Thursday, 05 January, 2017, 12 : 00 PM [IST]
Forecast 2017, Awaiting a Better Tomorrow
Vishal Suri, Managing Director, SOTC Travel
In the long term, demonetisation of currency is expected to impact the growth of tourism sector in a positive manner. There will be a more transparent economy via digitalisation that will lead to a boost in the economic growth. Speed and efficiency in getting the collection from customers will improve. The move is expected to increase online travel booking, EMI holidays and a change in business from unorganized to organized sector of travel.
GST, which is expected to be implemented from 2017, aims to replace multiple state and central levies with a single tax. All countries that have adapted GST have grown in their GDP. In case of travel & tourism GST is likely to eliminate multiplicity of taxes. Implementation of GST will rationalize and simplify tax regime. It will lead to ease and transparency in compliances.
2017 would be a very promising year for the travel industry. India’s rising middle class and increasing disposable income will continue to support the growth of domestic and outbound tourism. Travel for Indians is going through a remarkable change as they have evolved and seek new experiences. The millennial travelers will also be one of the fastest growing segments seeking innovative experiences. Affordable airfares and the availability of a holiday on EMI will continue to make international travel more affordable.
The growing demand for travel products from Tier II and III cities will propel the growth of tourism industry. Increasing mobile and internet penetration, use of travel applications are some of the factors that will enhance online travel bookings. Expanding of business interests globally by corporates will witness a further rise in Business travel. Going by all these aspects, the travel industry will continue its growth trajectory for the year 2017 as well.
Peter Kerkar, Director, Cox & Kings Ltd. (Mumbai)
Post demonetisation we haven’t witnessed any significant change in outbound bookings because most of the bookings for overseas winter vacation were received in advance. Domestic travellers prefer all-inclusive trips as everything from stay, food and sightseeing are taken care of. We have never encouraged cash payments and most of our customers pay through proper banking channels. Though largely fragmented and unorganised travel sector may experience a temporary set-back due demonetisation, overall it is a very positive move which will make the sector more organised in the long run. Though the last Union Budget was relatively silent on tourism industry’s demands, we are quite optimistic about the upcoming Budget. We hope that some key industry recommendations on lower GST for related services, development of tourism infrastructure etc., will be addressed.
Subhash Goyal, Chairman, STIC Travel Group (Delhi)
In 2017, the inbound travel industry is expecting a negative growth of around 7-10% due to demonetisation. The growth would have been 15-20% if demonetisation hadn’t been implemented. However, we are also hopeful for positive growth with better E-Tourist Visa regime and aggressive marketing by the Ministry of Tourism in major inbound source markets
Medical Tourism is also expected to grow manifold because of the formation of the National Medical Tourism Board which is trying to solve all the issues being faced by the medical travellers. The National Tourism Advisory Council under the Ministry of Tourism, will go a long way in solving the challenge of co-ordination between different ministries.
Iqbal Mulla, Chief Council, Global Tourism Council Trust
Due to the unfortunate events of 2016, including increase in Service Tax rate, the package cost of domestic and outbound travel has increased. These developments will slowdown the overall growth of the sector in the coming months. Because of demonetisation, with no disposable income in hand, travel spending will be affected. The additional burden of taxes has already made things difficult.
Ankush Nijhawan, MD, Nijhawan Group of Companies (Delhi)
Demonetisation might impact high-end leisure travel to long-haul destinations to some extent due to shift in preference to short-haul countries. On the domestic front, there has been no impact of the events of 2016. Bookings are going strong and will continue to do because Indians as a race are adaptable to changing scenarios. It waits to be seen how the second half of 2017 spans out.
Vishal Sinha, CEO, TUI Pvt. Ltd. (Delhi)
The Indian tourism industry is poised at the cusp of consolidation and growth. With double digit growth, we have a positive outlook for 2017. This will be driven through products curated for family holidays across the globe as well as within India. Experiential holidays will also be growing as a segment with self-sail holidays across Europe and Polar expeditions. Cruise vacations are increasingly gaining prominence among families and will continue to grow next year. Since 2017 also offers 14 long weekends, hence an opportunity for the customers for taking short breaks with family within India & explore.
