As the ITB Berlin event came to a close early this month, the attempt made by the nearly 300 exhibitor delegation from India to sell India did induce a certain amount of airy positivity! In the milieu to target the international traveler, have we lost our ability to see a burgeoning market right under our noses?
As the vital statistic goes, the Indian domestic tourist is back with the vengeance. The era of fancy brochures, which sold packages and room nights, wherein the tariffs were quoted in euros even for the hapless domestic traveler, has for the time being ended. The ongoing recession in Europe and American markets amid poorly managed public relations of near permanent crisis management supplemented the near doubling of hotel inventory in India has added to a prevailing minor gloom.
Though hotels here in India, now more or less have a unified single currency tariff, it is still ‘revenue management decision’ away from reverting to old dual tariff plans.
Several countries around the world had their own economic compulsion to create marketing campaigns to encourage people to travel within their geographic borders, adding to the reduction in International arrivals into India. The numbers come as tourism boards such as ‘Tourism Australia’, which created the ‘No Leave, No Life’ campaign to encourage workers to take their annual leave and see their country.
Australians are currently stockpiling 123 million days of accrued annual leave, adding up to tens of billions of dollars in holiday pay! Checking on what other countries have planned to provide a fillip to domestic travel, did throw some very valid facts. For E.g., Northern Ireland’s economy has received a major boost after people here opted to holiday at home this year, new figures show that a massive £100m was pumped into the province in the first eight months.
ALSO READ: Why 2019 is the year of MICE
India Tourism describes ‘domestic tourism’ as the “backbone” and shows off a figure of an estimated 561 million domestic tourist visits. With the rapid economic development taking place in the country and availability of greater disposable income combined with affordable holiday packages, tourism in India is increasing steadily and acts as a catalyst for the furthering the economic growth in view of its wide-ranging linkage effects and multiple impacts.
The Domestic Tourism segment, being the backbone of the Indian tourism product with a yearlong market is a vital cog in the wheel to feed to the increasing inventory that has emerged in almost city, town or leisure destination worth its name. The global business consultancy, Cushman & Wakefield reported that the Indian hospitality sector will add 100,000 new hotel rooms to be added in the next five years). This will lead to a rise of over 65 percent of total hotel inventory in India. The National Capital Region (NCR) and Bangalore alone is expected to contribute around one-third to the total expected hotel rooms supply during the period.
The aggression showed by all and sundry in creating wealth in the form of building hotels has resulted in the present glut. The last few years have seen India’s City hotels struggling to match occupancies amid rising inventory, which has an inevitable fall from grace. Some, who once justified the high prevailing rates due to ‘India Shining’ syndrome, have now conveniently disappeared and are grounded. In an era of higher occupancies due to limited inventory and a growing economy, what surprises more, is the utter lack of foresight to plan for the increase in inventory compounded with a slowed economy. Indian City hotels continue to disregard opportunities to create new markets for their properties. Diminishing occupancies, increasing inventory, too much reliance on Corporate Business has taken the wind out of its sails. The myopic mindset of Indian hotels, who are consistently lethargic to woo markets outside their comfort zone will have to reinvent their marketing and distribution.
Indian city hotels other than those Delhi have successfully driven the leisure market out and chased the MICE segment to Bangkok, Dubai, Colombo and Kuala Lumpur. In comparison to occupancies from Monday to Wednesday, weekend business in hotels fluctuates wildly. I would love to see the hotels provide their ‘variations in occupancies’ figures, as eagerly as they flaunt their ARRs and Best Available Rates!
One of the key drivers for Domestic Tourism will be the UDAAN (‘Ude Desh Ka Aam Nagrik’) scheme offered by the Govt. of India, where tickets are being subsidized at re-activated airports and a growing economic spotlight. 235 routes cleared by the Aviation ministry cover 16 unserved and 17 under-served airports and six water aerodromes. There are 50 airports which are already being served and will be connected to these under-served and unserved airports. The winner of the bid has got a 3-year exclusive right to operate flights on the route. The fare for half the seats in a flight is capped at Rs. 2,500 for an hour of a plane journey of approximately 500 km and a 30-minute helicopter journey. The selected airline provides 50% of the flight capacity – with a minimum of 9 and a maximum of 40 seats for planes and a minimum of 5 and maximum of 13 seats for helicopters.
