Inbound Tourism: A long way ahead
Despite introduction of the eTV and a slew of initiatives by the government, inbound tourism is yet to achieve the desired result
Industry and government do not seem to be at the same wavelength on the issue of performance of inbound tourism. No doubt, the government is avidly pushing forward various projects/schemes to make the country more inviting and hospitable for inbound travellers. The measures include the introduction of e Tourist Visas to 150 countries, welcome kit on airports, Swachch Bharat Mission, Swadesh Darshan (Integrated Development of Theme Based Tourist Circuits), PRASAD (National Mission on Pilgrimage Rejuvenation and Spiritual Augmentation Drive), HRIDAY (Heritage City Development and Augmentation Yojana), helpline, and Buddhist Conclave amongst others. But many things are yet to be done to push the growth in foreign tourist arrivals. These programmes need to be implemented on the ground as inbound industry is not happy with the pace of the growth in inbound segment. While government is quite bullish on the performance of inbound segment, industry wants government to take some concrete steps to see result on the ground. Union Tourism Minister (I/C) Mahesh Sharma has emphatically said at various industry forums that India has witnessed a growth of five to 40 per cent in footfall of tourists from the nations where Modi has visited in the last two years, except Russia. However, the government statistics suggest that foreign tourist arrivals witnessed just a 4.4 per cent growth to just over eight million in 2015. The good news is that inbound tourism has witnessed 10 per cent growth in the first seven months of this calendar year. T3 connects to some of the players of the industry to understand the ground reality.
Performance of the inbound tourism
Sunirmol Ghosh, Director, Indo Asia Leisure Services, termed the performance of the last inbound season as ‘disaster’. “I think disaster is the one word, which describes the last inbound season for India.The 10 per cent growth in numbers in the inbound has primarily been achieved by visitors from Bangladesh and Sri Lanka who hardly use our services. Or the increment is from the African countries and Afghanistan. These visitors come to India mainly for medical treatment. It does not help our business,” says Ghosh. Sarab Jit Singh, Vice Chairman, FAITH and MD, Travelite India opines that the last inbound tourism season for tour operators and hotels alike had not been very encouraging as most of the organisations have shown decline or no growth. “The coming season appears to be slightly better than last season, which may not be sufficient enough,” Singh adds. Aashish Gupta, Founder, StrategyPluto and Consulting CEO, Federation of Associations in Indian Tourism & Hospitality (FAITH) says that the last inbound season witnessed very marginal growth in numbers from all markets and the same trend may continue in coming season as well. Bharat Bhushan Atree, Managing Director, Caper Travel, also has the similar opinion when he says that the last inbound season was slow because of the slowdown in economy and international political problems. “The coming winter season looks relatively better as economy is improving but we do not foresee a big jump in traffic and revenue,” Atree adds. Pronab Sarkar, President, Indian Association of Tour Operators, feels that inbound has been a challenge till now, nothing special to mention. “We managed to cross eight million tourist arrival mark, but if you see the global trends, India’s performance as inbound destination is not bad,” Sarkar says and adds that the year is expected to end with a growth of 15 per cent positively.
Emerging trends
The moot question here is that why inbound operators are not getting enough business. “There is a gradual decrease in key source markets. Over the last two years, North America is down by around 80 basis points to around 18.5 per cent, Western Europe down by around 300 basis points to around 23 per cent, East Europe down by around 150 basis points to around four per cent, East Asia down by 100 basis points to around seven per cent and so on. This is a cause of concern. The key reason, probably, is the decreasing economic strength in the western markets apart from more competitive choices available globally,” the Consulting CEO of FAITH reveals.
Singh believes that there is a marked change in the tourism trends from various countries. “There is a drop in numbers from some of our regular markets but that is more or less compensated with the increase in numbers from various markets such as far east and African countries. India is definitely losing high-paying business from our sourced markets, which is a concern,” Singh opines.
