Tourism and Travel Trends from India:
News and views on India's Travel and Hospitality Sector

Weekly News Related to Travel Industry in India

Places in the News
Travel and Transportation Infrastructure
Niche Tourism
Policy
Travel and Tourism Support Industries
Travel Characteristics of Indians

Places in the news

1. Rajasthan trouble hits Golden Triangle tourism
The continuing unrest by Gujjars in Rajasthan demanding tribal status has severely affected tourism in the Golden Triangle circuit that includes Agra and New Delhi besides the desert state.

Travel agents and hoteliers said several groups of foreign tourists were stranded in Agra and Jaipur while many others had chosen to return to New Delhi to catch a flight back home.

'Hundreds of tourists have extended their stay in Agra hoping things would normalise in a day or two so they can proceed to Jaipur,' Sunil Gupta, chairman of the Uttar Pradesh chapter of the All India Tour and Travel Association, told IANS.

He said agents from eight countries in Agra were scheduled to go to Jaipur, but they cancelled their programme and returned to New Delhi.

Rajasthan, New Delhi and Jaipur form the most frequented tourist triangle in India. Rajiv Saxena, another travel agent, said that tourists were facing all sorts of problems due to continued blockade of the Agra-Jaipur highway.

'The tourists arriving in Agra from alternate routes have had to spend six to eight hours extra and undergo all sorts of problems and uncertainties,' he said.

Tourists between Agra and Jaipur are travelling via Alwar, taking six hours more in this hot weather.

The merchants' chambers have expressed deep concern over the continued violence in Rajasthan, which has left over 20 people dead.

'Exports have been affected. Glass goods from Firozabad (near Agra), Agra shoes, are all held up here. The losses continue to mount. Supplies to Gujarat and beyond have been hit, especially container movement to western India have been seriously affected,' said an exporter.

Meanwhile, hundreds of passengers to Rajasthan waited endlessly at the Idgah bus stand.

'We are waiting for a bus to go to Balaji, but there are no buses,' complained Atma Ram. 'It's such an inconvenience in this hot weather,' added Jagdish of Agra's Loha Mandi area.

Meanwhile, Gujjars in Agra area bordering Rajasthan held several rounds of meetings to mobilise support for their community in that state. The Agra-Gwalior road traffic was disrupted for some time Thursday.

Hundreds of villages in Agra on the border with Dholpur have sizeable population of Gujjars, who have felt bypassed and neglected.

'If the agitation continues for a day longer, it would be a severe jolt to the tourism industry in this Golden Triangle,' said Rakesh Chauhan, president of the Agra Hotels and Restaurant Association.

Friday, June 1, 2007
Source: IANS via Yahoo

2. Unseasonal snowfall in Dharamshala brings joy to tourists, businessmen

An unseasonal snowfall in the Himalayan region is drawing scores of tourists from the plains of north India to Dharamshala, the hilly resort in Himachal Pradesh.

These tourists, who are flocking here with families and friends are keen to avoid the scorching heat gripping most of North India.

Dhauladhar ranges in the Himachal Pradesh recently witnessed snowfall, which is unusual for May. This has also brought the chill back in the air, captivating tourists from across the country.

Local traders and hoteliers have also welcomed the change in the weather, and expect their cash registers to ring with greater frequency.

'The month of May is the hottest period in entire India, particularly, in the north part of India till June. This fresh snow in the mountains is going to create wonderful weather in Himachal Pradesh for next three weeks. That makes the coolest, best atmosphere for any traveller who is planning to visit North India, especially Himachal Pradesh,' said Prem Sagar, a travel agent.

Also known as Mini Lhasa, Dharamsala, attracts over 600,000 foreign tourists annually.

For many people, it's once-in-a-lifetime experience to revel in the scenic beauty of Dhauladhar Range.

'They (Dhauladhar Mountains) are incredibly enchanting. I wish I could stay longer here,' said Ellen, a Scottish tourist.

For many others, the mere idea of snowfall holds an amazing charm.

'It's very interesting because it's very rare that you will find snow in the month of May. Even in the month of December, the snow is less, and in month of May, if you find snow, that's amazing,' said Vikas, a tourist from Delhi.