With countries going overboard with marketing plans to keep its citizens homebound, India will find it difficult to sell its wares abroad at least for the next couple of years. We seldom have a strategy for the domestic travel market; it is always an afterthought or a kind of back-up market! Though India Tourism has recently come out with a scheme wherein partial reimbursement of marketing expenses for hotels, travel agents and other stakeholders is possible for those working in the domestic market, it needs to do more in terms of creating a long-term agenda and establish a full-time marketing body for domestic tourism, considering that has a user base of over 500 million.
With every destination around the world, when the going gets tough, the tough go domestic! India is probably still one of the few countries that are still obsessed with chasing slow-growth international arrivals. In spite of probably being the world’s second-biggest domestic travel market and comes with a lower customer acquisition cost, it still receives a treatment, primarily reserved to second-class citizens.
The writing is quite clear on the wall! We are not the world biggest market for fairness creams for nothing!
Corporate Travel: What’s about to change
Staying active, exploring the area and making the most of their time instead of rushing their stay and leaving as soon as possible is the business travelers’ motto of 2019.
The corporate business industry is an important component of the tourism industry and the economic development in destinations. This year, a general climate of economic stability, more direct flight options, and a robust international meetings sector will bring tremendous growth to the industry and generate millions in revenue. Driven by emerging technologies and shifting habits, corporate travel is experiencing a fundamental change in the way the traveler is served. Here are some forecasts and predictions, based on insights provided by WorldHotels.
Corporate travel is mainly about complying with company policies. But a new mindset is emerging when it comes to traveling for business: Standard traveling processes are not enough anymore; a personalized approach is expected. Travel companies must put people, not policies, first. Not only on private holidays but also on business trips, brands need to offer personalized services. Data, business intelligence, and analytics will help to improve the customer experience this year and need to be applied at every step of the customer journey. It starts with recognizing corporate travelers automatically when they dial in from a known number. Using past traveler behavior makes it possible to offer truly unique travel products and services. A personalized trip affords the corporate traveler a stress-free travel experience that’s perfectly suited to his preferences. Travel managers and human resource leaders will also benefit because personalized travel experiences will increase employee value proposition and help with recruiting and retaining efforts
Business or leisure? Both.
As workforces fill up with millennials and Generation Z workers, business travel expectations and habits are changing. The newer generations are interested in blending business and leisure travel. The lines between work and life are increasingly blurry and the so-called bleisure trips are on the rise and are likely to continue growing in popularity. Improved travel policies will give the possibility to combine business with leisure this year. This trend will come with the benefits of increased satisfaction and a reduction in stress for travelers.
Along with the growing focus on bleisure travel, there is a spotlight on experiences this year. Not only leisure but also corporate travelers want to soak up local culture. Experiential travel is the buzzword; today’s travelers appreciate a local experience instead of sitting in a meeting room all day. Staying active, exploring the area and making the most of their time instead of rushing their stay and leaving as soon as possible is the business travelers’ motto of 2019.
Business traveler well-being
Traveling for work causes stress and can put a strain on people’s lives. In 2019, the health and productivity of employees on the road will have top priority. Today’s corporate travelers need more flexibility and personalization when they travel. Hotels often don’t let people check in until late afternoon, which makes it impossible to freshen up and prepare for a meeting. Sometimes travelers even have to head back home at night, because the company did not book an overnight stay. That is why more hotels will start offering day-rates for corporate travelers. Whereas in the past the focus was only on costs, now it is also on traveler satisfaction.
In the past years, the travel and hospitality industries have been introducing robotic technologies. Today’s travelers demand convenient and fast self-service opportunities. In the hospitality industry, robots greet guests, offer check-in and check-out, perform room services, show guests around, provide information and deliver luggage. Robots can work 24/7/365 without holidays and breaks, they don’t demand a salary. However, they cannot adapt to unanticipated situations and cannot replace human sympathy and emotions. The hotel industry is a people’s industry; however, robots will take over more tasks this year.
