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The Indian Spring and Tourism

The just-concluded state elections have vindicated the market’s stance on the anti-incumbency factor. Even as experts draw multiple scenarios for the 2014 General Elections, what with state elections shaping the permutations and markets remaining euphoric in the short term, all this may or may not really matter much to you depending upon various factors. It can be investment in India for a common investor, the feeling of removing corruption for the common man and for me both and a positive feeling that transforms to boom in Travel.

 

 

So after the Arab Spring, we now have the Indian Spring. Well what more could you call it after the recent success of Aam Aadmi Party (AAP) in the Delhi elections. Look at the statistics – The number of votes that the first timer, Arvind Kejriwal (44269) got is more than the combined votes of Sheila Dikshit (18405) and Vijender Gupta (17952).

 

aamadmiparty_AFP

 

If that’s some signal of things to come, I would term this as a good signal. Having said that, the overall win of BJP in the 4 state elections also came up with a positive sign for the economy.

Whatever be the outcome of general elections in 2014, economic reforms and fiscal improvement are the only ways out for any ruling government given the current state of affairs; failing which, the outcome can be too harsh to face for the nation. Hence, while the governance style could change, the direction of reforms may not vary much, come NDA or UPA or a third front. The only positive factor that I see is that now you will have party like AAP that will sit in opposition and challenge the ways of governance.

Yes, sentiments do play a pivotal role in changing the investment climate, both internally and for foreign inflows. To this extent, the State Elections appear to be setting the stage for positive sentiments.

Historically, markets do not wait for events to happen. They anticipate events and discount them. And here, we are not talking of just the elections; we are talking of the host of domestic macro and market factors that are slowly but steadily turning favorable. So, we are talking of markets reading into these changes.

The equity markets rallied as part of the Indian Spring by 14% between September and December 2013 – an indication that it was not just anticipating election results (too early then) but reading into early signs of what could be an economic recovery.

And these are some of the conspicuous signs that are purely data based and therefore can not be ignored:

  • After nearly 10 quarters, GDP growth in the September quarter was marginally higher than expectations. And more importantly, the demand side of the GDP, especially gross fixed capital formation (representing investment demand) and consumption demand grew better than the previous quarter after a slump.
  • Inflow of dollars has considerably eased the liquidity tightness and ensured better money availability for short-term borrowing. Huge dollar addition to the forex reserves through the swap window for FCNR (B) and bank borrowing has also helped stabilize the rupee at around Rs 62 to a dollar.
  • The current account deficit has drastically fallen to 1.2% of GDP from 6.7% not long ago on the back of higher exports and lower imports.
  • FII flows have remain buoyant through 2013, notwithstanding the constant fear of a US tapering. fii
  • While US Fed tapering may be a factor that could continue to weigh on markets, it is widely believed that this has been discounted to a large extent by the debt market, which saw large FII withdrawals in the second half of 2013 thus far.
  • While corporate earnings have been lack lustre for several quarters now, the September quarter earnings of Sensex grew in double digits, compared with the 4% decline in the June quarter.

And how does this all transform into travel and tourism. With all the inflow of funds, comes the travel and therefore contribution to the Tourism Industry.

 

 

The scenario for the coming months has been positive though the seasonal traffic will go down during the festive dates in December. These are times that will provide opportunities for investors to come in and explore opportunities. Having said that, will it impact the Average Rates for the hotels – that depends from city to city as there is plenty of supply that is ready to come in.

 

 

By March 2018, Bangalore will rival Mumbai’s as the city with the largest branded hotel room inventory in the country, as per a research note by one of the world’s leading hospitality consultants HVS. India’s southern metro city is expected to have a hotel room inventory of 16,581 by that year, higher than Delhi and second only to Mumbai. And the difference with Mumbai would be a mere 300 rooms. At present, Bangalore is the third largest hospitality market with 8,536 rooms, following Delhi with 11,338 rooms and Mumbai with 12,807 rooms.

 

 

Whatever be the impact of economic conditions, with that much supply coming in you are looking at a 100% growth in room supply. This not necessarily transforms to a growth in Room Nights. And hence puts pressure on Average Rates that in turn puts a lot of pressure on the ROI of these new hotel projects.

