- ate the oberoi hotels. i remember when i was taking over as the president of the group, there was a lot of apprehension. i was 39 years old and there was a lot of appre- hension. there were a lot of senior people in the team. i remember mr. oberoi speaking to me that i hope everybody can come along. it has been four years now and not one senior general manager in the company has left. performance has been exceptional. so at the end of the day it is important to be very fair, transparent and growth driven. because age was never held against me as a criteria. i al- ways tell people that the only way to become successful is to build- ing a pie factor: passion, intensity and enthusiasm. people who have the pie factor will never fail. i learn from what mr. k p singh from dlf says. he says that the problem with india is that people do not demand – and if you come to mr. oberoi, it is the search for perfection. and when you are aim- ing for excellence, it can sometimes turn out to be tough. mt: what do you think is the biggest challenge facing the hospitality industry in india? kc: i think the biggest challenge from the hospitality industry perspective… you know i wrote a quote to my general managers about raising rates across the spectrum and the last line of the quote was very clear. despite all the noises that i see around demand improving, there is no substantial uptick in demand, while a see a lot of supply com- ing on board in a lot of areas. i interviewed a candidate, recently, from a competing hotel and i was surprised, rather concerned about the rack rates there; it is a good hotel in aerocity. the hotel will never make money at those prices. not today, not in the next year and certainly not in the next ten years. i think somewhere along the line, as an industry, we need to unite on two facts. first, what do we do to stimulate demand and i think it is the biggest challenge – which is very important. we need to look at exponential things that increase business rather than taking away business from each other – and we need that across the board. the current demand is not enough to ﬁll up luxury hotels. the need for coming together and taking a strategic cause where will all can collaborate is big. mt: if you leave the oberoi group, where will you go and why? kc: it is a tough question really. at one level…i have never really thought about it. i have never really thought about leaving the group from that perspective, because i think i am intrinsically ingrained with the culture and philosophy that is there in the oberoi hotels today. i am very passionate about certain things in life. if i am in this group, then i am very passionate about how do we get the industry together to create demand in this country. why cannot we get 20-25 million tourists? what can i do to do that? i am very passionate about easydiner. why cannot we revo- lutionise dinning in this country? why cannot we have a culture of cafes and restaurants? i am very passionate about healthcare. i am very critical of the government on healthcare. so, i would most certainly not be in the commercial space after this. i may be an entrepreneur; i may try to reform healthcare in this country. mt: what about bitb? kc: love it! it is because of the fact that navin has been able to get the entire industry together. for that we must give him a big hand. i think it is fantastic. he is trying to do his small contribution to the industry. we will be here next year; we will be here the year after and the year after. because all of us need to come together, and if we are all together in trying to grow tourism, i think it would be a great plan.
b itb 20 1 6: hospitalit y concl ave rajeev menon, ceo, asia pacific, marriott group we will go through our learning curve and learn from our mistakes: rajeev menon having recently concluded the much anticipated acquisition of the starwood group, the time now was to iron out the intricacies of the merger, creating an organizational structure and taking a concerted step forward, said rajeev menon, ceo, asia pacific, marriott group. in a candid one-on-one interaction with manav thadani, he reminisced about his early days, shed light on the challenges moving forward and a lot more. excerpts: 4-5 years to build the hotel. and then you have a considerable supply sit- ting in front of you. when you open a hotel, there is almost a panic situation to get cash ﬂows in. and that panic creates a real issue in my world, when the ﬁrst thing to do is to drop rates to drive occu- pancy to drive cash ﬂows to the business – and that then starts a series of events that does not help from a broader macro market point of view. so, the reality is that in india there has been a bit of a supply-demand mismatch in certain micro markets. as we look forward, we generally believe that there is immense opportunity to move rates. you know, you look at this year. there has been about 6.5% revpar growth in the industry. in our busi- ness, we have released our second quarter results and just at marriott, we are growing at double-digit this year, yet again – as we did last year, in terms of revpar. so, i think as we move forward, there will be consid- erable opportunity to move rate. mt: well, obviously, you have been asked this question. but, first congratulations on the marriott-starwood deal. what is your vision for the two entities in india and how do you see that rolling out? rm: thanks. you know, indepen- dently and together, with marriott and now starwood, we have always believed that india is a decades- long growth story. you see the great work that starwood has done over the years in positioning their brand, in partnership they have with itc. and you look at our portfolio of marriott hotels and how we have grown. we are uniquely positioned today. we see immense possibilities as we move forward. to me, india in the next 10-20 years will see tremendous growth in almost every lodging segment there is. and we want to have brands that are posi- tioned in these lodging segments. today, we operate 14 brands. we are about to bring w into goa, which is a stunning brand, and is going to be a stunning hotel. i have been there a couple of weeks ago. we see great opportunities for hotel brands like moxy and ac, and a couple of other starwood brands that would come into this market. so, india is ripe for growth; we are seeing the cycle turn. and as i have said for years, this is a decades-long growth story and will continue. mt: i think the hotel industry has never seen two such large entities come together. how difficult and challenging has that process been? rm: we have only closed the deal two weeks ago, now. and we have a lot of work ahead of us. we have started the integration process. in the next few weeks, we will announce the organisation structure – and our focus has clearly been to bring the best of starwood talent and the marriott talent, together to create what will be, what is the largest hotel company. it will establish itself as the largest hotel company in india. what is more important for me is that it would have the best brands in every lodging segment in its class. mt: does that also mean that since you are the big elephant in the room, your flexibility will be a little compromised and that you will move a little slower in decision making? rm: well, we all go through our learnings. i will be a fool to say that everything is going to be perfect. i think, we are going to stumble. but i can assure you of a couple of things. one, there has been im- mense amount of planning that has going into this in the last number of months. we announced the deal ten months ago. and many folks here would know, we had a chinese company in there which kind of slowed the process down. i remember working on planning since december last year. so one, there has been a lot of planning. two, as a company, we have a history of acquiring hotel compa- nies. so if you look at the last year, we acquired delta – which is one of the biggest operators in canada. couple of years ago acquired protea, which is one of the biggest players in africa. before that we had ac by marriott. we have done ritz-carlton in the late 90’s; we have done renaissance. so mar- riott has a history of acquiring hotel companies. it is just that this time it is the single biggest acquisition in the industry. and i think, it is going to take time for us to bring the two companies together, integrate them effectively and learn from some of the mistakes that we will make. but our clear focus is to really be nim- ble, humble, learn from each other and the market and make correc- tions as we move forward. i think i feel reasonably positively in where we are today after two weeks. mt: how do you make the owners of different hotels come together? some of them may turn around and say that there are just too many eggs in the same basket. rm: when we started operating in india in mumbai, and when we launched our second hotel, there was a question that marriott has got two hotels in the same market. today, we have four hotels in that market, just the marriott alone. two more with starwood, and when you look at the marriott portfolio, it is extremely successful. i will take you to other cities like shanghai, where marriott alone has 22 operat- ing hotels. with starwood it turns to 40 properties. and what we have seen that the more hotels we open in a particular city, we have the ability, and more often than not, we improve our market share of those hotels. simply because as the distri- bution grows, we have the ability to sit in front of the customer and give him options. and, we have been doing this for many many years. so, i think it is about clearly deﬁning. starwood has an incredible portfo- lio. you look at westin, w, st. regis, sheraton – which is where i started my career. there is a lot of runway for each of these brands, including all the marriott brands. and the rea- son i say we is that as of two weeks ago, there is no starwood. there is one company and that is marriott international. mt: what is your view on aggregators and disruptors? should they be viewed as competition, or do you think that we can wish them away? what is your thoughts on that? rm: my view has been that over the years india has had two distinct lodging segments. one is the 4-star, 5-star and 5-star+ in the luxury space and the rest has been fragmented – guest houses, yatri niwas and all those kinds of ac- commodation. what is happening now is that a lot of these aggrega- tors are in that fragmented space trying to aggregate. at least for the next decade, i see no real com- petition from our perspective. it will all depend on how they come together and develop successful business models, but as we look at our brand portfolio today, start- ing from fairﬁeld, courtyard by marriott, four points by sheraton and upwards, we do not see any competition at all. up only a few weeks ago. and, yeah we talked about the old times, but more importantly about the future and all the things that we can do together. mt: right. i asked this question to kapil, too. tell me one time when you failed as a young employee. rm: i did. i am through and through a f&b guy. and when i was thrown at the front desk and also at housekeeping, particularly housekeeping, i genuinely failed. but thanks to some real tough envi- ronment back in the sea rock days, when there was a strike situation. there were a hundred of us, who ran the hotel for four months. with about 55% occupancy, we had to work on an average about 18 hours a day. i had to learn everything all over again. and honestly, i stand on every pedestal and say that those 4 months were the single best learn- ing experience of my career. mt: why do you think indian hotels have been finding difficult to push average rates up? rm: i think, broadly, as hoteliers, and in many cases developers, have had issues with regards to de- veloping assets and the cost base. i have talked about this before. there are a bunch of reasons for this. one is that when you look at the hotel economic model in india, to me, when a developer gets a 10-year loan – which now is kind of improving a little bit – but it takes mt: how do you travel so much, raj? rm: it is a vitamin pill that i am not giving you the recipe for. mt: i will start with a very simple question. what inspired you to get into the hospitality business? rm: as many of my colleagues know, my ﬁrst dream was to become an airforce pilot. i actu- ally got rejected from the airforce because of my eyes, and ended up in the hotel business. this was my second big passion…did have some family members who worked in hotels – and i was just enam- oured by the glamour of the hotel business. did realise that the reality is different on my ﬁrst day as an ap- prentice when i walked in, and had to clean 24 racks of glasses over the night shift. i almost gave up the hotel business. but i survived that day, and surviving still, and loving every minute of what i do. mt: have you ever worked outside of the marriott? rm: i have. i started my career with itc as a management trainee… worked there for a few years before i actually left for australia. there i worked for radisson and another hotel brand before i worked for the marriott, almost 16 years ago, now. mt: wow! life comes to a full circle. you would be working with dipak again, since you now have some of their hotels? rm: it was such a treat. we caught
b itb 20 1 6: hospitalit y concl ave domestic travellers will continue to be the backbone of revenue for hotels in india, concur hospitality stakeholders while top metro cities were registering decent international inbound, by and large, hotels in tier-2 and tier-3 cities were likely to remain centred on domestic leisure and business travellers for operational revenue. in a panel discussion, moderated by achin khanna, spokespersons talk on a gamut of issues facing the industry. achin khanna: what percentage of your total business in itc currently from inbound travel? and what are you doing currently to attract more inbound travellers? dipak haksar: as far as itc is concerned, i think our dependency on inbound tourists is very low, as compared to some of our peers in the industry. it is about 12-15%. largely, our ho- tels are in metro locations. therefore, they are more focussed on business travellers. having said that, in the last couple of years, we have consolidated our position in business and hotels in the leisure circuit – and, now, with the opening of itc grand bharat in manesar, opening of a hotel in jodhpur, we have the full portfolio of hotels in the leisure circuit. one of the problems that we have faced is the dependency on the inbound travel – which tends to be very erratic. i particularly feel very disappointed with the kind of the raise in numbers that you get when you go out to meet the dmcs in india, and you ﬁnd that the series of travellers who continue to come into your hotels over the years has not really given you any appreciative increase in size. you ﬁnd that the business coming in from this segment is just not proﬁtable. some- thing needs to be done if you want inbound travel to become a more proﬁtable segment for more hoteliers and the industry. barring some destinations, in the last one year, we have seen such softening of prices. with increase in supply, we have found a downward turn in the adr’s in the city. this is one area, i think something ought to be done. it is very difﬁcult for hotel com- panies to generate demand in the country. it is something all of us will have to work together, along with the government. a lot needs to be done in order to get the communication right, our position right in the national market. more so, it is also im- portant how we sustain that communication over a period of time. achin khanna: what dipak haksar very interestingly mentioned that the yield hotels are getting out of the inbound travellers is actually diminishing. we all remember the time when the inbound traveller, the foreigner, was the high paying guy. it was the domestic audience that paid poorly. it is quite the contrary now, is not it? raj rana: we are in 60 cities. we rely more heavily on domestic, rather than the international segment. our inbound share of the total business is about 10-12%. that said, it works for us, because in metros we tend to get higher shares of inbound. this 10-12% is just the average. achin khanna: chinmai, taj recently unveiled ‘tajness’ as a culture and a philosophy, it seems. do you think it will help you leverage your indian culture on the global platform to attract more inbound tourism, or do you believe that it is more centred around the domestic audience? chinmai sharma: it is a global campaign. we feel very strongly that it will not only help the domestic traveller, but also inbound. so far, all the feedback from all the international markets has been phenomenal. my elemental pitch to the leisure traveller, who is coming into india is very simple. it is very easy to say that if you are travelling to an exotic destina- tion like india, will not you stay with a brand that has been there for a hundred years – which does this to promote the culture, tradition and heritage? i mean, you can say that palaces that were build ﬁve years ago still smell of cement. if you really want to live in true palaces where royalty used to live, then come with us to have that experience. so, it is easy. we do not want to sell chicken tikka masala at the pierre in new york. it has to do justice to every side; all new yorkers should feel that it is a local hotel. but it would have certain inﬂuences which would tide back to indian heritage and hospitality. i think the best thing we have going for us is that hospitality is a part of our dna. so it comes naturally to us. we just have to basically take it forward in a more structured way. achin khanna: as raj and dipak mentioned about 12-15% as inbound percentage to their hotels. how does it pan out for you? chinmai sharma: it is little higher for us. if we include leisure and business, combined, then it is probably reaching 35%. if i include all my hotels, together, and do a nationality spilt, 50% of it is international. of course, it gets triggered partially because of our inter- national hotels. i mean our 80% of inventory is here. so, we are lucky that way. i would also want to say that we are feeling more conﬁdent about india as a market. so, ir- respective of what happens in the world, i think domestic indian travel is growing and we are all seeing it -and it is actually helping us in inter- national markets, also. being one of the largest economies – which is growing consistently at 7-8%, despite all the noise – it is actually helping more. when these guys go outside of india, we become the ﬁrst brand of choice. achin khanna: we generally hear on these forums that infrastructure is bad or the government is not doing anything. very rarely does one hear that we are not trying and as an industry we need to have the effort and intent to go out and pitch for it. on the same note, gtda, for instance, lately has been lesioning with tour operators with an intent to showcase goa abroad. all of us are aware that goa got hundreds and hundreds of charters from russia, saudi arabia, scandinavia and the north america. all of that is either going to sri lanka or istanbul. thankfully, domestic tourism has saved the day. you have a few hotels in goa. anything that brands can do to showcase destinations, not just goa. you are an operator, you may not be an owner, but what can you do from a marketing and pr perspective to showcase indian destinations? raj rana: look, i am a ﬁrm believer that ho- tels can only ﬁll in the blanks. the story still has to be written by governments’. whether it is marketing india, or marketing goa as a single destination. i mean, take the example of goa. it has been suffering because russian charters movement has declined. fortunate- ly, we say that domestic tourism has stepped in. it is now a twelve-month destination. we have 5 hotels there that are doing a reason- able occupancy of 70%+, which shows that there is some strength still left in goa. but if you really look at the clientele which has the money to spend, are they going to goa? or are they going to maldives? where are they going? and there are some fantastic beaches in goa. there are some fantastic hotels. yet, the higher spend is not necessarily coming to goa – and, may be, the reason is that when you come to india, you want to experience may be more than goa. in that sense, the overall comprehensiveness of the package is lacking. what else can one do, besides seeing the beaches? where else can one travel to? it is the efﬁciency of travel to other sub-ordinate destinations around goa. then we can do a better job at it.
