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BUSINESS TRAVEL

23% increase in tourists from India to Sweden

There is a 100 percent increase in the number of visa applications from India for Sweden from 2014 to 2018.

Photo: Shutterstock

There has been a 23 percent increase in the number of tourists from India to Sweden.  An improved people-to-people exchange, increased trade between the two nations, a concerted government interest from both sides and direct flights have contributed to this growth. These results were shared by Visit Sweden and the Consul General of Sweden in Mumbai at a seminar conducted Scandinavian Tourism board in Mumbai today.

More than a 190 Swedish companies are registered in India including Ericsson, Volvo, H&M, Scania, DeLaval, Tetra Pak and the latest entrant being the much-awaited, global home furnishings giant IKEA. In addition, several small and medium enterprises and Swedish startups have India plans. This growing bridge between India and Sweden has impacted tourism positively.

“The excellent relations between Sweden and India which have developed over the past few years with PM Löven and PM Modi’s respective visits, the joint declaration, joint action plan and the adoption of strategic partnership on innovation, are paving the way for increased bilateral visits and people to people contacts,” said Ulrika Sundberg, Consul General of Sweden to Mumbai.

“We have noticed the ‘bleisure’ travel trend – a combination of business and leisure travel. In addition, according to Statistics Sweden, there are 17,000 Indian passport holders residing in Sweden today. This along with other factors has led to an increase in tourism from India,” says Michael Persson Gripkow, Chief Brand & Communications Officer at Visit Sweden, Sweden’s Official Tourism Board.

Ruth Dolla, Project Manager – India, Visit Sweden said, “We look forward to further growth this year and in 2019. We continue to engage the travel trade community as well as the consumer and raise awareness about Sweden as a tourist destination. The direct flight from Delhi to Stockholm with Air India completed one year since its first flight in August 2017 and continues to bring incoming traffic from India to Sweden.”

BUSINESS TRAVEL

Jalesh Cruises takes delivery of its first cruise vessel

Jalesh Cruises first premiere cruise line catering to the Indian domestic and international cruise business, received its first ship, Karnika, the erstwhile Pacific Jewel from P&O Australia, today in Singapore. The vessel, which is the first in the fleet of the multi-destination cruise line Jalesh Cruises, will reach Mumbai on April 17.

Keeping with tradition, the 2,000 passenger ship, which weighs 70,285 tons, will go through its naming ceremony at a gala event in Mumbai on April 19.

Jurgen Bailom, President & CEO, Zen Cruises, said, “Today marks an important day for the Indian cruise tourism industry with the acceptance of Jalesh Cruises first ship. We are going to offer a memorable vacation to passengers on board with exotic culinary experiences, international hospitality and best of entertainment shows at high seas. With Karnika, we mark the beginning of memorable cruise holidays that will bring joy and delight to the Indian and global community.”

Karnika will dry dock in Singapore at Sembcorp Marine Admiralty Yard over the next few weeks for an extensive refurbishment exercise to customize the ship to suit Indians travelers. It will then proceed from Singapore to Colombo via Kochi, New Mangalore, Goa and finally arrive in Mumbai on April 17.

The cruise liner will be sailing initially between Mumbai and Goa for first few weeks till May 2019 before proceeding to the Middle East where it will remain till mid-September. The cruise liner will be exploring the huge coastal length of India and giving the customer to enjoy and savor the same. Between May 2019 and September 2019, cruise passengers will have a choice of itineraries between Abu Dhabi, Bahrain, Doha, Dubai, Muscat, and Sir Ban Yas Island.

Following the refurbishment, Karnika will offer a multitude of facilities including spas, salons, fitness, fine dining, leisure activities for kids and teenagers alike.

To give a wholesome experience of vacation to cruise passengers, Jalesh Cruises will also offer onshore Excursions across Indian port cities including Kochi, Mormugao, Mumbai, and international locations including Abu Dhabi, Colombo, Dubai, Muscat among others.

The company has initiated bookings for its 2019 itineraries on its website www.jaleshcruises.com or directly through its holiday advisors at 1800 266 8927 in addition to its Sales Business Partners.