Atree says Latin America, though is long – haul, is emerging as a new market. “Some of international cruise liners too are including Indian shore into their programme,” he says. Sarkar sees emergence of new source markets such as Russian Federation, Eastern Europe, CIS countries, China, Indonesia, Vietnam and Thailand amongst others. Karan Anand—Head, Relationships, Cox & Kings feels that there is interest for India once again as the economic climate in our source markets have improved. “New source markets are South America and the Far East. State governments have also been promoting the UNESCO Heritage sites and these attract tourists from China and the Far East,” Anand adds.
Ghosh sees a very significant development in the buying behavior of the customer. “Customer is willing to experiment and entrust his holiday to an OTA . His decision can be attributed to the price advantage. He is avoiding the travel agent. We, the DMCs, are dependent on the business from the agents. As their business is not increasing, our business is not increasing. Hence, we will all be forced to look for direct business with the clients. The trend has started as it can already be seen in the niche products, where the DMC is offering the product directly on the net and is getting business. This will slowly become the norm, and soon everyone will offer their services directly to the customer,” he says adding that he does not see any new emerging markets for India.
Issues related to eTV
Responding to a question that despite the introduction of e Tourist Visa (eTV) scheme to 150 countries inbound growth is not on the expected lines, Ghosh opines that the scheme is very complicated. “The frustration is with the payment gateway as most of the time it does not work. For the eTV to get more popular, we need it to be multi entry. It should be possible to apply for the visa at least six months in advance and not just 30 days as it is now the case. I still firmly believe that the increase in numbers will happen due to this facility when it becomes more customer friendly,” Ghosh says. Atree also highlights the same technical issue of eTV. “When tourists apply for eTV, they get only single entry visa and that also for 30 days. Hence, when tourists have planned to combine Nepal and Bhutan with India, they cannot apply for eTVbut have to apply in person for physical visa. But I believe talks are on and very soon multiple entry eTV will happen,” he says optimistically.
Singh also echoes similar points. “We had really high hopes from introduction of eTV. We thought it to be a game changer but the results have not been encouraging so far. There are several issues which have restricted the benefits for the tourism sector. The implementation was quite erratic due to website glitches, payment gateway not responding properly and tedious online submission of application. There have been several cases where tourists have unsuccessfully tried even 10 times to submit their forms and make payment, but they could not succeed. Also, the eTV is restricted to single entry 30 days visa and that too tourist can apply within 30 days to four days of his expected arrival into India. This means that tourist were unable to take benefits of special prices offered by hotel and airlines, if bookings are made in advance by six months or so,” Singh says and adds that the industry has requested the Government to issue multiple entry visa for six months that tourist can apply up to 180 days before their intended arrival into India.
Sarkar opines that there were some inherent issues which made eTV not so tourist friendly and thus became unproductive. “The current eTV process involves lot of inconvenience and there is a lot to be done in streamlining and to bring efficiency. All these negatively impacted actual success of e-tourist facilitation and we did not get the desired result,” he says.
Gupta says that while growth in eTV based arrivals is there, its impact is probably substituting the same demand right now. “But that will have to be closely analysed. eTV driven growth is contingent upon an aggressive marketing of the same and greater flexibility in conference e- visa,” he adds.
Implementation a challenge?
Almost all players are unanimous that mere announcement of the schemes/events will not bear the desired result unless there is a strict and smooth implementation in place. When asked about the visible change due to the schemes such as Swachch Bharat Mission, Swadesh Darshan, PRASAD, HRIDAY, Buddhist Conclave, Investors Summit and others, all of them raised their concerns. “All these are great schemes and events. On the ground, let’s just talk of Swatch Bharat. We the citizens of India are paying the tax. No one questioned it. We want our country to be clean, not only for our tourists but for our children and ourselves. But what is happening on ground? Nothing. We want action, which are sustainable and visible,” Ghosh says candidly.
Gupta suggest that sanctions for both PRASAD and Swadesh Darshan have to start converting into time bound fund releases for change to happen. Singh also feels the same. “Several good intended schemes have been floated by the Government of India, which if implemented properly, will majorly impact tourism and hospitality sector. Unfortunately, this has not happened so far,” Singh adds.