 

 

Look forward to a similar scenario with Aero City in Delhi. The industry fears aggressive competition, with the addition of 5,000-odd hotel rooms to the current inventory of 11,000 branded rooms in the Delhi-National Capital Region (NCR). This may result in pressure on ADRs. Hotels like Radisson Blu Plaza, which overlooks the Aero City and was the first Airport Hotel of the city has already invested in upgrading and renovating its property, expecting greater competition from the coming cluster of hotels in its neighborhood.

aerocitymap1

 

 

 

So while everyone agrees that there will be a short term pressure on ADR, there is also a feeling that in the long run this will convert to greater demand and therefore the ADRs will rationalize over time. There is a big emphasis on MICE business as well. With the capacity of the Delhi airport’s terminal-III expected to exceed 75 million after the completion of phase-I, hotel companies feel the airport would become a hub for long-haul routes passing through Delhi, for conferences and MICE (meetings, incentives, conferences and exhibitions) business.

 

 

According to HVS India, occupancy at upscale and luxury hotels in Delhi for 2012/2013 hovered at 60 per cent, with ARRs between Rs8,000-8,500 (US$130-138), a six to seven per cent year-on-year fall.

 

 

All in all a positive sign of times to come for the Indian Tourism. What you don’t want now are the external factors – Economy to be positive in US and Europe. A stable government as and when it comes in and a no nonsense business from our neighborhood (referred usually as external forces)!!

india-tourism

 

December 11, 2013 Posted by | Hospitality & Tourism, TOURISM | , , , , , , | Leave a comment

WELCOME 2011

Had been trying to take time out, concentrate and put down my thoughts for some time now. But seems it was as distant as my NY resolutions. So good to just start typing straight from the heart and doing a warm WELCOME to 2011, the year that hopefully will be filled with new challenges and excitement for the industry.

When I sit and look back now, I realize how fast the year has gone by. I spent a year in the development space and came back to Revenue Management at the beginning of 2010. It has been a roller coaster ride for me. Handling hotels across the region, challenging targets, last minute requirements, regular work pressures, travelling like hell, attrition and new recruitment and what not? Looks like I missed all this in 2009 and was enjoying it all the more in 2010.

But the biggest of all that I felt was and will remain a challenge seems to be acquiring the right talent and the reason seems to be very simplistic in nature. I have just managed to tweak the definition of revenue management–

“The art of selling the room at the right price at the right time to the right customer on the right channel by the right resource is Revenue Management*”

The word “resource” is crucial now a days in this definition. You need the right talent to run your hotel and handle business plans that generate revenues for your hotel. Each step that they take in short term and long term has a direct impact on the business. The vision this person has to look out in advance and adjust his strategies to optimize on market conditions can play a crucial role in the GOPs the hotels enjoy at the end of the month.

I had the pleasure of hiring two people in 2010 in my Revenue Management for Hire (RMH) division. While one was a bit easy as I was able to get some one back to work with me after a break, the second one actually gave me a chance to interview candidates and understands the current talent profile available in the country. When I moved to RM, I had 5 years of sales & marketing experience behind me. Today we have RMs that are fresh out of college and thrown in main stream. Not every one is lucky to get enough training before he is swimming on his own. Worst part not every one has even got a lifeguard.

End result – some bright minds leave a mark. Others are struggling and trying to understand if they are even in the right place first of all.

With the India development pipeline ready to explode. Pick up any established brand’s press release and they are talking about having a 100 hotels in the next 3-4 years. Where are we planning to get our talent from? WTM did a survey of key exhibitors and senior buyers this year and asked them about the biggest single issue facing their business over the next five years. While they covered points like Global Downturn, Exchange Rates, Taxation, Industrial Relations, Oil Prices, Consumer Protection, New & Emerging Markets – they failed to give any importance to Talent Requirements. Unless they want to keep it under others that accounted for 7% in the pie chart.

With all these new hotels opening up, the fear of attrition looms large on the head of every GM, HR Manager and Department Head. I was myself surprised and shocked by listening to some stories (breaking news items) of people moving from one hotel to another and being offered salaries never heard off. Well not that I am complaining since I am on the other side still. But I am wondering if the worth is really that much. Not to mention, I also came across stories of people leaving or rather asked to leave on account of under delivery results.

We usually debate today that with the number of hotels opening in Delhi NCR alone will make sure that the price points come down to 7-8K mark. Which leaves us with a question that where will the budget hotels go? So if the ADR is going to be in that range, does the salary structure justify the numbers?

Also, every year a decent 10% increment in salaries (if you get it) has a direct impact on the hotels bottom lines.

