Is franchising the best way forward?

Travel and Transportation Infrastructure
Policy
Niche
Travel and Tourism Support Industries …and much more

Travel and Transportation Infrastructure

Sector: Aviation

1. British Airways lists India as second largest market

Observing that India was a "voluminous route", British Airways has listed the country as the second largest market after the US and the third after Australia in terms of its revenue share. The premier airline, which used to operate 19 weekly flights to Indian destinations two years ago, now operates 43 services from London Heathrow to five cities in India.

"India will be the next biggest after the US in the long-haul market. As far as revenues are concerned, India is the third largest closely competing with Australia (in the second place after the US). Our plans are to stay big here," Robbie Baird, BA's Area General Manager for the Asia-Pacific region, told PTI in New Delhi.

Asked whether the British carrier would deploy the largest aircraft, Airbus A-380, or the long-haul Boeing B-787s on the India sector, he said the airline's policy was to consolidate and then expand on the existing network.

"We have done so in Delhi, Mumbai and now in Bangalore. While in Delhi and Mumbai, double dailies to London-Heathrow have been launched, the aircraft size has been expanded on the Bangalore route from B-777s to B-747s," Baird said.

Indicating that the large planes could be introduced in the Indian sector in the next 4-5 years after they were inducted in the BA fleet, he said "but who knows how fast the market grows" as witnessed on the India route in the past two years. "It depends on how the demand grows here".
October 26, 2007
Source: Hindustan Times

2. Bangalore international airport launch set for March 30

The new Bangalore international airport, five months away from zero hour, has started spreading the word among customers and travelling public about its launch date, March 30, 2008. Just after the midnight of that day, Bangalore’s all domestic and international flights will land at or take off from Devanahalli, 30 km away, instead of the existing HAL airport.

“Now is a good time to start informing everybody about the new airport,” said the spokeswoman for Bangalore International Airport Ltd, the five-promoter special vehicle that is building the Rs 1,930-crore greenfield airport.

“We have started feeding the thought of the opening date around, from the civil aviation authorities, the Government, airlines, to corporates and the public.”

It would mean an airport constructed from scratch in record 32 months and which would start off with handling 9-10 million passengers annually; some 20 airlines are likely to touch down here.

Manuals Ready
Nine manuals — pertaining to operations, safety, security, maintenance, emergency — and the airport readiness plan have been drafted and submitted to the Director-General of Civil Aviation. Approval of them will get BIAL the licence to operate an airport.

In a parallel activity, BIAL is keeping airlines — the airport’s primary customers — and corporates posted of their new destination starting just after the midnight of March 29-30, 2008. Besides sporting the date on its Web site, the company has begun with the medium of newsletters, mousepads, bookmarks, T-shirts, besides routine mailers to drive home the message. “For now, it’s all being done in an unconventional way,” the spokeswoman told Business Line.

“We chose the recent Bangalore Book Fair to put out the message through book marks and T-shirts for all the organisers at the fair. There were quizzes for school-goers about the airport.” The promotions should obviously pick up in the coming months.

Site Visits
Another way is to encourage select site visits by companies, schools, colleges and institutions, apart from the now regular trips of airline teams. “It was difficult earlier as the construction was at its peak; we now have a person solely to interact with these interest groups. The project is more than 80 per cent over, with landscaping at the parking lot and runway lighting done,” she said. The Siemens Ventures-L&T-Unique Zurich combine, along with minority promoters Airports Authority of India and the state-owned Karnataka State Industrial Investment Development Corporation, started construction of the airport on July 2, 2005. The State has contributed 4,000 acres at Devanahalli.

