The Future Is FIT

TOs Shift Focus From Group Travel

The sight of several avid Indian tourists sightseeing in a disciplined manner and sticking to frozen itineraries is typical no more. The new age Indian traveller prefers to venture out alone, take his time and enjoy the unknown. He is the FIT (Free Individual Traveller) and the tour operators are wooing him. Bhisham Mansukhani explores this rising trend

The Indian outbound as well as domestic market has is still in its nascent stages and has been on the upward growth surge for the last five years. It can be immediately ascribed to a number of changes, mostly positive in terms of Forex reform, cheapening airfares and flocking NTOs who have only sought to spur this segment further. The Indian traveller is changing. He is not afraid of the uncharted, he does not like to be rushed and he knows a thing or two about itinerary management. To quote one unperturbed tour operator, “It is the natural course of the Indian traveller’s phenomenon. The free individual traveller has arrived”.

Suddenly Something

The message is loud and clear and it has come from all ends. The Indian travel trade has been rather unanimous in their predictions that the future belongs to the FIT business. There has been a steady shift in the nature and character of today's traveller especially in the metro cities. Blame it on the multimedia effect, exposure or experience that Indian traveller today has evolved over time. The unaware, confused traveller of the past is now fast changing into someone who knows he wants and more so how to get it. The confused state of mind, the scepticism associated with an international destination and other question marks that arise are gradually being erased, in turn giving birth to a breed of travellers who are confident and aware. Says Mahesh Shirodkar, chief operating officer, Kuoni Outbound Division, SOTC, “FIT is the clear cut winner in the near future. There has been a drop of approximately 20 per cent in the outbound sector in the area of group travel. In the coming three years, there will be an approximate 40 to 50 per cent increase in the FIT business. There are also aspects that have proved to be supportive toward strengthening and increasing the position of the FIT in the market. With the charters coming in schedule, there would be a definite boom in the FIT business. People today are ready to experiment. Their idea of a holiday is also changing where they make their bookings late, which also in a way encourages the FIT business.”

On a national front Niranjan Gupta, Navras Tours & Travels, Bangalore, says, “The market was just about maturing when group travel flourished. This was about 15 years ago, when people were not very sure about what to expect from a place of travel as opposed to today where people are well travelled. Group travelling can be categorised as the first level of maturity. FIT’s are people who have reached the second level of maturity and can go to any place without fear. The market has grown well and the portfolio of the traveller has also matured a lot.”

Free To Be

Group travel can indisputably take the credit for both the explosions of outward tourism traffic making travel both internationally and domestically an affordable aspiration. However, its accent on rigid schedules and touch and go sightseeing meant it always ran the risk as strictly a first-timer option. That risk has now led to the widespread emergence of the free individual traveller. “The free individual traveller encompasses the basic idea of a traveller. Someone who explores, often alone and is unhurried, not really going anywhere,” says Gopi Iyengar, business development, Cox & Kings (I) Pvt Ltd. Juxtapose that profile with a hassled, brochure fumbling tourist stuck in a dilemma about whether to shop or soak in a glittering skyline for the last two minutes of his holiday in city number seven out of 24 and the choice is an easy one. According to Iyengar, the trend started by the affluent is now within the reach of the middle classes well. Philip Montiero, CEO (Tours), Melba Tours & Travels (P) Ltd in fact insists that the so-called group tour graduation is passé. “Indians are now open to travelling abroad by themselves, particularly to the Far East. FIT travel is not as expensive as it used to be and the buying power of the general client has increased. Put together, this combination makes FIT travel, the better option.”

Less Is More

Economy played its part as a double-edged sword for group business as competition saw prices plummet and the concept of Equated Monthly Installment (EMI) creep into the travel business. Margins flattened to near unsustainable levels as outbound tourism attained dizzy heights. Burjis Mehta, operations head, International Travel House says, “Group business has very slim margins as there is so much undercutting going on. Some agents earn as low as Rs 100 per group traveller on the Far East circuit. On the other hand, if they were to service one client who would stay at the Raffles Hotel, Singapore, they would make more profit and also provide a better product in the process.”

“FIT has been a traditional mainstay for the high end with the middle class now breaking through. It is largely believed that, for the FIT, the experience takes precedence over the price. The tour operator has to offer something different,” asserts Mehta.

FIT Ready?

