Prime Minister Narendra Modi’s call from the parapet of the majestic Red Fort on the anniversary of the country’s Independence Day sure took us all by surprise. The call was nudging his fellow countrymen to see more of India, thus hoping to increase footfall to India’s biggest tourism segment.
Why now? With the rise of hotel inventory across sectors and having successfully outpriced ourselves in the International markets, India has handed over our ‘bread and butter’ market to our Asian rivals on a silver platter!
With a ridiculous taxation rate in the form of GST of 28% imposed on rooms over U.S $100 (Rs.7500, considering the spiraling of the value of the US dollar vis-a-vis the humble Indian rupee) in an inane attempt to beat some sort of record, the Indian government has taken extreme pains to shoot itself in the foot. In an era, when the Indian foreign exchange was minuscule, India Tourism has always had a favorite son with the long-haul foreign tourist bringing in the much-needed dollar. But in the changing scenario, where the reserves are more than U.S $425 billion and inbound arrivals on the status quo, the timing to woo the domestic desi traveler has never been good.
With the Prime Minister happening to remind people to travel within India, it is also a ‘Shot in the Arm’ to the domestic travel market. The segment is diverse, blessed with a population of nearly 1.5 billion, all year round and ever so aspirational. The statistic on this vary–anything from 175-550 million traveling, of course, it is dependent on whom you ask!
If one considers the forex outflow as a result of India being one of the darlings of the global tourism export markets, it is surely not surprising. As per the statistics by US Exports, India is now one of the fastest-growing outbound tourism markets in the world, second only to China. The United Nations World Tourism Organization (UNWTO) estimates that India will account for 50 million outbound tourists by 2020. Despite the slowdown due to rupee fluctuations, the Indian outbound numbers have been growing at an average annual growth rate of 10-12 percent over the last seven years. The market for travel and tourism in India is expected to grow at a Compound Annual Growth Rate (CAGR) of around 7.23 percent during 2016-2021.
A growing, consumption-driven economy, a large and increasingly affluent middle class, and the ongoing liberalization of air transportation have contributed significantly to this growth in international outbound travel. Additional interest in niche tourism sectors such as medical, wellness and adventure tourism has also contributed to this growth. Increased smartphone and internet penetration have also contributed to an increased number of online bookings.
Indian spending outside the country while traveling abroad has doubled in the past 10 years, from the U.S $7.5 billion in 2005 to nearly U.S $16 billion in 2015 and is expected to touch over U.S $25 billion by 2021.”
Way back in the early nineties, when the properties were limited and the eagle-eyed foreign tourist looked as manna to save India from spiraling imports, it was a prudent exercise to tap foreign exchange. With an economy still growing at a little over 5% and being on the fastest growing large economies of the world, India has sure come a long way.
The domestic tourists are 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 ended. The ongoing recession in Europe and American markets and the saga of the Mumbai attacks supplemented the near doubling of hotel inventory in India to a new 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 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.
In a global slowdown scenario, where international arrivals have stagnated, New Zealand, for instance, still considers domestic tourists as their mainstay and makeup about two-thirds of the tourism industry.
Britain, in 2016, at the onset of lower domestic tourism grown, started an innovative marketing program by inviting young Brits to ‘Join the World.’ The campaign showcased Britain’s amazing moments, turning travel inspiration into advocacy and stimulating additional domestic holidays and spend. The domestic GREAT Britain campaign launched was designed to reverse the trend and recover the UK’s ‘lost generation’ and get more young people to experience the amazing holidays on offer at home. The campaign was backed by a budget of £2.5 million was run across Facebook, Instagram, Snapchat and dozens of billboards around the UK. Two new hashtags, #lovegreatbritain, and #loveUK, encouraged and enabled young British millennials to join the conversation. The activity hoped to generate more than 1 million additional overnight stays and provides a further £80m boost to the economy.
Down under Australia has created campaigns to capture the hearts of locals hoping more Aussies choosing to holiday in their own backyard. The latest National Visitor Survey released by the Department of Foreign Affairs and Trade, Govt. of Australia shows that for the year ending March 2019, Australians took 109 million overnight trips around the country and spent a record $75 billion, up 14 percent on the previous year. A few years, back Australians had stockpiled 123 million days of accrued annual leave, adding up to tens of billions of dollars in holiday pay.
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.
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 it has an 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 is still obsessed with chasing finicky international arrivals. In spite of probably being the world’s second biggest domestic travel market, it still receives a treatment meted out to second-class citizens.
Mere sloganeering or having the Prime Minister having to push discerning travelers to travel within is not enough. We have to sensitize state governments to reach out to markets within to have an impact! The attempt to reach out domestic markets is not a smooth highway though, but sure commands enough respect to reaching out to a market closest to hearts and proximity alike!