The access from the city on NH-7 is ready and the first overbridge over rail has come up. BIAL has taken up the ‘trumpet exchange’ or flyover to bring in commuters from either side of NH-7 into the airport site.
October 22, 2007
Source: Hindu Business Line

3. SilkAir’s direct Coimbatore service

In a move that would give a boost to tourism in South East Asia and to travel to the US from western Tamil Nadu and parts of Kerala, SilkAir, the regional airline arm of Singapore Airlines, will launch direct flights between Coimbatore and Singapore from October 28. Coimbatore will be the third city to be brought under SilkAir’s network in the South, after Thiruvananthapuram and Kochi. Speaking to newspersons, Mr Ramachandran Menon, Manager, SilkAir, India, and Mr L. Ravindran, Manager, Coimbatore, said the new service would meet a long felt need since there was no direct flight linking Coimbatore and Singapore. The service would provide for over 700 seats every week. The flight will leave Singapore every Wednesday, Friday and Sunday at 2130 hrs and will arrive at Coimbatore at 2320 hrs (local time). Flights would depart from Coimbatore every Monday, Thursday and Saturday at 0025 hrs and reach Singapore at 0730 hrs (local time) the same day.
October 22, 2007
Source: Hindu Business Line

Sector: Hotels and Restaurants

1. Carlson to add 52 hotels in India by 2009

US-based Carlson Hotels Worldwide is all set to add about 52 hotels in India by 2009. The company is looking to invest USD 15-20 million per hotel for expansion of its mid-market brands - Park Inn and Country Inn - in the Indian market.

Carlson is also keen on launching its luxury brand Regent in the country, starting with the NCR region and then, moving on to Mumbai. At present, it operates four global hospitality brands - Radisson, Park Plaza, Country Inn & Suites and Park Inn - in India.
October 27, 2007
Source: Travel Biz Monitor

2. The Ummeid to expand its presence to Jaipur and Udaipur by 2010

The Ummeid, a five-star luxury brand hotel chain having presence in Jodhpur and Ahmedabad, plans to set-up properties at Jaipur and Udaipur by 2010 with an investment of Rs 700 crore. The amount also includes the cost of adding 100 more rooms, eight Presidential rooms and 92 standard rooms, to the existing inventory of 60 rooms of the Ahmedabad property by early 2009. The hotel chain has already acquired land for construction of the new properties, according to Laxman Singh Champawat, Director-Sales and Marketing, The Ummeid. He added that the properties will be targeted at inbound travellers. Further, it is looking at introducing hotels at Pune and Bangalore by 2012 under a new business hotel brand, the name for which is yet to be finalised. Plan for setting-up a third business hotel at Hyderabad by 2015 is also in the pipeline.

Speaking about the hotel chain's plan to venture into business hotels, Singh said, "Unlike Rajasthan, which is a leisure destination, Pune and Bangalore are IT hubs. We wanted to establish our presence in these cities and hence decided to launch a business brand." As per his claims, the Jodhpur property witnesses 80 per cent occupancy levels during October-March and 30 per cent during April-September every year. Further, it is expecting a turnover of Rs 15 crore in FY 2007-08 as against the Rs 12 crore turnover it achieved in FY 2006-07.
October 27, 2007
Source: Travel Biz Monitor

Policy

1. India to liberalise visa regime for American scholars

India is working on liberalising visa norms for American scholars while the US would liberalise its visa regime for Indian professionals, especially nurses.

To start with, India is considering to ease visa norms, dispense with the annual personal attendance requirement for American executives and process visas of scholars at the Indian embassy itself.

The US, on the other hand, has agreed to address issues related to the required visa categories, including H-1B.

At a high-level bilateral meet, assistant to the US president for economic policy, Allan B Hubbard, assured the Indian side, “...on visas, it appears that we have now caught up. It is not more than a few days’ wait,” an MEA source quoting Mr Hubbard said. He was addressing a meeting of India-US Economic dialogue co-chaired by US treasury secretary Henry Paulson and finance minister P Chidambaram in New York last month.

Acknowledging that allowing “secured immigrants” was important for the US economy, Mr Hubbard reportedly said: “This effort has to continue and we need to encourage it. We feel there must be more opportunities. The president is aware of the situation; the issue is being debated in the Congress.”