And remember our industry works in a cycle. The last one had a 4-5 year run with its own ups and downs a bit. And jokingly though, a good friend actually said “God knows what is coming in 2013” in a corporate presentation. While everyone did laugh at it, I think it was something to think about…

So keep looking for the best man on the job. You never know when you might need his services. Keep the social media working for you.

By the way we spent some good time asking hotels to start working on this. Might not be as big right now but certainly no harm in being there rather than being left out completely. Technology always helps, the only problem being that we get too dependent on it. During my recent visit to US I came across this mobile technology of checking in at airports. You get a picture code and you have to scan it on the machine at the kiosk. You are in!! Its not being used for travel in India but definitely not very far. The hotels and airlines are already there on the facebooks and twitters of the world. How effectively they do it again depends on the Right Resource though.

For the rest of the predictions and gyan – just Google !!

December 30, 2010 Posted by | Hospitality & Tourism, TOURISM, Uncategorized | , , , , , , | Leave a comment

ROLE OF SOCIAL MEDIA IN HOSPITALITY

The use of the term “social media” has risen steadily since July 2006 and today is part of our day to day life.
Wikipedia defines Social Media as “media designed to be disseminated through social interaction, created using highly accessible and scalable publishing techniques.”

Social media supports the human need for social interaction, using Internet- and web-based technologies to transform broadcast media monologues (one too many) into social media dialogues (many to many). It supports the democratization of knowledge and information, transforming people from content consumers into content producers. Businesses also refer to social media as user-generated content or consumer-generated media. Social media utilization is believed to be a driving factor in the idea that the current period in time will be defined as the Attention Age.

Research on the need for Social Media Interaction points to three broad factors: creativity, expertise and collective intelligence.

Users do believe that it’s a great platform to express their own thoughts and expressions without any fear. So whether it’s about giving views for an airline or a hotel service or expressing ideas on how to improve on a particular aspect – the views are there for all to read and comment upon further (read debate)

As far as expertise is concerned, an online social network is perceived by consumers as an expert tool, as it offers a basis for the detection of emerging social trends and recognition of changes in consumer behavior, including member profiles, behavioral patterns and associated lists of contacts and further more their individual experiences at a hotel or airline.

Additionally, Online Social Networks may be a means of aligning individual thinking with collaborative intelligence, leading to group consensus. This can be about announcing an event, new job openings or promoting a social cause.

Social Media @ The Hospitality Industry
In ’06 and even much later, the hospitality industry continued to ignore the concept of using Twitter or Facebook or any other social media platforms for their promotional activities. The marketing initiatives were either off line or on very limited and repetitive online options. However, things have changed now and the same marketing teams are relooking at their strategy to reach the end customer through these channels. But they have a new challenge today.

While almost all are keen to get into the space, most hospitality companies today are not sure where to allocate funding or resources for the management of this critical aspect of their business. The reason for this is because to effectively manage and reap the benefits of social media a combination of skills and resources are required including public relations, operations, revenue management and marketing.

The recent emergence of online social networks (OSN) has changed the technological and communications landscape of the hospitality industry. The bloggers becoming self proclaimed critiques sharing travel experiences, recommending preferred accommodations, offering views on restaurant ambiance, quality and service, as well as hospitality companies monitoring and contributing to self-sponsored sites or using these channels for their HR needs (LinkedIn particularly) have all changed the way the industry is looking at Social Media in current times.

Social media monitoring gives hotel marketing managers an opportunity to keep their fingers on the pulse of how consumers are responding—to what extent current marketing campaigns are successful, how they need to refine campaigns or packages over time and, ultimately, the business outcomes.

How to enhance the .Com experience?

A recent research acknowledges that toolbox technologies can be used to monitor and analyze brand equity, market influencers and consumer intelligence. Social media monitoring and analysis are also capable of identifying sensitivities about a customer experience without necessitating market intrusion. Additionally, the technology can profile or delineate influential consumers for targeting. Customers that engage in blogging or photo or video sharing are more likely to assert influence in the marketplace. By identifying individuals who disproportionately influence markets or consumer behavior in the market, a business can determine a strategy of appeal.

