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Indian travelers expected to spend $136 billion by 2021

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The Indian traveler has come of age, spending approximately $94 billion in 2018, on around 2 billion domestic and international trips, helping the Indian travel and tourism industry achieve unprecedented scale.

The momentum is expected to continue and the industry will grow at a 13 percent CAGR to $136 billion by 2021, according to a report, ‘How Does India Travel’. The report outlines how India spends on travel, the influence of online channels in their purchase journey and potential growth opportunities for travel businesses till 2021.

Deep diving into the $136 billion spends, the report cites a 12 percent growth in transportation ($50 billion), 13 percent growth in lodging ($21 billion) and consumption, which includes spends on shopping, recreation and food, to grow at 13 percent ($65 billion) over the next three years. Additionally, as more people come online, smartphone penetration improves and use of digital payments goes up, the report estimates that Indian travelers will spend an additional $24 billion on online travel bookings over the next three years, a growth from 25 percent in 2018 to 35 percent in 2021.

Online is a significant source of research

Elucidating the planning journey of Indian travelers, both for business and leisure, the report calls out five phases of a customer journey – Interest, Research, Booking, Experience and Sharing. The report states that during key research-heavy phase of interest, research and experience, digital plays a pivotal role with over 86 percent of consumers being influenced by online channels. During this phase, travelers spend their maximum time on search, travel tour provider websites, price comparison websites, and travel articles. Online video too plays a significant role with 21 percent of travelers being influenced by this platform. In the booking and sharing phase, the report states that nearly 60 percent of customers book transport and lodging online, and over 50 percent share feedback online with social media being the dominant platform.

Talking about the market opportunities for online travel players, Vikas Agnihotri, Country Director – Sales, Google India said, “New users perceive that online channels are geared towards the more frequent flyers and experience-oriented travellers; and existing travelers research online but the lack of trust in payments and booking experience make them end up booking offline. If travel players tap these online users through personalised marketing, messaging and travel plans, they can further augment online travel bookings. This can be done by adopting digital technologies to influence customers early in the journey and moving from one-time engagement to ongoing relationships to have a positive impact.”

“There is a perception amongst consumers that online channels are geared towards premium customers, along with a marked distrust around payment and pricing terms. It is imperative for businesses to address these concerns in order to effectively tap into the growing base of users.” Arpan Sheth, partner Bain & Company said.

Decoding the Indian travelers

The report further identified the five cohorts of travelers in India, across business and leisure travel, and categorised each against their online research behavior:

Frequent flyers: Nearly 70 percent of them booked online, cumulatively spent $17 billion in 2018. They make their choices based on convenience, availability, brand preference and past experiences.

Budget business traveler: 86 percent of them researched online whereas only 60 percent book online, cumulatively spent $20 billion in 2018. This cohort makes their decisions based on cost of travel, availability and consultation amongst their personal business network.

Experience-oriented traveler: Around 70 percent of their bookings were done online and cumulatively spent $22 billion in 2018. They extensively research both online and offline for ‘authentic’ experiences and convenience of options; display high loyalty towards preferred brand of airlines or hotels and actively share experiences.

Budget group traveler: 90 percent researched online and 55 percent booked online, cumulatively spent $29 billion in 2018. They make multiple decision-makers in the process and take the final decisions based on minimal cost.

Occasional travel visiting friends/relatives: 92 percent researched online but only 60 percent booked online, spent $6 billion in 2018. They maximize family convenience within a budget and believe online terms and conditions are restrictive.

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San Francisco International Airport purchases six new electric buses

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Today Proterra announced that San Francisco International Airport (SFO) has purchased six 40′ Proterra Catalyst E2 electric buses and three 60 kW Proterra plug-in chargers, joining a growing list of airports across North America transitioning to electric buses for airport ground transportation. The new battery-electric bus fleet will reduce Bay Area emissions and support SFO’s goal of carbon neutrality by 2021 while cutting its bus operating costs.

