In an exclusive conversation, we focus on India’s inbound tourism, the status today, its scope, and how to make this work. Participating in this conversation include Aman Nath, eminent hotelier, historian and author and mentor, Neemrana Hotels; Kapil Kaul, Director India, CAPA Aviation Consulting; Sarabjit Singh, MD, KTC Travels and Transport; and Rohit Kohli, Joint MD, Creative Travel, one of India’s leading inbound tour operators. Anchoring the conversation is Navin Berry, editor, Di Conversations.
Navin: Where is India’s inbound heading? Numbers are picking up. We have yet to touch the 2019 figures in inbound, but we are inching slowly.
We have some very critical questions here. Kapil, tell us there is huge infrastructure development, airports opening, airlines connecting, aircraft being ordered – largest aircraft order first by Air India and then again by Indigo. So, in all this space, where does inbound figure? All this capacity build-up, where does it leave inbound? Is there a window for inbound or is it all for affluent Indians going abroad?
Kapil: Inbound industry has an exceptional opportunity if they understand that India is a long haul and ultra long-haul destination. And what Indigo is going to do on long haul? In about the next 10 years we will have almost 150 more wide bodies. So, you will see most of North America, multiple frequencies, 8-10 points, most of Europe, UK, Australia, Africa, all operating with the best product, with multi frequencies. They will invest in their brand in these markets and distribution in these markets. So, Indigo and Air India combined, I would think they will operate more than 200 aircraft wide body aircrafts over the next 10 years. Now, if the inbound industry understands that they are going to go nonstop everywhere with multiple frequency and a good product, it will stimulate traffic. Third, fourth, freedom carriers stimulate traffic, too. Now, if the industry is awake and alert to the situation of what’s going to happen, I’m sure there are tremendous opportunities.
It is true that most of the Indian carriers will take Indian traffic out and the diaspora traffic in the US. So yes, because if flights are getting full, they are able to get significant yield, I don’t think there is any need for them to think differently unless and until government and all of you guys in the inbound get together and say, let’s work together. But I don’t think anybody’s interested. If you’re not interested, I don’t think airlines will go out of the way if their fights are full, they’re making good money.
Navin: Nobody’s interested, meaning?
Kapil: I mean, basically, inbound to me is restricted to trade shows; is restricted primarily to some few micro activities. I don’t think we have a larger picture of how to get inbound leisure. Because the moment you look at tourism from NRIs and Bangladeshis and Sri Lankans to come, you are bound to have a growth. And if that growth keeps you happy, that’s fine. Look at inbound leisure, I think you have an opportunity if you want to convert inbound leisure working with Indian carriers, that will redefine distribution, that would need some investment collaboration. We have a historic opportunity.
The second point of inbound is we don’t yet have a short haul inbound business that comes from the Middle East, for example, that comes from Southeast Asia. Now, with Indigo bringing these LRs, XLRs and 321 Neo, so you have the opportunity both for the six to seven hours with XLRs to go up to eight hours in some parts of Eastern Europe with these wide bodies which are going to fly there. Now, it is a question for the industry to say that, listen if we are happy with business travelers coming and OCIs and H1B moving, and that’s tourism, then good luck to them; but if you really want inbound, I don’t think India has ever had an opportunity like this that’s going to present itself.
Navin: What do you say Sarab Jit?
SarabJit: See you have an opportunity because of flights coming in and connectivity. The basic thing is that India is not being marketed for the last five years at all. And even before that, as he said, that we were focusing on certain things only, whereas scenario has changed, the opportunity is enormous in front of us. Our marketing should go all across the globe. We should not be restricting our exercise of marketing and promotions to certain restricted areas.
Navin: But tell me, tell me in your own business, say if you look back 10 years ago, what was the size of your fleet at that time?
SarabJit: In the transport segment, we had about 160 vehicles.
Navin: And how many do you have today?
Sarabjit: Around 1200.
Navin: In 10 years, you have grown 10 times.
SarabJit: I think there is a difference because four – five years ago we changed our business line completely.
Navin: But, for KTC that is the kind of numbers we are looking at. Now, 10 years ago, out of your total business, how much of it was inbound leisure?
SarabJit: 50% was inbound.
Navin: Today, what percentage of those 1200 vehicles is your inbound?
SarabJit: Around 5%.