Manoj Saraf, Director, Gainwell Travel & Leisure (Kolkata)
Impact of demonitisation will persist on the tourism industry in 2017. The first quarter of 2017 will be affected at large due to demonitisation. Money in the hands of middle class has gone down and their priority as of now is not on holidays. The increase in the bookings that was observed in the last two years will not be seen in 2017. Summer bookings will dry up by 30% to 40%. Along with tourism, hotels and airlines will also be affected. Each industry has to take necessary steps to tackle this phase.
Harmandeep Singh Anand, MD, Jagsons Travels Pvt Ltd. (Nagpur)
Considering the events of 2016, business has seen a slowdown in the past month. In the near term, long-haul travel will be impacted. Short-haul destinations in Asia as well as CIS countries will be preferred in 2017. Business travellers as well as wedding planners will look at newer and nearby destination options which give a similar feel of their long-haul counterparts. This will give a boost to CIS countries as even corporate entities will look at controlled spending in 2017 after demonetisation. Overall, 2017 will see a tone down in traveller spend and travellers would adopt the wait and watch policy.
Rajiv Duggal, CEO, Lavasa Corporation
The year 2017 will turn a positive stroke for the tourism. The industry, as it is on a growth path although a bit slow temporarily due to demonetisation, it’s an initial knee jerk reaction which will end is already settling down.
The Indian traveller will increase its bandwidth and constant aspiration to travel and with the way the world is vowing the Indian traveller, I do not see any reason that outbound and domestic numbers will not go north ways. My skepticism, if any will always remain on inbound tourism, where we need to still do enough and more to give a truly international experience. Infrastructure, air & ground transport, quality logistics is yet not what would make the India experience world class.
Ankur Bhatia, Executive Director, Bird Group & Member, CII Core Committee on Aviation (Delhi)
Tourism, hospitality and aviation have emerged as key drivers of growth among the services sector in India. In 2016, these sectors experienced a new era of expansion driven by strategic initiatives by the government and also attracted some of the highest FDI. The same trend is likely to continue in 2017 as businesses will focus on growth and expansion resulting in greater options, better connectivity and improved quality. The competitive landscape within the Indian hospitality industry has never been as dynamic as now and 2017 will witness a spike in demand from Tier-II and III cities.
Ashwin Narayanan, CEO, Travel Tours (Bengaluru)
I am hopeful and optimistic as we enter 2017. While 2016 has been a tough year for the tourism industry, I am confident that 2017 will be an exciting and challenging year for us, as the outbound travel market continues to grow in double digits. Companies that continue to innovate, create new product offerings and build stronger relationships with their customers will thrive. As our country’s GDP continues to grow steadily, I am positive that we will see this translate to a good outbound season.
Neelu Singh, CEO & Director, Ezeego1 (Mumbai)
2016 was a positive year for the travel industry, and we are quite optimistic about 2017. Though budget 2016-17 was not very travel friendly. Similarly, the demonetisation move did create a slowdown in the industry, with the unorganised travel sector being hit the most. However, it is also true that this move brought about a decisive shift from unorganised travel sector to the organised travel sector, thereby making
this business more transparent. With little impact on travel bookings this year, we are certain that the situation will be normal very soon and will not affect our summer travel bookings as we expect our outbound travel business to grow at least by 10%.
Rajesh Magow, Co-Founder & CEO-India, MakeMyTrip
Introduction of GST and demonetisation, this coupled with smartphone penetration and adoption led by young travellers is driving the shift from offline to online in the travel industry. Young Indian travellers are very spontaneous and social media driven and this has been demonstrated by the surge in last minute bookings. Strong advance purchase, rise in travel spends, lower airfares year-round, higher spending on luxury travel experience within India and abroad by travellers and rise in solo-women travel are some of the top trends we observed during this year. Going forward, we are optimistic about the growth prospects once the demonetisation effects are settled.
