High ground

Prem Subramaniam

India's economic growth story has fuelled unprecedented interest in our country. But while this offers enormous opportunities, it also presents challenges. A recent conclave held at the Indian Institute of Travel & Tourism Management, Gwalior focused on four specific areas: tourism education and training, entrepreneurship development, industry institute partnership, and research and consultancy.

Tourism education and training

Getting aspirants with the right skill sets, training them on an ongoing basis, rewarding and retaining personnel are all going to require tremendous attention. This will require a paradigm shift in the way we view education and training, which have so far largely been in a static situation with regard to course content, teaching methodologies, skills of teachers and relationship between education and its applications in the corporate world. Even in the past there was a gap between knowledge acquired in a formal environment and that desired by those providing employment. This will increase unless there is a review of current practices and changes are introduced.

The recent exodus of students to other countries has increased with the more liberal foreign exchange regime as well as ease of funding education through bank loans. This trend is likely to continue and will place further pressure on the supply side of tourism, which is already adversely affected by students opting for more lucrative assignments in other sectors. Vittorio Raddicce while heading Selfridges and embarking on a Bollywood promotion at his store, said he was in the business of "retail theatre" and even shopping is emerging as an experiential exercise. The rapid growth plans of Dubai are also likely to influence the manpower base.

Priorities in tourism have also altered from being a generator of foreign exchange with a focus on international arrivals to an industry capable of generating employment across a very diverse spectrum of skill sets and organisational size. This requires a shift in focus to domestic and regional tourism. It also requires the creation of content ranging from improving service attitudes of the lowest denominator such as porters, taxi drivers, waiters, housekeeping staff to training pilots for the huge inventory of airplanes for which orders have already been placed.

Indian carriers currently employ over 300 pilots of non-Indian origin thanks to a lack of training facilities. Already the emergence of private academies providing crew such as airhostesses, pursers and ground handling have helped fulfil some of the demand and the success of these institutions is likely to spawn imitations without adequate content. The increase in the call centre and BPO sector will require better fleet management, training of drivers and increased security measures. More inter-nodal transport hubs are likely to emerge with the completion of metro projects and the National Highway programme. Midway facilities need to match up to the aspirations of a new generation of travellers.

In the hotel sector too our inventory of rooms is set to more than double in the organised sector without a corresponding increase in training institutes to provide the necessary manpower. Land prices have increased leading to a surge in speculative investment, extortionist tariffs without a corresponding increase in providing value. It will result in levels of enthusiasm in building hotels which are unlikely to be sustainable in the long run without a robust management in place.

The information available to potential investors is also weak without data on the exact nature of the segments filling hotel rooms, the demographics, purpose of visit, length of stay and the revenues. In cities like Bangalore where the need for extended stay is clearly the cause of increased demand, the so-called unorganised sector is growing at a far more rapid pace with many serviced apartments.

Since the need for sensibly-priced mid-market and budget accommodation is likely to be an enduring business model, new chains and new configurations of accommodation are emerging which challenge some of the established parameters. In an accommodation unit the three broad areas of built space are the private spaces (rooms, suites, apartments), the public spaces (lobby, corridors, restaurants, conference rooms, health club, swimming pool, business centre, front office) and the service areas (kitchen, stores, laundry, air-conditioning plants, boilers, water treatment). In order to improve efficiencies, sensitivity analysis to increase revenue-generating areas and multi-use capabilities as well as look at better supply chain management, outsourcing of laundry/housekeeping/security/franchising of food outlets/branding of bars is desirable and needs analysts with creative abilities.

The extension of hospitality services to the management of malls, IT parks, hostels for students, training of entrepreneurs seeking to turn their homes into B&B establishments will require dynamic training modules. The Jawaharlal Nehru National Urban Renewal Mission (JNURM) programme intended to vitalise our urban environment presents opportunities to have better utilisation of community resources.