Corporate travelers have started to demand a sense of autonomy; they would like to choose their own flights and accommodation in accordance with their preferences. With mobile booking and accommodation such as Airbnb, corporate travelers can plan their own trips hassle-free. 2019 will see an increase in demand for flexibility. Millennials will account for nearly half of travel spend in the next years and will emerge as a pre-eminent force in travel consumption. Corporate travel policies need to accommodate their travel needs and attitudes and expand self-booking options.
Artificial Intelligence (AI)
Artificial intelligence can identify the personal touches that draw potential guests to a hotel and tailor experiences to them. With the ability to streamline processes, optimize and personalize experiences, AI will create more guest-centric hospitality this year. AI will be used more frequently for customer support. More and more companies will use chatbots to interact with customers and deliver responses. AI draws conclusions based on behavior and feedback and the more it works the smarter it will become. It helps to analyze the preferences and requirements of corporate travelers and then provides personalized recommendations. This year will bring a lot more innovation in the field of AI. Artificial intelligence is a greater trend towards meeting employee expectations, not just business demands. It is one of the key technologies this year to increase user adoption and delight.
The Internet of Things (IoT)
Now is not the time to discount the IoT as old news. In fact, it’s not yet done changing how businesses run. This year a range of new technologies to improve efficiencies, to minimize disruption and to meet increasing traveler expectations will be introduced by airlines, hotels and travel sellers. Big data, process automation and the internet of things will improve the guest experience. The Internet of things offers wide opportunities and allows smart devices to communicative through the internet. More and more hotels will use it to control light, air-conditioning and heating systems to the guests’ preferences, even to control coffee machines. The Internet of things technology is also capable to issue warnings on the necessity of replacements. It can facilitate the check-in process by sending electronic keys to smart devices. IoT solutions will roll out fast in the hospitality industry this year, making it smarter every day.
Like this story? Follow MICEPOINT on Facebook
Why 2019 will be the Year of MICE
With large conglomerates throwing in incentives programs, the MICE segment in India, though young, is projected to show remarkable growth.
2019 looks bright for the Indian hospitality segment. Last year, most hotels in the country showed a positive performance in both Average Room Rates (ARR) as well as occupancies. With hotels now focused on experiential hospitality, it looks like 2019 will see a healthy outcome as well.
According to Hotelivate’s recent report titled, 2018 Indian Hospitality Trends and Opportunities, the India hotel sector’s occupancies are inching closer to the 70% mark. In 2017-18, India’s nationwide ARR was Rs.5,759 for all hotels.
This is primarily because the hotels have begun experimenting and are open to new ways to grow their brand.
“The hospitality industry has taken a step away from the traditional and keeps exploring and growing, adapting to needs and demands of users who want to push boundaries and 2018 was no different,” said Roshan Rajpal, General Manager, Hyatt Hyderabad Gachibowli.
New Delhi grabbed the lion’s share, as it continued to have the largest base of branded rooms (14, 724 rooms) in India, followed by Mumbai and Bengaluru. Industry stalwarts now predict that there is a possibility of Bengaluru toppling New Delhi to grab the top spot.
“2018 was corporate transient dominated for Bangalore luxury market. Additional flights and cheaper connectivity promoted frequent travel from feeder markets including Mumbai, New Delhi, Hyderabad, and Chennai. Occupancy growth was registered along with ADR growth in almost all sub-pockets of Bengaluru. Big budget weddings with new decoration and flow were organized throughout the country with many International performers joining the fun and entertainment,” said Saharsh Vadhera, Director-Sales, Shangri-La Hotel, Bengaluru.
With an occupancy of 69.5% and an average rate of Rs.5,807 in 2017-18, the city’s hotels grew their RevPAR by 9.4% despite a near 6% growth in supply.
Mumbai grabbed an occupancy rate of 75%, and continues to rule the roost. With an average rate of Rs.7740, Mumbai achieved RevPAR growth of 3.7% in 2018.
With enhanced connectivity and world-class meeting facilities in the pipeline, Mumbai is all set to top the charts. “The tier-2 and tier-3 cities played a major role in the expansion of mid- to economy scale hotels in India. The luxury segment will continue to expand, keeping only metropolitan cities as their major base,” said Nishant Agarwal, General Manager, Novotel Mumbai Juhu Beach.
