There is no looking back, but India’s arrivals is yet to reach any critical levels, compared to our potential. Our marketing is absent, we need to get aggressive and support the international travel trade.
So, how are the numbers stacking up? For A&K, and for Indian tourism in general.
Ever since the curtains fell on Covid, thankfully there’s been a slow but steady recovery for business into India. Especially 2023 was a slow start, but towards the last quarter, business came back quite nicely. I’m speaking specifically for the luxury markets and from the key markets that do business to India, which is the Americas, UK, some parts on the continent, Australia, Japan. The last quarter of 2023 was actually quite good. 2024 for A&K has been an exceptional year. We have seen a growth of about 35 percent over 2023.
And how does this compare to 2019?
Very good question. So, 2019 was our best year. If you take 2019 as the base year, we are plus 10% over 2019.
You are now 10% over and above your record year?
So, there are two parts to this Navin, so you should understand. One is, that in simple inflationary growth because prices have gone up about 15 to 20% from that period. So not necessarily in terms of headcount of passengers, but in terms of revenue.
In terms of head count, where would you be?
We are just at par or still below par, or just at par with 2019. But in terms of revenue, we are about 10 to 15% ahead of 2019, if you take that as the base year.
If we look back at 2019 as your best and also base here to today 2024, when you are doing 10 to 15% better. Have the market segments changed or they are virtually the same over this time?
The segment remains pretty much the same. The high spending Americans that were coming in 2019 are back with a vengeance in 2024. And 2024 has been the first full year of a full recovery, so to speak. Now, not all markets have recovered Navin. So certain markets where the economy in itself is a little soft which is even on the continent. And I speak for the industry. So, whether it is Spain or Italy, they are still struggling with passengers and numbers and revenue.
What about Uk?
UK, I would say is back to 2019. Numbers are back.
Are you dealing with Scandinavian also?
No, it’s too small a market. But of course, having said that, because we are part of something like the global network, Virtuoso, a consortium of high-end luxury retail travel agents, so by default, Scandinavians do also come to us.
The Middle East?
No, we don’t really work with them. If you talk about the Middle East specifically a lot of them come over London.
When you said 2024 is going to be your first complete year, we still have two and a half months to go. So, are you also building into this, the expected numbers over the next two and a half months?
Of course. Yes. When I give my numbers, because pretty much now we are 80% where we are going to close 85%. Now it’s only a top up that will happen in October and November and December. But the numbers will not radically change beyond 15% on terms of our sum total of business.
Where are you spreading your groups over India? Looking at again 2019 as your base year and best productive year, how is the profile of the destinations that you’re using, changing? Or is it still the same destinations that your groups are typically visiting?
I hate to say this, we all thought the world will change. Things will change, post the pandemic. Not really, it’s exactly the same. I would say a good 65-70% of the people coming into India and I’m being generous still come predominantly north and 30% goes south.
And I say north, I’m striking a brush across which includes right up to MP, into the national parks and so on, so forth. And then typically, the ones who really are going deep down below the Deccan plateau, which will be below Hyderabad that is the ones that are going south.
Only thing that has changed is people are spending more money per passenger. So, one is inflationary, one is per passenger spent, so more people are spending more on their holiday. And luxuriating. Somebody who are buying a business class ticket is now happy to buy a first-class ticket. Fares have also gone up radically.
We were told post covid, that much has changed in the way people are travelling, say for instance, more experiential, more to never before discovered areas, anything like this happening that you see in your market?
Yes, they would spend maybe a night more, they would have toned down the pace of their travel where they would and the level of engagement is perhaps a little deeper.
Ok, let’s put things in perspective. India is one time baby. We might sit and believe that the lure of India is so good that people keep coming back. Not true, there’s so much to seen around the world. And so most people come to India, and I speak for the larger number. So, a good 75-85% people come one time, and they come predominantly covering the highlights of India. And in that they could perhaps spend a night or two extra doing what they’re doing and digging a little deeper.
But they are not, there’s nothing radically that’s changed that we thought perhaps would change because India is a multi-city stock. But people come and they do a circuit. So, they cover minimum three places, which is a week away. But most people travel 10 to 14 days in India, which is a little different from what you see in many other parts of the world.
So, let’s say a potentially a 15-day tour, you are saying that the typical cities or destinations, which they would have visited in 2019 is much the same as in 2024.
Identical.
Some years back, we were told that for the luxury traveler, the moment he arrived at Delhi Airport, and then he thought of going and visiting, let’s say the Oberoi Vilas property somewhere. From the airport to the Vilas property, in between, was a misadventure in terms of facilities and amenities. Has the experience in between from the airport, the moment you touched down at the airport to arriving at your hotel, has it become any different? Does that provide any additional ease in travel and comfort and luxury?