As one of the fastest-growing airports in the U.S., SFO has ambitious plans in place to reduce its carbon footprint. SFO’s Five-Year Strategic Plan sets goals of carbon neutrality across airport-controlled operations by 2021 and the reduction of greenhouse gas emissions by 50 percent from a 1990 baseline. Part of that plan includes the creation of a Clean Vehicle Policy to promote the adoption and deployment of low emission vehicles by both airport departments and ground transportation providers. The new battery-electric Proterra Catalyst buses will replace six diesel buses in its current operating fleet and will eliminate more than 23 million pounds of greenhouse gas tailpipe emissions over the 12-year life of the vehicles. SFO expects to purchase additional battery-electric buses to replace its CNG vehicles, for a greener, more modern fleet.

“Earth Day serves as a call to action; an opportunity for us to reaffirm our commitment to the environment,” said Airport Director Ivar C. Satero. “SFO is an airport industry leader in sustainability, and we have set big goals to achieve zero net energy use, zero waste, and carbon neutrality. By deploying San Francisco’s first public battery-electric buses, we’re on the path to zero emissions in our ground transportation services, leading the way in our quest to be the world’s most sustainable airport.”

The new electric buses will integrate batteries that are designed and manufactured down the street from the airport at Proterra’s Silicon Valley headquarters in Burlingame, California. With 440 kWh of battery capacity on board, the buses will be part of SFO’s fleet that currently provides buses to shuttle passengers between the terminals, long-term parking garages and other airport locations along daily routes.

SFO joins other California airports that are leading the electrification trend across ground transportation fleets, including Sacramento International Airport (SMF) and Silicon Valley’s Norman Y. Mineta San José International Airport (SJC). Beyond California, five additional airports across the country have chosen Proterra electric vehicles for their ground transportation needs, including Raleigh-Durham International Airport (RDU), Honolulu International Airport (HNL), John F. Kennedy International Airport (JFK), Newark Liberty International Airport (EWR) and LaGuardia Airport (LGA).

“San Francisco International Airport has long been a leader in sustainability and joins other forward-thinking airports around the country in transitioning ground fleets to 100 percent battery-electric buses,” said Proterra CEO Ryan Popple. “We are proud to help one of our local airports offer superior service and meet its sustainability goals while also providing reduced vehicle maintenance costs and lower total cost of ownership.”

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Russian billionaire buys world’s first private icebreaker

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One of the top 50 richest Russians, banker Oleg Tinkov, wants to present what he calls a first private icebreaker to the public next year, before the €100 million vessel sets sail to the Antarctic among other destinations.

Founder and owner of Tinkoff Bank, worth $2.2 billion, is going to show off the SeaExplorer 77, the newest addition to his pet-project, La Dacha, at the major global yacht show in Monaco as early as 2020.

After the presentation, the superyacht will head to the gems of the Indian Ocean, the Seychelles and Madagascar, Russia’s scenic Kamchatka peninsula and Alaska, before challenging its reinforced icebreaker hull in Antarctica in late 2021 and the beginning of 2022.

“It is yachting, but a completely different one,” Tinkov explained. “It’s about exploring, but not about drinking martini and showing off in Saint-Tropez.”

The ‘icebreaker’ cost the billionaire more than €100 million (US$112 million). The banker wants to enjoy it himself for around 20 weeks per year and plans to lease it for the rest for €690,000 per week.

The entrepreneur says he was the first to order such a vessel. In fact, it is an expedition yacht, which can break ice up to 40 centimeters thick and maintain autonomy at sea for up to 40 days. The 77-meter vessel, offering luxury accommodation for up to 12 guests in addition to the crew, also features two helicopter hangars, a dive center and decompression chamber, and carries a submersible, two snow scooters and waverunners.

Microsoft founder Bill Gates has already showed interest in the luxury sea adventure, and wants to have a three-week long charter, while a Russian businessmen from the Forbes list, whose name Tinkov did not reveal, wants to rent the boat for six months.

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Shopping at – where else? The Dead Sea Mall!

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When you think of the Dead Sea, do you think of a mall? What about a mall with luxury stores, an ice cream store, cafes, and even a spa?

A beautiful new mall at the Dead Sea, situated directly on the boardwalk and beach on the southern end of the salty attraction, offers both Israelis and tourists products at prices less the Value Added Tax amount. The cost of the rebate will be footed by the developer of the mall. Overseas tourists will be able to claim a double discount as they can still get a VAT rebate on many items.