Biji Eapen, National President, IATA Agents Association of India
Demonetisation has caused a severe country-wide currency crunch, and it has also had a domino effect on all aspects of the tourism business, both domestic and international. Records have shown an 80% drop in tourist spending with a 15-20% drop in foreign and 20-40% in domestic tourist footfalls. We expect the government to cogitate and declare ‘tourism’ as an industry and the 4th pillar as promised.
Ajay Prakash, Chief Executive, Nomad Travels & President, IIPT India (Mumbai)
Dismal - in one word! Paying lip service to tourism doesn’t help if the government’s actions believe the words. In the peak season, restricting tourists to encashment of just INR 5,000 is bizarre. The much anticipated GST, in the absence of any abatement,
is expected to only increase taxation on the industry. Tourism, it often seems to me, happens in spite of the government.
Sunil Kallyat, Regional Manager-Western India, Emirates
Enormous challenges ahead with a rapidly changing market environment post these incidents. May see a high flood on value based offers that possibly could drive a positive trend since this could be a one- time offer that may not be available later. A lot is also expected with the 2017 budget announcement primarily with tax reductions that may see a positive wave with some additional disposable income but too early to judge that trend.
Soraya Homchuen, Director, Tourism Authority of Thailand (Mumbai)
The emerging travel trend in 2017 will be primarily about food/culinary tourism, solo female travellers, soft adventure holidays and culture tourism. In the current robust tourism market, change is always afoot, and Thailand is building on several trends that are in sync with the global tourism trends. In terms of the prospects, 2017 is expected to be fruitful, as we are foreseeing a rise of Indian travellers by 10% and anticipating up to 1.21 million tourists from India alone.
Sheetal Munshaw, Director, Atout France India
Prospects for the outbound tourism industry for next year at this stage are speculative. The first quarter of 2017 will be crucial in determining whether demonetisation continues to affect travel. Its implementation in November 2016 did not hinder travel to France significantly as this time of the year is more “off-peak” for France ex India. Despite a challenging year for the tourism industry, France continued to do well with reference to Indian arrivals. We are estimating an approximate 10–15% increase in arrivals over 2015 and hope that the new year will augur well for France.
Sriram Rajmohan, CEO & MD, Club7 Holidays Ltd. (Mumbai)
2016 was a roller coaster year. The first three quarters of the calendar year saw growth in pax and there is a slump in the bookings for the last quarter. However, market has revived in the last fortnight of 2016. This gives us a hope that 2017 is going to be a decent year, and is going to be full of opportunities and whomsoever is having a right pricing will survive. My reading is people are going to be more conscious about the pricing and will definitely opt for a cost-effective travel solution, which is all inclusive. I also anticipate more short-haul travel in 2017.
Jagat Mehta, President, Enterprising Travel Agents Association
We are hopeful that the government will present a favourable Budget for the tourism industry this time. GST is round the corner but there is uncertainity about its implementation and rate. There has to be a level playing field, whatever services being extended by tour operators for outbound travel should not come under tax. With the change in lifestyle, people will continue to travel. The affect of demonetisation is not much on winter travel, we are getting enquiries and bookings are also being done for the same. But for summer season, people are bit apprehensive since the season (summer) is long.
Rajesh Menon, Regional Sales and Marketing Manager – South Asia, Cathay Pacific Airways
Currently, we don’t see any effect on our revenue due to demonetisation. We believe that 2017 will be challenging as we have seen more capacity added into the market. The weakness of the global economy has also led to a reduction in premium demand, with major companies tightening their belts on corporate travel. However, we understand the need to continue to invest improve our products and services.
Sujit Nair, Founder & Group MD, Akquasun Holidays Pvt. Ltd (Mumbai)
Tourism sector in India is very volatile and it depends majorly on economic conditions. Though we can expect a growth of 10% in 2017. Needless to mention, the effects of demonitisation would definitely have an impact on unorganised sector of hospitality industry. However it will largely benefit the organised sector and travel firms who had adopted technology. Unofficial channels of cash transactions would vanish and with banks having more liquidity – interest rates would decline which will boost various segments of the industry. In the short term, travel industry will see a downturn but it will definitely grow towards the second quarter of 2017.