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BUSINESS TRAVEL

Klook becomes the most-searched travel activities platform in India

Starting the new year on a high note, Klook has become the most-searched travel activities booking platform worldwide since October 2018, according to Google Trends. Travelers from the Asia-Pacific region have driven the momentum as Klook climbed into the top-ranking position. Compared with its closest performing competitor, Klook showed more than double the brand search since November 2018.

Klook’s top position on Google reflects a wider trend amidst the booming global tours and activities industry, which is estimated to reach US$183 billion by 2020. However, with the global tours and activities bookings sector currently at an online market penetration rate of just 15%, compared with 61% across the travel industry, the sector is set to continue its strong growth in 2019.

Three emerging patterns in traveler preferences further confirm Klook’s position as a global pioneer and the most-funded company in the tours and activities industry:

  1. Travelers book things-to-do before flights

According to Klook’s 2018 events survey conducted in 12 key markets worldwide, the traditional travel booking process has been evolving rapidly. 63% of travelers surveyed said that they book things-to-do before flights and accommodations. In India,  52% of travelers book things-to-do before flights. This differs from the traditional thinking that travelers start their shopping journey with flights, then accommodations, and lastly in-destination activities. Such behavior reinforces Klook’s position as both a booking and discovery travel platform.

  1. Travelers choose destinations based on one-off events and seasonal experiences

Klook’s 2018 events survey also showed that many travelers now plan trips around events. Out of 2000 travelers surveyed, 54% said they selected a travel destination because of a  seasonal activity or event, such as skiing in Canada, sakura-viewing in Japan, major concerts, or sports games. In India, 52% of travelers Plan Trips around One-Off Events. Products such as Jay Chou Concert exclusive priority tickets and cherry blossom tours in Kyoto on Klook position the platform well in capturing this traveler preference.

  1. Travelers set aside time for spontaneity

Craving authentic experiences and a sense of adventure, modern travelers prefer flexible itineraries that leave room for spontaneity. Instead of booking every activity ahead of a trip, travelers now book key events, then decide on the rest of the itinerary on-the-go. Klook’s booking data also finds that the same-day booking rate has increased nine times from 2016 to 2018. To enable this sense of discovery, Klook provides a seamless mobile experience where 85% of its bookings can be confirmed instantly.

 

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AIRLINES

Airline trends: Cautious optimism extends into 2019

The future looks bright for India’s aviation industry as business soothsayers predict impressive numbers in the next three years. According to the findings by India Brand Equity Foundation, the civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. India is currently considered the third largest domestic civil aviation market in the world. India is expected to become the world’s largest domestic civil aviation market in the next 10 to 15 years. India is also expected to displace the UK to become the third largest air passenger* market by 2025.

India’s passenger* traffic grew at 16.52 percent year on year to reach 308.75 million. It grew at a CAGR of 12.72 percent during FY06-FY18.

Domestic passenger traffic grew YoY by 18.28 percent to reach 243 million in FY18 and is expected to become 293.28 million in FY20E. International passenger grew YoY by 10.43 percent to reach 65.48 million in FY18 and traffic is expected to become 76 million in FY20E.

In FY18, domestic freight traffic stood at 1,213.06 million tonnes, while international freight traffic was at 2,143.97 million tonnes.

India’s domestic and international aircraft movements grew 14.40 percent YoY and 9.40 percent YoY to 1,886.63 thousand and 437.93 thousand during 2017-18, respectively.

During Apr-Aug 2018, passenger traffic in India stood at 141.77 million. Out of which domestic passenger traffic stood at 113.44 million while international traffic stood at 28.32 million. Total freight traffic handled in India stood at 1.49 million tonnes during the same time. As of May 2018, there are nearly 558 commercial aircraft in operation in India.

Meanwhile, the International Air Transport Association (IATA) forecasts the global airline industry net profit to be $35.5 billion in 2019, slightly ahead of the $32.3 billion expected net profit in 2018 (revised down from $33.8 billion forecast in June).

Lower oil prices and solid, albeit slower, economic growth (+3.1%) are extending the run of profits for the global airline industry after profitability was squeezed by rising costs in 2018. It is expected that 2019 will be the tenth year of profit and the fifth consecutive year where airlines deliver a return on capital that exceeds the industry’s cost of capital, creating value for its investors.