The Dead Sea is the lowest point on Earth and is surrounded by the stunning landscape of the Negev Desert. The saline water of the lake gives lead to the name Dead Sea, because no fish can survive in the salty waters. The other result of the salty water of the Dead Sea is its renowned health and healing properties and the unique feature that one can float naturally in them.

There are a number of public beaches open along the shores of the Dead Sea. Popular beaches include the Ein Gedi Beach and the beach at the Ein Bokek resort where many hotels offer private beaches, and where some beaches charge an entry fee.

If for nothing else, tourists can always go in simply to enjoy the air conditioning.

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SBC Travel Group announces new Chief Digital Officer

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SBC Travel Group, a technology company, has officially appointed Chief Digital Officer Anthoney Jayasekera. He steps into this role with more than 18 years of experience within the hospitality sector, having worked in digital marketing and online distribution for several leading global brands including Minor Hotels, Crown Melbourne and Aitken Spence Hotels where he was in charge of driving digital strategies.

“SBC Travel excites me as they have a passion for embracing new technology and building solutions for travel,” Mr. Jayasekera says. “Being with hospitality and travel for the last 18 years, I’ve been able to see the paradigm shift from traditional to digital platforms.  It’s exciting to see the transformation from then to now. However, there’s still more opportunity to improve and disrupt current processes so they can be secure, faster, novel, and cost-effective with the use of new advancements in technology.”

In his new role with SBC Travel Group, Mr. Jayasekera will direct the overall digital strategy for all business units within SBC Travel, manage the website and social presence and manage all digital marketing initiatives.

For more information on SBC Travel, please visit sbctravel.io.

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How does India travel? Let us count the 94 billion ways

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Bain & Company and Google India are together launching a report on “How Does India Travel.” According to the report, the Indian traveler has come of age, spending approximately $94 billion in 2018 on around 2 billion domestic and international trips. This has helped the Indian travel and tourism industry achieve unprecedented scale, and the momentum is expected to continue with the industry growing at a 13 percent CAGR to $136 billion by 2021, according to a report.

Fueled by digital, Indian travelers are expected to spend an additional $24 billion on online travel bookings over the next 3 years. The report outlines how India spends on travel, the influence of online channels in their purchase journey, and potential growth opportunities for travel businesses until 2021.

Deep diving into the $136 billion spends, the report cites a 12 percent growth in transportation ($50 billion), 13 percent growth in lodging ($21 billion) and consumption, which includes spends on shopping, recreation and food, to grow at 13 percent ($65 billion) over the next three years. Additionally, as more people come online, smartphone penetration improves and use of digital payments goes up, the report estimates that Indian travelers will spend an additional $24 billion on online travel bookings over the next three years, a growth from 25 percent in 2018 to 35 percent in 2021.

Online is a significant source of research

Elucidating the planning journey of Indian travelers, both for business and leisure, the report calls out five phases of a customer journey – Interest, Research, Booking, Experience and Sharing.  The report states that during key research-heavy phase of interest, research and experience, digital plays a pivotal role with over 86 percent of consumers being influenced by online channels. During this phase, travelers spend their maximum time on search, travel tour provider websites, price comparison websites, and travel articles. Online video too plays a significant role with 21 percent of travelers being influenced by this platform. In the booking and sharing phase, the report states that nearly 60 percent of customers book transport and lodging online, and over 50 percent share feedback online with social media being the dominant platform.

Talking about the market opportunities for online travel players, Vikas Agnihotri, Country Director – Sales, Google India said, “New users perceive that online channels are geared towards the more frequent flyers and experience-oriented travelers; and existing travelers research online but the lack of trust in payments and booking experience make them end up booking offline. If travel players tap these online users through personalized marketing, messaging and travel plans, they can further augment online travel bookings. This can be done by adopting digital technologies to influence customers early in the journey and moving from one-time engagement to ongoing relationships to have a positive impact.”

“There is a perception amongst consumers that online channels are geared towards premium customers, along with a marked distrust around payment and pricing terms. It is imperative for businesses to address these concerns in order to effectively tap into the growing base of users.” Arpan Sheth, partner Bain & Company said.