Kapil: Because the other verticals have grown so much.
Navin: So now this brings me to the other question, which you, Rohit, looking at the verticals of travel and tourism, the seriousness of endeavour in terms of inbound, our understanding of inbound has also shaped or evolved in the last 10-15 years. If you talked earlier as inbound as only leisure groups, we are now saying medical is also inbound.
Rohit: I don’t agree with that at all. I don’t agree that medical tourism is inbound.
Navin: So, you want to be the puritan that inbound for you is leisure and group driven or even FITs coming to India?
Rohit: Even incentive groups, even conferences. I will categorise as inbound. Medical tourism is not tourism. Somebody coming for a surgery is not a tourist. He is spending most of his time in a hospital.
SarabJit: From a government point of view, where you are talking about foreigners travelling or coming into India, where if foreign exchange is being paid, that is tourism for them? And we have to go by that consideration only, that is medical tourism.
Navin: Or even coming for sports tourism?
Sarabjit: I mentioned about 5% tourism, but the rest of the 95% contains more than 60% foreigners. These are coming as government trade delegations and other businesses. I would like to state on the larger infrastructure front, while the airline industry is growing fast and hotels are coming up all over the country, we are witnessing a major gap in the road transport fleet. The luxury fleet available in India for the recent G20 summit was woefully short.
Navin: So, how did you manage?
Sarabjit: We told the government to talk to the car manufacturers who provided 85 cars for the heads of states from Korea and then they went back. And then Mercedes and BMW cars – 150 cars were provided by them. And for the vans, instead of taking luxury vans, they compromised and brought it down.
Navin: So, are you saying that if you are going to see any influx of foreign tourists or even the growth of travel and tourism industry in the country, we will have to look at more road transport?
Sarabjit: I am linking it within the larger tourism infrastructure and to manage the staff in the workforce. So, everything is required.
Navin: So, capacity building has to be uniform across.
Sarabjit: Even hotels during G20. We have seen the hotels were not available. And even the government and foreigners alike, they had to downsize their delegations.
Navin: Aman, you mentioned in another context that some 90% of your occupancy at a premier location like Neemrana Fort Palace has moved to the Indian segment. Do you have the need at all to promote yourself to the foreigner because your capacity will be utilized unless you want to build another 200 rooms, which is not possible in your case.
Aman: Neemrana never hankered after the foreign tourists. We just did a product and whoever was ready to pay the price, we were happy with them because I don’t think we should discriminate. Many hotels did discriminate. They said, we don’t want Indians because, they have a certain behaviour, they create more trouble. They want more room service. But we were not, shall I say, anti-Indian from the start. I think the Indian has also changed, that image of that bad Indian traveller that went abroad and earned a bad name for India, that time has happily passed. The Indian traveller is evolving.
Navin: I think their children are also educated, more exposed.
Aman: Yes. We get a lot of young, smart Indians. And earlier you knew almost everybody who came there, when I was at my properties, I used to meet many people whom I knew. Now I go there, I don’t know anybody. I mean almost anybody that which is heartening, because people from Gurgaon, for example, they have smart cars, smart baggage, they dress well. Unfortunately, they’re all wanting to be seen and enjoy themselves, all the ladies wear European clothes. But that’s also a cycle, I think you have to go full cycle. It’s normal because India is now tailored to the world. So, whether it’s export surplus or our own capacity, we should be well dressed.
Navin: Rohit, would you like to comment on inbound specifically, are you experiencing any difficulty in terms of rooms, transport, how’s your business going?
Rohit: So, I’m going to start by respectfully disagreeing with Kapil because he said something that if the industry was not interested, it’s not up to the industry. As Sarab Jit said, the problem is that we don’t have any support. Right now, there is no reputation management of India. Forget marketing. The narrative about India globally is not great. Whether it comes to pollution, whether it comes to that occasional unrest, whether it comes to crime against women.
Navin: I had thought we had got over a lot of that. Much of it is in the past?
Rohit: Where have we got over it? We have got over it in the major news outlets, CNN, BBC, et cetera. But the common traveler is not watching those channels. There was such negative publicity recently about so many different things, and we all, we all got glimpse of it in our own cities. Negative publicity does get around still. And it’s impossible for a government to manage every single post out there, especially in these days of social media outburst. I’m not suggesting that a government needs to go and censor foreign media. It’s not possible. But we need to counter that with positive news. We need to have the Incredible India campaign which while it lasted was great. It was fantastic. It made an impact. Even today, people say Incredible India, even though that campaign is long gone!