It is understood that US ambassador David C Mulford has been able to resolve most of the visa-related issues between the two countries. “I should say, David wrestled with the bureaucracy back home and made it happen,” Mr Hubbard reportedly told the delegation.

The Indian delegation included commerce minister Kamal Nath, Planning Commission deputy chairman Montek Singh Ahluwalia, foreign secretary Shiv Shankar Menon, commerce secretary G K Pillai and secretary for financial services Vinod Rai. The US government representatives included commerce secretary Carlos M Gutierrez, US trade representative Susan C Schwab and under secretary of state for political affairs R Nicholas Burns.

According to sources, explaining India’s position, Mr Menon told the US officials that a new visa policy would be announced soon which would provide for processing of all visa applications by the US scholars in the embassy. “US executives would get a three-year visa, formalities would be reduced and they would be spared from annual personal appearance at the foreigners registration office,” he said.
October 24, 2007
Source: Economic Times

Niche

Adventure

1. Haryana Tourism to boost eco & adventure tourism

Pioneers in highway tourism, Haryana Tourism, has now taken the initiative to boost eco and adventure tourism in various parts of the state and has secured funds for the same. Activities like river rafting, kayaking, camping, nature walks, rock climbing, etc. have been started at Morni, the only hilly place of the state, which is being touted as an adventure sports destination on par with neighbouring Himachal Pradesh.

Inaugurating the first-ever adventure camp at Tikkar Tal, Morni recently, Kiran Chaudhary, State Tourism Minister confirmed that funds to the tune of over Rs six crore had been received for promoting eco and adventure tourism in the state. "We have zeroed in on Kalaser in Yamunanagar, Hodal, Sultanpur in Gurgaon and Tikkar Tal in Morni for the project. It's a pioneering effort and we are hoping that the public will wake up to the social responsibility of maintaining a clean environment," said Chaudhary.

She further added that the state had some good tourist spots with a lot of potential, which they plan to tap by introducing adventure sports. For the first time, the departments of Tourism, Forest and Sports had come together for organising such an event. "At the adventure camps, our effort is to provide all kinds of adventure sports. However, paragliding has been declared unfeasible though we tried to introduce it in Morni," explained Chaudhary.
October 24, 2007
Source: Travel Biz Monitor

Others

1. Honeymoon travel to hit new heights this season

Honeymoon travel looks all set to hit a new high this season. A distressed dollar spells good news for Indians in terms of cheaper holiday options. As more and more newlyweds get set to pack their bags and head overseas, travel industry insiders are looking at a growth of over 25% in outbound honeymoon traffic this year.

The honeymoon season, which picks up steam from mid-October and continues till March, contributes 15-20 % to the total outbound leisure traffic from India.

Usually, during this season, the outbound traffic to South-east Asia and South Asia surges by around 30%. “We expect growth in the outbound honeymoon travel to be around 27%, up from the 18% growth last year. People are continuing to gravitate towards South-east Asian destinations, though places like New Zealand and Egypt are also becoming increasingly popular,” Travel Agents Federation of India president Praveen Chugh told ET.

“We’re expecting numbers to pick up by 10-15 % as compared to 8% last year, because of the fast-growing GDP and booming stockmarket . At this time of the year, most people prefer to head to places in the southern hemisphere as it’s summer there. So, places like New Zealand and Australia are doing well,” Tourism New Zealand India manager Kiran Nambiar says.

Keeping in perspective the Indian honeymooners preferences for beach destinations, Tourism Malaysia is positioning the islands of Langkawi, Penang and Pangkor for honeymooners . Of the total tourist arrivals of 279,046 from India in 2006, 18-22 % were honeymooners. Basic honeymoon packages to Malaysia cost around Rs 32,000 for seven days and six nights.

“The honeymoon industry in India is gradually evolving, as the trend indicates that newlyweds are now opting for experiential packages and are more ready to try new things, be it soft adventure with night safaris, self-drive packages and eco-tourism trails. In times to come, long-haul destinations like the Caribbean will also be part of Indian honeymooners’ itineraries,” says TRAC Representations associate director Rajeev Nangia.

