In a freewheeling interview on the sidelines of an event hosted by Abu Dhabi Tourism & Culture Authority, India Office, Sunil Kumar, President, TAAI put forth some of the challenges confronting the industry in 2017. Commenting on the relentless onslaught of OTAs in the past decade, he noted that conventional travel agents needed to take to the online space for retaining their existing clientele base rather than acquiring new customers.
What are some of the challenges that you envisage in 2017?
2017 started a little difficult, posing a bigger challenge for our travel agents, because our leisure market is badly affected (by demonetisation). The leisure traffic in India has been used to, partially, pay through banks and partially spend their savings in cash. Now, those savings are all back in the bank. So, for them to take it out and spend on travel is not as much a priority as protecting it first, and then using at a later date. Six months down the line, I anticipate that things would slowly start springing back to normalcy. But right now, there is a cash crunch and it will have some effect on the industry.
Secondly, the India inbound, I think the government needs more aggressive. I do not see ‘Incredible India’ as a brand very aggressively marketed. If you take a look at global magazines, compare the tourism boards that are in circulation, globally, vis-à-vis ‘Incredible India’ in circulation. So, there is a big gap. The good thing that has happened, off late, is the visa-on-arrival. It is a very strong move. Our minister is a very big plus point. Mahesh Sharma is too good, but I think they need to get the associations into a stronger act. Most of the government’s initiatives are centred around Delhi, it needs to go beyond Delhi and go all over India. That is where the Indian market is.
What is your understanding of the constant rise of OTAs? Do you reckon that smaller travel agents are facing an existential threat?
The theme of our convention (TAAI convention held in Abu Dhabi) was ‘tomorrow begins now’, primarily focussing on the challenge that you have stated, and in order to enhance the capability of an individual travel agent to be able to offer convenience more than cost to their customers, they need to go online. What would happen is that the online industry which was dominated by, may be, numbers that you could count is growing and over a period of time the growing numbers would multiply. So, there would be more online companies. If you take a look at a medium-sized travel company, now they are convinced that they do not need to get online to get new customers. They need online to maintain their current customers, because unless one does not offer convenience to their consumers who wants to be book a ticket at twelve or one o’clock in the night, when you are not awake, and wants to book hotels when he is free, on the move, then it becomes important for everybody to go online. So, I keep telling my members that you need to go online, primarily to first maintain your customers. We are not even taking about new selling, because the needs of our own customers are growing. If I am able to deliver to the existing customer base, I am happy because their needs are growing. Their growth is my growth, automatically. I am not even looking at a new customer, but I am threatened that I will lose some of my existing customers, because I do not offer them the same convenience that somebody else is offering. Therefore, I need to be online.
Consistently, industry stakeholders have been asserting that the future of Indian travel lies with the domestic leisure segment. How much do you agree with this assertion, and do you reckon that we should train our gun to make the leisure domestic segment happen in the country, instead of focusing our energy in courting more international inbound?
There is a definite market for that segment. In my opinion, I do not think that it is a market which is so big. It may be big. I am not talking about numbers. I am talking about the sustainability of my office, and domestic tourism actually requires a lot more efficiency levels. It may sound a paradoxical statement, but handling a passenger going outbound to another country, or to many countries of the world is much easier than handling them to go into India. I say this because many parts of India do not rise up to the level at which others are geared up in terms of technology, outreach, connectivity and professionalism offered by local agents. So, what really has to happen is that the domestic market is huge in India, but the vendors in the domestic market have to be those whose capability must multiply right now, and on whom there is a greater dependence by all other agents in India. You actually need 100% B2B companies. You cannot have B2B and B2C. There should be dedicated B2B companies in India, and once we have dedicated B2B companies in India then the domestic segment would become a great opportunity.