b itb 20 1 6: hospitalit y concl ave senior hospitality stakeholders brainstorm ways to augment business and footfalls in a session chaired by manav thadani, senior hospitality and tourism insiders mooted ways to increase footfalls into their hotels and pointed towards the need for robust international inbound to shoulder the luxury and five-star segment. excerpts: india not prepared to handle larger international inbound; develop requisite infra, argues vikram madhok while the clamour has been around garnering a larger share of the international outbound, vikram madhok, managing director, abercrombie and kent questioned whether the available tourism and hospitality infra was enough to handle the increased influx. excerpts: on single biggest positive development, in terms of creating an enabling environment for the hospitality industry i have been in this industry for the last, cumulatively, 30 years. i have seen the industry evolve. i think the industry has come a long way from what it was in the 1980’s. speciﬁ- cally the hotel business, because earlier there was a big blur. they would have luxury hotels, other ﬁve-star hotels, and then there were the rest. we merely had some 25-35k rooms, not even that. this city had, may be, 5000 rooms. fast for- ward today, all that has changed. in terms of sheer tourism, india used to get not even a half-a-million tourists. everything was really nascent. infrastructure was non-existent, really. so, we have come a long way in all these elements, checking out all these boxes to where we currently are. on international tourism and infrastructure i completely agree to what kapil kaul said that we need to get our act together. however, i promise you that if 15 million tour- ists were to come to india, all the infrastructure will collapse. because right now, if we were to talk about the 8 million tour- ists, of which may be real tourists are 40% of this number. 60% of them are corporates travelling for business and there is no way to quantify whether one comes on business or leisure. it is simply inbound arrival into the country. also, there are multi- ple trips by corporates. so, these numbers are a little skewed. having said that, all our 3-star, 4-star and 5-star hotels rely very heavily on season for a higher average daily rate of the international arrival. if you take luxury hotels in all the tourist circuits – agra, jaipur, jodhpur and udaipur etc. – they are heavily reliant on international arrivals, because international tourists, typically, immerse themselves in really understand- ing the bandwidth of the country. in domestic, we hear that over a billion people are moving, but a lot of it is pilgrimage tourism. so, it is not necessary that they are ﬁlling our luxury or star-category hotels for regular tourists. i think there is no one answer for domestic and inbound, and i think you need to build infrastructure for the domestic trippers and then you attract the inbound travellers. on markets that have done well in the recent past and those that have not i think it is really commensurate with the economy. so, today one of the most favourite markets for india is the united states. they are travelling in the largest numbers, be it leisure or corporate. the americans are coming and i think it good. they have the ability and propensity to spend large amounts for a room, without a problem. so, that market is established, it is the largest market; it is also the largest market for india. thereafter, in spite of the brexit, we still see a decent demand, at least out of the leisure segment, out of the united kingdom. irrespective of what is happening and all the uncertainty etc., that market seems to have come back a little bit. europe is pretty much on the tailspin. we have seen retarded growth in terms of numbers, and i do not think they are coming back in a hurry. the entire orientation of the management to deal with social media needs an overhaul: suresh kumar social media as an area of engagement to better connect with consumers was going to remain crucial for hotels to look into, said suresh kumar, managing director, fortune park hotels. he advocated employing specialists for assisting management in orienting itself to changing times. excerpts: on domestic travel and economy if you look at the overall economy, globally, with india’s aspiration levels, and travel which is becoming far more aggressive, leisure properties within the domestic circuits will do very well – wherever they are present. secondly, this upgradation, which is what i say. if there are affordable airlines, affordable accommodation, it is creating tremendous pressure. small hotels, four-star and three-star would largely depend on domestic travel, and i think if we concentrate on the domestic trafﬁc, itself, i think, we would probably have good returns on our investments. aggregators and how much of attention do they deserve? i think in a commercial environment, it is something you cannot ignore. secondly, in india, we say we have a strategy, but we have not a strategy in our minds. so, we need to look at it. thirdly, it is also a game where the customer is trying to go through the aggregators without being aware of the credibility of the properties they are going to sell. so we do not know whether that inventory or experience is actually going to cause a problem to us, because when you actually start choosing a hotel and you have a certain level of expectation, brands add a lot of credibility. so unless brands get into their inventories, it can be a problem. but as long as brands remain away from them and stand-alone hotels start working with these aggrega- tors, i do not think we really need to worry on it too much. given itc’s capital, will mergers and acquisitions be a strategy for growth? itc hotels only looks at fortune hotels to get numbers across the country. but sure enough, what itc picked up is that it can also build hotels, and at a relatively low cost. so, a brand that has now come into the market called ‘my fortune’, where itc is investing into these. itc is investing into these hotels and we already have ten on the block. we are operating in bengaluru; coimbatore is going to open; we are building one in amritsar; bhuvneshwar is where we are going to build; kathmandu is where we are looking at. and these are ‘my fortune’. so it is good fortune for itc to invest at a lower cost; good fortune for us to run it at a fees. it is good for the customer, too, because he gets a very good alternative ac- commodation for himself – and these are very small hotels. so, i think, probably, we will look at it. on itc’s engagement on the social media it is one of the areas that needs tremendous amount of focus. by and large, hoteliers ﬁnd it very difﬁcult to move away from ‘shake hands’. it is a challenge. we are trying to get people who are specialists in dealing with it, because if you ask me, i am not so well equipped myself. therefore, we need special- ists to deal with the social media. i think that is where the world is. the entire orientation of the management in dealing with issues has to change. so we are putting in a lot of efforts in training our general managers, units etc.
b itb 20 1 6: hospitalit y concl ave india's domestic footfalls does not have the purchasing power to carry the luxury hotel segment forward: ashish jakhanwala ashish jakhanwala, ceo, samhi hotels pointed towards india's average per capita income, noting that luxury segment of hotels were more in need of foreign inbound as domestic travellers were yet bereft of the financial muscle to carry that segment forward. excerpts on domestic tourism we need to be careful about domestic tourism, especial- ly if you talk about 4-star hotels and above. please look at the per capita income in india. the per capita income in india is hovering around 2,000 dollars, today. that is very inadequate for supporting large scale luxury tourism in the country. if you are talking about 4-star hotels and above, you have to rely on the growth of inbound tourism. domestic tourism will support a lot of budget and mid-market hotels, because of the per capita income of 2,000 dollars. when people talk about the size of the economy in india, one big thing they miss is the per capita income – and that is why a lot of hotels and restaurants are empty; that is why a lot of starbucks store do not do as well as they thought they would when they came into india. it is a big surprise that a lot of people are not walk- ing through the door, and why they are not coming through the door is because of the ratio between the room rate and the per capita income; the cup of coffee and per capita. and if we keep our sight off the international inbound travel, sup- porting the growth of upscale luxury hotels, it is going to be very difﬁcult. on the selling side of the hotel business i think the reality is sinking in. i think, if you talk about the period between 2004 and 2008, i think hotels, not just hotels but any asset class in india was grossly overvalued. real es- tate, hotels, bond market, stock market, everything was over expensive. and then came a period between 2008-10… you know, india survives on optimism. the problem is that earlier people were quoting assets at 2x and 3x of the replacement cost. today, when people are quoting their assets at replacement costs, the prices at which they have been built today, we are sometimes very sorry to say that it does not work. let us do a simple mathematics. if a hotel sold for 7000 rupees at 70% occu- pancy; does 45% from f&b, it can only afford to be built at 78 lakhs per key. the reality is that those hotels are being built at a crore and a half or two crores a key. so even though expectations have been reset, there is a lot of bra- vado which is stopping the transaction to happen. there is a long list of npas and stressed assets because the transac- tions that are being done in the market are 3,4, 5 times. it is a great time to buy, but unfortunately, i will still advise caution, because we tend to underline bad days much sooner. we should not forget what we have gone through in the last 4-5 years. good days are coming, for sure. but if somebody is buying for perpetuity as good days is making a mistake. so, you need to buy for a few good years and then be ready for some bad years. it is an interesting time, but difﬁcult to get deals done. every hotel we operate must make money; we do not have the luxury to even out, says ajay bakaya an average indian hotel owner was not naïve and it was going to be stupid on the operator’s part to assume so, asserted ajay bakaya, executive director, sarovar hotels and resorts. he also noted that being recognized as a strong player in the mid-segment by a larger band of owners had kept them firm-footed in the segment. on working with other business operators we thought about it. we talked to people. we had discussions with some big brands across the world. one of the reasons why it did not work, in our case, was that none of the big brands were ready to cut their fees. they said this is what we charge and we cannot compromise. so, it was not working. unless, the two sides come together and hear each other out, i think we cannot grow. we can both make fees amenable for the owners. it won’t work, otherwise. but it is something which is going to come into india in a larger way and one of the thing that the operator has to give up is his ego on his brand, because you are operating on another brand all the time. but i do think it is a big opportunity to be utilised. views on the average indian hotel owner well, i think that the indian hotel owner is in no way dif- ferent from any other hotel owner. whether it chinese, japanese or any other nationality. we make it sound as if ours is a different category, altogether. at the end of the day, he is an owner and an investor, and he is looking at returns. so, people behave differently; there are different personali- ties. it is nothing to do with a genre of indian hotel owners. i think they are smart business people. they are not stupid – and it is a folly on the operator’s part to assume that the owners do not understand the business well; he (operator) is going to be stupid. on single biggest factor for a company: number of rooms, revpar or something else? it would have to be proﬁtable. proﬁtability per hotel. we do not have the luxury of saying that some hotels will make money and some will not, and we will balance it all out. we have got to produce proﬁt for every single owner. reasons for operating pre-dominantly in the mid- segment it is not that we have not tried. in fact, we are on the lower end of luxury in some of our hotels. but to be honest with you, in the country, the large band of owners recognise us as very strong players of the three and four star, sort of, segment. also, it is all aspirational, the moment it goes to 150-200 rooms, and we are still talking 5-star and above, he tends to think of bigger brands and its better proﬁle. customer loyalty program gives ihg an advantage over aggregators: shanta d’silva given the recent surge of home-grown and international aggregators in the marketplace, hotels have a reason to worry. however, shanta d’silva, head – southeast asia, ihg hotels believed that a carefully crafted loyalty program which had created a substantial customer base for the group gave them a tactical advantage over online players. aggregators and how much of attention do they deserve? i think there is space for everyone in the market, in different places in different markets. when you look at aggregators, even if you look at players like airbnb, their share is still a small share for the global hospitality market. but an interest- ing statistic is that their distribution is 70% outside of the core hotel area…i think there is space for everyone to play with, but i think the advantage that we have as brands is customer loyalty. ihg has one of the largest customer loyal- ty programs in the world. and when customers are looking at personalisation and consistency in delivery of services, that is where we are creating an advantage compared to the aggregators. on what if aggregators had their loyalty programs? i think that the interesting thing is that, you know, ihg started the ﬁrst loyalty program in the world and today we are the largest, overall. and it takes a long time to build that base. with our distribution of brands and consistency in service delivery, that reputation and loyalty gets built over the years – and we are conﬁdent that the growth percentage will con- tinue to grow. it will be a long time before aggregators catch up with that. on plans of investing into india actually, india is the third largest market, globally, for ihg. today, we operate 28 hotels in india across 4 of our brands. we have received phenomenal growth in india, in the last two years, we have grown about 30%. and we have in pipeline about 42 hotels, which will add about 7000-8000 rooms over the next three to ﬁve years. on single biggest factor for a company from an operating portfolio perspective, the operating performance of the hotel is very important for us. return on investment for the hotel owner is a priority for us, because we are in it together. looking at the other side of it, from a growth perspective, it is important to drive scale. i think to improve our scale and leverage it; growth from a portfolio perspective is also very important, especially being in a growth market where it is ihg’s third largest and important growth market, globally. so, i think we look at growth as a very important indicator of performance.
b itb 20 1 6: tech nology concl ave spotlight on innovation: online players invest in tech, personalisation to carve a niche innovation, smarter interface and stronger mobile presence were some of the buzzwords at the conclave anchored by phocuswright. the gathering saw speakers representing an array of new-age companies, service providers in the ota space, and also hospitality chains – who in their own admission were investing on digital and mobile platforms like never before. a major takeaway of the conclave was the rise of smartphone users and the need for companies to invest heavily in reaching out to the new-age consumer, perpetually on the move and always on the lookout for a seamless experience. since the advent of otas, the war for a larger market share has only intensified, often resulting in discount wars that, without the support of millions of dollars of foreign investment into these domestic players, would have bled lesser companies to oblivion. the viability of such prolonged discount wars was also deliberated on. looking at the larger picture, india is likely to be the centre of global innovation in the online space in the coming decades – and it is befitting for a nation with fastest growing number of mobile phone users in the world. what may also come as a shot in the arm for the online segment is the governmental thrust towards boosting digital infrastructure. the conclave touched upon many of such issues. we bring you excerpts of the proceedings. travel set to grow faster than india’s gdp; mobile- first interface fuelling upswing, says tony d’astalfo improved telecom and banking infrastructure, growing acceptance of the online medium for transactions and new entrants vying for mobile-first interface would push the indian travel spend at a rate faster than the expected gdp growth in the coming years, shared tony d’astalfo, research analyst, phocuswright inc. we bring you experts of his keynote address at the conclave on online travel+ technology. billion usd, compared to the overall sum of 246 billion usd. when you look at the overall penetration of the on- line travel in the asia pac environment, it is in fact one of the leading online players, accounting for almost 37% of the total bookings that are being done online today. india is a lead market, but china is growing at such a rapid rate that we think china will surpass india as the leading online market in the very near future. aggressive otas, better banking and telecom infra to boost online segment one of the things that online travel companies are doing today to raise the bar against suppliers. when indian online players started against traditional players, all of them established their presence on the web. new entrants have come into the market with a mobile-first strategy and they are causing traditional players to take a look at investing more heavily on mobile platforms. ,, by 2020, over 40% of the total travel booked from the indian market will actually be done online. the reason why we see it increasing is three-faced. firstly, it will because of improved telecom and banking infrastructure that will allow people to move online and transact their businesses; there will be a lot more of ota activity. they are getting more aggressive in going after indian travellers. and, ﬁnally, when people get more comfortable transacting online, they would be more likely to do that. so, we think that online penetrations are by tf bureau indian travel spend to outpace the gdp growth rate let us see how travel in india is faring compared to its gdp. the indian gdp is poised to grow between 6-8%, but the travel spend is actually going to grow at a much larger pace. it is good news if you are in the travel industry in india; you are actually going to grow at a much faster pace, as people are going to be spending at a higher rate the gdp growth rate. so, overall prospects are bright. india leads the online penetration in asia pac, but china may overtake soon what we also wanted to look at was online travel. it is a grow- ing sector for the community. so when we look at the total money spend on online travel bookings in the asian pac region, it is less than a third of the overall global booking at 105 likely to continue to grow. air and rail were ﬁrst segments where it came to the travel industry here in india. the fastest online sector growing online was the air category, but it is followed pretty closely by the hotel segment, and also by rail. so, we actually see all 4 spending categories going up. we will see more people book- ing online as time goes by. increased supply on the air-side, lccs to jettison the aviation sector’s reach the supply on the air side will actually increase. over a thousand aircrafts under order by various carriers for their operations, we will see at least a 4% increase in the level of online booking in the air category. in the heart of this devel- opment is the funding by lccs. they are the fastest growing segment in the airline industry worldwide; i am sure it is the same. india is actually the second fastest growing low cost carrier market after indonesia, in the asia pac. lccs are one of the fastest growing sector in the online space, worldwide; it has always been a very big sector. mobile-first interface critical hotel penetration in the online space is actually smaller than the air and the rail segment, but growing very quickly. there are a number of reasons what that is happening. we expect that is going to jump signiﬁcantly. so, we see the air penetration to jump by about 4% and the hotel segment to jump by about 7%. so there will be more people booking their hotels online over the next period of time. there are a lot of independent hotels who are pushing people to book online, which is having a huge impact based on the mobile technology. a lot of companies are actually interested in a mobile-ﬁrst booking platform that works particularly well for the hotel side of the industry. budget aggregators pushing hotel bookings online in the old days, unafﬁliated hotels in india were pretty wide spread and have seen a massive transformation. there are a number of independent properties are now branded. this will also be a signiﬁcant driver for hotel bookings in the online world. the networks of independent and budget hotels have grown signiﬁcantly over the indian market – and they are also capturing a lot of investments; over 177 million usd have been pumped towards these initiatives. it is something very interesting that traditional players will have to keep an eye on and it will have a signiﬁcant impact on the indian market in the times to come. otas changing the rule of the game, forcing traditional players to take stock one of the things that online travel companies are doing today to raise the bar against suppliers. when indian online players started against traditional players, all of them estab- lished their presence on the web. new entrants have come into the market with a mobile-ﬁrst strategy and they are caus- ing traditional players to take a look at investing more heavily on mobile platforms. mobile platform will fuel growth in the hotel sector and every other sector. it is the biggest invest- ment area across the globe, related to the travel industry. online travel agencies are trying to move consumers very aggressively from the desktop to the mobile-based interface. today their mobile booking share, post booking, is 37%. it is a little bit more than a third of the total bookings. we project that by the year 2020, almost two-thirds of the entire business will move to mobile-based applications. we see, now, that all of the traditional players have jumped into the fray with apps and mobile applications of their own.
