Fuelling the incredible rate of growth

By Bruce Hanna
President & CEO, Galileo

The World Travel & Tourism Council (WTTC) has identified India as one of the foremost tourism growth centres in the world in the coming decade with the foreign tourist arrivals to India showing an increasing trend estimated to touch six million by end of 2007. Taking into account the fact that these figures exclude the NRIs visiting India, the total number of international tourist arrivals in 2007 is estimated to be over nine million.

Although India has poor internet penetration, e-ticketing has made a strong start here. As per IATA estimates, 80 per cent of all ticket bookings in India are done electronically. The phenomenon is well on its way to achieving the 100 per cent mark by next year. With more channels springing up, e-ticketing is poised to engulf the nation. Better still is the fact that the growth of e-ticketing during 2006 has been perhaps the highest in the world.

The online travel market in India is expected to be the most dynamic in the APAC region and experiencing strong growth over the next five years. About 95 per cent of web-initiated travel transactions are expected to be fulfilled online (e-ticketing) in India as the market develops. The online travel industry is attracting new players while the existing ones are ramping up their operations to cope with demand. Travel portals are cashing in on the booming demand for hotel rooms. There has been a surge in hotel booking on travel portals in the past 12 months. The online travel industry is a US$ 800-million industry in India, that is, about 14 per cent of the entire travel industry.

As a result, the outlook looks extremely bright. India as a tourism destination is the toast of the world at the moment. Condé Nast ranked India amongst the top 10 tourist destinations. JBIC ranked her as the fifth most attractive investment destination. Besides, India is probably the only country that offers various categories of tourism, viz, historical, adventure, medical, eco, cultural, rural, religious/pilgrimage, spiritual, and beach tourism.

The buoyancy in the Indian tourism industry can be attributed to several factors. Firstly, the tremendous growth of Indian economy has resulted in an increase in disposable income, thereby prompting a large number of people to spend well-earned money on vacations abroad or at home. Secondly, India is a booming IT hub and more and more people are coming to India on business trips. Thirdly, an aggressive advertising campaign 'Incredible India' by the tourism ministry has played a major role in changing the image of India from that of the land of snake charmers to a hot and happening place and has sparked renewed interest among foreign travellers.

Encouraged by the incredible pace of growth exhibited by the industry, Confederation of Indian Industry (CII) and McKinsey have predicted that the industry will grow to earn additional revenues of US$ 2.2 billion by 2012. In order to sustain growth and meet the expectations of the future, it will be imperative for the industry to invest in infrastructure. There will be about 20,000 more hotels built for the 2010 Commonwealth Games and an increase in allocation for development of tourism infrastructure from Rs 423 crore to Rs 520 crore and the five-year tax holiday to two-, three- and four-star hotels in Delhi and NCR.

Growth in the Indian tourism sector, however, has also been accompanied by some damages to the local ecology, which should be addressed in order to retain the heritage and old-world charm that will help in enticing travellers to India. Also, a grant of export house status to the tourism sector and incentives for promoting private investment in the form of income tax exemptions, interest subsidy and reduced import duty, simplifying rules regarding the grant of approval to travel agents, tour operators and tourist transport operators should be provided by the government. There is also a need for creating an apex body, through private and public partnership in addressing various redressals, creating code of conduct and identifying opportunities to help develop this industry further.

Having said this, Galileo would like to support the growth of online travel and facilitate the usage of e-tickets and has already tied up with 31 customers to provide Galileo Web Services. Presently, 63 carriers are e-ticketing on Galileo in India and more than 200 globally, thereby leading to a saving of over 20 acres of forest every month. We also wish to prepare travel agents in creating new revenue streams as the industry is one of the world's most fascinating and rewarding industries.

Travel agents will continue to play an important role in the industry. However, the role they play will evolve from being a facilitator to a provider and will change from being commission-dependent retail officers into service-focused professionals. For instance some agents who have survived the zero commission in the West transformed their businesses to provide specific travel destinations, countries or regions and others catered to well-defined market segments like leisure travellers, honeymoon or adventure travellers. Going forward, agents occupying a niche will find it easier to demonstrate expertise and the value they offer clients, which will also help in justifying fees and charges.

Lastly, we are constantly investing in nurturing new talent for the industry and initiate training and development modules through the Galileo-associated travel training institutes, creating technological products and solutions that integrate the web 2.0 platform, generating more connectivity, mobility and thereby more power among the travel fraternity. Integration of e-commerce to create convenience and value-added products for the benefit of travellers is integral, thereby leading to saving of valuable time and money and bringing more and more content on the desktop, making it a one-stop-shop for the business travellers' needs.