Rajeev Kohli, Joint MD, Creative Travel (Delhi)
The Indian tourism industry is going through a very interesting phase. We are (in some ways) under threat from global markets and also due to financial policies, high taxation, etc., which is why the industry is under a lot of strain. I do however feel that we are a very strong and resilient supplier base industry in the country. 2017 is going to be a year of hope for us. We expect the government to confer the concessions and the positioning we need in the new GST policy. If that does not happen, then the tourism industry will further shrink. 2016 has already seen a downturn of 20-30% in the inbound business and unless we take some drastic step or change our tactics, nothing will improve. There won’t be movement unless policy-level changes take place or the centre and state provides better support to the travel and tourism industry.
GB Srithar, Regional Director, South Asia, Middle East and Africa, Singapore Tourism Board
Travel is increasingly becoming an important discretionary spend for Indian consumers. As smart travellers, they will be cognizant about travel safety and at the same time, endeavour to celebrate the joys of travel. A major change in the coming months will be the use of digital currency and adapting to cashless payment modes, as a result of demonetisation. We are optimistic that Indian outbound traffic to Singapore will continue to do well in 2017. We hope to welcome more family, business, cruise and working millennials’ visitors to Singapore.
E M Najeeb, Group Chairman, The Great India Tour Company (Kerala)
It is difficult to predict the inbound business prospects for 2017 as number of foreign travellers have had a bad experience in the last two months of 2016 due to the sudden demonetisation. Their negative feedback is bound to cause a serious impact in the first few months of 2017 and I am sceptical of growth unless the situation improves.
Raja Natesan, CEO, UNIGLOBE Travel (South Asia)
A lot is being said about demonetisation killing the Indian tourism industry but I stay an optimist in this regard. Yes, there would be short-term dips (and some sharp ones) because tourists can no longer use cash to lavishly spend on a holiday, but in few months, those who want to travel for tourism and who see it as a part of their lifestyle, will continue to travel. So will students, VFR segment and short stay holidayers. GST when it gets commissioned will boost travel and add a positive impetus to the economy. Most importantly, agents who were selling on cheaper rates, by accepting cash (thereby avoiding service tax), will now not be able to do so any more. That means a level playing field which is good news for all quality travel agents. On every front, be it infrastructure, internet connectivity, cleanliness, airline capacity, B&Bs etc., we are growing at a rapid rate. After a small blip, 2017 will be good for tourism both within the country and outbound.
Manmeet Ahluwalia, Marketing Head, Expedia India
2017 presents an exciting landscape for the travel industry with people waiting to go on a vacation in the first quarter of the year itself and multiple extended weekend opportunities throughout the year. This will also increase the propensity for last minute trips, owing to work pressures or other factors that hamper planning vacations in advance. As Indian travellers evolve, they will be more inclined towards travelling for experiences such as exploring new destinations, new cuisines, new state-of-the-art properties, meeting new people, etc., in 2017.
Manju Sharma, MD, Jaypee Hotels & Resorts
The hospitality industry in India shall continue to flourish with tourism currently contributing significantly to the GDP. A combination of noteworthy initiatives by the government like Make in India, Digital India and the E-Tourist Visa scheme will continue to provide a strong impetus to growth in demand in the hospitality sector. A key focus area for the industry in the coming year will be to identify and adapt to the evolving consumer preferences. The new age consumers today are globally well-travelled and digitally aware and hence desire services compatible to global standards.
Amit Agarwal, Senior Marketing Manager, Hotels.com
With mobile technologies developing at rapid speed, there’s no doubt that mobile usage for travel purpose will change and evolve in 2017. Largely 2017 seem to be a promising year in travel with 14 long weekends owing to public holidays falling either just before or after a weekend. Weekend getaways have become quite popular amongst the Indian travel market. Travellers are not just restricting themselves to destinations in the vicinity but are also opting for short-haul destinations such as Dubai, Malaysia, Phuket, etc. We believe that the same trend would further strengthen in 2017.