b itb 20 1 6: tech nology concl ave loyalty programs are not discounting channels; we work with partners to augment their skills, says vikas bhola a well-equipped partner with tools and analytics at their disposal worked better in retaining consumers and providing them a top-notch experience, said vikas bhola, regional manager – indian subcontinent, booking.com. he advocated viewing loyalty programs not as discounting channels, but as a part of creating an experience. excerpts: on the air-side of the business. how does the business segment break down? we are primarily a lodging company, so there is no air business. but we do know that the air-side is growing fast and it is helping the lodging space grow. and we are very excited about it. gaining and retaining customers. strategies around repeat business? we have certain products of loyalty program; it is called ‘genius’. it is fairly simple. a customer who books rooms for ﬁve times through booking.com becomes a ‘genius’ and gets a ﬂat 10% discount on properties. so genius is actually by invitation. we select a property which is best for our consumers. we believe in few core fundamentals like best quality supply, which is purely unique and develop great experiences for customers. we do not look at loyalty as a discounting channel; it is not a commodity, but an experience. heavy discounting and how sustainable is the trend? i fairly agree with these guys, but not fully. as a company, our philosophy is a bit different; we want to grow our top-line and bottomline together – and we will not fund discounts out of our pockets. that, however, does not mean that we do not have the best deals. how we do it is we work really closely with our partners; we fundamentally tell them how to run their businesses, give them tools and analytics to make those conscious informa- tive decisions. and that really works for us. if it is here to stay, i do not know. there is a ﬂip side to it. the good side is that it is turning the market around and the pool is increasing, penetration is increasing. on the ﬂip side, this discounting turning people into, you know, you go to the online space to get the best deals, and once that stops, it is so funded that way that they would take to other routes to fund that. credit cards, alter- nate ways of payments or something else. but this would just go on. so, our philosophy is very simple. we just really try to educate our partners and show them the beneﬁts of not handling the market this way. it is a responsible way to go forward. non-air revenue far exceed our air revenues; discounting will continue until unit economics improve, notes ritwik khare while discounting would continue for some time to come, there had been a gradual climb down in its degree, reasoned ritwik khare, sr. vp & head – business development, hotels, makemytrip. com. he believed that the process was an ongoing one, until unit economics improved, which was going to steadily bring down the scale of the dole out. excerpts: on the air-side of the business. how does the business segment break down? for us, in the last quarter, the non-air business was roughly 59%. in the early 2012-13, it was around 15%. so, the non-air side of revenue has exceeded the air-revenue for us in the company. we see that continuing to rise. we have a very ambitious target for 2020. gaining and retaining customers. strategies around repeat business the two big pillars for retaining customers to repeat with us is a simple reward program called mytrip rewards. you book 4 transactions with us, of which one has to be a hotel transaction, and you get a free room-night. it is by far the most rewarding loyalty program that we know of. it is also, by far, the simplest. similarly, if you do 8 transactions, you get two room nights – and that is the cap for the year. so, that is one pillar of our loyalty program through which we keep getting repeat customers. the second big pillar is the e-wallet; we play very aggres- sively on the wallet side, and that becomes a very big reason for customers to keep coming back to us. they keep tracking and redeeming their wallet cash. so, it becomes the most compelling feature for them to keep coming back to us. we have put a lot of stress on personalisation. today, we see that even discounting is personalised and loyalty driven. so, that is adding to the repeat clientele we get. heavy discounting and how sustainable is the trend? we launched in india in 2005 and were the ﬁrst to the start the air business. we have seen that play out; air business also started heavily on discounts – and today it has settled down to a good rhythm. it is a money making business and does well. there has been a huge online penetration. it is in the range of 45-50%, as far as the air business is concerned. while discount- ing has helped us open up the hotel business, but i think we are still scratching the surface. our numbers are similar; our online penetration ranges from somewhere between 17-20%. what is very clear is that this is not going to be the only strat- egy going ahead. that is why more and more companies are working on ways to retain customers in ensuring that ultimately the unit economics improves and discount rates keep going down. look at how e-commerce has panned out. discount levels are much lower today than they were three years ago. we view discounting as a means to strengthening the supply side; discounting here to stay, asserts parikshit choudhary instead of viewing discounts simply a tool to acquire consumers, it must also be viewed as a means to strengthening the long-tail of the supply side of the hotel industry, noted parikshit choudhary, senior vp and global head – lodging partner services, goibibo. he also mentioned that the concept of discounting was going to remain integral to the online space for the foreseeable future. excerpts: on the air-side of the business. how does the business segment break down? our numbers are slightly steeper than the rest here. our non-air contribution is about 65% of the total transaction volume. in the non-air segment, we have buses and hotels. we are pretty strong at the bus market share, almost 80% of the total market share. also, hotels are very signiﬁcant in that 65% share. which is called ‘gocash’. there are two currency wallets that we play. travel in india is a social phenomenon; there is a lot of social angle coming in. we have something called ‘gocash+’, where if you sync your phonebook and anyone on your contact list travels, you earn some bit of loyalty points. it can be used for next booking. it hooks on the consumer and helps us to grow our periphery. on gaining and retaining customers. strategies around repeat business i would like to go back a little and share that goibibo was one of the last entrant in the group of the big four. india has a huge bit of long-tail, and when you have a long-tail and they are not connected online, you would have issues with respect to fulﬁlment. so, you might book the room, stand in front of the hotel and the room might just not be available. i think, that is fundamentally what we started doing; when you book your room at goibibo, it is guaranteed fulﬁlment. when fulﬁl- ment happens, trust builds and you get repeat consumers. it is something that is very close to our heart. the second bit is having a post-sale service. the third thing which is taking the world by storm is our currency heavy discounting and how sustainable is the trend? look, we indians love discounts. let us keep that straight, and without mincing words, discounting is one of the easiest ways of acquiring customers. if you look at the core philoso- phy of goibibo again, we view it more as an investment in the supply also, and not in consumers. i talked about fulﬁlment, it was a problem that needed to be addressed; hotel’s share in the long-tail needed to be built. if you do not have a busi- ness share in the long-tail hotel, they would not fulﬁl. i am not talking about large chains here. so discounting is more in the supplier side to build in that discipline. of course, not one does it for charity. now, discounts are being at a lot more intelligent level. if you ask me if discounting is going away completely in india in the near future, it is not.
b itb 20 1 6: tech nology concl ave innovators showcase offerings, advocate affordable and seamless interface joy ghosh regional vice president – india & sub- continent, travelclick on emerging trends in the hospitality industry we get the data, clean it up and put it on analytic tool and let hoteliers see what kind of data they acquire. what kind of business can they acquire, convert and retain? in the second quarter of 2016, on a global level, 32 to 38 percent of all business that came was direct business. i am sure people are looking at how the ota business is changing globally, and how the web is changing globally. in delhi, from january to september this year, it is very interest- ing to see that when the demand has been going up, the revpar has been growing, too. whenever there is good demand, the revpar is going up and whenever the demand is falling, revpar is also falling substantially, as well. but the future is deﬁnitely looking better for the industry. gautam shewakramani founder and ceo, audio compass ence their destination, after they get to their hotels. this is the next frontier in travel; this is where all the spend is happening. people need help when they travel. many of us, including travel companies, agencies and dmcs do not either recognize it, or are not doing enough to actually address that need. in india, with so many stories and so much of information, you cannot blame them. there is free information, completely un- structured, available online. this is where sites like tripadvisor, wikipedia and a bunch of other apps come in. there are tons of material available on the taj mahal. i mean it is easy to know the opening and the closing hours, but you have to rely on this unstructured informa- tion when you get there. the other option is hiring a guide. the truth is that in india and in the apac, you are either stuck with a guide that is very cheap, or with someone who is very expensive – which is out of the affordabil- ity range for most travellers. that is where we come in. we provide, through our technology, a very high quality, digital, do-it-yourself expe- rience to travellers while they travel. satish singh founder and ceo, ttw holdings on the need for structured information at easy affordability for travellers on the go we are changing the way people experi- on b2b offerings we have multiple brands that we work on. what we do is to create experiences for our customers, which is not only about selling, but about creating an immersive buying experience. so the genesis of our busi- ness is about emulating the ofﬂine buying experience of a tour to move it online. the challenge we face is that if you look at a transactional product like an air-ticket, where the data points for a customer to make a buy- ing decision is very limited. so what we have tried to do is move the whole process online, creating an im- mersive experience for the customer to go ahead and book a tour. of course, when we talk of an immersive experience, we also allow them to build their own itinerary. it is very important to understand the new-age traveller for travel agents. this new-age trav- eller is educated, very vocal on the social media; this new-age traveller also wants to do things on his own. hari ganapathy co-founder, pickyourtrail on his company’s work a lot of people go to otas, travel agents, picking up tours, or those who want to enjoy it themselves and do a lot of planning. they invest signiﬁcant time on it. this is where we found an opportunity. we said is there a way we could simplify the entire process for the new-age traveller? that is where we sat down to ﬁgure out all the pros and cons. if you look at self-planning, it is obviously time consum- ing. there is a lot stuff happening online. there are payment wallets, a lot of coupon codes and, still, you are never sure if you are getting the best possible rates. at pickyourtrail you look at personalisa- tion, take your suggestions and a real time algorithm builds itineraries that suits a customer’s interest. deepak mavinkurve founder and ceo, goodhotel network as far as the online e-commerce business in india is concerned, it is growing. some time back a picture of a person paying a cop through online transfer went viral. that sort of sums up what is happening in that space. i divide this business into two parts. one is the commerce that is transactional. there is limit- ed decision making, like buying groceries and air-tickets online. the other one is the sales process that is much more consultative. it is complex, there are multiple decision making proxies – the business most of us are in, like booking holidays and hotels. the problem that we are trying to resolve is how to make the whole consultative selling process easier across the customer and the supplier. innovation and technology to remain central to hotel operations as consumers go mobile a roundtable focussed on the fast-changing consumer behaviour and the need for assimilation of technology and innovation into hotel operations saw spokespersons detail their organisation’s efforts in that direction. excerpts. chinmai sharma chief revenue officer, taj hotels resorts and palaces on technology and innovation infrastructure is what it is, but we have got to learn from some of these countries, as well – which are probably one-tenth in terms of what has to be offered, but the whole experience and infrastructure is a lot cooler. we hope to see investment in technology. technology in this part of the world is cheap. so, technology and innovation, kind of, go hand-in-hand. with a heritage and unique brand like us, we are hoping that the concoc- tion will deliver a very good punch. on aggregators well, with all these disruptors coming into the market, it does upset the applecart in some segments. but as rahul said, the good news is that more people will travel and more bookings will happen. as a brand, we feel we are more aspirational than some of these segment of hotels. rahul puri area director of revenue strategy – south asia, marriott international on investment on mobile interface i will talk about on a marriott global scale, the investment in technology is at an all- time high, in the past two years. i think marriott is investing a lot in technology – not just for the booking source but also for the guest experience part of it. mobility is our number one focus to reach out to the consumer who is booking direct through smartphones. gone are those days, even in a hotel, when a consumer would go to his room, pick the phone and order in-room dinning. he is booking meals through apps, right after he is done with his work. what we have seen is, from a source market point of view, there are small cities in india, where we have previously seen hardly any booking coming through, are now emerging and booking direct through smartphones. they could be booking through otas, marriott’s website or other voice channels. sandeep dwivedi chief commercial officer, interglobe technology quotient dawn of aggregators as a challenge the good news is that the industry is changing. the good news is that oyo or airbnb are consolidators, who are put- ting hotels on a platform where consumer behaviour is changing – looking at how they are booking. do we see it as a risk? no. because over 80% of our portfolio, whether in india or in the asia paciﬁc, is between four to ﬁve-stars. what we are catering to is more from the business angle. i mean, our 70-80% of focus within asia-paciﬁc, in terms of brand portfolio is still in the business segment. when we look at oyo and airbnb, they are more on the leisure side. so, we do not see it as a risk. on the positive side, we are looking at consumers who are booking differently. i am, again, combining that with mobility. on innovation and technology when a customer books through any agency, he needs a single pnr. he needs a single booking for hotel and air-movement, both. whether engines are capable of doing that or not? that is the ﬁrst question. so we keep on evolving in that space as a com- pany. we have developed our own booking tools, too, which are for the indian market. forget about these bigger chains, but do two-star and three-star hotels have the apis to connect to the system. that is the main challenge. we keep on investing in these things, because we are gds and we see more opportunity in the hospitality sector. much has been done on the air-side, it the hotel side which, now, needs to connected – and oyo is one particular example in that direction.