We are already witnessing a very high attrition rate in many of the sectors and HR units now look at a raft of reward and compensation packages to attract good talent and more importantly to retain talent. This means having a strong career building programme including off-sites, team building exercises and external training courses of varying duration as well as incentive programmes, conferences and motivational exercises.

Already the Web-based world is changing the distribution pattern and having a dynamic Web-based business model for marketing, reservations and handling loyalty programmes will become a key differentiator. Communicating using an internet platform requires using text, still and moving images, sound, voice over, music and this will require new skill sets which embrace technology and creativity. Making choices amongst the different media channels available to reach a targeted segment will be increasingly complex and the allocation of scarce resources will mean increased sophistication in planning tools.

As travellers become more experienced their aspiration too will change. We can expect a demand for more experience-based, participatory packages for varying durations as opposed to a sightseeing-oriented, spectator based, static itinerary of fixed duration. The demand for the kind of collateral created at Mehrangarh will rapidly increase.

While India is a youthful country we must not lose sight of the fact that by 2010 there would be over 100 million people who will be over 60 years of age. The creation of active retirees' communities as opposed to senior citizen conclaves will be the need of the hour. This will mean the management of built spaces with a clustering of services will become far more important than just buildings. Here too the need for training and education of personnel will become the key differentiator.

As the affluence of Indians increases and the sensitivity to our own tradition gets enhanced, gifting and creating linkages between creative communities and their potential clients, both individual and corporate, many of whom will have a larger awareness of their social responsibilities will be an important business opportunity. This in turn will mean bringing about relationships between diverse stakeholders through a transparent sponsorship and partnership programme.

Loyalty programmes will need to evolve as there will be a clutter which will lead inevitably to a sensible clustering. This has already happened in the West with UK leading the pack with the remarkable success of the Nectar programme. We are already witnessing mergers and acquisitions and this too will increase.

Cheryl Anderson started her career as a school teacher, moved on to managing children on cruise ships as a tour guide, went on to formally train as a guide and then wrote her best-selling "Getting paid to travel". Her crowning glory however was creating an online guide training programme which has now found acceptance at 1,200 colleges across USA. Online education is clearly the way of the future and obviously needs to be backed with real-time experience and this again calls for an overhaul of teaching methodologies.

Whatever has been described above is intended to give an insight to the rapid changes that are taking place and the need to adapt to these changes. This will require an assessment of our current status, of the gaps that exist between career opportunities and the relevance of the course content of our various programmes, the need to provide faculty with the resources and training to make their contribution more relevant and meaningful, and to upgrade our institutions with an infusion of relevant technology tools to meet the challenges of the future.

Entrepreneurship development

In India many government agencies have under-utilised assets which can be put to use to generate tourism revenues without vitiating the basic purpose for which those assets were created. Most government agencies are used to taking care of expenditure based on government budgets, grants and subsidies. The need to generate revenues was not felt earlier. In order to change this mindset it is necessary to impart education, training and re-orientation to vitalise these assets.

The railways has already taken a step in this direction by offering land banks at sites adjoining rail terminals for building budget accommodation. Likewise concessions for catering on trains and for providing food courts through private partnership have been radically altered. The results are evident in the turnaround of the railways. However, other large land-owning agencies such as the armed forces and the forest department as well as the owners of built assets such as the PWD, postal system, state guest houses and circuit houses have yet to follow suit.

This requirement is by no means restricted to the governmental agencies as a recent conference initiated by MP Tourism by bringing together 61 heritage property owners of MP under one roof. Most of the property owners are keen on using tourism to restore, preserve and enhance their assets but are not entirely sure of how to go about it.

Tourism calls for an improvement of the infrastructure along a tourist's trail. This means the standards of cleanliness and hygiene of food stalls, eateries, public conveniences require to be upgraded to acceptable standards, yet the enterprise must remain commercially viable.

Facilities en route too need to be improved and The A1 Plaza model of Reliance fuel stations is a good experiment in this direction.

Since most of our domestic tourism is based on religion and pilgrimage, ashrams too need to adopt an entrepreneurial spirit even if they are not for profit. This will improve their overall efficiencies and lead to better management of their resources.