If tour operators are queuing up for a gold rush style chase to tap this more urbane and lucrative segment of travel, they need to take a moment to think about the range of extras they need to integrate into their existing compendium to service the FIT traveller. Suraj Dalwani, MD, Krisia Tours specialises in FIT and corporate incentives only. In the last two years, he has been pleasantly surprised to find FIT traffic contributing 80 per cent of his overall business and is convinced his efficient back-end staff is not a waste. “Managing an FIT tour is an entirely different ball game. For groups, everything is pre-booked. You only have to market the product, find capacity and that is it. In my case, availability needs to be checked and reservations made after the package is marketed and sold. The client needs to be counselled and profiled and even when he/she is on vacation, we need have ready solutions in case of emergencies. Product knowledge is not a bonus, it is a critical necessity.” Cox and Kings have an FIT product called Flexihols, which as the name suggests offers travellers a range of duration’s and budgets for any given destination as per their needs. Iyengar says, “Flexihols are specifically targeted at FITs and is our way of recognising them. We feature suggested itineraries which are flexible as per individual needs. We also featured some of the traditional groups destinations in the Flexihols category to perhaps lure group travellers to convert to FIT.”

Specialising Already

The world is getting divided along the parameters that make destinations FIT-friendly or otherwise. Ground handling costs like car rentals, languages spoken, security and availability of Indian cuisine restaurants are some of the major, cinching factors that make the destination an FIT option, Montiero takes Europe as a classic example of a destination that is not kind to FITs. “In Europe, the cost of hiring a coach is a more affordable prospect that renting a car. The cost component goes up nearly two-fold. Herein Malaysia has positioned itself well for FITs with low car rental costs.”

The discrimination is not altogether lost on the NTOs. Newer markets noticeably are marketing themselves strategically to this segment. Canada rates as one of the most prominent examples. Terry Francis of the Canadian Tourist Commission says, “The Indian market is maturing very fast and the profile of the affluent, special interest traveller already exists in India. And we now have the product to offer to them. FIT is a definite focus as far as the Indian market is concerned.”

South Africa toes a similar line. Arvind Dhar, Travcare, a top-end inbound operator, avers, “We try to offer aggressive prices for FITs. The tourism growth to South Africa has been 25 per cent on a yearly basis. The turnaround time for inquiries is 24 hours.”

Southern Sojourn

In India’s southern market, evidence reveals a strong orthodox approach. Common opinion there still favours the old reliable group business. Group travellers are privy to rates, which are about 20 per cent lower than FITs. Bangalore-based Gayatri B N, MD, M M Travels, explains, “Group travel is going full-fledged and more passenger are availing group packages even though there are hidden costs. As for FIT, the trend is growing but it becomes more expensive for travellers when compared to a group as concentration on just two or four passengers is more tedious than the concentration on an entire group.”

In this competitive world, travel agents seem to believe that one cannot be picky about dealing with only FIT or only group. None believe in specialising in the FIT segment. Shravan Gupta, MD, Travel Air Private Limited, “FIT restricts itself to larger cities in the country while there is an emergence of group travel in smaller towns. A focus on FITs has huge potential but there are many challenges involved. The tour has to be highly customised, knowledge has to be tremendous, huge amount of information needs to be handy and time taken has to be kept under check as in an FIT case, the time taken per transaction is much more than that of a group.”

Destination-wise, in south India, there does not seem to be any divisions between places that FITs and groups want to go to. Hot picks include Pondicherry, Chidamabaram, Tanjore, Madurai and several destinations in Kerala.

New Proposition Is Here

Group travel redoubtably retains a lot of the credit for the outbound boom and remains close to indispensable as a revenue model for tour operators. Shirodhkar too is quick to point out that, “One definitely cannot rule out the importance and the significance of the group market. Their popularity especially amongst the first time traveller is many a times rather undisputed. Group travel will always exist and remain popular especially amongst the first time traveller.” Adds Veena Patil, director, Kesari Tours, “One cannot discount the importance of group travel as it definitely has its firm place in the business chain. Even today, we get a number of travellers who would prefer travelling in groups. In this case much depends on the mind-set and the preference, as there are people who find it most comfortable to travel in groups. Group travel has its share of fan following. For the first time traveller, the group tours works out to be popular keeping in view the safety and security concerns. It is more hassle free especially for the first time traveller. But yes, no doubt the FIT business is definitely showing an upward swing. We are also looking at concentrating on the FIT market without ever loosing focus on the group, as it is still an extremely popular travel option for the tourists. “Dalwani himself is contemplating expanding his FIT-driven business to include groups. Cox and Kings has been cross-selling products to its groups and FIT segment and the FIT profile itself has stretched to include couples, families and even groups of families. The veiled trend perhaps underlying the emergence of the FIT segment as a unanimous choice of consumer and service provider is of quality return for money and effort spent respectively. Standardisation, which marked the incipience of the industrial revolution, has transcended into the current age of customisation. India’s latest travel phenomenon mirrors that important historical phase and promises equally astronomical returns.

(With inputs from Reema Sisodia-Mumbai, Vyas Sivanand-Bangalore and Susan George-Chennai)