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Resource Center
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Inbound Travel, Where Are We Heading?


04 May, 2017

Akansha Pandey: The Indian government has been announcing attractive increase in inbound numbers whereas during meetings of trade associations, tour operators keep lamenting that they haven’t generated the same robust growth in their business. There is always a disagreement among the travel trade doing the rounds that the figures aren’t a true reflection of the actual state of affairs.

All the inbound travellers coming into India on tourist visa aren’t pure leisure travellers. The number of medical travellers is witnessing an upswing from the neighbouring destinations of Bangladesh, Nepal and Bhutan along with weekend shoppers. Also, the official data doesn’t solely comprise leisure tourists, but it also includes medical (mostly from Afghanistan, Africa, Myanmar and Bangladesh) and business travellers. E-Tourist Visa (ETV) has led to a positive impact on the inbound numbers to a large extent. However, the multiplier effect on the economy is created by leisure tourists who haven’t grown as per the expected rate.

Thankfully now the E-Visa has further been sub-divided into three categories of E-Tourist Visa, E-Business Visa and E-Medical Visa which will enable to gauge a fair idea of the pure inbound leisure numbers. Also, with the E-Visa facility being extended to the nationals of 161 countries for entry through 24 airports and 3 Indian Ports i.e. Kochi, Goa and Mangalore (Mumbai and Chennai seaports being added shortly), the visa application and travel process will be a bit easier.

The window for application under E-Visa scheme has been increased to 120 days and duration of stay on E-Visa has been increased to 60 days with double entry on E-Tourist and E-Business Visa and triple entry on E-Medical Visa. Separate immigration counters and facilitation desks to assist medical tourists have been provided at Indian airports namely, Delhi, Mumbai, Kolkata, Chennai, Bengaluru and Hyderabad.

Last Inbound Season

Talking about the last inbound travel season, Subhash Goyal, Chairman, STIC Travel Group, feels that it has been full of challenges for inbound tour operators in India. With high expectations, the inbound travel business from October to March has been more or less like the previous year for STIC. “Between October and March there is an increase in inbound travellers every year, but the last season’s increase was less than expectations. We were hopeful of at least 15-20% increase whereas the inbound season ended with a mere 4-5% growth, he said.

From November onwards, demonetisation had a hard hitting effect and a number of tourists were stranded. Even though the Minister of Culture and Tourism, Dr. Mahesh Sharma went out of the way to get the old currency accepted at tourist monuments, there many of challenges which were faced by the inbound travellers and a negative feedback about India was sent out, feels Goyal.

Aashish Gupta, Founder, Strategy Pluto clarifies that a number of reasons are responsible for the dull inbound season. Undoubtedly, demonetisation has had a major impact; however, it has affected different traveller segments differently since November 2016. “The rate of change has been minimal in the high-end travel bracket, but the price-sensitive travel segment has witnessed a 15-20% downturn in business. The impact had been worse if remonetisation hadn’t happened in time. With remonetisation the segment has recovered but the increase in service tax was again a huge setback for the tour operators. In addition, with Trump’s new immigration policy Non-Resident Indians (NRIs) were sceptical about travelling to India. The depreciation of pound against the rupee post Brexit also influenced travel decisions. In the coming time, if GST rates are not favourable to the travel and tourism industry, then the momentum can sink further,” claims Gupta

Market Performance

In the past inbound season, the United States of America (USA) has done well with a number of business travellers coming into India. The Visiting Friends and Relatives (VFR) traffic has also surged post Prime Minister Narendra Modi’s international visit. Other markets which flared well were the United Kingdom (UK), Middle East, China, Japan, Korea, Sri Lanka and Bangladesh. However, travellers from some countries in the former Soviet Union, North America and West Europe have declined. Russia also fell flat due to the charter policy and the Ruble depreciation.

“There is a staggering downfall of 30-40% from markets such as Europe and Russia. I don’t think it has been much affected by demonetisation, but there are a number of inter-related factors. On the other hand, USA, UK, Sri Lanka and China have performed well,” feels Debjit Dutta, Director and CEO, Impression Tourism Services (India) Pvt. Ltd.