Various technology options like ChatterGuard.com, an online social media monitoring and reputation management system, HotelSocialBlogs.com, a turn-key Travel 2.0 Distribution & Marketing service, CommentCards.com, a full-service business-2-consumer comment card service,

eProposalSystem.com, an online RFP response system hotel Sales Managers, RFPLink.com, a group RFP lead generation, HotelDirectBook.com, a consumer hotel portal, and reporting system, DiningClick.com, Internet Marketing Services for the restaurant industry, and Spa Interactive, Internet Marketing Services for the health spa industry are available today to effectively utilize the power of Social Media in the Hospitality space.

What’s happening out there?
For the E-Marketing Managers – Microsoft’s Bing and Google have already announced that tweets from Twitter will be included in the search duo’s organic results. Facebook status updates are likely to follow. For travel and its relationship with search, indexing of live Twitter and Facebook updates will trigger an evolution – once again – in how travel companies think about Search Engine Optimization and social media.

In the Google-Twitter arrangement as an example, it is unclear as yet how Google will index and rank the stream from Twitter – but if it uses the same relevancy and linking protocols it applies at the moment to natural search, then this is a powerful change in engine’s capability. This is just one in a series of steps by Google to address real-time information. Recently they quietly added a parameter which allows granular time search: for new results within the last 5 minutes, 30 seconds, 10 hours, etc

As in the past, results for a search for “XYZ Hotel New Delhi” on Google would probably have returned the property’s website may be along with a Google map image, a Trip Advisor review, Yahoo Travel reviews, a handful of aggregator sites (where aggregation is entirely automatic, using algorithms which carry out contextual analysis and group similar stories together e.g.: RSS Feeds, Google News), an Online Travel Agent or OTA like the Make My Trip or Expedia or Travelocity, and maybe a blog post or forum entry in the first few pages. And yes you can always count on the sponsored links on the top or on the right that depends on the money you spent for electronic marketing.

But now the good news is that the results may include relevant tweets from Twitter. The relevancy may be determined by how many other Twitterists have re-tweeted the post, number of inbound links from respected and page ranked authorities, number of followers for the tweeter, etc.

In one quick stroke the search engines will be including the essence of travel: the here and now of the travel conversation or what the web community is saying about destinations, airlines, hotels, tour operators, agencies and, most importantly, the reaction to it. If this is the case, Twitter becomes a powerful channel for travel companies and can no longer be ignored. And the fear is that travel companies may well possibly flood Twitter or Facebook with hundreds or even thousands of messages in the hope that it ends up on an organic search result relevant to their brand. This is relevant from the plenty of fan pages on Facebook in the hospitality space.

The Social Media platforms might at the same time may simply become a huge distribution network of offers and late deals by the travel companies. So it’s not far away when the leading hotel companies can have a special offer right there just for its fan club on the social media network or launching an opening offer for a new hotel only by sending tweets to its regular customers.

One of the interesting tightropes of social media is that what makes something Happening in one moment where it was Outdated just six months prior. Users on Facebook are more discerning about making suggestions simply because if the person has a bad experience at a hotel as a result of that recommendation, it might just come back to bite them post the “Moment of Truth”. Twitter users, on the other hand, are more impulsive and less likely to screen their recommendations.

Or, to put it in a travel context: Facebook suggestions are like suggestions from a hotel concierge and Twitter suggestions are like reviews you read in a magazine. If the XYZ hotel concierge sends you to an exhibition venue that is closed, the hotel will compensate you with may be a meal or even a cash credit. However, you’re not going to get that response from the magazine — or with a Twittered comment. That is why Facebook status comments have greater utility than Twitter.

Who are using it already?
AIR FRANCE KLM, European based airline holding company and one of the largest airline companies worldwide, launched BLUENITY (http://bluenity.com/) what they claim to be the first social network launched by the airline industry. All usual social elements such as sharing, recommendations and reviews flights, hotels, restaurants and destinations are included. Next to that, customers are able to display flights booked through Air France KLM on their profiles, find other members on the same flight and find members at similar destinations.

Bluenity is the first community site for travelers in the airline. The consumer can communicate with and meet people who travel with Air France and KLM, at the airport, in the plane or at your destination. The trip becomes an opportunity to meeting people: for example, one can exchange favorite addresses (hotels, restaurants, shops, events, excursions…), share a taxi on arrival, use your travel time to make new contacts. One can also submit good travel tips, views and comment on tips given by other members of the community.

This social media platform is hoping to get a reasonable market share with a potential target group of over 75 million consumers who fly with either one of the two airlines.