b itb 20 1 6: make in in dia concl ave tourism must succeed for ‘make in india’ to succeed: amitabh kant india’s recurrent pursuit for a sustained double-digit economic growth, to not only meet the needs of a swelling workforce entering the marketplace at an unprecedented pace, but also to attain the long standing aspiration of becoming a developed economy will acutely depend on the success of the tourism industry in the coming years, believes amitabh kant, ceo, niti aayog. excerpts of his keynote address at the make in india in tourism conclave at the bitb 2016. among states last year, on 100 points. we made the states compete, and they competed ﬁercely. we said, we will name and shame the state; we will put their names out in the public domain. gujarat came on the number one position and andhra came on the second spot. we are doing this year’s competition on 344 points, and i can assure you that gujarat will lose the number one position, and andhra will lose the num- ber two position. there is so much of competition. chief ministers are calling meetings; chief secretaries are calling meetings. therefore, the big movement is about the ease of doing business. we need to keep our focus on this. in this year points of dipp, we should while we are growing we must create jobs for our people. we cannot grow at the back of a jobless growth. and therefore, travel and tourism is critical. it is the most important sector, if the pm’s ambition is to accelerate india growth with job creation. you cannot have accelerated growth and job creation without travel and tourism. ,, include all the points which impact the ‘ease of doing business’ in travel and tourism. so that we can make travel and tourism the easiest things in the world in india. that should be our key emphasis. the second thing that i want to point make is that tourism grows when we understand that we are in a globalised world. and is to be a very integral part of the global community. if busi- ness grows, travel and tourism grows. if india phones. therefore, technology can be the biggest driver and india must have the ambition to make itself a totally cash- less and paperless society by 2025. we are only a twenty billion market in e-commerce, but the speeds at which we are growing, india would be about a 300 billion dollars’ market by 2024-2025. every major transaction will play out on e-commerce. that is the way it has played out in china. in china, in the last ﬁve years, the e-commerce market has grown by 600%. alibaba – a chinese company started in 2000 has become a 200 billion dollars’ company by 2014. therefore, technology will drive india and in many ways, you will see this happening on mobile phones, adhaar, biometrics interface. we must understand that if our ambition is to grow at 9-10%, it is also important that we accelerate our pace while creating jobs, because accelerated growth without inclusiveness, accelerated growth without equity will be extremely dangerous. while we are growing we must create jobs for our people. we cannot grow at the back of a jobless growth. and therefore, travel and tourism is critical. it is the most important sector, if the pm’s ambition is to accelerate india growth with job creation. you cannot have accelerated growth and job creation without travel and tourism. tourism must remain in the forefront for job creation and we need about 13-14 states which emerge as champions of travel and tourism. that is why i praise cm j&k mehbooba mufti because she has taken upon herself to revive and make tourism an antidote of terrorism. she has actually decided that normalcy in the state can only be revived through travel and tourism. therefore, my belief is that we need a big revolu- tion in the world of travel and tourism. now what does it take to create a travel and tourism revolution? to my mind, travel and tourism is essentially a private sec- by tf bureau “it is a great pleasure and an honour to be in the midst of you. travel and tourism is a unique forum to promote india as a destination of peace and therefore, it is incumbent upon all of us to make j&k a destination for travel and tourism, again. india is growing at a rate of 7.5% per annum. it is an oasis of growth in midst of a very barren economic landscape across the world. but the challenge for india is to grow at rates of 9-10% over a three-decade period on a sustained basis, year after year to be able to create jobs for a very young popula- tion. india is passing through a demographic transition, which rarely happens in history. 72% of our population is below the age of 32. and therefore, while we grow and expand, it is also necessary that we create jobs. so, if we have to grow at those rate and in relatively short period of time – 5 to 6 years – what do we need to do? and what is the role of tourism in that? so, ﬁrst and foremost, i think we have made ourselves very complicated, complex and difﬁcult place to do business in. it takes inordinately long to get permits for construction and get- ting electricity. it is important to make india an easy and simple place to do business in. in the last two years, we have worked on ‘make in india’ program to make india one of the easiest and simplest places to do business in. we have dismantled a lot of rules, regulations, procedures and acts that we have built up in the last 68 years. the legacy of the last 68 years has been towards building procedures, acts, rules and regulations, and therefore dismantling them is necessary. we have been able to dismantle 1058 acts. you can register a company in 1 day; you can do a msme registration in exactly 5 minutes. in exports and imports, we have brought down the number of forms required from 11 and 9 to 3. so there is huge focus on ‘ease of doing business’; we have jumped up 12 positions of the world bank ‘ease of doing business.’ on the world economic forum global competitive index, we have jumped up 32 positions in the last two years. no country in the world has been able to achieve that, and we need this momentum to continue. but india is a very large country; bigger than 24 countries of europe, and therefore much of the action is in the states. we need to make our states easy and simple. in dipp, we did a competition ☛ india is a long-haul destination. 97.2% of our tourists come by air; we are not like any other country. ☛ india, barring the retail segment, has opened up almost all sectors for fdi. we are one of the most open economies in the world. grows at 9-10%, business will grow and people will come in, and people will go out. today’s business traveller is tomor- row’s leisure traveller. therefore, we have opened up india’s economy in defence, railways, construction, insurance, pension funds and e-commerce; we have opened up all sec- tors. other than multi-brand retail everything is opened up and india is one of the most open economies in the world, including some aspects of tourism – which were held up and we have opened up. india has now become one of the most open economies of the world. foreign direct investment (fdi) has gone up by 53% while globally fdi has fallen by 16%. in terms of fdi, india is the number one destination. on fdi inﬂows, we are the num- ber world’s number one destination by financial times, ernst &young and several other ﬁnancial analysts. the third point that i want to mention is that india is now the centre of global innovation in many ways. in the last four years, we have attracted close to 1500 multination corporations in bengaluru and hyderabad. microsoft, bing, ge, ultra-low cost ech machines, philips and others. 1500 companies including services and retail are being innova- tive here for the rest of the world. 1500 top manufacturing and services, and all the top pharmaceutical companies have relocated their research and innovation centres to india, and we need to accelerate that. india has seen a huge energy and vibrancy in terms of its startup movement, and this is happening because we are the only country in the world with a billion mobile phones and a billion biomet- rics. what this will lead to is that india has the potential to become a cashless and paperless society by 2025. we have the potential to make all debit and credit cards, all atm machines irrelevant and redundant by 2025, because the universal payment interface – which has been launched by the rbi will enable you to do all transactions by mobile tor activity with the government acting as a facilitator. we go through a circle where we say that there is a shortage of rooms, we crate the infrastructure, and once this infrastructure is cre- ated we say it will create an excess capacity. let me assure you that within two years you will say that there is a shortage of rooms again. so we need to make that circle grow bigger and bigger. therefore, there are couple of things that india needs to do. while we have opened up our visa regime, we need to expand it even further, and we need to make it far easier and simpler. the e-visa regime needs to be extended to many other countries to make it easier and simpler; make it so simple that we could make coming into india as simple as a drop of the hat. india is a long-haul desti- nation. 97.2% of our tourists come by air; we are not like any other country. in all other countries, when you try and com- pare our numbers with thailand, malaysia and singapore, it is totally fraud. because in countries in europe, people travel by cars and visit a place for 1-2 days. they cross geographical boundaries and come in. but in india, 97.2% of the people come by air, and because india is a long-haul destination, people prepare their itineraries and travel. therefore, the number of days they spend in india is the longest. therefore, india needs to make getting visa extremely easy and simple, but also open up the air regime totally. you can- not make your air regime dependent on the national carrier. it must open up the air regime to allow carriers to come into india from different parts of the world. even now, today, small places like hong kong and singapore have 10 times the con- nectivity as compared to india. therefore, you need to not only open up your metros, but also bring in direct air-connectivity to the regional cities. as smaller cities like varanasi, kochi, trivandrum, calicut grow, we need to bring in international; carriers straight in there and allow many states to grow on the back of tourism.
b itb 20 1 6: make in in dia concl ave the conclave has put forth some interesting ideas and solutions to our present day conundrums: v k duggal vinod kumar duggal, former governor, manipur moderated the session on ‘make in india’, sharing his insights on several issues raised by speakers. he believed that the conclave was a step forward in the right direction for formulating an action plan to tackle imminent issues facing the country’s tourism and developmental landscape. excerpts: on the need for enhanced air-connectivity it is a very challenging issue for the industry and it is an equally challenging issue for the government. indeed, it goes without saying that unless you have all-round connectivity, it will be a huge impediment to the growth of the tourism and hospitality industry. when one is talking of ‘make in india’, i suppose that is one area we have to look into. the only thing which i will say in defence of india is that on removing bureaucracy and need for new destinations, particularly in hill states well, i have no objections. i am now retired, so it is pretty all right for me. but i do think that they play an important cog in the wheel. the phenomena of crunch in airport ☛ airport infra crunch infrastructure exists in many cities of the world. the other day, someone was nar- is an international rating to me the experience of jakarta. problem. i think, recently, a pata meeting took place there, and the experience was that if your plane was not landing before nine o’clock in the morning, if you are landing later, it may take you as much as 4 hours to reach the city – and it has to be either late evening or very early morning, else it is difﬁcult. on amitabh kant’s speech he raised a very important issue of earmarking 13 states, which have tremendous potential in tourism and then taking them to new heights. it, of course, will support na- tional growth and economy. on goa and its importance goa, though small, in size is an important tourism product and has a key role to play. since i have been the city chief for 4 years, i know what delhi’s problems are and how we get stuck. i am not diluting the issue. all i am saying is that these problems are real and they need to be addressed at a certain level. on homa mistry’s speech after having done all the world talk and the business agenda, it was good to have homa as the last speaker. he gave some very illuminating examples as to how the indian tourism can grow. we need a major shift in policy and thinking to develop hill states and tourism therein: vijay mankotia hill states have their unique set of challenges and limited resources to tackle them, needing more thrust from the central government, argued vijay mankotia, vice chairman, himachal pradesh tourism development corporation. he was of the opinion that tourism needed to be freed from the shackles of bureaucracy to truly flourish. after the british left in 1947, nobody is more aware than you are that not even a single new hill station has been created. whether you take darjeeling, shillong, sikkim, deh- radun, dalhousie, or anywhere. now that does not speak very highly of a country’s imagination towards tourism. whatever we have now is virtually an overkill. kullu, mana- li, dalhousie and dharamshala – if i talk about my state – are absolutely chock-a-block. and the most haphazard manner in which these little hill stations have outgrown themselves, we need to look at new sites. we have identiﬁed new sites in himachal pradesh. need for a tweak in thinking and policy but you (government) need to shift your gears, when you talk about invest in india or make in india, you need to shift your gears to the higher altitude of the himalayas. it is where nature, snow ﬁlled mountains and rivers await you; jungles and fauna await you. but i think there needs to be a major shift in the thinking and policy of our government here at the centre. people here would know that there is a gross lack of resource in the hill states. so we are heavily funded by the centre. if i have to take a tourist to my state, the condition of roads is bad because of the vagaries of weather – rain, snow, sleet and hail. it gets hot during summers. it takes a toll of roads. i need connectivity. shimla, which is the capital of himachal pradesh has no air-connectivity – and, it is not as if we do not have connectivity today. it has not been there for the last three and a half years, because of the apathy of the airport authority of india and the ministry of civil aviation, and air india – which is supposed to be operating ﬂights there and say that they do not have small aircrafts to ﬂy into shimla. what do you expect us to do? it is a federal structure. i feel very proud of my pm when he goes abroad, irrespec- tive of parties we may belong to, when he talks about india and the applause he gets there. but i want to get my pm’s attention to these small states, also. so that india grows as a whole, as a composite, not as a sector. this country needs to break free from bureaucracy. you cannot be talking about three or four people who stand out in bureaucracy for what they are doing. the bureaucracy, as a whole, has to understand that we have great future ahead, only if we break free from the many chains and shackles you have tied us to. tourism, wellness and hospitality key sectors for make in india: atul chaturvedi a multi-pronged effort to make processes simpler, infrastructure more robust and approach more in tune with the global times was already underway, iterated atul chaturvedi, joint secretary, dipp. he detailed how the government was proactively addressing key lacunae by working on removing bottlenecks. excerpts of his speech: ‘make in india’ was conceived when the government realised that how complex and complicated we had made india with reference to doing business and making any investment into india. therefore, 25 focus sectors were thought off and, among those 25 sectors, tourism and wellness were also two sectors. whatever is being done with the help of all the sectoral min- istries and departments, with the help of state governments and private industry, is towards the tourism, wellness and the hospitality sectors. tion, they have been talking about india being one of the most open economies of the world. a new approach we are looking at several other things, other than make in in- dia. the pm is talking about digital india, skill india and how these things go together to make the right kind of investment to motivate investors, who come and make in india. these na- tional initiatives are an important aspect of a new approach to make in india. on making processes simpler ‘make in india’ is basically a pillar of a new and resurgent india and there are several new things that we are looking at. at the top of the agenda is obviously new processes. we are looking at processes that are coming in the way to making any investment, and how do we do away with those hurdles. therefore, the whole aspect of ease of doing business be- comes very important. fdi and re-writing of the fdi policies is a key part of the ‘make in india’ initiative. that is why world over, whether it is a un body, world bank or any other international organisa- infrastructure there are a number of things that are happening on this front. there are 21 new cities, six industrial corridors, and top of that corridor is the delhi-mumbai industrial corridor, in the ofﬁng. all these are being planned to ensure that we provide plug-and-play kind of a facility to the investor. delhi-mumbai industrial corridor is the biggest infrastructure project happening anywhere in the world. it is a 110 billion us dollars’ investment opportunity. the smart cities projects, which consists of around 100 cities, has also being launched simultaneously.
b itb 20 1 6: make in in dia concl ave states must put their act together or we will remain a slogan on the paper: nikhil desai batting for more proactive and pre-emptive tourism initiatives from state governments, nikhil desai, md, gtdc outlined how the coastal state was in midst of a major revamp in its tourism policies to address impending bottlenecks. the new tourism policy was going to lean on sustainable development and robust community participation, he said. excerpts of his speech at the conclave. india would witness much higher b2b and b2c travel it is important for states to put their acts together and i am sure we can be one of the best countries ever, as far as the tourism sector is concerned. last few years have seen more focus on seeing sustainable increase in the number of tourists coming into india. we boast of one billion domestic travellers. never mind that 70% of these travellers belong to the religious tourism category, but one billion people are travelling within the country – which represents a huge market. in 2015, we have 8 million international tourist arrival in the country. thanks to the e-visa regime, which, now, has been extended to over 150 countries. there has been demand from the tour- ism industry sector that the duration has to be increased from 30 to 100 days – and it has to be made multiple-entry. the government of india is giving a serious thought to this initia- tive which has been launched. unless states perform, we are going to remain a slogan on the paper. when we put our heads together, we realised that every tourism destination goes through a cycle. it starts with the exploration cycle and ends at stagnation cycle. unless there is an effort put to rejuvenate the particular destination, this very important sector which generates one-third of the total employ- ment will stagnate. it was going to be very difﬁcult to pick our acts together. so the government has decided to evolve a tourism mas- terplan for the state. a masterplan which will look forward for the state for the next 25 years. it will look at sustainable development, involvement of local community. goa tourism development corporation has been designated as a special purpose vehicle to develop tourism infrastructure in the state. the task is huge and a lot of money and funds would be required. working on rejuvenating the tourism product i am very happy to tell you that in the last one year we have ﬂoated eight initiatives for the private sector to hold hand with the government sector. i am also happy to tell you the goa tourism became the ﬁrst tourism board in the country, which is not only marketing government-owned hotels, but also tied up with over 150 hotels from goa – and have started marketing their products. lack of airport infrastructure biggest challenge to ‘make in india’: kapil kaul the biggest hurdle to the successful implementation of ‘make in india’ was the lack of airport infrastructure and the sheer absence of a strategic vision towards creating it, outlined kapil kaul, ceo- capa india. excerpts of his speech: india bereft of a strategic plan to develop airport infra the excess infrastructure at the t3 is going to choke in the next 3-5 years, even if you put metro. it means that you will have a challenge of capacity – which would mean that it will challenge, even if you have airport capacity, you will have an excess infrastructure issue. i want to reiterate that airport infrastructure is going to be the biggest challenge. you cannot have ‘make in india’, if mumbai airport is saturated and we cannot take any more ﬂights; we cannot have ‘make in india’ if pune airport is closed – and we cannot have ‘make in india’ with capacity shortage challenges. and we have no strategic plan to develop airport in- frastructure, apart from incremental plans to improve capacity. 90% load factor from a tourism perspective means that the cost of tickets are going to be high and the capacity is going to be short. and, therefore, your tier-1 has a challenge of get- ting people from a tourism perspective. when we look at tier-2, with a-320s and i must say we are go- ing to have massive capacity in a-320s, so that is one tier where we have signiﬁcantly structured. but when you go to critical tiers, when you look at atr, under-50 and under-70 seater capacity, a country of india’s size has 50 planes! it is unthinkable that shimla, mysore and jaisalmer remain massive cities without any infrastructure, because we do not have the tier-3 – which are the atrs and other smaller aircrafts. that is a big challenge. how can ‘make in india’ come if we do not have the tier-3? connectivity and chocking tier-1 capacity in terms of connectivity, there are four tiers. first is the tier-1 – where jumbo aircrafts like the a 380s come to india. there is a 90% load factor of every airline in tier-1. sometimes in the peak, it 95-97%. when we talk about connectivity, anything over 70% means that you need to initiate more trafﬁc and give more bilaterals. unfortunately, we have a very faulty design with respect to bilaterals. i must say, there is no courage for strategic liberalization, just incremental liberalization. make indian aviation cost-competitive if you need to make viable and investable airlines, you need to ensure that you have cost-competitiveness. it sufﬁces to say that anything that indian aviation produces is the costliest in the world – whether it is fuel charges, host charges and whole set of taxation. it may not be of interest to you directly, but if you do get cost-competitiveness you do not get investable grade airlines, resulting in making connectivity impossible. all of us play an individual game; we must revisit our approach for better results, says homa mistry homa mistry, ceo, trail blazer tours india pvt. ltd. minced no words when he blamed the complete absence of a concerted push in gaining more inbound footfalls for india’s continuous mediocre show. he asked the industry stakeholders to revisit their approach in courting tourists. on tour operators as an important cog in the wheel i am a tour operator. we play a very crucial role in the entire tourism industry. we are the glue that puts everything together. we are the link that makes the chain; we are the soul of the tourism industry. we all heard from who who’s on how to make in india, but my views are different. we are where we are because of our own doing. and we will continue to be there. i do not see some kind of magic happening that a lot inbound tourism is going to grow. out- bound will continue to grow, and inbound will remain ﬂat. i have an example. ☛ india’s presence in exhibitions, globally, is not translating into desired inbound footfalls. we are where we are. on lack of a concerted effort by stakeholders in tourism, you have large shows like bitb, itm and others. when you see the representation of india, it is beautiful. internationally, not only do we take stalls but you would ﬁnd four times the number of indians than any other country in the exhibition. but at the end of the year, you will see that the numbers of places like sri lanka, new york and singapore are far more than us. i go with my itinerary to a person. airline goes to the same person and the hotelier, too, goes to the same person. everybody is going indi- vidually and trying to sell his own product. we never go as a country. that is the difference and that is why a few weeks ago, we had the olympics. most of us would have seen the inauguration. chinese contingent had a large red ﬂag and immediately after them were the blue blazers. we had an equally large contingent and well represented. but china won gold medals after gold medals and you all know we won what. the reason for that is very are all playing an individual game. it starts with the embassy; the embassy says you apply for ten days, i will give you ten years’ visa. the do not say don’t come after 30 days and if you come on 60 days then no multiple entry. there are no issues. if your documents are correct, we will give you visa for 10 years. attractions, state governments come to sail our country and ﬂy away with all our tourists. it is time to take a look at our approach.
