Travel News September 2007

Travel and Transportation Infrastructure

Aurangabad airport to be refurbished under Ajanta-Ellora Tourism & Development Project

Finnair on cloud nine over India business prospect

Air passenger traffic in India is to double in five years: ASSOCHAM
Heritage status for Kalka-Shimla rail track?
Emaar-MGF ties-up with Marriott Group to set-up hotels at Kolkata and Amritsa
Booming economy, tourism makes Indian hotels among worlds costliest
Versace group plans to set up mega resort in India
Amit Burman to enter restaurant
Big Mac's no longer betting big on kid stuff in India
Kumarakom Lake Resort to develop property in Karnataka
ITC eyes Fortune in rural hotels
Karnataka to focus on home stays

Sector: Aviation

Aurangabad airport to be refurbished under Ajanta-Ellora Tourism & Development Project
September 26, 2007

Maharashtra Tourism Development Corporation (MTDC) along with Airports Authority of India (AAI), are developing the Aurangabad airport under the Ajanta-Ellora Tourism and Development Project. Under the development of the Aurangabad airport, new construction of passenger facilities like new passenger terminal and ancillary support facilities are being developed. Other facilities included in the development plan of the project will be constructing a new apron of 500 x 400 metres and also a taxiway for the aircraft. This project is the part of phase two of the Ajanta-Elora tourism and Development Project with an investment of about Rs 700 million. This development is expected to be completed by the mid 2009.

MTDC is the controlling agency in this project whereas AAI is the implementing agency for the project. Japan Bank for International Corporation (JBIC) has given the soft loan to Government of India through Ministry of Tourism (MoT). "Ajanta-Ellora in Aurangabad is a world heritage site, and the development of the airport will not just increase the number of tourist arrivals but also further strengthen the tourism sector in Maharashtra. We will also develop other required facilities like lounges, coffee shops, waiting rooms, restaurants etc. for the regular travellers and the tourists at the airport," informed Abhay Yawalkar, Joint Managing Director, MTDC.

According to sources in the industry the Aurangabad airport is expected to start international operations in one or two year's time. The current airport handles approximately 2,345 passengers per week. The phase one of this project covered conservation and restoration of the Ajanta-Ellora Caves, afforestation, and improvement of road, water supply and signages. On the airport development front, the first phase entailed strengthening and extension of the existing runway from 6,000 feet to 7,000 feet, installation of Instrument Landing System (ILS) and other navigational systems, air conditioning of the departure lounge, as well as construction of the boundary wall. "For the development of the tourism sector, we have set up a tourist centre called, `Ajanta Visitor Centre' wherein information on the tourists circuits, hotels etc. will be provided to the tourists," added Yawalkar. The phase one of the project was started in 2001, while phase two kick started in 2005.

Source: Travel Biz Monitor

Finnair on cloud nine over India business prospect
September 23,2007

Finnair, the official carrier of Finland, took 19 years to start 25 weekly flights out of China but less than nine months to operate 12 flights a week from India. The logic is simple. With all the big IT players of India in Finland and growing Finnish business presence in India, corporate travel is on a high.

Alongside, for the first time, this eastern Scandinavian nation is keen to project its brand ambassador – Santa Claus – in India. Besides, domestic tour operators too are now drawing up special tour packages for ‘winter tourism’ to Finland.

“In 2006, Finland had more than 45,000 over nights (tourists who stay for one or more nights) from India, up 40% from the previous year,” says Taina Tornstrom, director – Indian sub-continent, Finnair. “It takes 6.5 hours to fly to Helsinki from Delhi, and the Helsinki airport has also been voted as the best European airport, which works in our favour,” says Ms Tornstrom.

According to her, in roughly two years, the fleet would be doubled and the airline would make forays into Bangalore and Chennai. Interestingly, this would augur well for the Finnish Nokia, the world’s largest handset maker, since it has its Indian plant in Sriperumbudur near Chennai.

“Finland has started its promotions and fam trips this year. It also recently showcased vegetarian food that the destination offers. By next winter, it will gain popularity among Indians,” says Arup Sen, executive director of Cox & Kings. The package for three nights costs Rs 22,000 (including accommodation, meals and sight seeing) and Rs 50,000-60,000, if you include airfare. Of course, the prices don’t include taxes.

“With increased air connectivity, Finland is now gaining popularity. Passengers are not just using Finland as a transit hub but many leisure travellers are also going there. The number of corporate travellers is also picking pace. The cost is in line with other European countries,” says Nalini Gupta, head-travel business, Thomas Cook.

Raj Travel too has tossed up two winter packages to Finland this year – a seven-night and five-night extravaganza to rope in leisure tourists. “Asia accounts for roughly 30% of the overall revenues of Finnair,” says Ms Tornstrom, adding that owing to current demand, more capacity building is on the cards.

