Forecasting 2012 travel in India

(eTN) – We are entering the last week of January, and making predictions for the next eleven months in 2012 has become partially easier, thanks to easing of some pressures in the financial markets, worldwide. One cannot, however, say with any degree of precision how debt-ridden countries the world over, and more particularly in some parts of Europe, will turn out solutions from situations that are particularly fragile and could have far-reaching consequences if not handled with care. How, for instance, does one discipline overspending and control bad unmanageable borrowings? A million dollar question, which may not be necessarily “bailed” out by currency. Depending which way the situation pans over the next three to four months, we could see a modification of travel behavior. For instance, there will be an increase in short-haul travel between neighboring countries and regions as compared to long-haul travel, should financial conditions go haywire, globally.

The second factor, and an important one at that, is the challenges forced by constantly-changing weather patterns across the world. Japan and Thailand suffered to no end in 2011, and this year could throw up some surprises as well. Tsunamis, thunderstorms, floods, and earthquakes have sadly become more common than say, about three years ago. How does it affect travel plans? Quite simply, travelers will tend to avoid zones and areas they consider dangerous. Throwing caution to the wind is meant for the hardy, so explorers and backpackers could buck the trend and venture into “dangerous” areas.

The uneasy situation prevailing in the Middle East with transition (of power) not being as smooth as it could’ve been, and the prevailing tension in Iran, could act as a damper for travel, particularly long-haul and over the Middle East. Civil wars and the urge for democratic rule have resulted in many long-drawn-out and bloody conflicts between civilians and monarchies. The tension in Egypt saw many tourists cancel travel plans with losses extending to Libya, Tunisia, and Syria. On a global level, travelers the world over tend to avoid regions where civil revolt exists. Not many tourists would like to spend holidays in curfew-ravaged towns, where availability of food and provisions, and, not forgetting safety of human life, are of prime concerns.

These are the three main factors which are likely to influence global travel in 2012. How does this pan out for Indian travel? Probably the biggest concern for outbound Indian visitors revolves around the stability of financial markets and geo-political stability in India. On the assumption that political stability and financial markets don’t get overburdened, we will see a steady growth of anywhere between 10-15 percent over the previous year. A steady increase in the number of middle-class population will ensure the numbers will always be met. The same can be said for middle-class graduating into the rich and super-rich category. There is also a dramatic increase in travel in II-tier and III-tier cities where increase could take place geometrically. Domestic air travel increased by over 24 percent this year, a great indicator of burgeoning demand, and willingness to pay more, thereby saving valuable time.

India has fascinated incoming visitors to no end, although, existential problems cast question marks when actually traveling within India. Travelers are intrigued to no end and are constantly baffled by the paradoxes of the land and its people. Quite rightly, India is a subcontinent which can only be described as being “truly incredible.” As experiences improve, so will the numbers. On the other hand, initiatives being undertaken by the department of tourism, government of India, in reaching out to new countries and extension of visa on arrival facility, will ensure India will become a transiting destination, as well as a long-haul destination for different versions of travelers. Predicting a handsome double digit growth can’t be ruled out – when travel is a more favorable and conducive condition the world over, it ultimately helps to reduce poverty levels within India. Pleasant sights bring in more visitors, and the reverse is also true.

Domestic travel is the savior for destinations the world over. In India it’s no different, but much greater. 550 million footfalls each year is a tremendous number, even a 10 percent increase will actually have a multiplier effect in boosting travel further. One can hardly deny, there will be tremendous growth at this end, particularly during long weekends, festival periods, and religious events. Of late, many theme events are bringing in many more visitors and are creating a ripple effect and also building affinity groups. The Sunburn festival in Goa and recently-concluded literature festival in Jaipur offer testimonies of an interesting trend.

As demand increases so would supply. In keeping with trends and beliefs, supply of service providers is going to increase, putting pressure on margins to be earned. Air travel in India could see an increase in fares but not a handsome one (because of competition), while on the other hand, there could be a softening of prices for boarding and lodging facilities with intent being to increase occupancy rather than windfall profits. Providers of land arrangements in India would follow this trend as well, relying more on numbers to outdo the competition.

Forecasting 2012 is a bigger challenge than 2011 for the simple reason that there’s more fluidity out there than probably anytime before. Try reading a newspaper today, on the left hand side its singing hosannas about everything, the right page predicts doomsday. Being an optimist gives me a chance to live another year, I’ll stick to the hosannas and the left. Being a southpaw, hasn’t influenced the decision.

The author, Hector Dsouza, is President of L’orient Travels in Mumbai and an ambassador for eTN.