Dharamshala is also home to exiled Tibetans. Their spiritual leader, the Dalai Lama, who fled to India from Tibet after a failed uprising against Chinese rule in 1959, has set up his headquarters in the town.

Tourism is the mainstay of the State's economy, generating about 100 million dollars annually.

Wednesday, May 30, 2007
Source: ANI via Yahoo.

Travel and Transportation Infrastructure

Sector: Aviation

1. EgyptAir launches new flight to India from tomorrow

National airline of Egypt, EgyptAir will launch its flights to India with the commencement of Mumbai to Kuala Lumpur route from Saturday.

There will be three flights a week on Monday, Wednesday and Saturday from Mumbai to Kuala Lumpur and vice versa, an EgyptAir release issued here on Friday said. EgyptAir will be flying Airbus 330. The aircraft comprises of 268 seats in a twin-aisle configuration across two guest zones, with 24 seats in the business class zone and 244 seats in the economy zone, it said.

"Kuala Lumpur has been on our agenda for quite some time due to its proximity to India. India is now the second fastest growing economy in the world and the demand for frequent travel to and from the Middle East will continue to increase for the foreseeable future," EgyptAir's Regional Manager, Ahmed Wasfy said.

Commencement of the new flight from Mumbai to Kuala Lumpur will provide an important link for lakhs of Indians and Malaysians travelling, living and working in the places. It would also connect leisure travellers flying from Europe and Gulf countries via India for holiday in Malaysia, he added.

EgyptAir is also set to increase the frequency of its Mumbai to Cairo route from two to three flights per-week with immediate and direct connection to London, Europe, America, Africa and the Middle East areas

Friday, June1, 2007
Source: PTI via Economic Times

2. How Deccan boards Kingfisher biz class

It was in early May that Vijay Mallya decided to change the course of Indian aviation. He called Captain Gopinath, the founder and chairman of Air Deccan, and tried to make him an offer difficult to refuse.

Air Deccan’s back was on the wall: it had only a month’s cash left; it had defaulted on payments worth over Rs 200 crore to various partners like simulator providers, spare engines suppliers and maintenance firms. Time was running out, but not the Captain’s tenacity.

He refused the deal and said, “I am from Mars and he is from Venus.” He then shot off an e-mail to all Deccan employees requesting them to dismiss all speculation about any merger or alliance with Kingfisher. All of a sudden, the deal seemed to be over. There were gloomy faces at Vijay Mallya’s headquarters. At Deccan, the situation was desperate.

The company needed a partner quickly, raise some money so it could continue to fly. The offers from the Anil Dhirubhai Ambani Group (ADAG) and Texas Pacific Group (TPG) had their own share of problems. ADAG wanted majority control of 51%. Captain Gopinath rejected the idea outright: he simply didn’t want to give up control.

Also, he didn’t want to get swallowed in the ADAG apparatus where Deccan would be just another investment. TPG would bring in the money but offered no real synergies which Mallya’s Kingfisher provided. There were a few other private equity players in the fray as well.

“But picking up a stake in Air Deccan would have forced us to do an open offer. This would have increased the size of the deal and we were not ready for it,” said a senior executive from an airline who did not wish to be quoted. As the deal size got bigger, these financial investors fell off their bikes.

Edelweiss Capital, Deccan’s advisors then swung into action. The firm had done some work for Kingfisher in the past, and had some idea about its operations. A rapport also existed between senior Edelweiss and Kingfisher executives. Using their goodwill with the Mallya camp, they persuaded Mallya to adopt a different tack.

They pointed out the synergies between Deccan and Kingfisher and the benefits of consolidation in a industry reeling under severe cost and margin pressures. Mallya, meanwhile, was also thinking along similar lines. He realised that his first approach was too strong and had put Gopinath on the defensive. It had made Kingfisher look like a predator. The public statements about his interest in Deccan had only elicited a sarcastic response from Gopinath.