Source: Economic Times

Air passenger traffic in India is to double in five years: ASSOCHAM
September21, 2007

According to a recent report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), air passenger traffic in India is expected to double in the next five years and triple in nine years from now.

The airline industry has every reason to rejoice as it is likely to grow by 10 per cent year on year in the next three years, stated the ASSOCHAM report. And in terms of cargo operations, the domestic and international traffic is projected to increase by 4.5 per cent and 12 per cent respectively over the next decade.

Source: Travel Biz Monitor

Sector: Railways

Heritage status for Kalka-Shimla rail track?
September 13, 2007

After Darjeeling toy train, the century-old Kalka-Shimla rail track may now be placed in the World Heritage list.

A UNESCO team of experts is examining the 104-year-old rail track in Himachal Pradesh to decide whether to grant it World Heritage status.

The two-member team, headed by Robert Lee, will study the 96 km track, that passes through 103 tunnels, for the next three days and submit its report.

Indian Railways hopes to get heritage status for the track like the Darjeeling railway line and boost its earnings from tourism.

"Besides the railway track, tunnels, bridges and railway stations, we are minutely studying all the relics along the railway track," Lee said.

"We will also interact with the Indian government," he added.

The British built the Kalka-Shimla rail track and the first train was flagged off by Lord Curzon in 1903.

The track rises from 650 metres to almost 2,100 metres and passes through 103 tunnels, 969 bridges, 919 curves and 18 railway stations during its journey.

Source: MSN India

Sector: Hotels & Restaurants

Emaar-MGF ties-up with Marriott Group to set-up hotels at Kolkata and Amritsar
October13, 2007

Emaar-MGF has tied-up with the Marriott Group to develop two properties, one each at Kolkata and Amritsar. The property at Amritsar will be a 150-room business hotel and will operate under the Courtyard by Marriott brand. Emaar-MGF will also construct a 250-room luxury property in Kolkata that will function as a JW Marriott hotel and will become operational by 2010. Further, the company's super luxury hotel at Goa, which is a joint venture with the Accor Group, is also in final stages of completion.

Source: Travel Biz Monitor

Booming economy, tourism makes Indian hotels among worlds costliest
October10, 2007

The long wait of tourists and business travellers expecting some softening of hotel room rates and hoping to find accommodation more easily in the country's top cities, is far from over. With supply lagging behind demand, room rentals and occupancy levels continue to rise across the country. According to the latest figures from hospitality research and consultancy firm HVS Hospitality Services, the average room rate across all star-category hotels in the country rose by 30 per cent over the previous year, touching Rs 7,075 in 2006-07. Average occupancy for all star-category hotels was 72 per cent in 2006-07, up 0.7 per cent over the previous year.

The growth in room rates and occupancy is driven by high demand from both business and leisure travellers. While demand has grown rapidly, supply has not been able to keep pace. Hotel rooms in India's leading cities today are among the most expensive in the world.

According to Manav Thadani, MD, HVS Hospitality Services, "If rates continue to grow at this pace, they will become a deterrent to business and tourist travel. In the long term, inflated room rates will also have a severe negative effect on potential demand. The effects are already noticeable in most markets. For the first time in four years, markets such as Bangalore, Chennai, Delhi, and Hyderabad have seen a decline in occupancy rates." In Bangalore, where room rates are among the highest in the country, occupancy level has declined for the second consecutive year.

Another consequence of the exorbitant rates in branded hotels is the emergence of a segment comprising unregulated and unorganised hotels and guest houses. This segment is booming in Bangalore, Delhi, and Pune. Bangalore, especially, has 2,000 rooms in the unbranded segment, which exceeds the supply in the branded category. With rates in the branded category so high, unbranded hotels and guest houses are also able to command a good price. In Bangalore, their rates range from Rs 3,000-7,000 per night.

The all-India average occupancy level touching 72 per cent is significant. Said Thadani: "When the average touches the 70-72 per cent mark, it indicates substantial unaccommodated demand." That's because of the cyclical nature of demand in the hotel industry: demand is higher during weekends, and again, high during the peak season.

Added Thadani: "The high room rates also mean that the correction in rentals, when supply catches up, will be sharp." According to an HVS report, Bangalore, Pune and Hyderabad could see correction in rental rates in the short term. In other cities, it will be 3-4 years before supply catches up and rentals rationalise.

The answer to escalating rentals, of course, lies in developing more rooms and at a faster pace. But as Rajendra Thakre, MD of Singapore-based Meuse Hotel and Hospitality, which aims to invest $200 million in India by March 2008 said: "The run up in real estate prices has made it tough to develop hotels here."

