India not prepared to handle larger international inbound; develop requisite infra, argues Vikram Madhok

While the clamour has been around garnering a larger share of the international outbound, Vikram Madhok, Managing Director, Abercrombie and Kent questioned whether the available tourism and hospitality infra was enough to handle the increased influx. Excerpts:

vikram-madhokOn single biggest positive development, in terms of creating an enabling environment for the hospitality industry

I have been in this industry for the last, cumulatively, 30 years. I have seen the industry evolve. I think the industry has come a long way from what it was in the 1980’s. Specifically the hotel business, because earlier there was a big blur. They would have luxury hotels, other five-star hotels, and then there were the rest. We merely had some 25-35k rooms, not even that. This city had, may be, 5000 rooms. Fast forward today, all that has changed. In terms of sheer tourism, India used to get not even a half-a-million tourists. Everything was really nascent. Infrastructure was non-existent, really. So, we have come a long way in all these elements, checking out all these boxes to where we currently are.

On international tourism and infrastructure

I completely agree to what Kapil Kaul said that we need to get our act together. However, I promise you that if 15 million tourists were to come to India, all the infrastructure will collapse. Because right now, if we were to talk about the 8 million tourists, of which may be real tourists are 40% of this number. 60% of them are corporates travelling for business and there is no way to quantify whether one comes on business or leisure. It is simply inbound arrival into the country. Also, there are multiple trips by corporates. So, these numbers are a little skewed. Having said that, all our 3-star, 4-star and 5-star hotels rely very heavily on season for a higher average daily rate of the international arrival. If you take luxury hotels in all the tourist circuits – Agra, Jaipur, Jodhpur and Udaipur etc. – they are heavily reliant on international arrivals, because international tourists, typically, immerse themselves in really understanding the bandwidth of the country. In domestic, we hear that over a billion people are moving, but a lot of it is pilgrimage tourism. So, it is not necessary that they are filling our luxury or star-category hotels for regular tourists. I think there is no one answer for domestic and inbound, and I think you need to build infrastructure for the domestic trippers and then you attract the inbound travellers.

On markets that have done well in the recent past and those that have not

I think it is really commensurate with the economy. So, today one of the most favourite markets for India is the United States. They are travelling in the largest numbers, be it leisure or corporate. The Americans are coming and I think it good. They have the ability and propensity to spend large amounts for a room, without a problem. So, that market is established, it is the largest market; it is also the largest market for India. Thereafter, in spite of the Brexit, we still see a decent demand, at least out of the leisure segment, out of the United Kingdom. Irrespective of what is happening and all the uncertainty etc., that market seems to have come back a little bit.

Europe is pretty much on the tailspin. We have seen retarded growth in terms of numbers, and I do not think they are coming back in a hurry. 

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