Another factor was also weighing on Mallya’s minds. If he failed, Deccan will have no option but to do a deal with any of the other investors. ADAG, with its money and muscle, would be a formidable competitor. Backed by the younger Ambani’s almost limitless fund-raising abilities, Deccan could continue playing the price warrior.

Dirt cheap tickets would be dumped in the market, further worsening the financial position of all airlines. Mallya decided to turn on the humility tap and let the charm flow. As he hopped across London, Glasgow, Monte Carlo and Paris, he resumed conversation with Gopinath. With the help of some advisors, Mallya worked on Gopinath.

He dropped all talk of acquisition, takeover or merger. He adopted the line of a friendly investor. He also refrained from public statements that would irk Gopinath or other investors. His team, meanwhile, was preparing the ground along with Edelweiss. They pitched the deal as an investment by UB Holdings, not Kingfisher Airlines.

This was crucial in order to persuade Gopinath that a more flamboyant rival is not taking over his company. It was a different Mallya who phoned Gopinath early last week. “Would you consider it if I come in as an investor?” he asked. “May be we can come in with minority stake and then raise our holding through an open offer,” he told the Captain.

As Gopinath began to understand Mallya’s proposition, the king of good times made his killer move. “You continue as the chairman. This is probably the first time in my life that I am sitting as a vice-chairman in any company I have been involved with,” Mallya is said to have told the Captain.

Gopinath liked the idea. The alternative, ADAG, was simply not acceptable to him. But there was something he needed to resolve. Air Deccan’s original backers, including Lachmandas Ladhani, who were believed to have opposed plans to sell stake to the UB group. Mr Ladhani, one of the original investors in Air Deccan, has a 11% holding in the company. He managed to carry the day taking with him Mr Ladhani as well as the financial investors, ICICI Ventures and Capital Partners.

While Mr Mallya may have been persuasive, there’s another man who wanted Captain to do the deal: Kiran Rao, the executive VP of Airbus. Considering that Air Deccan has placed an order for 62 A320 aircraft amounting to $2.4 billion, Airbus reportedly was concerned about the pre-delivery advance payments from the cash-strapped Air Deccan.

So, a meeting reportedly took place in Europe early this week between Mallya and Airbus officials. The final decision was taken in consultation with Airbus officials. With everything going for the deal, Captain Gopinath decided to give up the spartan efficiency of Air Deccan to board the Kingfisher business class. While the Air Deccan brand remains, and the two companies will operate “independently”, it is clear that the days of price warriors are over.

At the press conference to announce the deal in Mumbai on Friday, it was clear who the dominant partner was. The venue was flooded with Kingfisher colours of red and white, and the Kingfisher girls had been thrown in for more colour. With the exception of the airline’s CEO and CFO on the dais, Air Deccan was hardly in evidence.
Saturday, June 2, 2007
Source: Economic Times

3. Best Western to develop 100 hotels in India
Cabana Hotel Management Pvt Ltd, the Indian master licensee for Best Western, the world's largest hotel group, will develop 100 hotels in India's emerging business centres over the next seven to eight years by bringing in an investment of $1.2 billion.

After signing an agreement in Mumbai this week, a team of officials from the Mumbai-based Cabana and Best Western are going around the Indian metros and tier II cities to finalise their plans.

The Cabana group will develop 3.5 to 4 star hotels in various cities and 5 star capable hotels in major cities. It would also look at acquiring hotels in tier II cities and converting them into Best Western brand hotels.

Cabana has finalized plans to establish six hotels in Ooty (Tamil Nadu), Bangalore, Jaisalmer (Rajasthan), Kanyakumari and Rameshwaram (Tamil Nadu) and Bhubaneshwar.

The construction of these hotels is likely to be completed in two years.
'We are now looking at Delhi, Mumbai, Chennai, Chandigarh, Indore, Lucknow, Patna, Ahmedabad, Surat, Nagpur, Aurangabad and Hyderabad,' Prabhu Goel, co-chairman of Cabana Hotel Management, told IANS.

'Business centres are our priority. We would like to cover all metros and state capitals,' said Prabhu, whose group owns and runs eight Western-branded hotels in the US. The master licensee agreement with Cabana is part of US-based western International's aggressive development plans for India to leverage the country's growing business travel and tourism market.