Meanwhile, Kolkata witnessed the highest increase (20.7%) in supply among India’s major hotel markets as it played host to renowned events such as Under-17 FIFA World Cup, IPL, Global Bengal Business Summit, and a few national medical conferences.
Noida maintained its position as the smallest major hotel market in India with 1,515 rooms despite an increase in 6.5% in supply in 2017-18, and it is expected to remain so in the medium term.
Down South, Chennai, often labeled as the price-sensitive market, proved the naysayers wrong when it showed a 10.5% growth in supply. Chennai’s RevPAR improved by 1.1%, indicating that the Chennai hotel market remains positive in the short to medium term.
Having opened its 100th hotel in the country, it is not surprising to see Marriott International top the charts with the largest inventory in India. Taj Hotels Resorts Palaces Safaris, despite having more number of properties, came in second owing to its lower rooms per hotel ratio. Radisson Hotel Group, which has added 1,500 rooms to its operational portfolio last year, ranked third. This was closely followed by AccorHotels, with the Ibis, Mercure,a and Novotel brands leading the growth in India in 2017-18. The other hotel chains are yet to cross the 10,000 rooms-mark. Both Lemon Tree Hotels and Sarovar Hotels & resorts are aggressively adding close to 10% of their existing inventory in 2017/18. Hilton Worldwide (ranked 13) expanded its base of existing rooms by 18% last year and is now looking to expand at a much faster pace by introducing more brands from its global portfolio.
What this means for MICE
2018 witnessed a balanced MICE business with India coming to terms with the aftermath of demonetization and GST effect nullification. With large conglomerates throwing in meetings and incentives programs, the MICE segment is India, though young, is projected to show a remarkable growth this year. Thanks to the efforts of the Indian government, preparations are in full swing to introduce new policy changes that would make India one of the most preferred MICE destinations in the world.
In an effort to aid the MICE segment, the government is working on easing the visa process, which currently requires multiple visa clearances to attend short-term conferences. Once this is done, Indian hotels can expect more footfall than they can handle as India, as a destination, has already made its mark as safe and spectacular.
“2019 looks like a MICE-dominated year with many city sold-out events, including pharma and Aero India 2019. Successful competition of such events will promote India as a responsible country with the infrastructure to cater to much larger events in the future. With diverse cities and cultures along with International Brands, India is a hot pot full of excitement for the organizers,” said Vadhera, adding that Bengaluru will see a robust increase in residential conferences due to a strong supply of inventory as well as demand. “BIEC and Palace Ground will continue to drive bigger conferences for the city along with luxury hotels including Shangri-La Hotel Bengaluru with multiple venue options under one roof,” he said.
Mohammad Shoib, Director of Sales at JW Marriott Hotel Bengaluru, explained that hotel companies investing in the MICE segment have opened up opportunities for international corporate travelers significantly. The opening of two new convention centers in South India with Sheraton Whitefield (banquet spacing being the strongest point) and Hyatt Kochi has given options for MICE planners to look beyond Hyderabad International Convention Centre (HICC).
Even hotels that were not MICE-centric is beginning to see the potential. “The Hyatt Hyderabad Hotel though not a very large market for MICE has seen its fair share of events picking up. The weekend MICE business which was non-existent for corporates has now evolved and weekends are now busy. Most large MICE events in Hyderabad are now over weekends. Thanks to a lot of factors like transportation, infrastructural development, the boom of corporate companies that have added to the same,” said Rajpal.
Kerala, despite the floods, witnessed growth in their RevPAR with better occupancies. The state showed remarkable resilience. 2018 for Kerala, was punctuated with last moment MICE bookings, increasing acceptance of shared services, and innovation from both tourism and hospitality.
“We had a great start in 2018 and Kochi hosted some of the major events for the first time, such as the Australia World Orchestra and the 10th Indian Ocean Naval Symposium. In 2019, we are in line to host some of the most prestigious events such as World Advertising Congress, India Open Snooker Tournament, APICON 2019. The city will see a lot of footfall from various parts of the country and abroad in the coming months,” said Girish Bhagat, General Manager, Grand Hyatt Kochi Bolgatty.