Mauritius Tourism has introduced a new option of self-drive packages targeting the Indian honeymoon segment. The minimum package for two people starts from Rs 49,000.

FOR THE MOON

Travel industry looking for 25% growth in outbound honeymoon travel.

A distressed dollar spells good news for Indian newlyweds.

Honeymoon travel contributes 15-20 % of the total leisure traffic from India.

South-east Asian destinations continue to be preferred destinations.

Egypt, New Zealand also becoming popular
October 24, 2007
Source: Economic Times

2. Tamil Nadu Govt to introduce 'rural tourism'

In a new tourism concept, the Tamil Nadu Government has decided to introduce 'rural tourism' showcasing Tamil culture and customs.

Two villages in the district, where Tamil culture and customs were still preserved, had been identified for the new tourism concept, District Collector Pradeep Yadav told reporters today. He said Rs one crore each would be spent on Kadampadi village and Punjarasanthangal villages in the district have been selected for inclusion in the rural tourism sector. This included Rs 65 lakh each from the Central Tourism Department, for developing infrastructure.

A consultative meeting of local body representatives, tourism operators with TTDC Managing Director M Rajararam was held as part of it, he said.
October 22, 2007
Source: PTI via Economic Times

Travel and Tourism Support Industries …and much more

Service Providers

1. Maison de La France to target luxury travellers from India in 2009
Maison de La France (French Tourist Office) is planning to target luxury travellers from India in 2009. "We are currently in the process of developing packages and promotion strategies for the same," Pascal Visintainer, Marketing Director, Maison de La France said on the sidelines of the road show, 'French Connection 2007', which took off at the Taj Mahal Hotel in Mumbai yesterday and will conclude today evening. The Office is planning to organise promotional events such as parties, dinners and golf competitions in India to showcase France's luxury offerings. It will also market all-inclusive packages in partnership with Indian travel agents and tour operators. A dedicated website featuring all the information about the country's luxury travel will serve as an additional outlet for the Office's marketing campaigns.

On the global front, it is looking at targeting tourists from long-haul destinations in 2008 as they tend to stay for a longer period, according to Visintainer. He added that this will also help establish France as a stand-alone destination. Further, the Office wants to eradicate the notion of France being an expensive destination. With India being a long-haul destination, it will be organising study tours and FAM trips for the country's travel trade and media personnel. Bollywood is another medium through which it wants to showcase France's offerings. The highlight of all promotion campaigns in India will be French music, dance, theatre and cultural festivals.
October 25, 2007
Source: Travel Biz Monitor

2. Cool off in Swiss Alps with hot new offers

Wanted: Indian tourists, especially in the 60 years of Indo-Swiss Friendship Year in 2008. That's the message being sent out by the Swiss tourism authorities. “India is a very important bracket for us as they are high-spending travellers amounting at spending 400 Swiss francs per day. That is huge,” says the Director of Switzerland Tourism, Federico Sommaruga. Little wonder then, that the Indian share of Tourism in Swiss country has gone up from a minuscule 2 per cent to 15 per cent in the last one year. And the future for the Indian travel industry is even brighter. “We are looking at a 15 per cent growth every year for the next ten years,” says Sommaruga.

India also makes it to the Top 13 in the Swiss Tourism Board list of all the travellers they get in a year. This winter therefore comes with a spate of offers starting November there you could get to Swiss Alps in 18000 bucks with taxes on the first ever direct flight from Delhi to Zurich. The board also has special offers for honeymoon travellers and discounts on stay options. In 2008, Switzerland will be included in the Schengen visa given to tourists which means no extra effort for a Swiss visa.