Kapil: I just don’t understand this. But if you talk about Incredible India, India was very different. The, the experience was different at that time and Incredible India could have made sense 15, 20 years back. And you are such a large country where the dynamics that you talked about, like pollution, congestion, crime against women, it’s a natural byproduct of an economy growing and becoming bigger. My point is that Incredible India was at a time when that could be communicated the way Incredible India got communicated. But today, what you require is not incredible India.
Navin: What in your opinion is required?
Kapil: No, my first question is whether we want it or not.
Navin: Who’s the we?
Kapil: We means as an industry and whether we require it or not.
Rohit: We want what?
Kapil: Do we want the kind of inbound that you are aspiring for.
Rohit: Why not?
Kapil: But I don’t see action on that.
Navin: My sense is that as far as India is concerned, and it’s totality, the story between the top six metros and the rest of our tier two, tier three cities is slightly different. In rest of India, I think the need to get foreign tourists has come down because the Indian traveller has by and large taken care of the available infrastructure?
Aman: I want to add one thing. I don’t think that the people who come here to our properties, they’re really charmed, with their travel with India. So that narrative has changed.
Navin: I am saying the same thing, that in a city like Delhi, for instance, with all its five-star hotels, is still not a tourist city, especially for Indian travellers, not at least for leisure. Or, for those using our organized hotel capacity. So, rooms and capacity are still available.
Rohit: But that has never been the case. Metro cities have never survived on inbound. I am not even talking about Metros.
Kapil: I want to just place two things. I’ve been speaking this for a while. First of all, I don’t think we have the architecture to build inbound tourism. It’s coming on its own. Our campaigns and what we require are different. We don’t have that know-how; we’re not set up to succeed. And it’s not a blame of the government, it’s just everything. If we think these trade associations can build tourism – no, then I think we are on the wrong track.
Rohit: But then that’s not their role either.
Kapil: Trade association members are in the distribution business, so, why not?
Rohit: I’ve been saying this for 25 years, inbound has grown in this country despite government. That is the inbound tourism in this country, has been a pure play of the private sector. Whether it’s hotels, tour operators or others.
Sarabjit: See, promoting a destination is the government’s job. Which has not been done properly. Now for the last five years, for whatever reasons, promotions and marketing has not been done at all.
Rohit: We’ve gone backwards.
Sarabjit: And, now there is nothing in the near future visible also that anything is going to be done. Whatever little tourism is coming today. It is all efforts of people like Rohit and others.
Kapil: When you are talking with the Prime Minister, he has on multiple times, talks about one of his five Ts as tourism. I think it should inspire people who are responsible for tourism, especially in the Ministry of Tourism. I don’t think that message goes down. I don’t think the prime minister is going to devise a strategy at his level. He has given a signal. I don’t think that signal is trickling down, either within the government or within the industry.
Rohit: The reality is very different. What you’re saying is theoretical. Somebody has to take a call, somebody in the government now, whether it’s the Prime Minister.
Navin: I often felt, because the Prime Minister has spoken not once, several, several times. Sure. He has come up with some very innovative ideas. Such as every Indian taking 21 trips within the next three years to discover our own country. I did not see a single promotion coming from any domestic tour operator or from any hotel group saying, come make these repeat visits and you’ll get this extra. Very often, when the PM says something positive, I have not seen the industry take leadership of the idea.
Kapil: We’re digressing this a bit. The Prime Minister is the biggest champion of your tourism. And whether it’s domestic, he asks weddings to come here. He gives the message, who has to take that message, the trade to trade as well as government. Then somebody has to answer, why is the marketing budget slashed to almost zero. If the Prime Minister is advocating tourism as one of the strategic pillars of our economy, somebody has to answer that. Why are the tourism budgets being slashed? Why are we not recasting tourism? It is not Prime Minister’s job. To my mind, the Prime Minister has done his job.
Rohit: Do you think the budget has been slashed to zero and nobody in the Prime Minister’s office is aware of that? There is a mismatch.
