the recent Paris
Air Show, Indian companies were among the biggest spenders, spending
a total of US$13 billion on 150 new aircrafts at Le Bourget. This
dramatic expansion in the aviation industry indicates a spectacular
growth in Indian tourism over the past two years, with both inbound and
outbound travel galloping ahead of targets. With tourist inflows barely
dented in the aftermath of the tsunami, India’s travel industry is
targeting five million visitors this year.
follows record inbound traffic in 2004 when visits soared 25% (to more
than three million) from January to November.
recorded an increase of 18% of bookings – from 229 704 to 270 799 –
to India from Asia Pacific over the January to May period of 2005
compared with the same period last year.
stellar outlook for India’s travel and tourism revenues is confirmed
by Oxford Economic Forecasting in a report commissioned by the World
Travel & Tourism Council.
industry will bask in an annualised real growth rate of 9% over the next
10 years, double the rate predicted for overall world tourism growth and
outpacing China’s progress (at 8.6%).
overall revenue from India’s travel and tourism industry will increase
to around US$90 billion, from the current US$39 billion, within 10
years. Over the same period, travel-related jobs will grow by three
million, from 24.5 million – one in 18 jobs will be in the tourism
sector. New opportunities will open in travel-related call centres,
airport handling services and tour agencies.
is now firmly on the tourists’ radar, especially around Southeast
Asia, says Mr Kaushnesh Thakur, director of the Singapore office of the
Ministry of Tourism (MIT), India. “The Indian economy is rapidly
expanding and there are more trade and investment activities. India is
being talked about more. Previously, people around Southeast Asia
didn’t know much about India.”
Thakur also credits the “Incredible India” tourism marketing
campaign for the unprecedented visitor traffic from offshore and for
kick-starting the phenomenal growth in domestic tourism.
a yearning for a return to basics, to rediscover simple pleasures and
embrace a unique experience has always been a major incentive to visit
India, there’s more than just “spirituality tourism” driving
today’s record tourism industry growth,’ explains the MIT’s Mr
the pilgrimage places such as Buddist centres are a big attraction for
visitors especially from Singapore, Thailand, Japan, and Korea – many
regions in India have established themselves as attractive
include Kashmir, neighbouring Himachal, and Kerala on the south coast
that is fast gaining its reputation as a premium spa centre offering
popular backwater cruises.
the Golden Triangle of Delhi, Agra and Jaipur continue to draw large
number of tourists.
are seeing more secondary destinations open with the explosion of
inbound and domestic tourism,” says Mr Thakur.
is also now in the top ranks of incentives and meeting destinations.
Mumbai, for instance, has had 30% growth in business travellers over the
past 18 months.
was ranked among the top five destinations by 20,000 travellers who said
they would most like to visit when polled for the latest Travellers’
Pulse Survey by influential Lonely Planet.
it’s not all one-way traffic.
to the Oxford Economic Forecasting Report for the World Travel &
Tourism Council, the burgeoning middle class in Asia’s fourth largest
economy is directing more of its spending to travel. An additional
US$420 billion is expected to be generated by this group over the next
travel is forecast to grow 9% to US$46.5 billion over 10 years (from
US$19.5 billion). A 7.6% rise in business travel will earn US$5 billion,
double the current take.
steep growth in business travel demand is sustainable, says Dhrubo
Mukherjee, a director and head of business travel for Cox and Kings.
“India is evolving as a knowledge economy. We are seeing more business
outsourcing, major banks and airlines establishing back offices and
continued call centre expansion.”
demand for business travel comes from established centres such as New
Delhi, Mumbai and Bangalore. Mr Mukherjee notes Pune, 170km south of
Mumbai, and Kolkata, are also emerging as top-tier business
demand has changed the role of travel agents,” says Mr Mukherjee.
“We are no longer just issuing tickets. Increasingly, our role is one
of a facilitator – offering solutions, managing budgets and online
tools and contents for clients.”
to Viiveck Verma, Managing Director, Abacus India, this shift in roles
for travel agents is being driven by the demands of the changing Indian
traveller. He says, “In India, traditionally, the agents have mostly
been focused on air tickets. Although many say the receding airline
commissions have played a significant part in this evolution of the
agent, I believe it is more so being driven by the needs of the
traveller. The Indian traveller, similar to many other travellers in the
world, expects greater access to more information within a shorter time
understand these needs and have developed solutions and content that
allows travel agencies to effectively manage the complexities and the
demands of their customers. Abacus TravelNetwork and Abacus HotelSmart
collectively meet the requirements of travel agents looking to sell
non-air packages to their travellers,"” said Mr Verma.
growth will bring major challenges. One of the most obvious is a looming
shortage of expertise – more travel training centres, for instance,
are needed – and hotel rooms in popular centres such as Kashmir.
one of the most pressing concerns for agents, notes Sudhir Patil, is
red-hot competition for airline seats.
director of leading Indian agency - Kesari Tours - points out the
country’s middle class, already numbering 50 million, is fast
expanding, which will put more heat on agents to fulfil burgeoning
technology systems, backed by our partners such as Abacus, are easily
meeting the extra demand from more travellers, but agents often face the
issue of not getting enough tickets,” said Mr Patil.
he is confident India’s open skies policy will increase inbound and
outbound capacity over the next few years.
of the most visible developments of unprecedented domestic demand is
keener competition in the skies over the sub-continent making it more
convenient and affordable for overseas visitors and domestic travellers
to see more of India.
MIT confidently predicting India’s international travel market to grow
50% year-on-year during the current summer period, recent new airways
entrants are aggressively trawling for market share and discretionary
Airways, India’s largest domestic carrier has carved out 43% of the
domestic flight market, overtaking veteran national, state-owned Indian
Airways is determined to increase its passenger traffic – domestic and
international – by 15-18% this year. Hence, over the next 30 months,
it will spend US$400m on buying and leasing 17 Boeing aircraft, adding
to its current fleet of 42 planes.
company’s confidence was backed in February’s IPO when 17.27m Jet
shares sold out in 10 minutes.
pressure is also coming from low-cost competitors, including Air Sahara,
domestic budget carriers such as Air Deccan, Kingfisher Airlines,
Spicejet and Magic Air. And, waiting in the wings is another future
entrant, Indigo Airlines, which placed an order for 100 A320's at the
Paris Air Show.
to get ahead of the competition, Indian Airlines extended its
distribution network by signing an agreement with Abacus in January 2005
giving the GDS access to all Indian Airlines domestic fares. With this
agreement, Abacus-connected travel agencies across India were booking
travel for their customers on Indian Airlines directly from their Abacus
terminals. This agreement has enabled Indian Airlines to save costs on
maintaining their standalone reservation terminals while providing
travel agents with an easier way to access Indian Airlines fares
directly through their Abacus terminals.
are exciting times for the travel and tourism industry in India. China
had better watch out – India’s fast catching up!
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