Source: Financial Express via Yahoo

Versace group plans to set up mega resort in India
October 4, 2007

Fancy enjoying the most expensive luxuries at a Versace group hotel without leaving the salubrious Indian tropical clime? Well, you will get the chance shortly.

The Versace group is planning to set up a mega resort in India, which could be the third in its global chain of luxury hotels after Australia and Dubai. The Palazzo Versace (Versace palace) hotel is likely to adore the skyline in Goa, sources close to Italy’s Gianni Versace SpA told ET. The Versace hotel at Gold Coast in Southern Queensland is reportedly the most expensive hotel in Australia.

“The project could bring a massive investment into India, which could be in billions of dollars,” said the source who did not wish to commit a figure. The group will not have local partner for the India project. For all the luxury resort projects, the Milan-based Versace group has a tie up with Australia’s property developer Sunland Group Ltd. Construction projects such as resorts are allowed 100% foreign ownership in India without specific government approval.

The second Versace resort, which is under development in Dubai, is expected to be opened 2009. This is being developed by the Sunland Group and the Emirates International Holdings. "It will have 214 suites and 190 condominiums and several swimming pools," said the source..

It is understood that the group has plans for many capital cities in the world. These luxury resorts reflect designs from the opulent Renaissance palaces in Europe and its classical architecture. The Gold Cost resort houses a 750-kg chandelier owned by the legendary designer Gianni and its driveway has the second largest pebble mosaic design in the world made of rare Italian and Brazilian marble. Gianni’s brother Santo now heads the company that is diversifying into hospitality and aircraft interior design.

The group, which already has a boutique at a hotel in Mumbai, is also planning to open one in New Delhi. The group recently opened a boutique in China too. "India has a great passion for textiles and it has a fast growing upper middle class. India is a major focus for our home collection,” said the source.

Source: Economic Times

Amit Burman to enter restaurant
October 4, 2007

Amit Burman, CEO of Dabur Foods, is foraying into the restaurant chain business with Lite Bites, all in his personal capacity.

With about Rs 150 crore investment committed to the F&B retail space over the next three years, Lite Bites is positioned to be a holding company that would harbour a slew of brands.

Currently, Lite Bites is being promoted by three partners — Amit Burman, Rohit Agarwal and Tej Pavan Gandok — with Mr Burman as majority shareholder.

The company operates restaurant, Subway, as a franchisee, and has just brought in another international multi-format chain, the Dubai-based Hot Brands International, with whom a JV is being forged.

Source: Economic Times

Big Mac's no longer betting big on kid stuff in India
October 3, 2007

Big Mac, America’s iconic child-centric brand, could learn a lesson or two from its Indian counterpart. Even as the world’s largest food chain continues to pile up junk food and obesity charges from concerned parents and public health advocates in the US, its Indian subsidiary seems to have circumvented all such contentious issues.

McDonald's India kids’ component — the amount of sales contributed by kids — is now perhaps the lowest in the world. Children now account for less than 18% of McDonald’s India sales, down from more than 33% when it started off here a decade ago.

Happy Meals, Big Mac’s most famous sub-brand specially tailored for children and a company trademark since 1979, has been witnessing a year-on-year decline in sales in India. “Kids’ visits to our stores have been declining year-on-year and have been overtaken by young adults, but we’ve also consciously building McDonald’s as a family brand,” McDonald’s (North) India MD Vikram Bakshi said.

Instead of trying to get children back in its fold, McDonald’s India has replaced Happy Meals with localised and baked products like curry pans and puffs as a core focus area. Big Mac’s trademark ‘I’m Lovin’ It’ campaign does not feature children anymore and instead uses only teenagers, adults and the elderly. Further, McDonald’s famous mascot Ronald McDonald is used only for the odd CSR initiative.

Teenagers and young adults now account for about 70-75% of the food retailer’s customer base, followed by kids with family (around 18%). Elderly people fill up the remaining pie. Mr Bakshi declined to reveal McDonald’s India’s revenues or profit/loss numbers. “That is something we never disclose,” he said.

Like in all world markets, McDonald’s India, too, started off by addressing children as its core target group. It aggressively pushed Happy Meals with toon-merchandise and toys, creating only kids-focused advertising and taking Ronald McDonald centrestage in all ground promotions through merchandise and footprints leading to order counters.

However, with global concerns over child obesity gaining ground, each of those strategies has been done away with.

The American quick-service chain, which has invested nearly Rs 800 crore in India, plans to pump in Rs 300 crore more over the next three years. “The additional investment will be infused for back-end operations to improve productivity of food processing plants and suppliers, expanding and testing new format stores and entering new markets,” Mr Bakshi said.