Decoding the Indian travelers

The report further identified the five cohorts of travelers in India, across business and leisure travel, and categorized each against their online research behavior:

  • Frequent flyers: Nearly 70 percent of them booked online, cumulatively spent $17 billion in 2018. They make their choices based on convenience, availability, brand preference and past experiences.
  • Budget business traveler: 86 percent of them researched online whereas only 60 percent book online, cumulatively spent $20 billion in 2018. This cohort makes their decisions based on cost of travel, availability and consultation amongst their personal business network.
  • Experience-oriented traveler: Around 70 percent of their bookings were done online. and cumulatively spent $22 billion in 2018. They extensively research both online and offline for ‘authentic’ experiences and convenience of options; display high loyalty towards preferred brand of airlines or hotels and actively share experiences.
  • Budget group traveler: 90 percent researched online and 55 percent booked online, cumulatively spent $29 billion in 2018. They make multiple decision-makers in the process and take the final decisions based on minimal cost.
  • Occasional travel visiting friends/relatives: 92 percent researched online but only 60 percent booked online, spent $6 billion in 2018. They maximize family convenience within a budget and believe online terms and conditions are restrictive.

However, challenges remain in meeting the expectations of these travelers. Customers perceive online channels geared towards premium cohorts (frequent flyer and experience-oriented traveler), while mass cohorts, with $55 billion in spending, remain underpenetrated. There are about 160 million non-transacting active Internet users in India with only 5 percent of online travelers from Tier-2 or Tier-3 cities. There is a significant (20 percent) difference between the booking rates of premium cohorts and mass cohorts, the latter being also dissatisfied with online channels (~33 percent satisfied) vs. premium cohorts (~42 percent). The second challenge is in penetrating existing users who exhibit a marked distrust in use of online channels to make bookings, especially around payment and pricing terms and booking experience compared with offline channels. Consequently, their online usage drops between the research (>86 percent online influence) and booking phases (~40 percent offline bookings).

How travel businesses need to adapt to the needs of online consumers

The report cites five major shifts that marketers need to make to market to the online travelers – First, alleviate consumer concerns by improving the booking and payment experience to build a trusted brand and increase adoption. Second, they need to address the negative customer perception issues by mass customization to drive higher share in the segment. They also need to utilize consumer technology to penetrate mass segments (standardize, enable sharing), reach non-transactors (build offline presence), and create new user access.  Moreover, they need to find innovative and frugal ways to package the experience to increase both adoption and retention.  Finally, they need to create a robust digital backend to adapt to customer needs across the purchase journey.

“The contribution of travel and tourism’s spend in India has reached developed market levels, from 6.7percent of GDP in 2013 to 9.4 percent in 2018. This growth, combined with a rapidly growing internet user base and adoption of online bookings will lead to $24 billion in incremental revenues through online channels by 2021. In order to benefit from this trend, businesses need to actively increase new user adoption and increase penetration in the existing user base across the purchase journey.” Joydeep Bhattacharya, partner Bain & Company said.

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IndiGo airline under safety audit by India’s civil aviation regulator

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India’s civil aviation regulator will conduct a special safety audit of the low-cost carrier IndiGo following concerns about the snag-ridden Pratt and Whitney (P&W) engines, which power the airline’s A320 Neo aircraft.

While an annual audit of IndiGo was due in April, a special Directorate-General of Civil Aviation (DGCA) review will also be done of the airline’s operations and engineering departments.

“We confirm that there is currently a DGCA audit of IndiGo, which is combined with the annual main base audit. IndiGo has received a limited number of show-cause notices. IndiGo has responded accordingly and we can only comment on this matter after we have a discussion with the DGCA,” the airline said in a statement.

An airline source, however, dismissed reports that show-cause notices had been served on two senior officials of the airline.

Indian carriers IndiGo and GoAir have been inducting the P&W engine-powered A320 Neo aircraft since 2016. The former has 72 of these planes and the latter has 30.