'The Indian economy is growing at incredible speed and the growth potential in Indian hospitality industry is immense,' Anil Wad, CEO, Cabana, told IANS.

There is huge under supply in hospitality industry.
'The airlines industry is growing at 25 percent for five years but there the hospitality industry is not keeping pace with this growth. The hotel tariffs are going sky high and even exceeding the tariffs in the West,' said Anil.

India has an estimated 110,000 hotel rooms across all categories, 40 times less than the total rooms in the US. 'The number of hotels in India is less than the hotels in Las Vegas,' he said.

Cabana says that the hotels it would build in India would offer premier services but at the pricing will be lower than the luxury hotels.

Best Western will not participate in equity while Cabana will finance the investments through a mix of equity, debt and private equity placements.
'The funding will be on our own. There are private equity prospects and we will also do public financing,' said Prabhu.

'We are going around the country to see potential sites to invest in. The Best Western people are keen to see the kind of growth India is experiencing. We are taking them to tier II cities like Bhubhaneswar,' he said

Cabana hopes that the six properties it was building would break up in the very first year of their operations. 'It usually takes two years to break even but we expect it in first year,' he said.

The revenues for first few years from each of these hotels are expected to be $2-4 million and they will scale up to $4-5 million. The revenues from the luxury hotels in metros are expected to be $20-25 million.

On the advantages of being master licensee for Best Wester, Prabhu says: 'There is lot of flexibility in operating hotels. They have set of standards but you can exceed that set of standards. It is the largest chain of hotels in the world and the licensing fee is also very low.'

Best Western wants to have a strong brand in India to target the large number of Indians going abroad, especially to the US, Europe and China, where the Best Western already has strong presence.

Headquartered in Phoenix, Arizona, the Best Western owns and operates 4,200 hotels in 80 countries.

Saturday, June 2, 2007
Source: IANS via Yahoo

4. DIAL invites cos to set up luxury hotels at airport

Delhi International Airport Ltd (DIAL) has sought expression of interest from hotel developers and real estate players to develop a hospitality district in the airport. It has earmarked five land parcels within the airport complex that would house luxury and business hotels, service apartments and a convention centre, spread over 40 acres.

Roadshows are currently on both in India and abroad to solicit international and Indian hospitality developers as partners in the project. DIAL is expected to finalise the development partners for the hotels by August this year and the properties are likely to be operational before the 2010 Commonwealth Games.

DIAL has floated a new subsidiary company, Delhi Aerotropolis Private Ltd (DAPL), to undertake the development of the 250-acre of real estate around the airport, creating a hub for hotels, commercial office and retail space. It had appointed property consultants Jones Lang LaSalle (JLL) and Lehman Brothers to prepare a master plan for the project.

Bidders can participate on their own or as part of a consortium or a joint venture, with maximum number of four members. One can bid for single land parcel or for the whole district. As per the selection criteria laid out for hoteliers and developers to participate in the project, bidders need to have a minimum net worth of $75 million if they are pitching for a single land parcel.

However, anyone bidding for the whole district needs to have minimum net worth of $350 million. In case of a consortium, the lead investor or developer should have at least 50% stake in the JV. Expression of interest from developers have to come in by June 5.

Following this, parties would be shortlisted for presenting their request for proposals (RFPs) that would include their detailed financial proposals. While RFPs have to come by July 31, DIAL has set a cut-off date of August 28 for finalising and signing of agreements with the selected development partners.

As per estimates by JLL, Delhi would need another 8,000 hotel rooms by 2010 at the time of the Commonwealth Games. Currently, Delhi and NCR together have an inventory of around 7,000 hotel rooms. Given the paucity of hotel rooms, five-star hotel room rates have already touched an all-time high of around $200-300 per night.

The hospitality district, adjacent to the National Highway 8, or popularly called Delhi-Gurgaon road, would be well connected with the main city through high-speed rail link.