Kapil: Mismatch is that when let’s say when Tatas took over Air India, right? Tatas took over Air India. There are certain things that happened because it was the largest, sort of the biggest sort of the reform that government took. 60,000 crores of debt was taken off. Out of the balance sheet, they may get about 10,000 is the biggest call. Somebody, who did that transaction, understood the value of the transaction. Now tell me, when the Prime Minister says I want to promote tourism, he advocates it and the budgets get slashed to almost, almost nothing. Why aren’t you heard? Why is an airport group or an airline group not heard, then you have to say that. I’ll tell you whatever little I’m told. If it goes to him or through the ministries in the right manner, this will almost change dramatically. But why are you not heard?
Navin: On another note altogether, in this whole growth story around aviation, are we going see new gateways, international gateways, for inbound traffic?
Kapil: I think the growth will be pegged around third, fourth freedom carriers.
Navin: Will we see new gateways?
Kapil: Of course you will see, at Bangalore, six metros.
Navin: What about new gateways? Are we going to see an Indore or a Nagpur?
Kapil: Regional, because you don’t need, every airport, cannot afford a long haul flight. You have to concentrate around six, seven places.
Navin: When you say we are going to be in the same league in some years to come as the US market is. USA has what, 11-13 major international gateways.
Kapil: I think India would go up to 10 gateways. If you take it to SFO, Air India has two flights. Now, once the Russian war is over, then United will come. I see from Delhi and Mumbai, multiple frequencies. Even Bangalore. You’ll see Hyderabad to New York, direct flights.
Navin: You say regional, my other question is, regional tourism is the lowest hanging fruit for additional travel and tourism into the country. Are we tapping it in any way? As a tour operator, are you looking at Singapore and Thailand for your inbound, or are you still looking only at US, UK, Europe?
Rohit: So, before Covid, Asia was about just over 10% of our business. It contributes 10% of our business today. All over Asia. It, it was a mix of everything. China was very low because we generally don’t focus on China today, it’s under 2%. So, we actually took a conscious decision to exit a lot of markets that for us, I’m talking about purely as a company. For us, these are not high yield markets. We have grown today and we are, we are ahead of pre-covid purely because we changed our business model completely. We were always in a certain segment and as we grew, we started adding on, collecting baggage, so to speak. And not that these markets are baggage, but there is a certain type of way these markets are handled, in which some companies do very well. There is going to be a lot of growth out of Asia, I believe. And, and I think there is a lot of more, there’s more connectivity out of Asia, Singapore Airlines, Thai, et cetera are trying for new points.
Navin: That’s true for you only or is that a general trend in the business, overall?
Rohit: I think Asia has grown slower since Covid because Asians have not got over their long-haul fascination yet. And I’m talking about key source markets. That is Korea, Singapore. They’ve been slow to come back. Like for example, Japan used to be a significant market for India 10 years ago. Today it’s not even among top 10. I’m talking about real tourists. I’m not talking about arrivals.
Aman: If you look at the whole world, I would say France should be a role model for India because if their population is 65 million or something, they get 92 million tourists. Now imagine, if you got 1.5 billion tourists. The thing is that not because we have the land. We have 1200 kilometres of coastline. We have the Himalayas. Now we are talking about 200 airports. So, the thing is, even a road – for instance, we have a property which is called Hill Fort Kerosoli. It is a 700 year-old fort, which did well because it’s between Neemrana and Tijara. But an amazing highway has been built – the Bombay highway – you get there in two hours, which used to take four hours earlier. So, it’s full all the time because you just get in your car. Two hours is nothing. So, I think the government is doing fantastic things. Road connectivity is a big bonus for our tourism.
Sarabjit: The Prime Minister said one T is for tourism and at the same time, he also invited the non-resident Indians to come to India. And also bring their friends. Talk about India. What happened? The official circle mistook it, and rather than making more efforts on marketing and promotions abroad, they stopped the promotions completely. There’s no marketing. There is zero budget now. Now because of the express highways and faster trains, you can travel much faster. The problem is that the Indians have already choked all the places. The rates have gone up. The hotels are charging premium prices. And that is the reason you were showing the returns have gone up. The reason is this, that any hotel you pick up all over the country, 90% of them are charging much higher rates than they should. At this moment what I think we need new tourism destinations, completely new, because Indians want to travel and they have money. You should make high-end tourism spot for Indians.