Problems in engine

There have been problems in different parts of the engine, including the combustion chamber, knife edge seal, lift-off seal, front hub corrosion and heating of oil near lift-off seal leading to smoke on board a flight, apart from vibration during climb.

The engine-maker maintains that the problems are taking place as the engines are new into operations.

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SriLankan Airlines’ new plan to be like Emirates

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In a bid to turn the loss making airline into a profitable venture, SriLankan Airlines has come up with a five-year strategic plan. Part of the plan will see them emulating industry leader Emirates, with a new hub and spoke network model.

In a statement SriLankan Airlines said:

“SriLankan Airlines has formulated a new five-year Strategic Business Plan for the period 2019-24 with the objective of transforming itself into a financially viable organization airline group with high brand visibility and a global reputation for excellence,”

They went on to say that the national carrier had an ‘enormous contribution’ to make to the GDP of Sri Lanka, including import, export and tourism.

What is SriLankan Airlines planning?

Their latest five year strategic business plan includes major development of the Colombo hub to make it a key connecting point for a variety of markets. SriLankan are targeting passengers connecting through Africa, Asia and the Middle East, in a bid to grow as big as rival airline Emirates.

As a member of Oneworld, SriLankan are hoping to leverage their membership to develop their network for the future. In contrast to their current point to point model, they plan to work on more of a hub and spoke model to develop new opportunities.

The plan is to be presented to the Government of Sri Lanka for approval shortly.

New routes and fleet

Currently, SriLankan Airlines operate with a fleet of 27 Airbus aircraft. Specifically, these are 13 A320 family aircraft and 14 A330s. As part of the five year plan, the carrier intends to select new fleet inclusions which match the requirement of their developing route network. They have also said they want to reconfigure their existing fleet to offer an enhanced business class service.

Already, the airline has announced a fifth weekly service between Colombo and Tokyo from July onwards, using its Airbus A330-300s. If the plan is formalized by the government, we expect to see many more new route announcements over the coming weeks.

As well as routes and fleet, the plan specifies that it will:

  • Enhance the customer experience by improving customer-centricity throughout the airline
  • Adopt best practices to improve productivity
  • Grow online sales to reach a wider market in a more cost effective manner
  • Improve employee engagement
  • Implement a competitive cost structure through a greater cost consciousness throughout the company

The plan is being headed up by Group Chief Executive Officer Vipula Gunatilleka, who was appointed to the airline in mid-2018. Prior to joining SriLankan, Gunatilleka was a board member and CFO of TAAG Angola. There, he worked closely with Emirates while they were managing TAAG, so no doubt knows his hub and spoke business very well already.

A loss-making airline

The airline is undergoing a major shakeup with a view to turning a profit. Over the last nine months, the carrier’s net loss more than doubled to a total loss of $135m. It is hoped that the five year strategic plan being tabled today will transform the airline by 2024.

 

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Qatar Airways partners with Rolls-Royce to trial its Virtual Reality training tool

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Qatar Airways is proud to be the global launch partner of Rolls-Royce’s new Virtual Reality training tool. Recognized for its ongoing commitment to innovation, Qatar Airways is the first airline to trial the ground-breaking new technology as part of its engineering training plan.

The new tool is designed to provide engineers with Rolls-Royce Trent XWB refresher training in a virtual environment without the need for a physical engine to work on. Qatar Airways engineers will be the first in the industry to experience this cutting-edge technology.

The Trent XWB, which powers the Qatar Airways A350 fleet, is Rolls-Royce’s largest engine and must be separated before engineers can transport it for maintenance and repair. Using HTC Vive equipment, engineers will be immersed in the process, using sight, sound and touch to separate the two parts of the engine in a virtual setting, without the complexity and cost of a real engine.

Qatar Airways Group Chief Executive, His Excellency Mr. Al Baker, said: “Qatar Airways is an airline of the future, and we constantly strive to deliver innovation in every area of our business. Our ultimate goal is to provide our customers with a quality on-board experience every time they travel, and by adopting the latest technology in our engineering department, we aim to ensure that they arrive at their destination smoothly and without disruption. We are very excited about the new Virtual Reality training tool offered by Rolls-Royce and we are proud that they have chosen Qatar Airways as their global launch partner.”