With 121 stores up and running in the country, Big Mac’s first outlet at the New Delhi domestic airport equipped with a kitchen is scheduled to open shortly, and the site for a store at the Old Delhi railway station has been finalised. Expansion plans are underway at two-tier and three-tier cities such as Meerut, Varanasi, Karnal, Kanpur and Gwalior. It is also toying with the idea of setting up an outlet at the busy Noida toll road in the NCR region.

Carrying forward its localisation strategy, the food retailer is set to make French fries locally through a greenfield plant in Gujarat, set up by one of its key supplier partners — McCain Foods. The plant, set up on an investment of Rs 100 crore, will manufacture fries exclusively for McDonald’s in the first phase. The fast food chain has been importing fries from New Zealand and Holland all along.

Source: Economic Times

Kumarakom Lake Resort to develop property in Karnataka
September29, 2007

Kerala-based Kumarakom Lake Resort, owned by the Paul John Enterprises, is planning to extend its footprints to Karnataka and is developing a property near Domlur, close to the Bangalore International Airport. It will be a five-star leisure hotel and will have 51 luxury suites and is slated to become operational by this year-end, according to Shelly Thayil, General Manager, Kumarakom Lake Resort. The promotion and marketing of the upcoming property will be done in association with the Leela Group, which also manages the marketing of the existing property.

Commenting on the company's business strategy, Thayil said, "Bangalore has a lot of tourism potential and currently there is a huge shortage of rooms in the city. We are trying to capitalise on this opportunity by developing a world-class hotel. The Domlur property will cater to travellers looking for luxury accommodation in the city.

Source: Travel Biz Monitor

ITC eyes Fortune in rural hotels
September 22, 2007

Cigarette-to-hotels major ITC plans to set up around 15 three-star hotels over the next three years in rural areas where it has retail hubs. To be christened Fortune Lodges, the hotels will have around 25 rooms and cater to business and leisure travellers.

The rooms will be priced between Rs 1,000 and Rs 1,400, based on the location, and will provide a basic room and dining service, gym and a wi-fi connection.

The overall plan is to cater to the rural tourism market, which the company believes has huge potential. “We believe that rural India is one of the major experiences any tourist can have. There is a lot of demand in these areas and since we already have a presence in some key villages, we plan to capture the traffic here,” said a senior executive of ITC-Welcomgroup Hotels. He added that the objective was to provide safe, hygienic and comfortable accommodation to executives who travel to the hinterland for work. “With many companies heading to rural India, we believe this proposition will work," he said.

The lodges will be built on the premises of its rural retail hubs called Choupal Sagar. The hubs are typically spread over 8 acres to 10 acres and have enough land to spare for a hotel. The first Fortune Lodge will come up at a Choupal Sagar at Sehore, nearly 38 km from Bhopal, capital of Madhya Pradesh.

At present, the company has 18 Choupal Saagar in three states — Madhya Pradesh, Uttar Pradesh and Maharashtra. Each Choupal Saagar caters to around 200 villages. The construction of eight Choupal Saagar in these three states are in advanced stages.

Fortune Lodges will be classified under the three-star category and will cost the company Rs 2-2.5 crore each with ITC planning to invest between Rs 8 lakh and Rs 10 lakh per room. ITC runs 75 hotels across the country under its Luxury Collection, WelcomHotels, WelcomHeritage and Fortune Hotels brands. At present, the Fortune chain has 30 hotels under the brands — Select, Park, Inn, Resorts and Residences.

Source: Economic Times

Karnataka to focus on home stays
September18, 2007

In a bid to boost tourism in the State, the Karnataka Government plans to focus on home stays by offering accommodation facilities for tourists at heritage houses, traditional houses and farmhouses. According to Dr C Somasekhara, Director, Karnataka Tourism, the State's aim is to register 1,500 home stays across the state by the next financial year.

"Considering that home-stays qualify as non-commercial activity, those offering their homes as home stay options for tourists are exempted from taxes, thereby making it an economically viable option for both, those offering it as well as, those availing of it," said Somasekhara. Besides, it works out to be a viable option for the State as well. "1,500 home-stays work out to 7,500 additional rooms for tourists, without having to invest in any more hotels," he explains.The plan is to put up the names and addresses of the home stays on the State Government's website.

Karnataka Tourism is now keen on promoting its rich heritage houses, traditional houses and farm houses as home stay options. "Tourists, especially foreigners visiting Karnataka, will prefer to stay in places which are unique and at the same time, within their budgets. Besides, our home stays are eco-friendly," maintained Somasekhara, as he went on to add that home stays have become a feasible alternative to lodges and also provide a source of income in the rural areas.

According official sources, around 5.5 lakh international tourists and over 27.5 lakh domestic tourists visited Karnataka last year. This year, the State Government has made a budgetary allocation of Rs 148 crore for development of tourism, particularly in terms of improvement of infrastructure.

Source: Travel Biz Monitor