Aman: We’ve got 1400 islands. Some of them are bigger than Singapore.
Kapil: And to be frank with you, when the Maldives controversy started, when I saw the picture, I mean, I don’t know how many people thought this is better than Maldives. What did we do after that? So, my point is, I’m again referring, having seen the aviation industry, and I may be biassed in my outlook. They create a system and navigate a complex regulatory policy structure within the government. Tourism industry, I don’t think they have that system to navigate. Because only time you go to the government is when the associations think they are in trouble.
Rohit: Well, okay, that’s also a factor. The industry has grown so much that they no longer need newer pastures.
Kapil: No, why not? Why not? I’ve seen your father maybe 25-30 years back, which could be five years, 10 years. I’m saying that at his age, the influence that he or Mr Inder Sharma or many others wielded, that was tremendous. It may be good for us to say we are small.
Rohit: The fact of the matter is, in those days, relationships meant something. There was an approachability. There was an approachability to the Secretary Tourism; there was an approachability to the Minister. My brother and I have grown up in this environment under these names that you’ve just taken. And we’re so fortunate that we’ve grown out of that era. We, you think nobody wants to do it. The problem is that today, unfortunately our industry has become transactional. There was a time when the entire inbound industry would talk to each other. Today there is no communication.
Kapil: The entire industry, when you represent with the government and whoever you are dealing with, the commercial rationale of individual people who are representing the industry, overwhelms the government. During Covid this question, the tourism ministry will get budgets, not the supply side, just to make the demand side work and get some concessions. It didn’t happen. The airlines didn’t get it. They just made loans available. But no other concession happened. It didn’t happen for other industries as well. One of the reasons I was told that, and this may be true or not, I can’t qualify this, but I’ll tell you, and I said this at a CIO forum, that the trust in the private sector is lacking. The government remains skeptical about how and where these funds will be used.
Rohit: Well that’s unfair. That’s their perception.
Kapil: Only thing I’m saying, it’s very easy for us if we have to really take tourism move ahead or aviation ahead or industry ahead, we need to bring all of these elements to the table. You need to say, why isn’t it worked? What was the leadership barriers? Are you getting the traction at the other end?
Rohit: But unfortunately, I say again, that’s not the reality.
Navin: I want to strengthen what Kapil is saying by saying that my sense, is that in the last two years when the business environment has so dramatically changed, firstly, please appreciate where I’m coming from. There is no tourism lobby in the country. There is no tourism lobby. There is no tourism lobby by default. By default, meaning there are hoteliers, there are tour operators, there are airline people. If I tell you that an airline person, a very senior person told me we are not into tourism, we are into travel and it can’t get any bigger than that person. He doesn’t think he belongs to the tourism industry. So somewhere a tourism lobby is missing. Somebody needs to put up that tourism lobby in place. Your understanding of tourism has to dramatically change in our country.
Kapil: But I must tell you that if it is easy that you’re showing a double-digit growth in tourism, which is compensated by medical or business or OCIs. There is no need for you to do anything else because you’re already doing double. And if that keeps you happy, that’s good.
Aman: We should dream bigger then.
Kapil: Of course. And I had this issue we prepared something on inbound, we put everything on the table. We wanted to have an honest conversation. That industry is not prepared to do an honest conversation. And if the industry is not prepared to do an honest conversation, what next?
I was telling industry is not willing to have a private honest conversation. You can’t change. But I’ll tell you one more thing. If today you ask the ministry that if the budgets are slashed after the prime minister has, who is inspiring you all the time for tourism, your budgets have been slashed. Can you be accountable to the industry? We are respectfully saying it’s in national interest. I say that why have you slashed the budget? Who’s going to answer?
Aman: I personally went and had the Rajasthan tourism budget doubled.
Kapil: I’ll say this to you on record, if you could do a transaction like Air India and shave off 60,000 crores off the balance sheet. Big bold decision. This government takes big bold decisions. Unfortunately, in the tourism industry, nobody counts to the same level so that these big decisions can be taken.
Aman: The Tourism Minister should be treated like the finance minister.
Navin: I have one more question, which Aman touched upon briefly, about the thousand types of ‘roti’s’ available and the moving away from the ‘croissant’ and how the Indian is also looking at more Indian experiences?
Kapil: But that’s a great point.