“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer. So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile,” said Alexandre de Juniac, IATA’s Director General and CEO.

Performance Drivers in 2019

Economic Growth: GDP is forecast to expand by 3.1% in 2019 (marginally below the 3.2% expansion in 2018). This slower but still robust growth is the main driver of continued solid profitability. There are significant downside risks to growth from trade wars and political uncertainties such as with BREXIT, but the consensus view is that these factors will not offset the positive impetus from expansionary fiscal policy and growing business investment in major economies.

Fuel Costs: The 2019 industry outlook is based on an anticipated average oil price of $65/barrel, which is lower than the $73/barrel (Brent) experienced in 2018, following the increase in US oil output and rising oil inventories. This is a welcome relief for airlines which have seen jet fuel prices fall, albeit at a slower pace owing to the impact of low-sulfur environmental measures undertaken by the marine sector that have increased demand for diesel (which competes with jet fuel for refinery capacity). Nonetheless, jet fuel prices are expected to average $81.3/barrel in 2019, lower than the $87.6/barrel average for 2018). The full impact of this decline will be delayed due to heavy levels of hedging in some regions. Fuel is expected to account for 24.2% of the average airline’s operating costs (an increase from 23.5% forecast for 2018).

Labor: Total employment by airlines is expected to reach 2.9 million in 2019, up 2.2% on 2018. Wages are also rising, reflecting the tightness of labor markets, and it is expected that unit labor costs will increase by 2.1% in 2019 after a long period of stability. Aviation jobs are getting more productive. In 2019 we expect productivity to increase by 2.9% to 535,000 available tonne kilometers/employee. 

Passenger: Passenger traffic (RPKs) is expected to grow 6% in 2019, which will outpace the forecast capacity (ASKs) increase of 5.8%, and remains above the 20-year trend growth rate. This, in turn, will increase load factors and support a 1.4% increase in yields (partially clawing back the 0.9% fall experienced in 2018). Passenger revenues, excluding ancillaries, are expected to reach $606 billion (up from $564 billion in 2018).

Cargo: The 3.7% annual increase in cargo tonnage to 65.9 million tonnes is the slowest pace since 2016, reflecting the weak world trade environment impacted by increasing protectionism. Cargo yields are expected to grow by 2.0%. This is well below the exceptional 10% yield growth in 2018. It does, however, continue the recent strengthening of the cargo business, since cost increases are lower. Overall cargo revenues are expected to reach $116.1 billion (up from $109.8 billion in 2018).

“Air travel has never been such a good deal for consumers. Not only are fares staying low, but the options for travelers are also expanding. Some 1,300 new direct links between cities were opened in 2018. And 250 million more journeys by air occurred in 2018 than in 2017,” said de Juniac.

APAC NET PROFIT

Asia-Pacific carriers are expected to report a $10.4 billion net profit in 2019 (up from $9.6 billion in 2018). The net profit per passenger is expected to be $6.15 (3.8% net margin). This is a region of diverse markets, some of which are seeing strong growth from new LCC entrants while others are very dependent on outbound cargo from key manufacturing centers. Cargo revenue growth has slowed from the strong performance of 2017 but remains positive for airlines in the region. Lower fuel costs, low levels of fuel hedging and strong regional economic growth are supporting profitability in 2019 in this region.

HIGHLIGHTS OF EXPECTED 2019 PERFORMANCE

  • The return on invested capital is expected to be 8.6% (unchanged from 2018)
  • The margin on net post-tax profits is expected to be 4.0% (basically unchanged from 3.9% in 2018)
  • Overall industry revenues are expected to reach $885 billion (+7.7% on $821 billion in 2018)
  • Passenger numbers are expected to reach 4.59 billion (up from 4.34 billion in 2018)
  • Cargo tonnes carried are expected to reach 65.9 million (up from 63.7 million in 2018)
  • Slower demand growth for both passenger traffic (+6.0% in 2019, +6.5% in 2018) and cargo (+3.7% in 2019, +4.1% in 2018)
  • Average net profit per departing passenger of $7.75 ($7.45 in 2018)

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