The Delhi airport is the second most busiest airport in the country after Mumbai, with over 200 transit passengers every day. The traffic growth projections are to the tune of 25 million passengers annually by 2010. The number of transit passengers are expected to grow exponentially over the years.

Thursday, May 31, 2007
Source: Economic Times

Niche Tourism

Medical
Spiritual & religious
Rural
Wine
Heritage
Adventure
Education
Nature tourism
Luxury & rejuvenation ( ayurveda, spas, holistic healing, cruises, customized travel)
Others

Policy

1. APAI pushing for guidelines on compensation

The Air Passengers Association of India is pushing for guidelines for compensation for air passengers with the Centre but is yet to receive a response on recommendations submitted by them, a top official of the Association said.

"We have submitted guidelines on providing compensation to passengers in line with the EU compensation guidelines to the Union Minister for Consumer Affairs,Sharad Pawar and also a copy to Praful Patel, Minister of Civil Aviation. But so far, we have not got any response," D Sudhakara Reddy, founder and national president of APAI told reporters on Friday.

The European Union has guidelines on providing compensation to passengers in case of delays, rerouting, damage to baggage apart from other such problems faced by passengers, he said.

Reddy said the Association planned to take up the issue with the Parliamentary Consultative committee on aviation. "We need a law for passenger rights," he added.

APAI also planned to approach the Airports Authority of India to implement at all the airports in India,a notice issued by the Mumbai International Airport to the retailers at the airport to sell all goods only at MRP. Most shops in the airports in the country charge exorbitant rates for the goods sold by them, he pointed out.

Friday, June 1, 2007
Source: PTI via Economic Times

Travel and Tourism Support Industries …and much more

Service providers

1. Dreamland Tours Inc. Announces Customized Tour Packages To India
Dreamland Tours Inc. ( http://www.dreamland-tours.com/ ) announces a revolutionary system of customized tourism packages to India. These packages, designed to cater to the individual needs of travelers, enable you to pick and choose from an array of tourist hotspots across India, and add in additional services, building a travel package made just for you. The system was designed keeping in mind the huge growth the company has experienced and to make optimum use of the wide network of offices and staff in place across India.

Statement from President & CEO, Zach Thomas, “We have seen a tremendous increase in tourism to India over the past several years. With expanding cultural and business ties between the United States and India, our travelers are highly interested in getting to know and experience India’s culture, witness the majestic landmarks, and in general, just to see what all the buzz about India really means.

With an infrastructure of offices and staff in all major cities across India, we are able to co-ordinate and manage the travel plans of our clients on their journeys across India. We can now customize our tour packages to send, and take care of, our tourists any time, any place, across the length and breadth of India. We’re offering our clients everything from Airport pickup to tour guides and a personalized chef. Our centralized back office system tracks the progress of every service ordered by each client, with electronic reports filed by our employees, on location.

Makes our service more streamlined, and our customers a lot more satisfied. Best part is, in spite of the huge growth our company and each regional office has experienced, there’s still room for a lot more, and we’re forecasting double digit growth figures for each quarter over the next year.”

About Dreamland :- The company, based in Manhattan, was created to cater to the growing flow of visitors from all over the world to India. Dreamland’s parent and holding company, is Indo American Tours Inc. The company promotes customized tour packages to India, including wildlife and safari expeditions, religious tours, resort and relaxation tours ( Goa ), Taj Mahal ( North India ) , palace on wheels ( Rajasthan ) and medical tourism packages ( Kerala ). These are in addition to standard tourism packages such as first time tourists, honey moon packages, group tours, etc.

Wednesday, May 30, 2007
Source: PRleap.com

Travel ecommerce

1. Makemytrip.com targets Rs 1,000 cr biz

Make My Trip.com, an online travel company, said it is likely to break even this fiscal and expects to double its online transactions as well as turnover.

Keyur Joshi, co founder and chief operating officer, said the company expects to double its turnover as well as the number of total air tickets and travel transaction this financial year.

The company clocked a turnover of Rs 550 crore in the financial year 2006-07. This fiscal year the company aims to double the turnover to touch Rs 1,000 crore.