Since tourism involves many small and medium enterprises, access to micro finance is key. Training is required in putting together project proposals that meet the criteria for funding.

As a result of the changing dynamics, new business opportunities have emerged - developing websites, creating content for the website, new forms of tourism including adopting a monument as offered by Rajasthan, new soft adventure options, development of home stays as offered in Delhi, new routes and forms of transport because of a liberalised civil aviation policy, the introduction of metros in major cities, new entrepreneurship options such as event management, radio taxis, wedding planner, professional conference organisers at new venues, development of loyalty programmes and CRM, outsourcing of many services such as visa issues, housekeeping, security, fleet management, laundry, food services.

This indicates that there is room for development of a raft of executive development programmes, small entrepreneurship capacity building programmes and modular courses which can be adapted for client-specific and site-specific needs.

Industry-institute partnership

The relationship between industry and academic and research institutes are best established in USA that has a tradition of putting knowledge to use for commercial gain. More importantly, industry has been prepared to create a suitable funding model so that R&D does not suffer. What started as a pure patronage has turned into a fine example of partnership.

In India too there has been a marked improvement in relationships being fostered between industry and institutes and among the notable successes is the establishment of the Indian School of Business in Hyderabad with the state government coming forward to provide land and a group of entrepreneurs coming forward to create an endowment to establish an educational establishment aspiring to meet standards of excellence. A healthy flow of visiting faculty from US universities, a good stream of guest faculty from the industries, and opportunities for resident faculty to undertake assignments with industry and a good track record of student placement has helped.

IIT Kanpur, IIM Ahmedabad and IDFC have been pursuing a 3I initiative which brings together expertise from technology, management and infrastructure backgrounds to focus on a core area of infrastructure each year to compile a publication of papers for which a dedicated team works year round. This compilation is used as important resource for strategic planning.

However, in case of institutes set up by the government, especially in the domain of tourism and hospitality, our record is less than satisfactory. Each large hotel group has preferred to set up its own institute for training and development of manpower rather than rely on establishments set by the government under the IHM banner. Recently, the FHRAI has set up another establishment collaborating with a Swiss institute. The situation is equally distressing in the domain of tourism-related institutes. Earlier the emphasis was primarily on ticketing courses as there were modules available from IATA and there was a relationship between acquisition of ticketing skills and gainful employment. However, with advances in technology and an increasing environment of dynamic pricing the need for such skills is not as paramount as before. Many of the tourism programmes offered have not altered adequately with the industry.

The Indian tourism scenario owes its origins to relatively modest family-run establishments with little or no formal education and skills acquired on the job. Despite the increase in size of these establishments the inherent character did not change. Experience on the job was considered far more important than having undertaken a formal course. With a shortage of inventory in peak periods being a fixer was essential rather than having a strong management bias. Worse, racketeering in shopping, an incestuous commission structure and engaging in foreign exchange violations, buying the goods of the tourists and assorted ways of boosting incomes kept the base salaries pegged at very low levels, thereby not attracting the right talent. In the meantime most courses on tourism were actually history, geography or other course revamped as tourism courses and taught by academics. These would consist of PhDs in obscure areas with no real life work experience, field knowledge or continued interaction with tourism businesses. As a result the intake into tourism establishments has largely been from those who could not fulfil their primary desire to join a different vocation.

With the sudden growth of the sector post 2003, where just the official category hotel room inventory would change from about 1,00,000 rooms developed over 50 years to at least 2,00,000 in just three to five years, we can anticipate a 30-35 per cent shortage in trained manpower. This will be enhanced with the entry of private airlines, with the electronic reservation system of the Indian Railways through IRCTC, and the entry of a spate of vehicles as well as the expansion of the road network, but above all the mobile penetration and growth of TV, internet and the FM radio channels which is going to require manpower with new and varying skill sets. This will present challenges but more importantly opportunities as industry will be seeking creative solutions to meet the manpower crunch.

