Regional markets matter, and a friendlier visa culture too

DNA decided to take a look at the travel and tourism sector, because of the tremendous impact that the “Incredible India” campaign has made both within and outside India. To get a fair perspective, some of the best minds in this business were invited, representing airlines, foreign tourism promotion boards, and travel agencies. The panel comprised (in alphabetical order) Neerja Bhatia, general manager, India, Etihad Airways, Pieter De Man, general manager - India, Nepal, Bangladesh, Bhutan, Sri Lanka, Maldives, Air France/KLM, Ashwini Kakkar, managing director, Mercury Travels, Manoharan, director, Malaysia Tourism Promotion Board and Veena Patil, managing director, Kesari Travels.
Given below are excerpts from the discussion that took place:

Kakkar: Let me kick off by saying that 5 years ago inbound traffic into India and outbound traffic were both of the order of just little short of 4 million visitors. But, the inbound traffic has not grown
much since then. It is currently around 5.5 million. But outbound travel has grown dramatically to almost double that number.

This is on account of many things. The last couple of years have seen both the European economy and the US economy more or less shrink. The Indian economy, along with other BRIC economies — Russia, Brazil, China — have by and large shown substantial growth. But what is more interesting is that outbound tourism from India has grown faster. Thus, if India’s GDP has been growing more or less at 8% and 7.5%, then outbound tourism has been growing at 14% to 15% p.a.

The other aspect is that Indians had a higher disposable income. This has led many to feel, “I have to see the world”.
Add to this market forces which include things like advertising, promotion, articles which the print media or television have been putting out and humungous amount of effort towards education by some of the travel companies, especially some of the large travel houses.

DNA: This obviously raises two other issues: first that promoting tourism within India has not been very aggressive, and second, that as a result, more people preferred to fly out of India than travel within…
Kakkar: I do not think it is on account of any lack of effort on the part of the national tourism organisation of India which brought out this brilliant campaign called ‘Incredible India’. I think that the campaign is absolutely phenomenal. It is a multi-dimensional campaign. It is visible not only on television, but also on the internet, in print and all over the world. But you must recognise the fact that for one country to promote itself all over the world it takes a lot of effort. But there are many other issues which govern this, most importantly visas, connectivity, availability of hotel rooms, pricing of hotel rooms.

DNA: What about infrastructure and security?
de Man: I don’t think that security is an issue . I don’t believe that infrastructure is an issue. I think India is a hot commodity for many people. But visas are an issue. What we are doing in India is we are spending tremendous amounts of money on a fantastic campaign called Incredible India, but we are keeping our doors closed. It is extremely difficult for people who are not close to a culture or close to an embassy to get a visa. I will give you a live example: I am Dutch. My wife and kids are in Canada and my children want to come to India to visit me but they have Dutch passports. So they have to appear before the Indian consulate which is not nearby. And this for an interview to get a visa to visit your father? For the tourist it is worse. He has options. He travels to other places. I think if we open our doors for starters that will help inbound tourism enormously.

Kakkar: Why can’t we introduce visas available on arrival? Maybe free visa for short-term visits to India?

Manoharan: Moreover, [we need to remember that] the European and the Western markets have changed and unfortunately the focus of Incredible India is more to the western markets. They should re-strategise.

I just want to give an example how we in Asia faced an economic and financial meltdown in 1997-98 and it hit Asia. Almost all countries — Korea, Thailand, Malaysia — were affected very badly.

That was when we decided to focus on the regional market.
We realised that most tourists like to travel to areas within 4-6 hours of flying. The return for the tourist is also a lot faster and it becomes easier to develop our domestic market, which is also very important. So we looked at destinations within 5-6 hours. And we began promoting Malaysia in those countries. Earlier, we never had five-day weeks. But the economic meltdown made most offices work five days a week. So on Saturdays and Sundays we have holidays. So, lots of domestic tourism could take place. India also became important because after the Asean, India is the second largest contributor to Malaysia in terms of number of tourists as well as receipts. After all, in Malaysia we have 2.6 million people of Indian origin. And 140,000 of them visited India.

DNA: That brings in money…
Manoharan: Last year, receipts were half-a-billion dollar to Malaysia. That was never the case before the economic crisis in Asia. By focusing on India is incredible, by focusing on a long-term development of a market, by looking at budget hotels, for the budget traveller, we actually developed a market for the region. Today, we have more than 60 flights from Kuala Lumpur to India.

Just consider this: how many people come all the way from Europe to Asia, and how many Asians travel within Asia, and you will discover where the market lies. The Asian traveller is used to poor infrastructure. He is used to the climate. This allows for year-round tourism. The complaining of infrastructure won’t be that much.

And when a country is growing, there are challenges to expectations. Western tourists feel disappointed when they do not see a bullock cart on the road. Instead they find high-rise buildings. So you need to promote what the tourists expect to see.

The Asian tourist has fewer [such expectations]. They will easily assimilate within the existing culture and the way of life. That is why we need to re-focus our marketing strategies.