b itb 20 1 6: aviation concl ave aviation set to witness unpreccedented growth but infrastructure critical challenge aviation sector in india is in midst of ‘acche din’. considerably low cost of aviation fuel, rising disposable incomes, a substantially progressive aviation policy in the offing and record-breaking number of aircrafts on order from global factories are some prevalent conditions that signal a robust rise in air traffic in the next few years. however, there are grey areas, too. the biggest challenge facing the aviation industry is the lack of commensurate growth in airport infrastructure. while the focus of the government has been on making flights more affordable for the common man, but apart from incremental growth in infrastructure, the larger strategic vision to tackle the rising traffic seems missing. with an expected 233 million domestic air-travellers by 2026 in the fray, the need for a massive infra push was never more glaring, noted senior industry representatives. with the top leadership of the air india group in audience, its imminent action plan, both, on domestic and international routes were discussed at length. taking stock of the big picture, the conclave anchored by capa touched upon some of these key issues confronting the industry. we bring you excerpts of the conclave: proactive policies, infra overhaul must to realise the imminent boom in aviation sector: kapil kaul kapil kaul, ceo, capa india, in his opening remarks at the conclave on airlines and airports, stressed on the need for addressing the threefold conundrum of lack of adequate skilled manpower, favourable policies and regulations, and overhaul of infrastructure to truly tap the potential of the aviation industry – which was at the cusp of an unprecedented growth in passenger and fleet numbers. excerpts of his speech. he stressed that there was almost a sustained double-double digit growth in both the segments in the past 10-12 years, highlighting that there was “a strategic shift in one extreme of growth to another extreme.” he, however, was quick to point out that despite the unprecedented growth in numbers, india still ranked in the bottom of the list of top twenty aviation markets, in terms of seats per capita. internationally, india was address them could severely constrain the much anticipated leap forward of the aviation industry. “the absence of liber- alization of policy and regulations could seriously impact the aviation industry’s growth. our international bilateral regime has been stuck for the last 8-10 years. we have seen very little incremental movement in bilateral trafﬁc,” he lamented. he added that if india had put in place a more liberal and progressive bilateral regime in place, the international trafﬁc would have been much higher. given the growth in the past decade had ushered from a noticeably smaller base, india’s ascent in the aviation industry had remained possible from safety, security and other critical oversight functions, he detailed. “when we look at growing from almost a hundred million to 233 million, the whole structure and oversight management needs to be very strong. they must match the level of growth that we wish to see,” kapil kaul mooted. raising an important issue, he highlighted the shortage of skilled workforce available for managing india’s fast over- ﬂowing airports. “we see the cost of per block hour of pilots increase by almost 20% in the next ﬁscal, or two. it is a similar trend we witnessed from 2004-2009,” he said. calling for massive investments in augmenting airport infrastructure, kapil kaul termed it “critical.” “our exist- ing airports are moving towards saturation. bengaluru and the lowest in terms of seats per capita, with 0.04 seats, he said. arguing that the data was testimony to the fact that india was going to witness a massive upside of growth, he said that “it is probably going to continue for the next 3-4 decades.” while these numbers were reﬂecting the pos- sibilities that lied ahead, they also testiﬁed that india was a massively under-penetrated market, the absence of liberalization of policy and regulations could seriously impact the aviation industry’s growth. our international bilateral regime has been stuck for the last 8-10 years. we have seen very little incremental movement in bilateral traffic. when we look at growing from almost a hundred million to 233 million, the whole structure and oversight management needs to be very strong. they must match the level of growth that we wish to see. ,, ☛ our existing airports are moving towards saturation. bengaluru and hyderabad are going to saturate in the next ten years. the entire metro infrastructure would saturate in the next ten years. giving a snapshot of how the aviation market had panned out in the last 10-12 years, kapil kaul pointed towards a major spike in the number of passengers, both, in domestic and international segment in the past decade. sharing some ﬁgures, he said that the domestic trafﬁc had moved up 3.3 times, from 51 mil- lion, roughly, to about 169 million. “the international trafﬁc is up by 2.4 times, from 22 million to 55 million. from 2010-16, the domestic trafﬁc saw an annual growth of 9.9 %, and inter- national passengers grew by 7.6%,” kapil kaul divulged. despite the capacities that “it was bringing the market.” envisaging a whopping rise in domestic numbers, kapil kaul shared that capa ﬁgures estimated domestic passen- gers to swell to 233 million in 2026, as compared to 84 million in 2016. international numbers were to witness a similar growth trajectory, “hitting 133 million mark by 2026, as com- pared to the current 55 million.” he, however, cautioned that the predicted numbers were dependent on plethora of factors, and india’s inability to hyderabad are going to saturate in the next ten years. the entire metro infrastructure would saturate in the next ten years while the non-metro infra is likely to saturate in the next 3-5 years,” he said. he reiterated that if india was able to tackle these multifac- eted challenges through a proactive and progressive policy in place, supported by better airport infrastructure, “it is going to be a sweetspot for the aviation industry in the decade to come.”
b itb 20 1 6: aviation concl ave ashwani lohani, cmd, air india we are fully confident of dealing with pending legacy issues: ashwani lohani ashwani lohani was at his candid best when he responded to a number of questions – which included legacy issues, future expansion plans and government packages. ashwani lohani in conversation with kapil kaul. excerpts: of air india and star alliance in the revenue, especially north america feed? are you making some inroads there? al: yes, star alliance has deﬁnitely helped the airline. it is good to be there. but as far as ﬁgures as concerned, growth ﬁgures, i think my commercial director pankaj srivastav would answer this question better. kk: the upgradation side, a fundamental requirement of star alliance. is there a continuous service upgradation, both, in flight and on ground happening simultaneously? al: yes. there is a deﬁ- nite thrust on improving by shashank shekhar kk: one of the things that was talked about was asset monetization when we talk about legacy issue. has anything moved forward on the asset monetization front? al: yes, we have started moving forward, but it is not that we will sell away all our assets. like, we shifted our headquarters from mumbai to delhi; we have a huge a huge building there. we have given out a lot of ﬂoors on lease; on rent. but prime ﬂoors are still with us. the ground and the ﬁrst, and top 3-4 ﬂoors are still with us, because we operate from there. but we do not need so much of space, so some of them are on rent; we have sold some ﬂats. we have some more properties we would want to monetize, but we do not want to just lose control. kk: and the third thing was the capitalization support which the government gave, around 6 billion (dollars), and roughly about 3 billion+ is coming. are you seeing the capitalization support to continue timely by the government, as it was done earlier? or there may be changes in that? al: well, whatever is sanctioned, that will continue. and we are deﬁnitely not looking at anything beyond that. kk: and you are getting timely capitalization from the government? al: yes. kk: i mean as and when you required? al: yes. kk: i want to ask you one question, especially on long-haul and, in fact, there has been a very aggressive expansion of air india – which is good for almost everybody who is here. for tourism, hospitality and others. it envisages a fuel price which is very benign and moderate. what happens when the fuel prices go up significantly? is there a mitigation that the air india has thought of? whether to increase yields a bit more? because one of the problems that every international airline faces on long-haul flights is that the moment you change the fuel price from 40$/barrel to 60-70$/barrel, it changes dynamics significantly. so, is there a continued thrust on international, irrespective of the fuel prices, in the next five years? al: i understand that fuel prices play a signiﬁcant role in decid- ing whether the airline will make proﬁts or loss. but right now prices are good, and they look good, at least for the next couple of years. we intend to continue our thrust on expansion right now. kk: with respect to your association with star alliance, are you seeing revenue? because, we were told that 6-7% contribution from star alliance. what is the status services. kk: what about the yield part? al: on the number part, we see our growth continuing. we do not see an issue there, but deﬁnitely yields are an issue. yields have gone down considerably, from 5600, 2 years ago, to 3600-3700 now. it is extreme- ly substantial but i think better sense will prevail among various airlines, and they will not bring it down any further. it will be a mutual harakiri if we keep on with that. kk: another critical part is the turnaround. i believe you may be looking for a partner for aiatsl (air india air transport services limited). maintenance part is being put on to get foreign investors. so are you seeing the mro that you build in nagpur and other engineering facilities, an aggressive hive- off, get potential partners. the ground handling part which possibly could be monetized significantly, so do you see that continuing? al: we hived off the ground handling functions. i don’t think about whether we should hive it or not. i have got different views on that issue. now we have a reality; yes, we have a ground handling company aiatsl – which we have hived off and it is doing fairly well. and that will occupy more territory in the times to come, and we will share the proﬁts. the second is the engineering side. in engineering also we have hived off mro. for ground handling almost 50% of the work is done by air india and 50% by other airlines. but for engineer- ing almost 95-96% is of air india, so it almost like a department of air india at present. ultimately, when it gets a lot of outside business, then it will start functioning like a hived off or a business entity. but that will happen because we are moving fast in that direction. nagpur has been a good addition to the entire family; it has very good infrastruc- ture. by the ﬁrst or second quarter of 2018, the entire thing would be complete. you know for any mro, the major business is from engines. engine shops are still being made. once that happens, i am sure it will leapfrog. yes, we are looking at getting major business from other airlines for the mro. kk: in terms of ground handling, you have two companies. al: (interjects) i would also like to mention about our air india ex- press which also quite some time back had hived off from air india and became a separate company. that is doing really really well. it is running very efﬁciently. kk: i have a question for air india as well. al: (pointing towards the audi- ence) the ceo of air india express is here in the audience. kk: we will ask him, too. air india aitsl which is the other ground handling company you have, so going forward do you see air india sats expanding or the aiatsl expanding into other airports? al: i think both will expand. kk: what was the timeframe on the engine mro? al: i think by the beginning of 2017, the engine test cell – the test- ing facility should be operational. that will give us some business because you can bring your en- gines for testing and minor repairs, but for the engine overhaul, shops would be ready by the ﬁrst or sec- ond quarter of 2018. kk: now, strategically going forward, do you see air india express expansion the way it was envisaged? is that on the regional international side, will there be fast-tracking of that? that is the no. 1 question. why does not the air india express do domestic? al: air india express has got some 18-19 planes right now. we are looking at converting that into a 50 aircrafts company. it is going to grow. it is mainly doing internation- al, but in the future we may look at domestic routes, too. kk: so you see domestic routes as a possibility? al: it can. i mean the domestic market and the pace at which it will grow. i would like the air india family to conquer as much market as possible. it will be done by air india, alliance air and, may be, air india express as well. but air india express has started making inroads. it was basically considered a south-based company, but started ﬂights from chandigarh, delhi, varanasi and lucknow; it is now becoming a pan-india phenomena. kk: the other part is that because you do not have a low-cost arm and you still have higher cost structure, expanding air india express in the domestic market, even though it may cannibalize your parent brand, it is much better than air india cannibalises rather than the competition. therefore, air india express must look at expansion moving forward. lastly, i have a question on the risk side. if you look at the domestic capacity, we are bringing in international capacity. now bilateral agreements are basically incremental, but that may change in the near term. 5/20 may chance things. if i were to ask to that what are the near term 2-3 risk evaluation for air india for the next 2-3 years, is there anything you can comment on? al: commercial enterprises are always riskier. there is always a risk in anything commercial because in hindsight we can always say that we could have done things differ- ently. any decision that we take can fail or succeed. it all depends with what intensity you take on a task; it basically decides whether something is going to fail or suc- ceed. our focus, primarily, is not on the imponderables. it is not on things on which we have no control over. our focus is basically on things which are in our control. kk: in that do you see domestic a bigger challenge than international, because the domestic will continue to be a very different animal in the next two years. al: the bigger challenge that i see is internal; it is our own internal sarkari processes. that is a challenge in running a commercial organisation in the government setup. we will be able to get over that.