Kunal Kothari, Executive Director, Rail Europe India
Initially, we felt demonetisation would affect the business in the near term. But, looking at the number of bookings in November alone, I don’t see any major drop in outbound numbers. Those who make bookings through cheque and online transactions will continue to do so, but those who transact in cash, will now have to move on to credit card or NEFT/RTGS payment systems. Things will change positively and corporate credit cards will gain momentum.
Vasudha Sondhi, MD, Outbound Marketing
The prospects for the tourism industry in 2017 still look good and positive. Due to the current monetary situation, there is a lack of feel good factor. However, everyone is on a wait and watch mode, primarily waiting for the national budget, GST roll out, understanding of taxation going forward
from April. For Outbound travel, the last quarter has been a little slow. The slowdown is expected to last till the first quarter and in any case the first quarter is always slow. Large group queries from April onwards is being received by us. Domestic travel, especially the discretionary spend and cash spends have come to a halt. Therefore, all the usual tourist destinations within India would be seeing a lower than usual tourist arrival and this would continue in 2017 till people again have cash reserve.
Sunil Kumar R, President, Travel Agents Association of India
The adverse impact of demonetisation is bound to affect the travel industry in the first six months of 2017. Travel has taken a backseat and is no more a priority for people today trying to evolve from demonetisation. Overall, travel sentiment has drastically reduced hence affecting ticketing as well. Post demonetisation, airlines have also announced a number of flash sales which goes on to show that their business has been impacted. However, these low fares will strengthen the travel sentiment during this dull period and business will hopefully catch up by summer of 2017.
Praveen Chugh, President, Travel Agents Federation of India
With the new National Civil Aviation Policy in place and regional connectivity being boosted, the growth of aviation sector looks promising. As tourism is also inter-related to aviation, domestic ticketing will continue to grow. However, outbound travel has been adversely affected by demonetisation and it will take good 4-6 months to take pace.
Subramanya Sharma, Chief Marketing Officer, Cleartrip
2017 is a year of long weekends, perhaps the highest number in last few years. We will continue to see weekend getaway destinations getting a larger piece of pie. We are excited as the customer demographic will continue to grow younger and independent. New types of consumer interfaces like voice input take main stream in times
to come. With innovation and customer centricity on top of our mind we are very positive on the road ahead for Cleartrip.
Mahesh Iyer, Chief Operating Officer, Thomas Cook (India) Ltd.
India has over 850 mn mobile subscriptions, more than 4 times the number of Internet users. With an increase of travel gross bookings taking place online, the increasing Internet and mobile Internet penetration rates could play a vital role in the Indian online travel market growth story and we have our sights clearly focussed on our omni channel model. The Indian consumer is a quintessential value- seeker and we expect value to be a powerful driver in the upcoming summer. A continuum in the FIT segment is expected, with engaging itineraries and experiential/interest based programmes in high demand to meet their discerning palates.
The brag-value quotient of holidays will continue to drive Middle India and their hunger for travel with drive demand for group travel.
Aparna C Basumallik, Country Head, Europamundo (Kolkata)
Demonitisation will have its challenges in terms of liquidity. The travel style and spending pattern will undergo a change for sure. Eventually if the government eases the taxation we should find a surge in the first time budget traveller. Now with curbs on gold hoarding and cash hoarding people will spend on themselves and travel is a great option. Quality travel has reduced. The Indian market has shown resilience and I bet on it.
J K Mohanty, MD, Swosti Group (Odisha)
2017 looks very promising as we are beginning with increase in both domestic and foreign travellers. For the hospitality industry to flourish, we need to dedicate this year in generating professional and well certified manpower. The government and private stakeholders need to focus on updated curriculum, coming up with better training institutions providing professional expertise to cater to the growing demand.