Citing a solution, he said that the future lies in cross-border tourism from neighbouring destinations such as Bangladesh, Nepal, Bhutan, Sri Lanka and Myanmar. Whether it is land package to some niche destination or river cruises between Kolkata and Dhaka, such itineraries are an attractive proposition to en cash on. The multiple-entry tourist visa for select countries too, can also work wonders for India tourism.

Trade Awaits Leisure Tourist

Though the inbound travel numbers are growing, but the pure leisure travellers aren’t showing the expected increase. Tour operators feel that the overall sentiment to travel to India has dampened. People are not willing to travel to India and they are surrounded by confusions and misconceptions.

“Even in the February and March, the business has been down. The operational challenges post demonetisation further dampened the sentiment and people were cautious and apprehensive, and thus resisted travelling to India. Negative news such as liquor ban and shutting of illegal slaughter houses travels quicker and a hue and cry is created of every such news. The inbound numbers are ought to increase with time with easier visa norms, better connectivity and infrastructure, but India need to focus on leisure travellers,” outlined Sunil Gupta, Director, Travel Bureau.

Also, the negative news covered by media globally has brought a bad name for the country. Goyal counters this by saying that today there is no country in the world which is safe. The incidents that happen in India become the front page headings as there is absolute freedom of press. Electronic media makes mountain out of a mole hill in order to gain TRPs, he feels.

Besides, India is perceived as a difficult tourist destination with lack of infrastructure, accessibility, cleanliness, etc. Sunil added that it has taken the Indian government over 60 years to realise that the one of the most visited cities of Agra should have an operational airport. “We recently undertook a big Incentive Group to Golden Triangle who stated that they enjoyed Amber Fort more than the Taj Mahal. Foreign travellers condemn the mismanagement and unclean state of affairs at tourist monuments. They are in a hurry to see the Taj Mahal and leave. We should analyse that what kind of experience they will take back,” he laments.

Way Forward

Travel is an intangible product and thus the target audience needs to be approached differently. Today, destinations are undertaking aggressive marketing and promotions and travellers are spoilt for choice. In the minds of these avid travellers, India isn’t considered a preferred holiday destination. There is a dire need to do away with the vanilla promotions and tourists must be encouraged to choose India with innovative branding, positioning and marketing strategies in place. Even travellers from the USA (a high paying source market) are looking at new, unexplored and experiential destinations.

Tour operators keep discussing that during India Tourism roadshows in foreign markets, the footfall isn’t that impressive as they keep repeating the same presentation or itineraries time and again. The decision-makers of travel companies who attend for the very first time start sending their front line staff or a mere representative to ensure presence. These presentations need to be made more meaningful and result-oriented. Even at travel marts in India, trade has at times pointed out that not all hosted buyers are selling India. As a result, no optimum output is witnessed in such cases.

As of now, for India tourism there is a dire need to promote unexplored destinations. The Golden Triangle has been said and done. Kerala too has been explored by inbound travellers. It is high time that we focus on niche and experiential travel destinations such as East India and North East of India and similar in close cooperation with state governments. In tandem, the infrastructure, supply chain management and publicity should also be in place. There is a need to reach out to the end travellers and inspire them. The tour operators around the world might know India, but unless the traveller would inquire them about India or would want to visit, the inbound leisure numbers will not grow.

Talking about the image of the country as a leisure travel destination, Aashish highlighted that India is not typically considered as a holiday destination. “To counter that image, we need to create new products and stop beating around the bush. Asia and even Europe has been coming up with new destinations promoting affordable luxury options. Mega tourism zones, which were announced in this year’s union budget, are the way forward. Even state governments can take initiatives in shaping up tourism hubs. Serious effort can also be taken in marketing and branding of leisure hotels targeting the segment. It must also be remembered that long haul leisure travellers from conventional markets will continue to go down with time with increasing age and declining purchasing power,” he said.