b itb 20 1 6: aviation concl ave massive upswing in non-aero revenue; far east emerging well for cochin, says ceo, cial in a session moderated by kapil kaul, a c k nair, ceo – cial shed light on a host of operational details. speaking at the conclave, he shared that with a larger array of products and brands in its quiver, the airport was making almost 70 percent of its profits from the non-aero side of operations, as its duty-free outlets and retail stores have been successfully attracting serious footfalls. “our traffic to non-traffic percentage, when we started the airport, aero-side was 60% and non-aero was 40%; that has been reversed recently. it is almost 70% non-aero and 30% aero,” stressed the ceo. battling for stronger infusion of retail outlets, products and brands into airport’s offerings, he iterated that the latest trend suggested that “when you add good retail good retail outlets in the departure or the arrival side, it does well.” he added “there is more duty-free business on the arrival side, as kochi is the terminal arrival of the region.” he shared with the audience that main business generated by the airport was emanating from duty-free shopping, which was being operated by cial. “the major business is in the departure side. when departure increases, it adds to the duty- free business,” he detailed. backing the assertion made by the air india cmd ashwini lohani that increased purchasing capacity of the average consumer had grown in a noticeable fashion, he called it “an opportunity as well as an engagement in the indian aviation sector.” he said “it is especially so for airports, because a lot of domestic travel is happening from the north to the south and vice versa. there is so much of domestic travel happen- ing. also, an average indian is travelling abroad for tourism. that is why we are seeing a phenomenal growth, and we are looking at expansion to cater to the needs of the next 10-15 years. we are looking at expansion of the new international terminal and also the domestic terminal to cater to the needs,” elaborated the ceo. speaking on the latest trend in the realm of footfalls, he agreed that there had been a change in the trend. “three hundred thousand passengers are ﬂying directly to europe; the direct trafﬁc to the united states is around two hundred thousand. good trafﬁc has developed to the far east from kochi. destinations like kuala lumpur and singapore are picking up,” he shared. replying to kapil kaul on his question whether the impending gulf crisis and larger movement of local diaspora heading to kerala was impacting business, he said “as of now, there is not much change in that. but yes, there could be a change in it. it is not a challenge for the airport, but also of the economic setup in kerala. not only for airlines and airports, it is a challenge for the socio-economic setup, too.” he shared that given the paucity of land available with cial, outside the airport, the thrust was “on maximum utiliza- tion of available land resources.” philippines a great experience; keen on more international operations, but due diligence must for gmr, shares p s nair gmr’s foray into philippines has turned out to be incredibly encouraging, and the project to construct an airport terminal continues to be well-ahead of the proposed schedule, shared p s nair, ceo- gmr airports. also, despite having faced a bitter experience in its attempted move into the maldives, gmr will continue its lookout for international projects, but only after due diligence. excerpts of his discussion with kapil kaul at the airlines and airports conclave anchored by capa. sharing his insights on the investment perspective, especially from international markets, p s nair asserted that india was currently being looked at as a great opportunity for investments, globally. “there is tremendous interest in india. we have to make sure that we make the best use of available opportunities,” he said. when asked about his experiences in dealing with philippines, he termed it “very welcoming”. “we had a great interaction. there was a seamless transaction for us, i would say. so far our partner has been good. we are ahead of the schedule for the commissioning of the new terminal there,” he added. he commented that gmr initiatives had already changed the face of the airport and “it was there for people to see.” lauding initiatives undertaken by the philippines gov- ernment to augment travel and tourism to its shores by constituting a tourism taskforce, p s nair said that the task- force had representation from all stakeholders. “only a couple of weeks ago, some 40-odd travel agents and tour operators were brought into philippines from melbourne by them. it was a joint initiative. it was managed by not only the state or the port operator,” he said, showcasing how the entire industry had come together to for a concreted push for tourism into the country. “hoteliers gave accommodation; airlines managed tickets. the government is proactive. these are all out-of-the box ideas,” he said. he mentioned that while gmr was keen on furthering its international operations, it was going to sure to “conduct perfect due diligence before venturing in.” detailing that when maldives went for the ﬁrst inter- national bidding, gmr did not bid, keeping in mind the environment and lack of political stability. “we did participate in the second bidding, because the transactional advisor was non-other than the world bank’s arm,” p s nair said. “they are extremely transparent in their dealings. how- ever, despite these measures, all of you know what actually happened. the government has the power to expropriate and decided to give a compensation. we might get a compensa- tion. we will have to see,” he added. private sector must lead to seize opportunities available in the aviation sector: raj shekhar aggarwal rising disposable incomes, pro-development political outlook and growing interest in india were factors positioning the indian aviation sector at a pedestal – which presented itself with unprecedented opportunities for investment and growth. how the private sector was going to tap it was the larger question at hand, argued promoter of the private airport at durgapur. “looking at the framework of the aviation sector in india, the private sector has been given a lot of leeway. so, the policy is so revolutionary that even an individual citizen can open an airport,” shared raj shekhar aggarwal. decade were going to be much higher than what the sector had experienced in the past. “there is a need for the private sector to come forward and bridge in the gap. currently, most of the focus seems to be on what the government will do at speciﬁc airports, which are already operational,” he said. noting that the change was that it had not been acted sharing how he intended to solve the connectivity issue, upon earlier, he said “it was seen that there was a need for an airport and associated infrastructure at a particular location, then it was taken up with state governments and the central government. it so happened that there was enough room available in the regulatory context to do it in the private sec- tor,” he detailed. placing his wagers on growth beyond what most were envisioning, he called out the twin factors of inﬂiction point of incomes and crude oil prices, where they were, to jettison growth way beyond expectations in the years to come. outlining challenges for the coming decade, he pointed out that the biggest concern was ﬁnding a model that resonated with investors, adding that “one has to look at the market and combine various components relating to aviation to be able to make that happen.” he noted that challenges and opportunities in the coming he said as it was an issue with a number of upcoming destina- tions, there was an urgent need to ramp up marketing on the ground. “there is a need to reach out to those who might travel by air, but are currently availing other airports. it is a work in progress and a lot more needs to be done there,” he added. he mooted a concerted push by airlines and airports, stat- ing “it needs to be a joint effort by local business community, the airport and airline companies.” on the question of capitalization and economic challeng- es stemming out of lack of revenue generation for the airport, he contested that there was enough capital in the balance sheet. “the issue is of converting the potential revenue in to actual revenue for the business to ﬂourish. that remains more of an operational and a marketing challenge than a capitali- zation challenge,” raj shekhar aggarwal said.
b itb 20 1 6: aviation concl ave air india in midst of a determined domestic and international expansion of routes kapil kaul engaged with shyam sundar and pankaj shrivastav to better examine the imminent course of action for the maharaja. they both exuded confidence of acquiring more aircrafts to actively tap into new sectors. excerpts of the discussion: europe and north american markets will remain the focus of international expansion for air india: pankaj shrivastav ai express to have a 50 aircraft fleet by 2020; not averse to domestic but must make financial sense, says ceo taking its already laid strategy of augmenting its long and ultra long-haul routes, air india was going to continue to ramp up its key international connections, said pankaj shrivastav. air india express was not averse to plying on domestic routes, provided it made financial sense for the carrier, and with the prevalent ticket rates, it certainly did not, admitted shyam sundar. excerpts: if you have to look at the next two years for air india on the international front, how do you plan to break the medium-haul and long- haul? which gateways are your priorities, and why? taking it further from where our cmd left, on the international expansion, i see air india poised to grow substantially on the international side. we have added as many as nine international sectors in the last couple of years. and as he mentioned, the next one is commencing from the ﬁrst of december; that is the immediate one for now. but there are plans to grow substantially in the europe market, and that has largely got to do with the fact that the we have a dreamliner ﬂeet with us – which is ide- ally suited for about 8-10 hours of ﬂying. we have 9 destinations covered today in eu- rope with dreamliners. we look to connect at least two more european destinations in the next year and a half. of there. likewise, in madrid. so, because of the vast network, we will ﬁnd their pres- ence in whatever cities we plan to operate to. but yes, going to the hub airport of a star carrier is absolutely necessary for us. secondly, about the ultra-long haul, we we have started the san francisco are going to get about three 300-ers, which would give the ability to connect some more ultra-long haul destinations in north america. these three aircrafts would be coming sometime in 2017, but i think we will not be able to wait that long. we intend to connect at least one usa city, likely to be washington by march of 2017. we are going to have the canadian market covered with a ﬂight from amritsar on a dreamliner via birmingham. these are being planned by the june of 2017. kk: the destinations that you choose, if you look at the eastern side, europe or canada, is it linked to some star alliance? do you from a network development perspective keep in mind? when you go to singapore, vienna and toronto, is the star alliance partnership a critical driver that you will bale to get some support and move people around? star alliance today has 28 partners and whichever market you operate to, star alliance would have a substantial pres- ence there. being a star alliance member, you would ﬁnd some sort of connectivity available with whatever destination you are ﬂying to. the last sector we introduced was vienna; it has 7-8 star carriers operating out ﬂight, which would not have been as suc- cessful as it is today; we are increasing the frequency from three to six. it is largely because of the tremendous help we got from united. they have, in fact, given us some excellent spas to cover most of the californian and western cities of usa. toronto again, as and when we go there, air canada’s hub is toronto. we hope that we will similar kind of beneﬁts from toronto. you talked about vienna. i was very sceptical at the launch, especially after what happened to lufthansa operating in austria? what has been your experience of operating out of austria? what is happening now with the vienna market? the operations came all of a sudden, where in a matter of 45 days we had to not only decide whether we would go to vi- enna or not, but also put possible contracts and agreements in place. we ﬁgured that austria and vienna actually acts as the gateway to the eastern and central europe – which largely remains unexplored by the indian outbound. so, we took a risky decision. from the ﬁrst day of operation till now, we are operating at loads in excess of 90%, on a bidirectional basis. overview of the last two years and why was there profitability enhancement. on volume enhancement and turn-around in air india express one is that fuel prices have been very kind. that is an external fac- tor. but internally, there has been a tremendous improvement in terms of aircraft utilization. there has been improvement in the occupancy factor within aircrafts. there has been route rationaliza- tion, knocking off dead domestic sectors behind international sectors. all of it has paid rich dividends, and just to go forward, some of the points men- tioned by kapil like the ability to sustain growth, because resource con- straints seem to be writing on the wall. where are the pilots? the need for 700 aircrafts and 4000 captains – these are the things that really daunt me, not just for myself, but for the whole industry. it does look like a big ask producing 4000 captains. it is just not in in- dia; you may not ﬁnd them globally. now, we are talking about getting pilots from abroad, but that, too, is limited in terms of availability. so i think it is a big issue for any airline and also for air india express. as i told you, we were growing at the rate of 40%, this year. y-o-y, we have 40% growth in our ask and commensurate growth in our revenue. i think the past two years have been very easy, because the environment has conspired to help all airlines and air indian express to record very good results. going forward, i think the challenge lies in the fact that people might get used to the kind of fare that are in the market. that is a worry. the picnic will last for as long it does. it is anybody’s guess how long fuel will stay at 60 dollars/barrel, but then if you want the market to get used to fares like rupees 3000 and rupees 4000 for a three-hour sector, god save you! i believe that the kind of aggressive growth that we are projecting, based on the number of ordered aircrafts etc., will have a cascading effect on regional international routes – where we feel that we have a very nice niche. operating mainly from tier-2 cities, we have a lot of potential there. will air india express look at domestic routes? of course we would, if it makes economic sense. i do not think it makes sense if the fares are going to be where they are – even for a low cost airline. for a low cost airline to survive, it would be challenge. so i would think there are a lot of opportunities within 4-hour range from india into neighbouring countries. then there is a lot of scope beyond those neighbouring points to onwards points like the far east, northeast asia and deep southeast asia. predominant middle east focus of the network and risk owing to over- dependence and transformational changes happening in the economy. you know, there are a lot of virgin markets, even in the middle east. well, it might attract a lot of other carriers as well. there is a lot of potential in southeast and the far east asia – which is totally untapped. there is no indian career to indonesia; nothing to vietnam; nothing to philippines; nothing to cambodia. there is a whole lot of geography there that is not covered. so it a matter of not getting confused; i do believe that if you try and service two or three sectors equally well, it might be at the expense of one or the other. we are in the process of a large expansion. we are looking at it as our chairman was saying, 50 aircrafts by about 2020. it obviously needs looking at new markets.
b itb 20 1 6: h e ritag e concl ave tourism needs crafts to survive and create a larger experience for visitors: jaya jaitly jaya jaitly, founder and chairperson, dastkari haat samiti was the keynote speaker at the ‘uniquely india’ conclave at the bitb 2016. addressing the gathering, she made a strong pitch for looking at arts and crafts as an intrinsic element to the larger tourism experience that states and destinations were seeking to inculcate. edited excerpts of her address: crafts. and i hope you all will end up feeling the same way. dilli haat is one of the places, where it so happened that i collaborated with the delhi tourism to make a permanent marketplace for what i call im- permanent people. craftspeople from all over india come over, supposedly on a rotational basis, about two weeks at a time. this came about from all my travel in india, because we see village marketplaces. most agricultural societies, anywhere in the world, have village markets. even now, in very sophisticated areas in france, farmers’ markets are making a comeback, where you do not only ﬁnd food products available in the markets, but crafts as well. what artisans really want is to be a part of the experience, and i am sure being in tourism all of you have realised that have tribals from different parts of india; northeast different from central india. they have their histories of nomadic journeys’. they have their histories of ethnic ties with differ- ent countries. i do not think anybody here in tourism ever misses out on using the word ‘heritage’ somewhere in their brochures and their thoughts. living in kashmir for all these years, i know that tourism means poniwalas, shikarawalas, includ- ing the craftsmen, everybody is dependent on tourism for their livelihoods. today, a craftsperson does not only want to be the maker of the product, for which they have to hunt fast diminishing raw materials – forests have been cut down or are inaccessible to them, textiles have gone synthetic – all of these things have made it a challenge for a person with skill to sell their products. what they really want is to be a part of the experience, and i am sure being in tourism all of you have realised that tourism is not having a hamburger joint somewhere in a ﬁve-star hotel, it selling the india experience, and that is a lifestyle. the lifestyle must involve these people to carry out their heritage livelihood; they must not feel like objects on display. a lovely project, in which we must recognise inatch’s role in supporting us, in varanasi, when went to see the artisans and framers who have had a millen- nial old connection; ever since you have farming, you needed artisans alongside. what inspired me to say that tourism is not having a hamburger joint somewhere in a five- star hotel, it selling the india experience, and that is a lifestyle. the lifestyle must involve these people to carry out their heritage livelihood; they must not feel like objects on display. ,, ☛ i do not think anybody here in tourism ever misses out on using the word ‘heritage’ somewhere in their brochures and their thoughts. i am privileged and honoured to be speaking at a tour- ism event, and thanks to intach, i am here. simply because crafts for me, after working for 45 years with craftspeople all over the country, i have long realised that crafts like anything else cannot be in isolation. some- how, as a matter of happy circumstance, ever since 1986, i have been closely connecting crafts with tourism. first when surajkund crafts mela began, i was put on the board, and i am still on the board – where we try to make sure that the best craft from all over the country come. from that time, i kept thinking that is it that craft has to ride on tour- ism to survive? or tourism needs crafts to survive? this has been an important question and i am more and more conﬁdent enough to say that tourism needs let us convert a traditional village market into a better urban market infrastructure, and give the craftsperson the space and respect in the city which has the purchas- ing power. this is how the dilli haat come about; it has spawned many more haats, most of them badly run, because most of them are in government’s hands, with disinterested ofﬁcials looking after them. i do not want to talk about that much, but you will see the potential of dilli haat when genuine people come. what i would want to make the recurring theme of this afternoon’s discussion is that, both, in tourism and crafts, there is immense scope for livelihood. it is because i want to sustain those livelihoods, because they come out of her- itage; they come out of a legacy which is multi-cultural. we handloom weavers, the lanes are so dirty, narrow and inaccessible that you need to take a rickshaw. and those rickshaws are so pathetic and yet we struggle to negotiate a car over a ﬂyover. more necessary than ﬂyovers is to make those rickshaws comfortable. there are a lot traditional painters in varanasi and those painters can decorate those rickshaws. with a little effort, those rickshaws, more than the street art on the wall, has become a mobile art. so suddenly, you can perk up whole of varanasi and take them into the bylanes. the rickshaw wallah also feels a part of the tourism experi- ence. these are the kinds of things i like to do, where you are uplifting more than just a craft. you cannot uplift the industry, unless you have all of these things involved. heritage intrinsic to tourism,vital for growth at grassroots, believe industry insiders jose dominic, chairman, cgh earth luxury is not opulance but an experience i will re-word the subject for the day as experiential and holistic destinations. i will share the experience that we have offer. i am in the business of tourism and i am in the business of tourism for en- terprise. jaya jaitly is here. we borrowed her palace and converted it into an ayurvedic centre. i want to share what we called the cgh story. we brought tourism to the island where people’s principal occupation was (through) ﬁshing and coconuts -with a spectacular sea all around them. the hotel we set up there did not require to be consumptive. when it was opened on 18th of december in 1988, its advertised feature was: the absence of. the absence of telephone, television, newspaper, air-conditioners, hot water, multi-cuisine restaurant and swimming pool – all absent. present was nature and the means to enjoy nature with a condition, without causing any diminution to it…and the price we should charge, for that service and that attitude. in 1988, when people who came to the island from london and istanbul ﬂew to mumbai; they stayed overnight in mumbai. at that time, i remember, many of them would stay at the oberoi towers – there the price was 180 usd. they would then come to kochi, stay there overnight and then take a ﬂight to agatti island and then take a boat to bangaram island– a big journey in itself. when we thought how such we price? people said, people are paying this much to get here and so, we should charge the same, too. when we charged the same price, the tour operator community was aghast. how dare you charge this kind of price, we were asked. they had chandeliers and we had mud and thatch. our learning was that mud and thatch could also be luxurious. the most often comment from people who stayed with us was that please do not change anything, even if you double the price. that was the learning that luxury was not on the built opulence, but the experience. 90% of the people who worked with us were islanders, whose only previous experiences were coconuts and ﬁshing. of course, the heritage of the land is spectacular and the nature simply breath-taking.
