2014 unlikely to be any different for India’s travel sector

NEW DELHI, India - The year 2013 has been mixed for the travel industry.

2014 unlikely to be any different for India’s travel sector

NEW DELHI, India – The year 2013 has been mixed for the travel industry. While rising inflation, depreciating rupee and uncertain economic environment failed to put an end to the travelling public, they did, however, play spoilsport with many forced to curtail their travel and go for the tried, tested and relatively cheap destinations, preferably domestic.

Many travellers changed their plans of a holiday in foreign destination in favour of a cheaper domestic location, given the sharp slide in the rupee’s value.

“Given the falling rupee, the year 2013 saw many Indians preferring domestic travel destinations and week-end getaways over international options overall,” Jackson Fernandez, Managing Director at travel search site Wego India, said.

According to Vishal Sinha, COO, TUI India, “2013 was a challenging year for the travel industry, as the significant rise in exchange rates affected all travel companies.”

He explained that there was an impact on international travel on multiple levels, from cancelling plans to reducing the number of vacation days, and reduction in spends on extra ad-ons. “However, there was positive news on the domestic front, as we did see 10-15 per cent increase in domestic bookings this year,” he added.

Vikram Malhi, GM, South and Southeast Asia at Expedia, said over the last few years, travel for Indians was no longer a luxury but a way of life. Indians were now developing a keen sense of exploring new destinations to rejuvenate themselves from monotony of every day live and thus even the falling rupee failed to kill the enthusiasm of Indian travellers, he said. However, it did bring the need to choose wisely, he added.

Destinations less explored

The year 2014 is not expected to be much different with Indians continuing to opt for domestic trips and short week-end getaways. There will also be a rise in the number of people not going to places which have been on the holiday map forever, but exploring the lesser know ones.

Aloke Bajpai, CEO and co-founder of travel planning and search website, ixigo.com, felt, “Travel is no longer once a year, multi-city, whirlwind trips as most Indian travellers are increasingly looking out for short haul holidays to offbeat locations.”

He added that with the global economic slowdown across all markets along with a weakening rupee, most travellers are now opting for domestic trips and short week-end getaways, a trend which is here to stay during most part of 2014. “It is safe to predict that domestic tourism will be the mainstay for quite a few states like West Bengal, Himachal Pradesh, Madhya Pradesh and north-eastern regions,” he said.

Talking about trends in the outbound travel segment, Mr. Bajpai said, “While experiential tours are a rapidly emerging trend among urban elites, who are now driving growth for adventure travels and unique experience journeys, the population of tier II markets are progressively showing interest in short haul international destinations like Thailand, the UAE and Australia.”

Sharat Dhall, President of Yatra.com, said, “…The year (2013) subsequently saw an increase in inbound tourism along with a marginal rise in outbound tourism. We look forward to 2014 being a better year for the travel industry, and expect the players to offer better deals so that the customers can be the biggest gainers in the forthcoming year.”

Mr. Fernandez expects emergence of the “niche traveller, once referred to as backpackers, although in today’s parlance could be termed ‘well-informed individual travellers’’’ in 2014.

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“Value for money will be top of mind for travellers and expectations will be higher than ever before. Given the rupee depreciation Indian travellers chose India for the majority of 2013 which has given rise to newer locales to sprout and scale standards to match other holiday destinations,” he added.

According to Rohit Khetrapal, co-founder of hotel booking site Findmystay.com, “Domestic destinations and traditionally less visited destinations in Southeast Asia, Eastern Europe and Africa will see a spurt in bookings.”

Mr. Malhi said the recent battering rupee has led Indians to ditch far off destinations like Europe and the U.S. for Southeast Asian destinations. People now prefer Thailand, Malaysia, Hong Kong, Vietnam, the Phillipines and Indonesia and repeat travellers are looking at visiting more exotic locales like Krabi, Hua Hin, Chiang Mai, Koh Samui, Sabah, Bintan, Kota Kinabalu.

“At present, a return trip from Delhi to Goa costs around Rs.20,000, whereas a return flight trip from Delhi to Bangkok costs around Rs.25,000. With such marginal difference in the cost, people will any day choose an international destination only,” he said, adding that similar trend is expected in 2014 as well.

Mobile matters

Companies believe that next year travel firms will see a mobile explosion with vast majority of their customers working off mobile phones and tablets on the go.

“With innovation in mobile technology, the year 2014 will turn out to be a landmark year with travel companies designing products with mobile in mind. Over a year ago, most travel sites had less than 10 percent of traffic from the mobile platform, but in present times, most travel sites have almost 30 percent traffic from mobile’,” Mr. Bajpai said. Mr. Fernandez added, “The mobile travel market will boom in 2014 and the B2C channel of communication is key to reaching larger audiences through apps, mobile site versions and games. Social networking will continue to become integral marketing channels for travel companies as the most effective method in growing brand awareness and engagement with customers.”

Likewise, Mr. Khetrapal said, “Mobile will come more into dominance as the smartphone market explodes further… People’s reliability on recommendations of offline travel agents will decline as people seek to go online and see various options and their reviews before they book.” The company too plans to launch a mobile site in early 2014.

Travel budgets

Inflation, falling rupee value and high airfares primarily were the factors impacting holiday budgets this year.

According to TripAdvisor’s TripBarometer survey, fewer Indian travellers are planning to increase their travel budget next year, compared to 2013, despite more than half stating that they are optimistic about the economy in 2014. While 59 percent of Indians are planning to increase their travel budget next year, the figure is down from 76 per cent in 2013.

Nikhil Ganju, Country Manager-TripAdvisor, said, “While many Indians do not plan to increase their travel budget considerably in 2014 vs 2013 despite a significant (57 per cent) number being optimistic about the economy, 59 percent, however, plan to boost their travel spend in the coming year.”

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