What lies ahead
The MICE in 2019 is expected to grow at an average of 7% to 10%. The sizes of MICE will become larger, making it a buoyant 2019. The meetings above 500 delegates are expected to grow from 74% in 2018 to 80% in 2019. “This means the size and the scope of corporate events are getting bigger. This growth of the size would obviously increase the spending budget. India has a lot of destinations which are being geared up for a larger MICE business in terms of infrastructure and preparedness. The use of outdoor facility and technology would be among the top trends in 2019,” said Akash Gupta, General Manager, Gokulam Grand Hotel and Spa.
Goa is one of the most preferred holiday destinations, making it an ideal travel destination all year round. “For MICE and leisure travel, corporates look for destinations which offer a combination of great value and a relaxed atmosphere and Goa is the ideal location. Alila Diwa Goa has been a pioneer in developing the Leisure Conferencing Concept. As the word Leisure conferencing suggests, a lot of corporates would like to explore a different environment than a conventional ballroom seating. At Alila Diwa Goa, event curators have developed and curated unique itineraries for each MICE group of various sizes,” said Melbon Noronha, Assistant Director, Events, Alila Diwa Goa.
“India has huge potential when it comes to being a major MICE destination as it has such a varied landscape – from a beachside setting to cool calming hill stations, from buzzing cities to sprawling deserts, there is something for every kind of meeting organizer. The buoyant growth in the tourism sector and the support from various government agencies and private players to improve tourism infrastructure will help India become the most sought-after MICE destination,” said Victor Chen, General Manager, Le Meridien Goa, Calangute. He added that personalized experiences, social media and technologies like virtual reality (VR) are set to dominate the segment.
The airline industry is also opening up the skies, adding new destinations, making travel accessible and time short. This will grow by leaps and bounds bringing cheer to the hospitality network and in extension the MICE segment.
KEY MICE TRENDS
Personalized experiences: Increasingly meetings are becoming areas for creative collaboration, instead of a standard meeting room, there are emotionally intelligent event spaces such as sensory lounges, recreational rooms and experience zones that help to facilitate greater partnerships.
Social Media: For the past few years, live feeds and Q&A via social media platforms are being used to keep the audience engaged throughout the events. Utilizing these social networks can be a big asset to any event organizer who is keen on collecting useful data analytics about their attendees.
Virtual reality/Augmented reality: Virtual reality or Augmented reality enables users to have a perspective of how a room/meeting space would appear with certain changes. This technology is increasingly being used to enhance attendees’ experience at events.
Metro cities: International MICE of Small & Midscale is not only looking at Leisure destinations but have started trying Metro cities as well with strong travel connectivity.
Green initiatives: Domestic MICE, attract a lot of energy-saving initiatives offered by hotels.
Ideal time: Major months for large MICE activities are October, November, February, and March.
The Indian travel industry logs on to trade-fair bandwagon
When the global exhibition and trade-show sector is a $65 billion industry with over 31,000 major events taking place and the Indian space is estimated to be worth at Rs65,000 crore with over 700 shows, how can the Indian travel industry be far behind? According to the Indian Convention Promotion Bureau, of a total of 8,294 events tracked, India has a market share of 1.1% (Asia & Middle East has 19.5% share) with an estimated size of the MICE industry in India around Rs4,000crore-Rs5,500 crore. Still a very minuscule part of a global market space of over USD 65 billion!
Trade shows have made a remarkable comeback as a preferred marketing medium for the Indian hospitality and travel industry with over 10,000 exhibitors participating in over 50 travel events in the country. India still has a very young travel and tourism industry with stakeholders still finding ways to enhance reach. Indians as a business community still would like to establish relationships and this is where travel marts have truly helped. The Indian travel industry has greatly benefited as exhibitions is probably the most cost-effective mode of acquiring a customer and plays a big part in maintaining business relationships. Exhibitions have helped the industry create new markets for their products across the country, devise right market entry strategies, and gain immediate feedback.