b itb 20 1 6: h e ritag e concl ave snapshots of th e concl ave s shikha jain director, dronah and convenor, haryana state chapter on living heritage we have a new term emerging now. it is called living heritage – which is that you are experiencing, both tangible and intangible, together. a living heritage festival has been started by the maharana of mewar foundation in udaipur – and it was with this concept – because we prepared the conservation plan, we realised it was not one of the asi monuments which was in ruins, but it has a continuity. it has traditions and rituals being followed, and they need to be showcased together. dharmendar kanwar, writer and convenor, intach jaipur chapter on heritage and tourism working in tandem when a heritage tourist comes to the town or to the country, he spends 38% more than the traditional tourist. a heritage tourist also stays 34% longer than a traditional tourist. so, they spend 20% more and also stay 22% longer. heritage tourism creates more job and strengthens local economy. when we combine heritage and tourism, we are, actually, not only creating employment but we are also safeguarding our heritage. simply because if we want our tourists to come and see our heritage, then obviously we want it in a very good condition. bindu manchanda head, crafts, community and heritage, intach on the concept of creative economy culture is a driver and an enabler, and without the cultural impact in any experi- ence, i am not just talking about tourism, no experience is actually a complete one. crea- tive economy then becomes everything that an individual can create – and can earn and sustain himself, his family, his village and his community. the concept of linkage between tourism and creative economy is an evolving concept. it is a concept that changes. now, we think it is also a creative economy. it is not just craft which is creative. so anything which we create and can have a socio-eco- nomic impact becomes a part of the creative economy. mala barua, owner, mystic asia on spiritual heritage of india we have, from the days of the 50’s and 60’s, from the days of hippies, people coming to india for spiritual knowledge. they have taken yoga out of the country; they have taken ayurveda out of the country. but they have not really been able to touch vedanta because vedanta is totally intangible. it is abstract; it is metaphysical, but that is the essence of our spiritual heritage. so i started mystic asia, bringing indian spiritual masters, putting it in a format where we took people away for 5 to 8 days retreat to really go deep into a subject. so if we were doing an ayurvedic retreat, it was not about massages, but it was a little educational on what exactly the philosophy of ayurveda was. spiritual heritage is very intangible; it is more intangible than culture. i feel we are not tapping on that enough. tour-operators and travel agents need to include heritage much more into their programs.
b itb 20 1 6: h e ritag e concl ave indian heritage offerings unmatched, adopt best global practices to market them given india’s unique civilizational continuity and cultural diversity, heritage could have been india’s strongest usp in its search for a stronger presence in the global tourism landscape – befitting its stature and offerings. on the contrary, sadly, it has turned out to be a weak link in the larger bouquet of tourism segments, predominantly a result of the perennial neglect bestowed by successive governments’, irrespective of their political lineage, noted speakers at the uniquely india conclave, anchored by intach. they argued that heritage was the raw material which created a larger tourism product. despite hotels and destinations feeding on them for their businesses, not much had been done by them to conserve them for posterity. there was an unanimity on positioning india as a destination which was rich in creating rural experiences. interestingly, some speakers argued that boosting the homestay segment could, to a large extent, allay the issue of not having adequate inventory to cater to tourists, domestic and international. suggesting a way forward, panellists batted for looking at best global practices and emulating them to attract global tourists. heritage is the raw material that makes a tourism product, not packaged products, laments piplani heritage was the core of a tourism product and key stakeholders were critically reliant on showcasing the heritage segment to sell their products to consumers, reasoned navin piplani, principal director, intach heritage academy he, however, was quick to point out that despite its visible importance, it remained at the bottom of the list of priorities for the government and the private sector. is putting money into the conservation of the taj mahal? the poor archaeological survey of india – which cannot take care of their own building. if you go to their own building, it is leaking; their budget is only `250 crores or `300 crores, possibly. promote tourism, do not sell it intach was set up in 1984 to look after several million unpro- tected sites in the country. but what can intach do without the support of all the stakeholders who are driving the beneﬁt out of all the conservation and preservation efforts? if two percent of these corporates come and tell us that we are with you and let us not talk about money. there are hotels in every city. why cannot sessions like these be organised once a month by one hotel in one city? and you will have 365-days a year, fully booked, because they are so many. if you have one sponsored heritage walk by one hotel in one city, you will have 365-days fully booked heritage walks in this country. not only in urban areas, but in rural areas, too. opportunities are unlimited. let us not look at the outside world. let us look at the potential we have and the world will come running to us. you will not have to spend money to invite all these people. the potential remains unexplored, and the government research needs which go to feed into the sector of heritage conservation. heritage a raw material for tourism heritage is the raw material for tourism, but sadly very few people are willing to support that raw material. 2 percent of csr money is nothing for companies like indigo, tata and the oberoi. i mean where are your customers going? where are your ﬂights landing? division, natural heritage division, heritage educa- tion and communication services, documentation centres, libraries, so on and so forth. the youngest division is the intach heritage academy – one that i head. this division aims to link all these other divisions and chapters in a more consolidated away to look after the training, capacity building and heritage is the raw material for tourism, but sadly very few people are willing to support that raw material. 2 percent of csr money is nothing for companies like indigo, tata and the oberoi. i mean where are your customers going? where are your flights landing? you take them to heritage sites and what is your csr? 2 percent! it is laughable. it should be 20%, because based on that 20%, you can then make your 80%. we are still one-fifth of what we are asking for. ,, ☛ tourism industry must look at heritage from the perspective of being the raw material that makes their ﬁnal product sell to tourists. we are too reliant on the packaged product. we are in a very good position to handhold pro- jects that have been initiated in different parts of the country. intach is omnipresent in india, so wherever you need a partner, we are there to hold your hand. intach is the largest heritage conservation non-government organisation, non-proﬁtable organisation. our convenors are not paid. they put in their work out of their passion. so, you have kind of an army of people who are looking for spaces and places where their expertise, knowledge and experience can be made use of. we also have art heritage division, material heritage you take them to heritage sites and what is your csr? 2 percent! it is laughable. it should be 20%, because based on that 20%, you can then make your 80%. we are still one-ﬁfth of what we are asking for. can you think of a country which has a ministry of tourism? it is difﬁcult. it is either ministry of culture, media or sports. so, we are looking at larger conceptual framework on which tourists would rely upon. but it is only in our country that we have a ministry of tour- ism – and still very little money is put into the conservation and protection of the raw material. a lot of money is being put into travel, tour, infrastructure and holiday homes. who and the public sector priority is, with hygiene, education and all these issues, too low. intach is trying to bring their priority from ten to two, or one in some point in time. that is the sole aim of intach – and we do hope that support- ing events like this, and even getting 20-30 people together, the cultural consciousness will rise in the country. we will be able to connect more, internally and externally. basi- cally, relying on the raw material, rather than the packaged product that we are all wanting to sell these days. we need to promote tourism, not sell tourism. and then people will automatically come to us.
b itb 20 1 6: h e ritag e concl ave india is the only country that can sell emotion: steve borgia calling india a unique nation, only in the world, with products galore and the ability to sell emotion, steve borgia, mentor, indeco hotels made a passionate plea for working towards garnering market share from international source markets, rather than pinching clientele from one another – which, unfortunately, seemed to be the prevalent norm. excerpts of his speech: f rankly speaking, we are all doing what we love to do. nobody told me to go to a remote village and build a ﬁve-star hotel there. i deﬁned ﬁve-star there; no- body told shahjahan to build the taj mahal. it is all our passions and we are trying to ﬁnd a market for it. i do not think india needs to stand in a queue to be sold – oldest civilization, documented from the very ﬁrst day. if i go to an international market to say that banaras is older than history, i need one hour just to explain to them what is it all about. we speak 2000 languages and write 50 lan- guages; we taught the world how to count; we introduced air-mail to the world. i think we need to sell it how it is sold, world over. you put one angelina jolie in front of a monument, the very next year the monu- ment gets ten thousand entries. why are we not doing it? we still want our bureaucrats to stand there. a guy who is holding that po- sition for, may be, 3-4 months. who knows him? i think we need to see how to change the style of marketing in our own way. i stopped believing in this. we had a miss portuguese coming to india and i spoke to her on the phone, and she said, she is the contestant number three for miss world. so, i said i will host you in south india, would you like to come? be- lieve me, she came with seven great press people in the world – and she decided to do a photo shoot in my deer park. luckily the deer cooperated! it was a great occasion. now, i am getting whatsapp pictures from those journalists, who are sharing pictures of the magazines in which these stories have been published. india can sell by itself. what is it that we do not have? and creat- ing products is the last problem we have. you take anything in india, show it to the world and you will have a thousand people coming. but showing it to the right world is where the issue is. india is the only country that can sell emotion. all other countries will have to content with selling experience. when i take a group of tourists to a local temple, and when they see a shiva pooja happen- ing, they are all weeping. i ask them why are you doing this? they say they do not know why they were having tears in their eyes. so, there is no dearth of products. we need to market it the way great masters sell it. how is china selling? how is france selling? sell it the way they sell, and go out of the country and sell, instead of going to the gate of my neighbouring hotel and distributing brochures. we are pinching each other. let us go to the source market and pinch our share from there. then india will be the most cost effective and beautiful country, and a country that can give you the best of emotions. let us work towards that. create experiences around heritage to make them self- sustainable: rakesh mathur rakesh mathur, former president, itc welcomheritage noted that heritage sites like the humayan’s tomb were in midst of a slow degradation. he batted for making monuments self-sustainable by creating a larger tourism experience around them. i wanted to add a few points to what has been said here. first, in as much as we need to sell, we need to get our act together – and i will just give you an exam- ple. delhi is host to some of the best tourism monu- ments, and i think topping the list is the humayun’s tomb. several years ago, the archaeological survey of india received a grant. and there are several people here who are stakeholders in that complex, because we live in the neighbourhood. they got a grant to restore humayun’s tomb to its former glory, from the aga khan foundation. this was in 1997-98. i saw a lot of work being done and it was beautifully restored. but what i have seen over the years, and some of us see that every day, because we go there every day for our morn- ing walks, there is nothing but slow deterioration setting in. and why? for the simple reason, in my opinion, this monument is not ﬁnancially self-sustaining. you do not have to go to the government for grants. what i have been writing to the asi… you know, we have a morning walker’s pass, and you will be shocked that it is only rupees 275 per annum – it is what we pay to use it every day, throughout the year. now, even if i double that amount, i do not think anyone of us will resent it. it is just a question of raising some more fund. i think it would be a great idea and we have been talking to the government about it, too, that we must create a larger experience. there could be sound and light shows. there could be a larger experience where people can enjoy an evening outside the walls of the tomb – where history is repeated, and you can combine it with a dining experience. but there is nobody who is willing to make that decision and i am sure they would raise a whole lot of money to sustain that tomb in the glory it is meant to be. you come outside the gate of the tomb and there is a very historic place – which is the dargah of nizamuddin. i would like you to come and see it as it is right now. there are about 2000 people staying on roads outside, doing anything and everything on the streets. it is dirty, ﬁlthy and there is no infrastructure. so you have two beautiful tourism attrac- tions of delhi and there is nothing but mess in between, total mess. if i were a tourist, i would not like to go there, honestly speaking. so where do we lack? we need to create infrastructure. tourism will rise, religious tourism will rise. we cannot resent people coming in buses from different parts of the country to visit the dargah of nizamuddin – which is a very sacred place for them. what we resent is that the government is doing nothing to create infrastructure over there. so we need to get our act together. i will request intach to take this up very strongly with the government. rural tourism and homestays can address prevailing lack of inventory and develop new frontiers hemant katoch founder, battlefield of imphal tours war tourism, if crafted with sensitivity, could jettison northeast india’s stature as a region for tourism, said hemant katoch. he illustrat- ed his arguments by making a mention of how many european countries had centred their tourism offer- ings around war memorials and battleﬁeld histories. what i have been doing for the last four years is essentially looking at the northeast of india. the eastern frontier. we are looking at a part of the country’s history, which is not very well known. the fact that japanese actually attacked india during the second world war, around 1944, and fought around our bordering areas of manipur and nagaland is not very well-known. you have got a lot to discover in the region. you have got second world war cemeteries, japanese war memorial, indian army memorials and battleﬁelds. there are enough examples from the rest of the world, most famously around the ﬁrst world war battle- ﬁeld, around belgium and france – which have made entire economies focussed around battleﬁeld heritage, and done so in a sensitive manner. you do not have to promote it in a way that gloriﬁes violence, but you can do it in a sensitive way that focusses on your own history; takes into the narrative of these natural landscapes and give something a little different to a part of the country that does not get many visitors. harkirat singh owner, citrus country farm stays speaking on rural and farm tourism, harkirat singh explained how his inventory of nine tents were proving a unique experience to visitors, bringing them face-to-face with the rural side of india. nobody was taking us seriously. all big travel houses used to say that it does not make any business sense, when we used to tell them that we have an inventory of 9 tents. we thought to ourselves that it does not matter. we have good quality product – and our staff was good. we provide a very differ- ent kind of experience – which no luxury hotel can gave, they cannot. they might be able to give better luxury than us, but they cannot give better hospitality than us, being in the rural area. i think rural tourism is the best way to see india. we need to promote it more aggressively in our tourism ad- vertisements. i have realised, having seen guests stay with us, that they enjoy the rural part more than the urban part – especially farmstays and homestays. they have realised that this is the best way to connect with people. it is the best way to understand how people work in rural areas, and also, they get the best experience. i am sure that the tourism industry in india is going to gather that. it is not go- ing to be in ﬁles and it is going to be taken more seriously. ankit rastogi leading marketplace at stayzilla ankit rastogi argued that homestays were a natural way to address the shortage of room that was often cited as a major hindrance to augmenting tourism in the country. it is a great way to bring back humanity into tour- ism, people into tourism. and one of the ways that stayzilla has discovered that, in the last one and a half years, is that homestays is a great way to see the unseen india. it correlates to what hemant said about the northeast. a lot of countryside in this country is beautifully crafted for sustainability. people are doing that every day in their houses. they are the foremost partners in any eco-tourism project. we are all very consciously doing that in our houses in a day-to-day way. we have been listening to paucity of rooms as a deterrent to tourism in the coun- try. a homestay is a natural way of addressing that.