Another leading airline – BRITISH AIRWAYS has also launched their social network and service METROTWIN (http://www.metrotwin.com/) on similar service offerings.

However one of the most successful examples of utilizing the social media space in hospitality industry is one of the major cruise companies worldwide. The Miami-based CARNIVAL CRUISE LINES has over 80.000 employees and about 13 billion U.S. Dollar revenue recorded in 2007 and is operating 22 ships which are expected to carry over 2.6 million passengers this year.
Blogging

With close to three million visitors already since 2007, Carnival is having quite a popular blog, written by Carnival’s Senior Cruise Director John Heald (http://johnhealdsblog.com/). The blog, which was started to give insight to the behind-the-scenes activity in the life of a cruise director, originally was a one month project but due to its success continued and is still growing strong.

Besides the enormous amount of visitor traffic and brand exposure, the blog is also stimulating consumers to be part of discussions, resulting in over 25.000 comments. Due to the tremendous success of the blog, earlier this year John Heald hosted his first blogging cruise, to which over 800 enthusiastic blog visitors took part.

Social Networking
Carnival has set up its own social network and community for their customers http://www.carnivalconnections.com/ featuring several social functionalities such as photo and story sharing, scrap blogging, cruise and trip planning, event organizing and a message board forum.

Of course carnivalconnections enables customer to connect to friends, invite friends and share experiences of previous cruises and expectations of future cruises with each other. Also, the social network provides customer to write reviews about cruises which they can share with the public.

Not having exact numbers of members available, we would have to conclude from the amounts of topics and posts on the forum, over 5000 topics featuring 30.000 replies, that the network is quite successful and a great example of how a travel company can interact with its customers. Only image the amount of knowledge Carnival is getting from communicating with customers through this channel.

Virtual Tour
Carnival has created a complete virtual tour of it’s Fun Ship Island at FunShipIsland.com, featuring social elements such as sharing and personalization, which enables customers to view all parts of the ship online. Other features include a downloadable content such as wallpapers, ringtones and mp3 music.

While interacting with this website, quick, optional questions and individual preferences are collected for each visitor, which results in tailored recommendations for of course carnival cruises.

Using twitter already in May 2007, Carnival can be seen as an early adapter of twitter. Since then, carnivalcruise features over 300 updates and managed to get close to 500 followers. Carnival is using their twitter account to monitor their brand, listen to questions from customers, communicate promotions, share news about carnival and wish customers a safe journey. Also, people are asked and stimulated to use other their social networks to share their cruise experiences.

Photo Sharing
Since 2004 Flickr has become the most popular website for everything related to images and after having been acquired by Yahoo in 2005, the service continued growing. Carnival Cruises has its own photo stream on Flickr, a location where all images uploaded by Carnival can be found. Having uploaded close to 250 images on different topics such as their ships, locations, interiors, crew and construction sites, carnival is providing an interesting insight into the brand Carnival.

Online Video
You Tube is a video sharing website where users can upload, view and share video clips, owned by search engine Google. Carnival has its own ‘channel‘ on youtube, where it publishes its videos, coverage and presentations.

Measuring success
Although it is hard to measure the success of social media without data on costs and revenues, it appears Carnival successfully implemented social media. Brand awareness, customer services and customer intelligence through social media is difficult to measure.

By February 2008 both carnivalconnections.com and FunShipIsland.com managed to record over one million visitors. In terms of transactions, the only number available we could find is 20.000 transactions through carnivalconnections.com, which is significant and expected to have increased since 2006.

Using social media
Carnival has introduced a general audience with all comforts of long and short term cruising and is successfully using social media to spread their message and increase their brand positioning. Although the numbers of followers on twitter and members on youtube are not even significant, the efforts of Carnival do illustrate how innovative the company is and how active the company is participating in the conversation with their customers.

Strategizing Social Media for Hospitality Industry
An effective strategy in the hospitality space to cover social media should consider these points:

The monitoring service should cover more than one or two social media websites or blogs. Depending on the market and clientele demographics, the consumer reviews may appear on non-travel websites and blogs or on social media sites that are popular within that region or even from it’s key inbound territory.

When monitoring social messages one needs to segment them by attributes. For example for your hotel, the attributes may include rooms, perceived value, dining and housekeeping. A different set of attributes will apply for a restaurant, conference facility, spa services or golf. Segmenting by attribute also makes the process of applying this information internally to improve a service, inform your staff or to write a response so much easier.