Patil: The “Incredible India” campaign is incredible, no doubt about it but the expectations are much higher as well. And when they come here, it appears a bit diluted. This will require us to segment the India experience in different ways for different people. Show India the way Malaysians would like to see it, or the way Paris would like to view it. India is now turning towards South-east Asia or Europe because of the deals Indian travel agencies and travellers get from places like Malaysia, Singapore, Thailand and Hong Kong. They have taken most of the market from India and now people become addicted towards travelling abroad.
Now this is really a scary because Indians are not travelling within India.

The government should focus on this because the tax structure and the polices make travelling in India more expensive than travelling to Hong Kong, or Malaysia and back. Each state can become attractive, so we have to look into it and see how our domestic tourist can targeted and how we can offer an all inclusive package that is affordable to him and his family. If a Mumbai resident wants to go to Sikkim or Darjeeling —- really beautiful places —- this travel will cost him more than travelling to Malaysia or Thailand. And once they are out of India, they get attracted and addicted to the infrastructure, the amenities, facilities and shopping. They do not want to travel within India any more and opt to travel to another Asian country next time as well. I am a travel agency, and if a person wants to travel overseas, it is good for me.

But it is not good for India. And we have to do something about it.

Bhatia: Even hotels in India are very expensive. If you have a budget for travelling in India, you can afford to holiday for three days. But if you go to Bangkok, you can with the same cost holiday for 6-7days.

DNA: Yes, the connectivity is longer, the cost is greater, the inconvenience is more painful...
de Man: India has 5-star hotels, but we need good no-star hotels as well. There are very few middle-class hotels. That is the story about infrastructure. Now, finally good 3-star hotels are coming up.
Kakkar: I think what Veena and Manoharan have said is very relevant. But I think we need to step back for a moment and look at things in their right perspective. True, the number of inbound travel of 5.5 million and 11-12 million for outbound… But do remember that domestic travel is 650 million people a year. That is a humungous number. Almost 13-14% of that is religious travel. The next highest is 12% visiting friends. But these are very large numbers.

The other fact is three-fourths of all travel across the world is short-haul travel. This is not unique to India but across the entire globe. The point Manoharan made is that India is not investing more in promoting India in short-haul. Of course it is difficult to promote ourselves in city states like Singapore, Dubai and Kuala Lumpur, but large countries with huge populations like Malaysia and Indonesia are short-haul countries for India and can contribute a lot. For instance, we should get some Chinese speaking guy and promote India to China. There could be a lot more traffic. The fact is domestic travel is being eroded. And instead of going all over the world and picking some here and some there of the 980 million that comprise global arrivals, it is better to focus on short-haul travel instead.

Bhatia: To support what Ashwini is saying, look at the GCC (Gulf) countries. They don’t have monsoons. It is also the time when they have their break. So if India promoted monsoon tourism more aggressively in the Gulf, it would be wonderful. It is also a lean period for Europe visitors to India and also travel within India. Whether it is Goa, or Kerala, if we promote ourselves much more aggressively in the GCC then we can pick up some really good numbers

de Man: It is important to work out alliances with any airline one can — my motto is to sleep with everybody — so long as the destinations get you benefits. When I came here, we had only 9 flights a week out of India — 2 flights out of Delhi and 7 out of Chennai. We spend huge sums on our campaign, but do not have the capacity to carry. So why don’t we stick with everybody, whoever flying. KLM is my partner, Air India is my partner, Thai Airways is my partner. From Thailand to Bangkok it takes only 1.5 hours. For Singapore you just cross the border with Malaysia. In fact, we always work closely with the competitors of national carriers.

Ashwini: In fact, whenever there has been an alignment of carriers, there has been huge success. If you see during the last decade, Malaysia Airlines [came with several alignments] and created several packages. I think Manoharan was single handedly responsible for that and traffic from India went up from about 60,000 to around 350,000 in a short period of time. The same has happened with Singapore. It has become today the No.1 destination outbound from India, even though the entire Singapore is smaller than Delhi city. It has managed to capture this by aligning itself with other carriers and aligned the government with its visa processing as well.

Bhatia: We have started giving free visa because we want to promote Abu Dhabi. There is so much now happening there. We have a Grand Prix ready. We got the Ferarri team ready so they have started giving free visa only to point-to-point traffic

Manoharan: I can vouch for the visa experience because as part of a government agency, when we came to India to promote Malaysia, we found our own immigration very defensive. Every time an immigration officer gets a passport, the first thing that comes to his mind is “How can I stop him from travelling to Malaysia.” This is uniform across the world. So, what we did was to take the immigration office together with us on all our sales missions.

Whenever we do any promotion, whenever we have a have a dialogue with operators, or corporates, we let the immigration people know for themselves what the problem is. Because otherwise, government agencies tend to say “This is my authority, my area, you don’t teach me how am I supposed to do things.”

When you have any issue, the first things immigration will say is “security”. You can spend whatever money you have from the treasury, but as long as the Visa process is not friendly, and you cannot accommodate people who want to travel to your country, everything is going to the drain.

In case of India, too, visa agencies must work with the tourism ministry. They cannot work as a separate entity. They must remember that the ‘Incredible India’ campaign India is not cheap in the global market. They must learn to welcome them.

You let the enforcement agencies check, but you should not stop [tourists] at the point of entry, when he submit his passport. It can be a very difficult exercise.