Rolls-Royce, President – Civil Aerospace, Mr. Chris Cholerton, said: “At Rolls-Royce we are designing, testing, and maintaining engines in the digital realm, so it makes sense that we bring cutting-edge technology to our training programmes. In the same way pilots complete elements of their training in a simulator, certain engineering tasks can be taught through Virtual Reality. Qatar Airways was the first customer to take delivery of the Trent XWB, and their forward-thinking vision across their business makes them the perfect launch partner for this technology.”

The Rolls-Royce Virtual Reality training platform trial follows Qatar Airways’ first venture into the world of Virtual Reality when it became IATA’s global launch partner of RampVR™ in August 2018. The award-winning system, pioneered by IATA, utilises the latest virtual-reality technology to simulate real air-side conditions for ground handling and ground service operator training. The RampVR™ system is being used by Qatar Airway’s Talent Development department to train their ground operations teams.

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Wings Travel Management Appoints Chief Operating Officer: Asia Pacific based in Singapore

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Wings Travel Management , a leading global travel management company providing business travel services to clients in the finance, construction, security, energy and marine sectors, has appointed Sonja Hamman to the newly-created role of Chief Operating Officer – Asia Pacific, based at the company’s office in Singapore. The move reflects the importance of the region and its potential for growth, since Wings established an operation in Singapore in early 2018 after acquiring Olympia Travels & Tours.

Sonja Hamman first joined Wings in 2001, and her impressive 18-year career with the global travel management company has spanned diverse operational, senior management and project-led roles in the UK, South Africa, Brazil, Nigeria and Angola.

Most recently, she has held the London-based position of Director of Global Strategic Partners & Yield Management during which time she has been instrumental in expanding Wings global supplier relations portfolio, focussing on supplier negotiations, NDC solutions and content..

Prior to this role, Hamman was Director of Global Projects, managing major initiatives such as the launching the Wings’ wholly-owned operation in Lagos, Nigeria; the acquisition and integration of Michelle’s Travel in South Africa; and establishment of Wings’ IATA and ticketing functionality in Angola – a non BSP region.

Her robust understanding and experience of Wings’ business has also been honed by setting up the company’s UK operation in 2002 in the role of Director – Operations – UK & Europe. This was Wings’ first office outside South Africa, where the company was founded in 1992. Hamman grew the UK business from the ground up, to a total of three offices. From here she moved to become Director – Oil & Gas Division with the remit to grow and expand Wings’ global energy business. While in this role, she also worked closely with the company’s Learning and Development team to establish the Energy Academy™, a unique in-house educational programme giving Wings’ travel consultants an in-depth understanding of how the oil and gas sector operates, in order to service their clients more insightfully.

“I am delighted that Sonja has taken up this strategic role – her extensive experience in opening and operating new regions coupled with her Wings DNA, places her as the perfect candidate to consolidate our operations in Singapore, and build a platform to grow our business in the Asia-Pacific region,” said Tony Sofianos, CEO, Wings Travel Management

“Wings is strategically and uniquely positioned to service existing global customers, but also capitalise on the growth opportunities across the corporate, energy and marine sectors thanks to our unique value proposition and wholly owned global operations” added Sofianos

Sonja Hamman stated: “I am very pleased to be joining Wings’ Asia-Pacific region as it’s such an exciting market with many opportunities. As well as ensuring the Wings brand becomes a recognised market leader in Singapore, I also look forward to driving the development and execution of our growth strategy for Asia-Pacific.”

About Wings Travel Management:

Wings is an award-winning global travel management company which has carved a niche in the market as a trusted travel provider for clients in the finance, construction, security, energy and marine sectors where travel is an integral part of their business model. Founded in 1992, Wings’ global reach spans North America, South America, UK/Europe, Asia, Africa, and the Middle East, where the company has wholly owned and managed regional offices. Wings Travel Management employs over 400 people around the world and has a global turnover of around US$325M. Wings is known for its unique expertise in navigating complex and challenging business travel, as well as generating cost savings without compromising on traveller safety. The company’s advanced, customizable technology solutions are all seamlessly accessible over a standardized global platform. www.wings.travel

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