A scoring method is needed to measure the trend of reviews by attribute so one can measure or compare trends up or down over time. If all reviews about the business are good, then the organization needs to know that and can take advantage of this input by posting or linking the messages to it’s brand website.

It is important for the organization to post responses to both good and bad reviews on the social media websites that allow response postings and where it is a blog one can generally add the comments. The response should be brief and address only the specific issue raised in a review. The comment should not read like an advertisement. In the social environment, consumers are on these sites to see the reviews, one-on-one information and not a commercial message. The value of the response is in the participation rather than interruption. The participation shows the companies’ willingness to listen and to be responsive; where as a commercial message may appear deceptive.

Conclusion
Simply monitoring one or two social media websites or blogs requires time and resources. It may give piece of mind, but there is no value or return on the time and resources without a strategic plan as to how this important information will be utilized. To reap the benefits of social media requires a measurable plan and clear expectation. The strategy should enable to benefit not only from negative reviews, but also the good reviews as well.

As part of overall strategy, the following key points can be considered while planning:

Social Media:
• Best Practices for Monitoring Customer Reviews
• Facebook Fan Pages for the hotel: Set-up or Optimization, Ongoing

Campaign Management, Content Postings, Fan List Growth
• Twitter Profiles for the hotel: Set-up or Optimization, Ongoing Campaign Management, Content Postings, Follower List Growth
• Flickr Profile for the hotel: Set-up and Optimization, Ongoing Management,

Content Postings
• YouTube: Flash Video Production, YouTube.com Hotel Profile Set-Up and Optimization, Ongoing Video Uploads
• Social Media Advertising (Web 2.0 Search, Banner Advertising, Sponsorships)
• Reservation Tracking and Conversion Reporting from the social media initiatives:
o Via the online booking engine
o Via the special 1-800 numbers used in the social media campaigns

Web 2.0 Features/Functionality on the Hotel Website:
• Interactive Calendar of Events (content managed by the hotel)
• Interactive Sweepstakes (e.g. 100th guest Free Room Giveaway)
• Blog on the Hotel Website (content managed by the hotel)
• Interactive Contests (Photo Sharing, Scavenger Hunts, etc.)
• Interactive Games (Good for resorts & casinos)

Building the Hotel Web 2.0/Social Media Strategy
• Hotel Defensive Strategy
• Hotel-Sponsored Social Media Initiatives
• Social Media and Hotel Employees
• Web 2.0/Social Media Marketing Initiatives
• Best Practices and Recommendations
• Brand/Corporate Level
• Property Level
• Destination Level

Because each site and each component of social media strategy has different objectives, they each have their own success metrics. One definitely needs to track engagement, satisfaction, and leads/sales. But to have a truly successful social media strategy, sales shouldn’t be the number one measure of success. From launching a new site to simply opening a Facebook fan page, each and every one of these initiatives involves a strategy and a foresight.

For some brands it doesn’t make sense to participate in every social networking site available, so one definitely tends to ease into new applications. The good news is that there are plenty to choose from and get into action…

January 13, 2010 Posted by | Hospitality & Tourism, TOURISM | , , , , , , , | 1 Comment