Excellent question. Far better. I would say our airports are absolutely world class and the experience that we have coming into India has infinitely changed for the better. And of course, our guests or the luxury traveller, they are being handled personally in a curated service from the time they arrive. They are met at the door of the plane. They’re brought through immigration, into customs, their bags are picked, and they’re into their vehicle and headed to the hotel. The roads are much better, the infrastructure, et cetera is now much, much better. It is vitally different from what we provided earlier.
So typically, your groups when they’re going from Delhi to Agra, they’re taking the new expressway, the Yamuna Expressway?
I would say 60% would jump on the expressway. 40% would still take the train because they want the experience.
And how about the experience on the train itself?
It’s good. Excellent. Top class, because now there’s a multiplicity of offerings.
And are we getting any more attractive as a country for luxury travel? And, my allied question is, are we able to create any more newer luxury experiences where we think as you said, maybe we are a one-time destination, but that can prompt them to come for another trip soon enough?
So, if people come to India and they like what they see, then they specifically want to come back and do something niche. So, if they had a flavour of our wildlife, and then they want to some back, do something other than wildlife, now wellness is a big story globally, which includes India.
Are newer luxury products coming around in the market?
Yes, there’s lots. So, thanks to the slew of new hotel offerings that are coming into India, you got the new Raffles, you got the new Six Senses. Existing properties, especially in the luxury space, the palaces, the villas they’re all actually now getting into more experience based where they give guests the option to do a little bit more, stay an extra night and of course, beyond just a spa and beyond the monument or the national park, but do something a little different. So, each one is heightening their experience once they step into the hotel.
Any one thing that you would like to see added or provided additionally, which can make India a more favoured destination for luxury?
Unfortunately, what is happening in the Middle East and Egypt, to a lesser extent in Morocco, Jordan, their loss has been our gain because we are a culturally rich historical destination. So, I don’t know you want to put it. Their business has been impacted because of the Middle East crisis. The war is impacting those destinations.
So, it behoves us to market ourselves internationally and to position ourselves in such a way to be able to perhaps take, pick up, what was destined to these areas, to come into our area.
Also, of course, as you know, we are not really in the face of a consumer or the intermediary either, there is no promotion of India, be it digital or print. In fact, there is no presence of India in the traditional source markets. So today, if you are talking about an international tour operator who has been loyal to India over the years, they have no one to go to, there’s no redressal, to go for the person to go to and to meet or speak to somebody. Or, if they want matching dollar funds to promote the destination, things like brochure support, et cetera, et cetera.
Tell me I’m talking little historical like 20-30 years ago. This subject, which you picked up though, the word that you used, brochure support, it used to be a big thing then. And a foreign tour operator would print so many more copies of a brochure, which would then be mailed to his database. Now, I presume a lot of it has now become digital, and it’s online.
So, believe it or not you know, in the United States and Australia, more in the United States, they still love to see a glossy brochure being dropped in their mailbox and to talk about exotic holidays.
So, the brochure is just as much in print or it’s also brochure in print and online?
It’s both. Let’s go demographically, psycho-graphically, the older lot still like to rely on a nice glossy brochure.
Is it true of the US market?
Yes. Because we get a lot of senior citizens out of US? And, but then that’s not only the US it’s also on the continent. After all, it’s an ageing world, and not everybody is savvy to get onto the net and to surf it and to go on and see social media.
So, in the luxury market, would you say print is still supreme and brochure support still as relevant?
Absolutely.
And we are not providing any brochure support today?
Okay, forget about brochure support. How about matching funds to promote the destination? There’s a big push now on digital, so after all, you spend money to engage through social media?
Yes. So how is A&K promoting? It’s your overseas offices, which help you.
We have huge machineries promoting the destinations, our spend is huge. And so, when I say matching funds, brochures are only one aspect of it, 25-30% of it. But the other part is digital. And like us, the others, I can speak for ourselves, we spend a lot of money digitally promoting through social media – Instagram, Facebook.
You asked me a question if there was one wish that I had.
I think the time has come now that we should make it a visa free regime for people who are coming into the country, especially from certain countries, like you already have it, from Thailand and from Sri Lanka. So, visa free regime should be visited if you really want to be a game changer. Specifically, if you want to try it as a pilot study, and do it in our shoulder months when typically we don’t attract too many people. So, let’s say if you are planning it now, say Visa free in April & May next year, and let people come, because today a lot of people get up and just plan and go to Turkey, Almaty, Vietnam, Thailand, because there is no Visa.
It’s a game changer! Tell me, it is a very interesting subject, you mentioned the well-heeled luxury traveller who overnight wants to come to India and play a game of golf. That’s not possible, buying a ticket and catching a plane?
Impossible. You first plan, the people have to have to work around it, and you apply for a visa.
My understanding is slightly different. We haven’t engaged the powers that be, adequately. I don’t think we’ve ever been able to get an audience to whom you explain why a visa-free regime makes the difference for inbound tourism. It’s the perception and explaining how this will make a difference.