When ex-IITians formed The Indus Foundation they found it difficult to offer endowments which had specific end use and were reluctant to put their money in bottomless pit with no deliverables defined. Since then, more robust systems and processes have been put in place to take advantage of a spectrum of resources including providing chairs to retain the right academics to head courses, fellowships for research, scholarships, in kind facilities to update equipment and to create digital environments through a brand association, cash endowments with specific applications, project based assignments which brings partners together, funding for participating in international conferences, attending courses and gaining field experience. Faculty has been encouraged to seek secondment in industry to get a more rounded knowledge base which has a theoretical bias strengthened with real life experience. Campuses have become venues for conference sponsored by industry thereby raising the revenue streams. In UK most campuses use holiday breaks to offer student and faculty accommodation to tourists through the British University Accommodation Consortium thereby earning adequately to peg hostel fees to affordable levels.

One of the key challenges in this exercise is the mandate under which institutes operate where earning revenue or undertaking commercial activity is seen to be deviating from the prime purpose for which the institute was set up. Most have no framework to receive revenues. Our success is based on consuming budgets and grants and to fall into an endless mire of subsidy based economies. This will need to be changed to an output-based evaluation.

Research and consultancy

We collect a lot of data in India but rarely put these to use to generate meaningful information. This would apply to data in visa application forms, embarkation cards, hotel registration cards and registers, railway reservation forms.

The Ministry of Tourism does compile statistics on foreign visitor arrivals and has adopted a satellite accounting system as recommended by WTO. But the nature of information is not good enough to inspire investment confidence. There is not enough published data on entrance fees at ticketed monuments, museums and galleries; toll taxes collected on tourist vehicles; collection of levies such as state taxes and luxury tax at hotels. We have no assessment of peak flows of traffic and pattern of demand. The record of how budgets have been spent and to what end use revenues have been subjected to is totally absent creating a vacuum in accountability.

There are no measurement and evaluation criteria to measure the efficacy of a campaign or participation in trade fairs, exhibitions, road shows. While airlines like Jet Airways have an ongoing customer feedback process, the same would not be true of other enterprises. Little or no measure exists of visitor satisfaction. Our ability to deal with visitor complaints are not measured either. Predicting future trends in tourism, changes in markets, changes in market segments, changes in demographics, are also not undertaken methodically.

In case of domestic tourism the situation is even more pathetic. We blithely dole out figures of 300 million+ as the size of the market with no back-up figures. Most professional enterprises believe that what cannot be measured, cannot be managed. Clearly, without adequate research we are going to remain intuitive in our judgements, which is ironic when you consider that an organisation like TCS says that nearly five per cent of its revenue comes from tourism-related information mining for international clients.

When it comes to tourism consultancy the situation is equally embarrassing. Despite a well thought strategy with a good framework for Tourism Master Planning and Grants having made available from the Centre, the quality of the state master plans has room for tremendous improvement. Most states have not used the seed capital from the centre effectively. Ideally the master plan generated should have been robust leading to projects being identified. This in turn should have encouraged private enterprise to be motivated to take up tourism projects as an area of preferred investment. Looking at the landscape of investment flows most of the investments have been in the gateway cities for business hotels. The flow for the pure leisure segments has been restricted to Goa, Rajasthan and to some extent Kerala. There are not enough specialist consultants. The fee structure does not encourage quality work. The time frames are too tight. Secondary data used by the consultants is suspect. Most consultants usually change the terms of reference of their deliverables and put all their constraints in fine print. The reports are usually 80 per cent gloss from cut and paste backgrounds with less than 20 per cent true content. Often the solutions offered are not site-specific and so you find the same laundry list of convention centres, golf courses doing the rounds.

This is clearly an unsustainable situation. The lack of a close relationship amongst the tourism community including the institutes, which are cocooned in their own world further aggravates the situation. This obviously has to change and the fact that there is so much to do should be seen as an opportunity rather than insurmountable challenge.

The writer is Principal (Business Development), IDFC