The Great Economic Downturn & The Great Indian Tourism Industry

Let’s go back to the year 2001, the year wherein we witnessed the crash of tourism for once owing to 9/11 attacks. The personal tourism activity recorded for that year stood at USD 645.06 Billion. The business travel & tourism was aggregated at USD 110.71 Billion. These figures for the following year went up to USD 662.76 billion and USD 134.49 billion. And did we say at that time that tourism has come to an end? The entire world was suffering from the fear of terrorism and hence was reconsidering their travel plans. Our country that depends heavily on the western world for its incoming business traffic was wondering on how to tackle the depleting numbers. The message was loud and clear. It was then that the country took some steps that marked the beginning of a new source market, a new trend. The domestic tourism was by now far forgotten. A few good campaigns, launch of Incredible India over a period of time and an active interest by the local state tourism bodies ensured that we are marketing our products to our internal customers who are cautious but at the same time have that risk taking ability. These are the people who stand by roadside and eat those pani purris, these are the ones who will stand in a local Mumbai train early in the morning with half of their body almost hanging outside. So with a healthy appetite and a spirit of adventure, our great Indian tourist was ready for a new beginning. Something that he never anticipated but always strived for. The results were astonishing. The year 2002 saw the corresponding Personal and Business T&T grew to USD 662 billion and USD 134 Billion. Something similar was seen in countries like Singapore that got affected by SARS in 2003 and remember this was also the year of the Gulf War. Tourism at time generated over USD 10 billion in revenue annually or about 5% of the country’s GDP. The numbers were down but not the spirit and the belief. While 2002 saw a total of 7.6 million visitors, the first half of year 2003 saw these numbers down to 2.5 million. But in order to boost the city state’s travel industry, the Singapore Tourism Board set for promotional tourism campaign on two sections, healthcare and education services. It also set up more overseas offices to tap fast-growing markets like China, India and ASEAN countries. The Singapore ROARS and Step Put Singapore campaigns not only minimized the impact of SARS on businesses but also staged a rapid recovery for the tourism industry. When the STB and International Advisory Council for Tourism met for to discuss and explore key issues and trends facing the city tourism industry, the key agenda was not short term. The agenda was to position Singapore as a destination for the next 10 years to ensure tourism remains sustainable engine of economic growth. And we all are witness to the growth and comeback that this nation has recorded. I see no harm when our Finance Minister talk about cutting down on hotel and airline fares. Our industry works on volumes and that helps in a big way to bring down our overall costs. This is true for any industry and for long we have been asking to give tourism an industry status. The month of November 2008 saw a steep 10% decline in occupancies in NCR. While the ARR hike was able to boost a higher REVPAR over last year, it’s definitely not a very positive trend. Companies are looking at budget hotels, guest houses and day trips to cut costs. If its recession, its’ for everyone and the first thing that gets the cut is travel & boarding. And you do not need any Revenue Managers today to guide you on how to cut costs. Travel planners are keenly looking out on the best fares available across various airlines and hotels to ensure that they are able to save each and every penny. And why not, my personal belief is that this should be done throughout the year. You don’t need an economic downturn to teach you the basics of business. The economic downturn is in fact proving to be a mixed blessing for online travel companies, with budget travel and cruise lines benefiting from the current environment. According to Hitwise, UK online traffic to budget travel companies increased by 5.3 percent in September compared with the previous year. The websites of cruise companies experienced an 8.2 percent increase in traffic over the same period. Each of the top three budget travel websites in the UK – easyJet, Ryanair and Travelodge – has experienced at least a 20 percent increase in UK Internet traffic over the last 12 months. Almost 60 percent of visitors to cruise websites are aged 55+, with a further 16 percent coming from the 45-54 age-group. If these figures are any indicators of the global trend, I think we have a great opportunity at hand. Demographics will play a role in the growth of the various sectors online, but the economic downturn will also have an impact. Customers are now looking for all inclusive deals as a way of saving money, and online channels offers travelers with one way of achieving this. India is seen as a growing market for international airline traffic and the current market size is nearly $5 billion (Rs21,000 crore) a year. India, with its huge middle-class population of over 250 million, is like Airways, untapped gold mine. With its present international travel market not even covering 2% of the population, the country offers large opportunities for airlines. Deutsche Lufthansa AG, Singapore Airlines Ltd, Cathay Pacific Airways Ltd, British Airways Plc. (BA) and Emirates are in the process of increasing the frequency of their flights and connecting new destinations here. Everything that goes down has to come up and vice versa. So, when a rebound happens there (in global markets) these carriers will have an advantage as they would have already built capacities in India. Hong Kong Dragon Airlines Ltd (an affiliate of Cathay Pacific), Saudi Arabia’s Sama LelTayaran Co. Ltd (popularly known as Sama), and AirAsia Berhad are also launching operations in the country As for hotels, investment in the right city and right segment is always important and more so in the current times. Good location will be the criteria for the future development. Having a good mix of investments in premium, mid and budget segments will give the group a better robustness to weather the challenge ahead. The fact of the matter is that there is still a mismatch between supply and demand of rooms in India. Bad times, like the good ones, don’t last forever. Yet again a time will come when companies and people will resume their usual spending when the rooms are in short supply. While the next twelve to eighteen months will be challenging, things will be back to normal if we stand up to this challenge. The demand-supply mismatch will again come into the picture with continued shortage of rooms, which will again drive companies to develop hotels Tough times don’t last, only tough people do!!

April 12, 2009 Posted by | Hospitality & Tourism | , , , , , , , | Leave a comment