The total number of online transactions were seven lakh and the company expects to double the number of transactions this year. Presently, the company has a market share of 35-40 per cent in the online travel industry business in India.

Make My Trip.com, believes that the biggest impetus that its business will receive is from hotel and tourism segment. “The next big push will be for us in hotel and tourism segment,” added Joshi.

According to the company, online travel booking company has not tapped hotels in domestic tourism.

Presently, the company has generated 80 per cent revenue from air tickets and 20 per cent from hotel and travel segment. The company will soon start marketing its new business model where it will be providing online booking for hotels.

On Friday, the company launched its operations in Ahmedabad. Speaking on the occasion, Joshi said, “Presently, around 2 per cent of our online business comes from Gujarat.”

The company believes that Europe and the Far East have emerged as preferred holiday destinations for travellers from Gujarat. It also aims to increase its 2 per cent online business share from Gujarat to 10 per cent in the next two years.

The company has five branches all over the country. Make My Trip.com set up its Indian operations in September 2005 after four years of profitable operations in the US.
Monday, May 28, 2007
Source: Business Standard via Agency faqs

Events

1. Hyderabad to host Routes Regional Asia in 2009
Hyderabad will host Routes Regional Asia, the biggest and the most prestigious event of global civil aviation industry, in March 2009, and will become the first Indian city to do so. Routes Regional Asia will be attended by representatives from 100 airlines and 150 airports from across Asia.

GMR-Hyderabad International Airport, which will become operational in March next year, has won the mandate to host the event in a stiff global competition involving Beijing Airport and two airports of Australia.

The event will be attended by airline route planners, senior representatives from the airports, government officials, tourism authorities, industry related exhibitors and observers among others.

About 500 delegates are likely to attend the event, which will also mark the first anniversary of the opening of the Hyderabad international airport.

Route Development Group, a UK-based company, organises regional Route Development Forums in four regions of Asia, Africa, Europe and Americas every year to help the stakeholder in formal and informal networking.

T. Srinagesh, the chief executive officer of GHIAL, Tuesday told a news conference that this would provide the best opportunity to not only market the upcoming airport but also Hyderabad as a destination among the top decision makers in the aviation sector.

Eric Layden, vice president (emerging markets and government relations) of the Routes Development Forum, said: 'There is enormous increase in the middle class income group and demand for national and international air travel has never been higher,' Eric said.

He pointed out that 73 million passengers used the airport system in India during 2004-05 and it was predicted to reach 100 million by 2010. The country has 16 international and 87 national airports.

He described the growth of airlines in India as astonishing and said that they already had 400 Boeing and Airbuses and the Indian government was willing to continue to liberalise the air services.

Tuesday, May 29, 2007
Source: IANS via Yahoo

Research and Market reports
Human Resources & Training

Travel Characteristics of Indians

1. Indian tourists know 'no etiquette'
Indians may be the second largest in numbers when it comes to tourism in UK, but Indian tourists have been rated the lowest in terms of etiquette.

A survey of 15,000 European hoteliers by travel website Expedia has ranked Indian tourists as the second worst, next only to the French.

Trailing India in the league of terrible tourists are the Chinese followed by the Russians and the Britons, the survey said.

The Japanese are voted world's best tourists, followed by the Americans and Swiss. Among the 10 categories that hotel managers were quizzed on, Indians fared the worst on the politeness front.

While the Japanese could not be faulted on their manners, Indians were rated the most impolite.

And with most Indian tourists travelling to Europe with their own chefs in tow, it is not a surprise that the European hospitality industry views them as the least interested in trying out local cuisine or sampling local specialities after the Italians.

"We ate Indian food everywhere because that's what the others on the tour wanted. Imagine eating chole-puri on Mount Titlis in Switzerland and being served samosas while watching Paris' famed Lido show! It was such a let down," said Bibli Das, who was on an European package tour last week.

Cleanliness does not seem to be a strong suit either, with those in the trade saying Indians leave their hotel rooms in a mess though they are not as messy as the Russians. The Germans were ranked as the tidiest.

Wednesday, May 30, 2007
Source: IBN Live via Yahoo (With PTI inputs)