There will be special rail passes valid for all travel modes and new Indian Restaurants for your taste buds, and even discounted service apartments. “We are very welcome there. They are warm and loving people. In fact the announcements at Mount Titilus are even made in Hindi,” says the manager of Switzerland Tourism, Ritu Sharma. These special offers and discounts are all marking the run up to the completion of the 60 years of Indo-Swiss friendship in 2008.
So if you want to make this winter different for yourself and toast Christmas and the New Year to now capped mountains in Switzerland, this is an offer you must not miss.
October 26, 2007
Source: IBN Live

Events

1. Focus on infrastructure, tourism must: Buddha

West Bengal chief minister Buddhadeb Bhattacharjee said on Friday that the Indian government needs to invest significantly more in infrastructure to compete with economies such as China. He added that more job opportunities needed to be created, primarily in the service sector, including tourism, hotels and restaurants.

“Despite the Indian economy growing at an encouraging rate, there is still a serious problem of unemployment. We can’t support jobless growth,” said Mr Bhattacharjee. He was speaking at the 43rd annual convention of FHRAI (Federation of Hotel and Restaurant Associations of India) in Kolkata. According to the CM, only an emphasis on the PPP (public private partnership) model will not help. The government has to invest a lot more in infrastructure such as airports, seaports, etc, for the development of tourism.

He added that though the tourism sector in West Bengal was still neglected, the state government was laying stress on sectors such as tea tourism in North Bengal and ecotourism in the Sundarbans.

FHRAI president Rajesh Mishra also reiterated the need for infrastructure development. “At Rs 1,026.35 crore, the country’s tourism budget is only 0.15% of the Indian budget. The tourism budget for other Asian countries is China 3.8%, Singapore 9%, Malaysia 7.2%, Thailand 6.8% and Nepal 14% of their respective budgets. Thus, India needs to give significant importance to tourism in the years to come,” said Mr Mishra.

He also spoke, among other things, about the need for more hotel rooms, encouraging the PPP model and the Rural Bharat Certificate Scheme launched by FHRAI for uneducated youth from villages and remote areas of the country.

Mr Ron Scott, director of APIU Global, said a lot of issues being addressed in India were also being addressed in the UK. He too, spoke about the need for the Centre to invest more in infrastructure and the need for tourists to have easy access for places to go to.

“There are several UK-based companies at the budget and business level who are very interested in India. Leading budget hotel company Premier Travel Inn is looking at India and has earmarked sites in Mumbai and Delhi. Another leading chain for value accommodation, Travelodge, is also very interested in setting up a property in the country,” said Mr Scott.
October 27, 2007
Source: Economic Times

Research and Market Reports

1. Franchising : The future of Indian travel

Franchising, as a business module, was little known in India until the 1990s. Today, however, it has forayed into almost all industries - right from food and lodging to child care and even, travel. Earlier, small companies hired agents and dealers to run their businesses, who were later replaced by franchisees. In time, with the entry of foreign players, the whole business has undergone a makeover. Franchising was the best route for most international players to establish their presence in India, without having to pump in large investment.

If one were to explain the concept of franchising, it is best called a collaborative process, wherein the franchiser offers the expertise along with the brand name, while the franchisee enjoys the right of proven business and brand name and, in turn, pays the requisite royalty to the franchiser. In budding economies like India, where consumers are largely catered to by unbranded or unorganised competitors, franchising is a speedy way to organise the industry and offer a product or service of consistent quality to the end-consumers.

According to Sanjay Bhaduri, COO, VFS Global Services Pvt. Ltd., studies in the US have shown that if the franchisee business were to be translated into national product, it would qualify as the seventh largest economy in the world. "Franchisee models work on the need of both partners, but are more skewed towards the franchisor. The need of the investor is only financial/commercial gain, but that of the franchiser is to get entry into a market, a quick strategy of expansion with minimal investments," says Bhaduri. It's not surprising then that the franchising module is slowly catching up in India and considering the growing economy, it is bound to grow exponentially.

