Out of the box, innovative, structured support to Indian inbound industry is critical at this stage to improve incomes from our services sector. Look upon this support as investments, and not expenses, even as perhaps the equivalent of PLIs for the inbound tourism sector. Especially now with infrastructure matching the requirements of foreign tourists, this is but a natural extension. Its time has come: support the private sector as these are your sure-footed selling arms.
Since India reopened its orders for international travellers in March of 2022, much has been said and written about the segment’s recovery. The arrivals for the last financial year were slow but not unexpected as we were a late opening in the tourism world. Then came the next cycle, which we are almost done with now in December 2023. Almost every major tourism destination, West or East has not only rebounded back to its 2019 levels, but most have far exceeded international arrival figures.
India has not. Industry discussions estimate that our 2023-24 inbound arrival figures will be at 60-70% of pre-pandemic levels. We will consider only of real value tourists and not the absolute figures of bodies entering, for we all know when you dig deeper into statistics, they are revealing.
Tourism in India is multi-faced. Inbound, outbound, domestic, weddings, celebrations, religious etc etc etc. Hotels and airlines have rejoiced in their success with the belligerent domestic traveller. But it is short-sighted and somewhat cruel for the industry to not work together to ensure each tentacle of this gigantic octopus is equally healthy. You are only as strong as your weakest link.
Inbound tourism is suffering. But we have seen this before and we will never be despondent. This segment has fought battle after battle and will crawl back from the deepest depths to regain its glory.
We do need some action though. From the government, central and state. And from within ourselves. The most obvious starting point is to think and start doing things differently. Doing what we have done in the past and expecting different results will not work. This is a fundamental business principle.
Start with taxes, as that seems to be the easiest horse to flog for our industry. I do not agree that India is necessarily an expensive product. Most credible tourism destinations have seen significant price increases caused by demand & supply imbalances. That will gradually come back to equilibrium as is the rule of economics. But there are some short-term actions governments can take to spur demand. One is to give a GST tax break on at least the Tour Operators and hotel accommodation portion in the shoulder period of April to September only on receipts linked to foreign exchange earnings. This will give the industry the ability to launch short-term promotions to fill lower seasons. Also, it leads to great PR value in the global press. But this has to be done now to allow it to permeate the system in the next few months. The exchequer can only gain by increased numbers and is a zero-risk strategy. There is precedence to go by with states like Goa and Rajasthan have used such initiatives in the past.
Let’s talk about marketing, positioning and promotion. Our industry needs to come to terms that the Target Audience has been evolving over the years. All traditional marketing tools are no longer relevant. We are very old-fashioned and are somewhat stuck to the old vision of India which doesn’t contest well in a hyper-competitive environment. We need to recognise who our competition is, do a deep SWOT analysis, and go from there. Gracefully retire ‘Incredible India’ and restart afresh. We have for a very long time desperately needed a new brand. Incredible India no longer carries the charm or credibility it once had. The world has changed. Let’s start afresh with something that captures the imagination of the world.
A third aspect to look at is empowerment. Tourism administrations need to recognise that Indian tourism’s biggest and most faithful Sales Force is our Inbound Tour Operators and DMCs. This is a group of people who spend months of the year travelling around the world selling India. We are knocking on doors, pounding pavements, spending our own money in the national interest. We are fighting, begging and convincing people to sell and promote India. India will not have a stronger sales team than this. And the government will never have the market penetration as the scale we do. Yet, this is a most ignored and unsupported lot. What can be done?
One, for the next 12 years give every MoT recognised inbound operator unrestricted air tickets to invite 4 international travel agents per year to India to experience the destination. At an average allowance of `1,00,000 per ticket (some will be cheaper, some more so this is a fair cap) x 4 per year x 800 recognized tour operators that is just about `32 crores a year, and the scheme falls with the passages scheme the ministry currently has. No event we will ever do in India can generate this number of buyers. The money spent is small peanuts in the scheme of things.
Two, support all inbound agencies with a scaling marketing support system. The current MDA scheme is unfair and penalises those who are more successful in selling India. Open it to all companies. Bigger companies are bigger because they have invested more. We all need some support, no matter how much it is. Look at this as an investment, not an expense.
And three, create on a war footing a world-class online India Specialist training program and collateral tool kits (images, media, designs etc.) that we as inbound players can offer our partners. Outsource this in a global tender to get the best in class. Give us tools to excite our customers. But do it fast.
Lastly, the private sector needs to do their own thing. Our key associations are cash-rich and they need to use some of those reserves to create collateral the private sector can use to promote India. There is a lot that can be done very cost-effectively very fast that will go a long way in creating interest. It is not fair that the private sector depends only on the government for action. We have power in our own hands to move forward.
Sometimes the solutions are just in front of us. We just need to open our eyes & ears and listen. Think differently. Act differently. Be inclusive. Be ready to experiment. Be ready to take risks. This will make all the difference.
Happy to get feedback and thoughts on this issue. firstname.lastname@example.org
ABOUT THE AUTHOR
Rajeev Kohli is Joint Managing Director, Creative Travel, a leading inbound DMC, specialising in high end tourism.