Tourism Industry – Dutch Uncles

Domestic Travel and Hospitality, A Look at The Near Future

DU Desk — Sat, 10 Jul 2021 10:35:12 +0000

Since the past year, the intermittent imposition of mobility restrictions due to rising covid infections has ravaged the domestic travel and hospitality industry in India.

The wreckage in the hospitality industry owing to the pandemic can be well understood from the numbers revealed by the Federation of Hotel & Restaurant Associations of India (FHRAI) which says that the Indian hotel industry has been hit with a loss of more than Rs 1.30 lakh crore in revenue for the fiscal year 2020-21.

Moreover, revenue losses in the hotel segment are staring at a grim scenario as according to the Hotel Association of India (HAI) more than 40 percent of hotels are shut or are on the edge of closure that in the process has impacted 70 percent of the overall jobs.

The numbers on damage do not end here.

The entire value chain spanning from hospitality to tour guides and agents will be suffering losses worth $65.67 Billion, with the organised sector alone to lose $25 billion according to a joint study by industry chamber CII and hospitality consulting firm Hotelivate.

The Federation of Associations in Indian Tourism and Hospitality (FAITH), as soon as the lockdown was imposed had projected industry’s losses in FY21 will account to ₹15 trillion.

With the above-mentioned distressing statistics of the travel and tourism industry accounting for 9.2 percent in GDP and employing around 8.1 percent, what will the future look like?

What are our Travel Biggies Doing to Survive?

Make My Trip- India’s largest online travel agency’s revenues have fallen to a whopping 68 percent y-o-y in 2021 to $163 million and has reported a loss of $56 million loss.

With most corporate events and meetings happening virtually, corporate travelling is subdued that accounts for 30-35 percent of its revenues.

Make My Trip believes that it is the fear of contraction that is holding back else demand is there. Over more than a year of being caged at home, boredom and monotony have crept into people’s lives. With international tourism currently at a standstill, it presents the opportunity for domestic tourism to grow. The behaviour of revenge travel will emerge among leisure travellers that can help in revival.

Make My Trip and Goibibo in the coming 12 months plans to capture the small-town travellers. It will be increasing its inventory by listing more budget hotels.

Hospitality chain Oyo is stressing adopting cutting-edge technologies like data science, big data, and artificial intelligence that will play a key role in strengthening the operations of the travel and hospitality sector. In 2020 OYO, introduced two tech-based products for its partners.

Tariff Manager: a self-serve pricing tool that allowed their partners to set prices on their own adhering to guidelines. This product reduced the pricing ambiguities of hotel partners by 40 percent.

OYO Secure: a prepaid wallet-based system that lets partners deposit a certain amount in a secured manner.

Coming to Ginger Hotels, several standalone hotels are partnering with them to leverage their popularity and public perception to drive sales.

Similar to OYO’s emphasis on technology, Yatra.com’s slew of tech initiatives will include expense management software, Artificial Intelligence-based smart space and safe space solution ensuring contact tracing at a workspace, and an online platform for consumable sourcing for hotel partners. It is also working with NanoTech Company – Neo Dot that can identify body temperature in crowded spaces with a colour change.

Most travel and hospitality startups will introduce technology to offer convenience to customers and hotel partners and unlocking new travellers.

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According to ICRA, the apparel businesses to generate revenues like pre-covid times will have to wait till 2023.

Future of Domestic Travel and Hospitality in a Post Pandemic World

The domestic travel and hospitality industry is expected to rebound with more people getting vaccinated.

However, the apprehensions of getting contracted after vaccination will persist and therefore in the post-pandemic world, the emphasis on technology to offer a seamless booking and stay experience and bio-bubble level hygiene adhering covid protocols will be a must for the travel and hospitality sector.

To encourage leisure travellers to travel to domestic destinations government has launched the Swadesh Darshan scheme, where 77 projects have been sanctioned worth $ 863.60 million. the Government has allotted Rs. 1,200 crore for the development of tourist circuits under Swadesh Darshan for the Northeast.

The Ministry of Tourism has launched the NIDHI portal to understand the geographical spread of the hospitality sector, its size, structure, and existing capacity in the country. It will act as a common data repository for the Ministry of Tourism, State Departments of Tourism and Industry and will enable Central and State governments to deliver better support and services including policies and strategies for the tourism sector.