Aman: Honestly, it’s happening.
Navin: And that’s where I want to come to that when we are going to promote Indian inbound. How much uniqueness of the Indian product is being put together and packaged as an Indian unique tourism product to the world at large, even by an individual tour operator or by any hotel?
Kapil: That’s a great question. I like explain, one of my colleagues came from Sydney and I’ll just give you an anecdote so that it reflects that India is an intellectual adventure. He’s from Canberra and this is a not a colleague. He was working for the Australian aviation industry. He came from Canberra at five o’clock. Then everything shuts. He travelled in an auto for most of the time. He said, I like that noise. This is vibrancy. He later went for an holy visit, he was astonished. So, the colour of India, the cuisine, the culture heritage, we have is so fabulous. This is unique. Foreigners love it. But are we putting it out there enough?
Rohit: I this around the world infrastructure that comes, India does not need any tweaking on the experience. India has a very honest destination. We have experiences made for tourists. We are great at that. We are great at giving a great experience to anyone who, anyone who visits.
Sarabjit: I’m saying see whatever we are talking about, we are actually not going in the right direction. It is tourism export, which the government is concerned about. And tourism export is very clearly whatever brings in foreign exchange and that encompasses all the segments. Be it MICE, medical tourism, corporate, everything is included in that. And that we have to work on that. If we start doing only tourism as leisure, this thing is not going to work. The only thing is that the government must wake up, we are not getting any funding that clearly shows that the Ministry of Tourism is lacking somewhere to put forward their demand. I’m talking about inbound. You’re talking about destination promotion. I’m talking about inbound. In case you want to do this, that you have to work out a proper and complete strategy to do it. And how we were doing, there are certain things in the past which we have done, which will be continued in the new strategy also. But in other things, we have to change completely, drastically, and start promotions all over the world and start getting business. There is lot of business which can come in.
Government has set an export target of $2 trillion in 2030, 5.5% was a tourism exports figure of 2019. So, by that ratio it becomes taller. 110 Billion in 2030. Is it achievable? Of course, yes. If everything works together.
Navin: One quick question. Who’s going to bell the cat for inbound tourism?
Sarabjit: I can, provided there is somebody there to listen to me.
Kapil: I think the entire industry in one voice must create a new leadership. And the first leadership’s job should be to create a task force.
Navin: So, the industry needs to come forward. Even if we have to convince the government that it’s the industry voice that has to come forward.
Aman: I think you should call it Project Destination India, because it’s something we understand and that is the mission.
Sarabjit: I think the basic thing is that we have to come up with some strategy.
Rohit: The problem right now is that our industry voice is so fragmented. There are 50 associations going around saying 50 different things. You talked about airlines not considering themselves as Tourism. They’re not tourism and airline is a factor of transportation. They’re not tourism. They are enablers. They enable as part of the infrastructure. In some countries of the world where, where an airline i.e Singapore Airlines or Emirates and all which are the true national carriers and they are the big hub and spoke model for aviation. They are big stakeholders in a country like India. Look at America. In America, which airline is considered a tourism part? They come under the Department of Transportation. I think we don’t even need a tourism ministry.
Kapil: Airlines are in transport business, but airlines want business traveller.
Rohit: Okay, we’re talking about commercials. I think quite frankly, we don’t need to have a tourism ministry at all. We should come under the Ministry of Commerce and, and tourism should be considered an economic activity that is important to the GDP and foreign exchange earning of this country. And somebody with authority in the cabinet needs to be responsible.
Aman: It should be taken very seriously. If we were providing 30% of the revenue to the economy, the tourism minister or the commerce minister would be here.
Sarabjit: All exports are under the Commerce Ministry. They’re promoting each and every export from the country barring tourism.
Aman Nath: So where would you rank the tourism ministry in India? On the lower, at the lower side. So, it should be put right up.
Rohit: The tourism ministry is not taken seriously within the government because by itself it has no authority. That’s what I’m saying. For it, to do anything of significance, that is.
Navin: So let me conclude with your permission to say that we are all very optimistic about travel and tourism in the country. We want some more cohesive action building, some more cohesive marketing plans, more identification of the tourism product, how to make it more uniquely Indian and industry. And you also said, we need a stronger push for inbound to make it work.
Aman: And if you all put our best foot forward, we will be marching.