The exhibitor activity has changed drastically over the years. Now, the marketing activity of exhibitors includes major initiatives such as market research, market-entry showcase, and serious efforts to engage the travel trade. Organizations and companies have been off late using high-end technology to enhance their presentation during the event. One of the most successful marketing models in creating a destination by way of use of travel events is Kerala. The private sector exclusively uses exhibitions as a single most effective mode of marketing over the last fifteen years, and the results are everybody to see.
The venue is a major challenge in India. With the absence of proper convention and exhibition facilities in the country is a major drawback. Even cities like Mumbai and Delhi have no world-class event facilities. Making do with present Event infrastructure and current permissions and licenses required to organize trade-fairs is time-consuming and a sure dampener. The industry should demand a single window agency as procedures are getting more tedious than ever before.
Being a part of the travel event industry is quite mandatory for us to be at various events across the world. The quality of the event infrastructure is a point of envy. Most International travel events across the world also enjoy tremendous patronage from the National Tourist Organization and government bodies, which they see as a booster to their economy. With the Indian travel event industry still at a nascent stage, there is always room for improvement in terms of event operations and marketing. Good event practices and final product delivery in India still needs more fine-tuning and is something we can learn from the events abroad.
One of the most positive trends I have seen over the years is that the visiting trade doing their homework on the type of exhibitors they wish to meet and taking time to get in touch with the exhibitors, fix appointments and explore synergies. There are more structured meetings nowadays than ad-hoc time spent at the event.
With more travel events in India than ever before on different platforms, whether it is on a B2B or a B2C platform and successful events being promoted by Tourism departments of Gujarat, Madhya Pradesh, Kerala and recently Jharkhand joining the bandwagon. The way forward for travel trade shows is to establish their right niche and focus. India is a big country and we will see different events catering to different demographical zones, focussed segments as MICE, weddings, Adventure, Outbound, Domestic and inbound, technology etc. We will also more events in Tier 2 & 3 segments adding to the travel event portfolio in the country. With marketing expense on a tighter leash, use of Exhibitions offers the most cost-effective ways to reach out to your consumer.
Infrastructure challenges are currently paramount to the success of this rainbow industry here in India. China has 92 purpose-built exhibition sites spread over three million square meters. India has just 12 exhibition venues that occupy barely 2.6 lakhs square meter of space. India is 40% of China in terms of the size of the economy, but in the exhibitions infrastructure sphere, we are only 9 percent of what China does. Germany on the other extreme has over three million square meters of exhibition space, which considering India’s exhibition industry, is on a different planet altogether!
With longer gestation periods, no Convention Centres make money on the quick run. It is the City Municipal Corporation, to ensure, we create world-class convention facilities. With increased footfalls, increased tax revenues and adding a new employment engine, the city eventually benefits more. The Indian industry, irrespective of their sectors and verticals, need quality meeting infrastructure. The current ‘Make in India’ mania is useless if we do not have avenues to display and exhibit to a global audience.
The advent of international exhibition companies in India has got the industry tremendous respect and enhanced its professionalism. With the marked increase in the number of stakeholders using the exhibition medium, the industry is only poised to grow.
“Future Meeting Space” research to focus on role of events in corp comm
India air fares and hotels rates to increase by 2020
Hajj tourism at its peak in Saudi
Hajj tourism at its peak in Saudi
India air fares and hotels rates to increase by 2020
“Future Meeting Space” research to focus on role of events in corp comm
COVER STORY7 months ago
Why 2019 will be the Year of MICE
COVER STORY5 months ago
Corporate Travel: What’s about to change
EXECUTIVE HIRES2 years ago
Said Salim Said Al-Shanfari appointed as the new CEO of OCEC
NEWS4 months ago
Oman tourism arrivals to increase 5% annually to 2023: ATM report
EXECUTIVE HIRES9 months ago
Victor C. Soares takes charge as Sr. GM of Radisson Blu Goa
CRUISE5 months ago
The real growth of Indian cruise tourism is in home-porting: Nalini Gupta
AIRLINES5 months ago
Indigo adds 14 new flights
DESTINATIONS2 years ago
MICE contributes to 28.5% of Indian arrivals to South Africa