Apart from government initiatives, unique consumer trends such as staycation, short trips, and exploring driveable destinations from urban locations are likely to emerge that can drive domestic travelling.

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The Numbers: Domestic Travel Industry in India 2020-2021

Aakash Sharma — Fri, 02 Jul 2021 15:49:18 +0000

India is one of the fastest-growing tourist destinations in the world. The country offers plenty for international and domestic tourists, from beaches to snow-capped mountains and the beautiful culture of various lineages, traditions, and cuisines.

However, since the outbreak of COVID-19, the tourism industry has faced the most difficult and stark challenges. Although the full consequence of the pandemic on the sector’s economy is still unclear, India’s travel and tourism industry was one of the first few industries to be hit. The World Travel & Tourism Council (WTTC) estimates that the COVID crisis will cost the Indian tourism industry at least $2.22 billion.

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In 2020, experts assume that the Indian tourism industry shrunk by 25%, resulting in 50 million job losses.

People are Willing to Travel Despite COVID

Many people have yearned for soothing trips after subsequent lockdowns and travel restrictions. To satiate their travel desires, mountainous regions away from crowded cities are the first choice for a trip.

The Life in Pandemic report surveyed a sample of more than 800 people and found that by the end of January 2021, 56% of participants had already travelled to someplace or another, and 43% were ready to travel as soon as restrictions are lifted.

The Life in Pandemic survey included people from different professions and students between the ages of 18 to 54 living in tier I and II cities. Of those who have travelled, 82% expressed willingness to travel again. But a sense of maintaining precautions on their own instead of depending on others is prevalent among all.

Travel Revival Will take between Six Months to Two Years

A FICCI-Nelson India report from 2020 stated that the travel and tourism industry would take 6-24 months to recover from the pandemic’s destruction. The report is based on the figures of 248 travel agents and hoteliers in 24 cities in India. It stressed the need for fundamental government support, including policies and financial support, to deal with industry tensions exacerbated by COVID-induced lockdowns.

Business for travel companies and agencies has also declined sharply due to technology and digital platforms replacing the traditional channels of travel planning. Research by FICCI and Nelson India suggests that the government needs to partner with the industry to boost a digital shift and get them acquainted with the latest technologies. This will build confidence in businesses, and the Indian tourism products will actively function as businesses revive.

Millennials are a Key Demographic in Reviving India’s Travel Sector

Given their appetite for travel and adventure, millennials are likely to be the main drivers of India’s travel sector’s recovery after the pandemic. According to Business of Travel Trade (BOTT) Travel Sentiment Tracker, a survey conducted in September 2020 showed that 71% of those polled said once the government travel lifted restrictions, they would willingly explore India’s tourism hubs.

The online survey, conducted in September 2020 and covering over 6,000 millennials, showed that millennials also have numerous travel destinations on their lists to spend their vacations. In addition, around 41% of those surveyed said they would like to spend Rs 1-2 lakh on their holidays, followed by 30 percent of them who have a budget of Rs 50,000-Rs 1 lakh. Such figures indicate a promising revival strategy for the sector soon.

Government Efforts in Reviving the Travel Industry

Along with a range of Central government’s efforts, most primarily the ‘Dekho Apna Desh’ campaign, numerous states are also working towards a move to normalcy. The Uttar Pradesh government has recently opened the state’s most iconic tourism hub – the Taj Mahal – on June 16 after a two-month gap. Such moves will help the distressed business, and people’s livelihoods depend directly on the travel and tourism sector.

How can Businesses Take Advantage of People’s Growing Urges to Travel?

With the ongoing vaccination drive, Indians have gained confidence, expressing an inclination to travel for various purposes, including visits to relatives, vacations, or travelling for work at destinations with a low impact of COVID-19. This indicates a rebound in the travel segment, although domestic, which is inching towards pre-COVID stages.

Businesses of all scales in the travel industry need to prepare themselves in a renewed way to give comfort and safety to customers. Most importantly, to gain traction in their business, be it a transport service or long-range cab provider, hygiene promotion is key. Businesses must give destination level hygiene and adhere to safety assessment processes. Small companies operating in this segment must also focus on using digital tools and expanding social media outreach to reach more customers.

Eventually, travel will resume as mass vaccination drives immunise a majority of Indians. The industry needs to be prepared to cater to the demands of people and brace their revival process.

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