b itb 20 1 6: ince ntive s concl ave incentive travel has progressed from being a vacation to an experience, assert panelists in a conclave anchored by site, speakers overwhelmingly agreed to the need for corporates to look at incentives as a means to achieving enhanced performance at work. they also underlined that with a sea change in the profile of employees, corporates needed to induce that wow factor while planning incentive trips for their staff. focus on creating memories, experiences for the modern day incentive traveller: paul miller it was time to acquire a much wider gamut of offerings for service providers to truly understand the dynamic needs of a modern day incentive traveller, said paul miller, md, spectra – uk. in his keynote address in the conclave on incentive travel + mice, he asked the industry to look at creating unique memories for their clientele, instead of just sending them back home with a mundane shopping experience. excerpts of his address. substantiating his argument, he said “the idea of a ﬂexible agenda is in vogue. everyone wants to do their own thing. there are a plethora of choices ranging from innovative f&b, wellness and spa.” decoding the psyche of a modern day traveller, he said that add-ons like rewards and loyalty programs created the much needed motivation for travelling among the clientele. “today’s traveller ponders over what he is going to get in return. so, these value add-ons play a crucial role,” paul miller said. 77 billion dollars is a huge number,” he informed. further adding that almost 74 percent of us businesses were using non-cash rewards, he said “the business is very strong. automotive, medical and direct selling, and it is growing at a very fast pace.” sharing his perspective of the global economic outlook, he reminisced about 2009, when at the wake of the economic downturn, points were slashed and people started refrain- ing from spending money. “we saw better than expected recovery in 2013. and over 80 percent of our respondents are planning for growth, now in 2016,” he added, indicating a larger uptick in the global incentive travel and tourism industry. in hindsight, he believed that the idea of refraining from spending was not prudent. “what we learnt from the economic recession that one did not need to cut spending in that area, rather needed to put money into it, to get their staff to improve their performance,” he said. he said that countries like budapest, china, india and vi- etnam were “latest entrant in the list of emerging destinations for incentive travel.” listing out some of the more unique travel experiences that service providers could peruse, he commented that one-off experiences like dinning in the vatican in rome, gazing stars at the pyramids of egypt or re- cording a song in the same room where the beatles recorded the idea of a flexible agenda is in vogue. everyone wants to do their own thing. there are a plethora of choices ranging from innovative f&b, wellness and spa. we know that india is coming, so we have to be prepared. somewhere over the rainbow bridge, there is huge potential here. but india also needs to be prepared to host a much larger number of global incentive travellers than ever commenting on the indian incentive market, he said “we know that india is coming, so we have to be prepared. somewhere over the rainbow bridge, there is huge potential here.” he was, however, quick to add that given india’s fast transforming landscape, a large number of global before. ,, ☛ service providers must ensure on creating memories. a modern day incentive traveller expects much more than a routine experience. it was incumbent upon operators in the incentive travel business to constantly expand their bouquet of offer- ings to better decipher the ever changing needs of a modern day client, reasoned paul miller. he argued that “everything was trending and one needed to throw in a lot of options to really understand what the customer wanted.” travellers were coming to the indian shores, too, and “india also needed to be prepared to host far more incentive travel- lers than ever before.” giving an insight into the us incentive market, he termed it a highly mature market. “the incentive travel pie is very mature in the united states and we all know that. their legendary albums were “experiences that no amount of money could buy.” “as service providers, these are the experiences and memories that you would create for your clientele. it is so much better for them than going back with merchandise,” he asserted. non-cash rewards have gained more prominence for employees abhinash manghani, area sales & marketing manager, itc hotels explained the evolution of the definition of incentive travel and how it had transformed from being a mere vacation to a complete travel experience. on incentives travel incentives are reward subset of an incentive program, a recognition program, or a loyalty program, and a business tool designed to change consumer behaviour to improve cash ﬂow, employ management and customer engagement. over the last few decades, incentive travel was characterized as a modern management tool used to achieve extraordinary goals, by awarding participants a travel prize on achievement of their goals. by 1996, it had changed to be a global management tool to use exceptional travel experiences to motivate for increased levels of performance in support of the organisational goals. by 2014, recently, it is seen as a powerful tool that strengthens employee retention and cultivates a culture of thoughtful motivational suc- cess – and is a very integral part of the hr program to enhance business performance. now, travel planners are looking for more experiential travel for their employees. technology has become a large force. incentives are also seen as a part of the social good. wellness has become an important theme, and to motivate employees, non-cash rewards are becoming more and more important. in the us market, 46% of businesses use incentives to motivate their employees. companies that provide non-cash rewards have three-time higher revenue increase than organisations that provide cash rewards.
b itb 20 1 6: ince ntive s concl ave traditional approach to incentive selling getting redundant with millennials in the fray: neena kaul faced with the challenge of catering to a completely new breed of incentive travellers, who expected newer itineraries and possessed much greater awareness of products and destinations than ever before, the larger incentive industry needed to put in place a standard operating procedure to cater to their needs, said neena kaul, associate director sales operating & business excellence, goodyear india. excerpts of her views at the panel discussion. there had been a profound shift in the expectations of an incentive traveller, which was an outcome of a heady mix of several factors working in complete cohesion, said neena kaul. outlining some of the critical areas, she mentioned that “economies, people, expectations, policies, geographies and, the best of it all, consumers had changed.” she iterated that with fast changing fundamental drivers, the consumer, today, was well travelled, well read and knew what he wanted. “incentive travel and tourism is integral to across busi- nesses today. traditionally, when started with travel as an incentive, it was very aspirational. it was something they had never experienced before. today, it has turned now to a stage where it is merely a satisﬁer. the need for us is to shift gear, evolve, renew the entire approach,” she detailed. lamenting the lack of a standard operating procedure in place, she pointed out that it was going to be a major hurdle in mooting a new and an all-encompassing approach. “it is not going to come, because it not a standard operating procedure – which is to be followed across organizations. i have been doing this for over three decades, now. what i have learnt is that when i see the current crop, who is going to take over, the millennials have very different expectations. so asking the agents for a set itinerary to budget in my schemes does not work anymore,” she said. noting that the changing face of travellers was increasingly making selling them a product a gauntlet. “that would be my big- gest challenge. then, of course, the selection of destination which is unique and not run-of-the-mill, and the selection of vendors who has the differentiator factor are also critical,” she outlined. on the question of whether her organization used incentive as a reward or as a motivator for the next year’s per- formance, she shared that they used it as a reward, as it was against a set target for schemes that ran half-yearly. “it actually acts as an incentive for the next year, if you can actually cre- ate an experience for them. that is what calls for retention,” she added. when asked to share some advice for new travellers who were unaware of how their travel was going to pan-out, she mentioned that given their proﬁle, as providers, they rarely got this kind of an interface from their partners, where they could spell out their needs. “but i do concur to the other panellist that understanding your consumer is important,” she concluded. incentive trips must have elements of gratification and show-off value to create an impact: mukesh makhijani modern day incentive trips needed to be much more than an ensemble of usual elements of f&b experiences, said mukesh makhijani, director, stimulus hospitality private ltd. he called the need for gratification and a certain social media show-off value integral to an incentive travel experience. how do you convince corporates to, firstly, run an incentive, and secondly ensure a great delivery from the service side that would make their trips unforgettable? in the past 15 years, incentive has changed quite a bit. from a time when picking up a destination was the end of the trip’s planning, we have moved towards a time where the thrust is on more experiential. it is just not about having a cruise dinner and a r&r night anymore. it is a given in all incen- tives – stage, light, sound and all are a given in incentives. we have to look at creating experiences that touches a person one-to-one. with a lot of millennials there, especially in the indian market, incentive is about gratiﬁcation and has to have a show-off value. if you can click and post it; if you can create moments, it will connect with people. as incentive managers, we start to look at the end users, not the company organising it. end users are the consumers. these are the people who are getting all moments today in the market while shopping, watching a movie or going to a restaurant. it is not about go- ing to a restaurant and dinning anymore. so we need to move from the traditional location of just picking up a location and getting a bus and ﬂight, getting three dinners and lunches, and may be a gala dinner at night; sop’s which we create. incentive is an art; it is not a mathematical sum. on planning and coordination in the indian context, the time line which we use vis-a vis the western context is very different. the planning for taking a 250 people group would start 3 months back, if you are lucky. i got a request for ﬂying a group of 70 people, one week prior to the date of event. i ask them: what went wrong? making a usual destination a unique experienced for the incentive traveller. how to make that happen? now, there could be one experience that could be the highlight. there could be small experiences along the way. there is a lot of thinking process which goes into that. i will give you one example of goa. i am sure most of us have been to goa multiple times – and, in fact, i am more bored doing it than the client asking for it. so, if i have to do goa and it is a 150+ delegation. it is famous for bikes. so, why not do a bike trip than a regular bus trip. there are drivers taking you to the hotel while your luggage reaches directly to the hotel. sao, you’re a group of 150 people on the back of those bikes driv- ing from airports to hotels. experience does not have to be a ‘bangkok special’. team up with specialised service providers to make incentive travel different from a regular jaunt: vikas khokha there needed to be a differentiation between a regular jaunt and an incentive travel, which was only going to come about when organisations teamed up with specialised service providers, said vikas khokha, director-hr, zimmer biomet india. on engaging with his people: a different angle being a hr manager it is a very interesting topic for a hr manager, because the primary task of a human resource manager is to get people on board, and get them to perform. performance is a very important criterion. so, the work starts actually, more than employee engagement, starts from top-line to the bottomline. a critical task is to ﬁgure out how do i work with an incentive plan, which ﬁts into my top-line, but also secures the bottom line. when i sit with my ceo, i should be able to convince him for an incentive trip like this. with this challenge in mind, we would work on a self-funding model. that is what we work on. we work above our top-line. we do work on a business that targets self-funding. so, we would ensure that people achieve, and overachieve, meet the targets – which funds trips. that is the biggest challenge today. incentive as a motivation or a reward we being a highly sales driven organisation, we also use these trips for showcasing the top talent. and i heard you mention that retention of the top talent is a challenge. we use these forums to get people together and highlight the perfor- mance of top managers, people who are performing well, through these incentive trips. advise to the first time traveller who does not know what is in store for him if i track myself ten years ago, when we used to do these incentive trips, the focus was only on the destination and travel, and those could be easily handled by ourselves, within the inside team. today, it is a specialised work. i think ﬁner details in pointing out what are those aspects that we can pick out with the help of specialised service providers. it will help us being in more novelty. otherwise, it is a regular travel. any- body can go and check a destination out; anybody can visit a hotel or reach where we cannot reach. so, i think a specialised approach with the right partner will get us to get attracted to- wards customizing the whole piece towards that. you know, it will make incentive related travel very special for that person. making usual destinations a unique experience for incentive travellers we wanted to go out to different destinations that are unique, but going by the pressures of maintaining the travel within the same budget, we landed up in jaipur thinking what we could do here? we got our clients ride elephants to amer fort, who were given a traditional welcome at the top, and treated to a traditional fashion show. it was a great experience, which made jaipur look very different.
b itb 20 1 6: ince ntive s concl ave the government and industry needs to work together to strengthen incentive segment given how the incentive travel market had transformed in the past decades, there was a need for the government and the industry to come together for positioning india as an important destination for global incentive travel inbound. a number of issues came to fore which could be addressed without serious overhaul on the policy side. industry experts pointed towards lack of entertainment options, absence of incentivisation in the incentive travel segment and inept manpower to process visas as some of the many reasons for india’s dismal show. we bring you excerpts of what noted industry professionals said, who voiced their concerns and suggested a way forward. on challenges in reaching out the challenge is huge. the concept is fairly new and unknown in the marketplace. may be, because of lack of awareness. people think that you will go on a cruise ship and you are going to get closeted. if they have not cruised, and decision- makers, especially, if have not had the experience, it is very difﬁcult for them to understand. and remember, the decision-maker is taking the decision for hundreds of individuals. if he has not had the exposure, then we are the ones, as service providers, who get shafted. if i begin to tell you… the kind of activi- ties and the kind of stuff that we do on the board to bring in the wow, it is difﬁcult even for a hotel or a resort to do so. we have the ability to move from one destination to the other. so, the value that the corporate or the customer gets is far excess than what he would get on the land. then there are things like misconceptions that cruise is a luxury experience, so it must be expensive; sea sickness that can evolve. so people who are far away from the sea, especially in north india, it is difﬁcult for us to tell them that today’s ships are not passage liners, they are passenger liners – and there is a lot of differ- ence between the two. it is not the titanic era anymore. so, these are the challenges we face. sanjeev joshi managing director, time my understanding of the incentive market is that is the indian market, especially from outside to india is not growing for a simple reason that we are not investing. the govern- ment of india and the private sector needs to invest. without investing, you cannot get your rewards. more so, our market is mainly dependent on europe, and when europe goes into recession, the tourism industry suf- fers very badly. nitin sachdeva managing director, venture marketing as the data suggests, two-thirds of all incen- tive travel happening from india is happening overseas. it is a very positive ﬁgure. it is a very positive ﬁgure. however, working on newer experiences, corporates need to come of age in terms of more leave period. saurabh bhargava avp sales, taj group of hotels i think in the context of the indian industry and incentives, indian corporates have not given it the right place it deserves under the sun. there are a very few companies and clients, who have the attitude that we have to do it every year. when a corporate entity has a bad year in terms of ﬁnances, the ﬁrst cut is on travel. on the contrary, in the west, when the business chips are down, they invest more in their people. in all frankness, indian corporate houses have not given incentives the due attention it deserves. ranganathan parthiban director, swagatam tours the biggest challenge for international inbound is connectivity, comfortable con- nectivity – which is affordable for europeans. we heard paul talk about experiences like having a meal in the backdrop of a monu- ment, but unfortunately in india, not a single monument, despite the fact that we have world-class monuments, is allowed to be used for dinners. it could be a fantastic experience for people. you can have a dinner anywhere, but to have a dinner in the backdrop of a monu- ment is something which would be a great experience for people. entertainment is a big problem, even in big cities. you cannot even have music after 10 pm in hotels, and even then, you have to pay through nose for every permit, whether it is alcohol or any other permit. so, the need to improve is immense; we say that we have an open-door policy, but when it comes to organising, the gap between reality and talks is so wide. vikas suda managing director, vdoit4u on challenges in getting a bigger share of incentive travel there are two perspectives. first is from the outbound point of view. from outbound point of view, a lot of these new destinations are not well-equipped for processing group visas. when you have a group to these smaller countries, for 150-200 people, we always face challenges. reasons being, either the staff is not well-trained, or there is limited staff to is- sue those visas. sometimes the staff even does not know, especially in the european sector, whether they have to issue multiple-visas, if cruise is involved, or whether they have to issue a single-entry visa. this leads to a big embarrassment for corporates and agencies, as well. coming to the inbound part of it, the biggest issue we have is that we do not incen- tivize the incentive business. for instance, some countries offer incentives, if you bring incentive travellers to their destinations. but the moment a foreign operator asks what can you do for us when we bring incen- tive travellers into your country, we have no clear-cut answers. ratna chadha chief executive, tirun travel marketing i would say that indian corporates, so far, have not really given this a thought and we really need to do a lot more, because there are challenges. there is unawareness to a certain level – and i think, as service providers, we need to work with corpo- rates, who sometimes are very elusive. you are talking to the wrong guy for the right thing. in india, it happens lot. so, we need to change all of that. if corporates are in- terested, they really need to get to service providers and get to the options that are available, because there is a whole new world out there.