Franchise revolution:
At present, international food giants like McDonald's, Pizza Hut and Domino's Pizza, to name some, are successfully running their businesses in India through the franchise route, while leading footwear companies like Reebok, Adidas and Nike are equally bullish on the potential of their franchising operations in India. With the rising foreign exchange revenue from the travel industry, most of the international brands along with the domestic players are now trying their hand in the franchising business. Big players like Thomas Cook, Kuoni Holidays, Raj Travel World, Cox & Kings, Mercury Travels, Uniglobe Travels, TravelPort, CIBT Inc, Bulls & Bears and many others are opting for the franchising route to enhance profit margins and have a pan India - and in some cases overseas - presence.

"It's a win-win situation for both, the large company and the smaller franchisee," offers Sarvajeet Chandra, Head -Franchising, TravelPort. "Franchisers tend to gain from the franchisee's local market knowledge, existing infrastructure and real estate, which they would otherwise take time to build. Franchising helps them to augment their brand name for an economical cost," he adds.

According to Consultant Ernst & Young, the franchising industry is currently growing at the rate 30-35 per cent. However, Ritika Modi, Regional President, Uniglobe Travel (South Asia) Pvt. Ltd., believes that the industry is still at an evolutionary stage with a market size of around Rs 10,000 crore. "The Indian franchise industry today accounts for about USD 10 million. But, there is a lot more potential. The franchising model offers best of both worlds to franchiser, as well as franchisee. About 15 per cent of the sales in India are done through franchise, but in US the corresponding figure is about 60 per cent. So, there is a lot more to be done," maintains Modi. At present, Uniglobe Travels has presence in 700 locations in over 30 countries across the globe.

Bernard Martyris, Chief Human Resource and Member of the Kuoni India Executive Board, Kuoni Group, says, "Based on the growing demand, we have decided to take up the franchise route. On the growth path, we will set up our centres in the main cities, but will also look at tier II and III cities through this route. Our target is procuring at least 15-20 franchisees by the end of 2008." TravelPort manages 65 franchisees across the country and aims to manage 60 more by March, 2008. In July 2007, Thomas Cook had come up with 'Thomas Cook Gold Circle,' a franchisee programme for tour operators in India. By the end of this year, Thomas Cook plans to open 35 Gold Circle franchisee outlets across India, including Noida, Greater Noida, Gurgaon, Ghaziabad, Chandigarh, Karnal and cities in Punjab, Uttar Pradesh and Madhya Pradesh. Besides, CIBT Inc, provider of global travel document services, is expanding its network to extend its professional visa and passport assistance facilities through franchise arrangements to cover more than 30 cities in 2007. The company opened its offices in October, 2006 in Mumbai, Chennai, Delhi, Hyderabad and Bangalore, and is adopting the franchise route to cover tier II cities. Travelmartindia.com at present has 32 franchisee networks in India, while Cox & Kings aims to institute 700 franchise outlets by 2010. And Ezeego1.com plans to have 300 franchise outlets by 2010, for the visa and foreign exchange services.

Definite advantage:
"There are already more than 600 franchising systems operating in the country. The size and geography of India is ideal for business through the franchising model, particularly in the service sector of the economy," maintains Neelu Singh, COO, Ezeego1.com. "The best part about the franchise model is that a company can cater to a huge market with lower capital requirements. The company can grow to exceed the targets," she adds.

From the market perspective, franchise outlets offer a wide range of products and services to the clients at a consistent level of quality and affordable price. The advantage of the module is that the franchiser benefits from the bulk purchasing and selling and at the same time, the brand can actually penetrate a wider market, locally and overseas - that too without putting in major capital. A company can avoid some investment in terms of recruiting huge manpower by entering the franchising route.

Today, with the changing lifestyles, growing income levels, demanding customers and the advent of modern retailing, the franchise market is growing rapidly. Also, with the Foreign Direct Investment (FDI) policy for organised retail still not favouring the direct entry of foreign retailers, franchisee business models are braced to emerge as the biggest beneficiaries.
October 22, 2007
Source: Travel Biz Monitor