Challenges for inbound operators
According to Gupta, decreasing buying power in key source markets, greater competition from countries which are treating tourism as a strategic growth driver, high indirect taxation rates of India and minimal brand presence are some of the challenges faced by the inbound sector. Going a step ahead, Ghosh opines that India is facing an image crisis and hence, tourism to India is at its ebb. “We need massive image campaign to get India back in the eyes and memory of the clients. It may take up to three months to revive the business and see the results. Every day delay is taking us away from the main booking seasons,” rues Ghosh. Singh also feels the same. “In the absence of aggressive advertising and publicity as well as marketing, we do not see things turning around this season. It is also a matter of great concern that no senior official is posted at India Tourism offices abroad in the last three years or so, with the result, these offices are almost defunct. Major initiative is required from MoT to turn around things and we sincerely hope drastic changes will be brought-in immediately,” Singh says. Anand also emphasises on the need to market India more aggressively. “We need to market our destination more aggressively. Our tourism offices overseas should work closely with the incoming agents in order to push India as a destination. Atree while highlighting the need for publicity in overseas market says that there are many problems in tourism industry hampering the growth. “These are duplication and high taxes on accommodation, food and liquor, basic infrastructure at railway station and bus station, cleanliness, signage and non-availability of neat and clean toilets at the monuments and on the highways. There is no proper coordination between different agencies and departments of center and states. Also bad publicity in press like rape and murder in capital city and unrest in Kashmir, floods in many part of Northern India, discourage people to travel,” Atree adds.
Future Perfect?
Almost all players hail the passage of GST Bill and New Civil Aviation Policy. However, they want it to be tourism friendly and quicker implementation. “GST is a welcome move, as it will aim at improving the tax compliance by all parties in market. This will eliminate the disadvantage of organised players and provide a level playing field across the travel industry. From a customer perspective, in the short term there may be a possibility of rates going up, subject to what rates (including exemptions/abatements) will be finally decided by the GST Council. However, the customer will certainly benefit in the medium term to long term as duplication of tax incidence from hotels/airlines to tour packages will be minimised and setoff of taxes paid is passed on through the supply chain up to the actual consumer,” Anand says. Ghosh wishes that tourism should be put on the lowest GST slab. “No country exports taxes. But if the government does not use its logic and is driven by the greed of the states and popular welfare schemes only and in the guise of generating more tax revenues they put the GST of 18 per cent , it will be the last nail on the coffin of inbound tourism and also outbound,” Ghosh opines. Gupta believes that a lower rate than 10 per cent on domestic tourism and a zero per cent rating on tourism exports has the potential to double the size of Indian tourism.
Regarding New Civil Aviation Policy, Ghosh terms it as a very far sighted policy. “If implemented in the right spirit without the political considerations, this will generate great employment opportunities apart from developing the far flung areas of our country,” Ghosh adds. “Implementability has to be made pragmatic,” quips Gupta.
In conclusion, players want government to have a proper mechanism for the implementation of various schemes and start the promotion of Incredible India in overseas market without any further delay if inbound tourism is to grow. According to Atree, promotional and marketing activities are not so visible and effective at the moment and it needs to be handled professionally with integrated focus and energy. The Ministry’s overseas promotion needs to be more aggressive, says Gupta. Singh opines that there is almost a total black-out on branding internationally for various reasons. “The marketing activities through roadshows have also yielded limited results as their planning and execution has always been much below the international standards,” Singh adds. “We just hope that the Ministry of Tourism launches the Incredible India campaign ASAP, not only in English but also in the local vernacular in all the main source markets,” Ghosh says. “Hope the year 2016 will be very fruitful for our industry,” Sarkar aims.
Murari Mohan Jha
Blurb :
“I think disaster is the one word, which describes the last inbound season for India.” – Sunirmol Ghosh
“India is definitely losing high-paying business from our sourced markets.” – Sarab Jit Singh
“When tourists have planned to combine Nepal and Bhutan with India, they cannot apply for eTV.” – Bharat Atree
“We need to market our destination more aggressively.”
