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Indian travelers expected to spend $136 billion by 2021

April 24, 2019 by Forimmediaterelease

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

April 17, 2019 by Forimmediaterelease

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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Viking and China Merchants Group to build cruise line for Chinese cruise market

April 10, 2019 by Forimmediaterelease

Viking Cruises and China Merchants Shekou, representing China Merchants Group, announced they have signed a memorandum of understanding to form a joint venture focused on building a cruise line with worldwide cruise offerings for the Chinese cruise market.

This will be a wide-ranging partnership covering from product development to sales and marketing. Further, China Merchants Group’s shipbuilding subsidiaries will partner with the joint venture to design and build new ocean cruise ships dedicated to the Chinese market.

“China is a dynamic outbound tourism market, and we are pleased to be partnering with China Merchants Group in this joint venture to drive the development of the cruise industry – we see Viking’s way of cruising less as a trip and more as a lifestyle,” said Torstein Hagen, Chairman of Viking. “For more than 20 years, we have led the industry in developing a fleet of ships and a range of cruise itineraries that we believe provide guests with the most comfortable and enriching way to explore the world. Our partnership with China Merchants Group will allow us to bring this Viking travel lifestyle to more Chinese travelers more quickly, satisfying the Chinese market’s unmet demand for a greater choice of sophisticated travel.”

“China Merchants Group treasures this cooperation with Viking. This is a full scale, multi-dimensional cooperation that covers all three main business sectors of China Merchants group,” said Gangfeng Fu, president of China Merchants Group. “Viking has gained tremendous experience in cruise operations and branding strategies during its 20 years of rapid growth. We sincerely hope that the alliance of the two powerful brands will create synergies and innovative business models that will lead the cooperation into a market-leading cruise brand.

Viking operates a current fleet of 78 vessels, offering scenic cruising on rivers and oceans around the world. China has been a part of Viking’s destination portfolio since 2003, and since setting up local operations in China in 2016, the company has seen strong momentum in its European river cruise product tailored for Chinese-speaking guests.

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19 more hotels with 3000 rooms to be added to Marriott Hotels in Middle East and Africa

April 8, 2019 by Forimmediaterelease

Marriott International expects to add 19 new properties and more than 3,000 rooms to its  Middle East and Africa portfolio in 2019.  Underpinning a strong demand for its diverse brands, the new additions are in line with the company’s expansion plans to add more than 100 new properties and nearly 26,000 rooms across the region by the end of 2023.  Marriott estimates its development pipeline through 2023 represents up to $8 billion of investment from property owners and is expected to generate over 20,000 new jobs across the region.

“Our growth across the Middle East and Africa is fuelled by a strong demand for our diverse range of well-established brands, each offering different attributes that cater to this region’s ever changing and evolving marketplace,” said Jerome Briet, Chief Development Officer, Middle East & Africa, Marriott International. “This region continues to present us with opportunities to further grow and enhance our portfolio across new and established markets.  While the majority of our growth will be through new-builds, we are seeing an increasing number of conversion opportunities, especially in the luxury space.”

Year-to-date, the company has opened five new properties in the region and is expected to add 14 more – bringing its portfolio across the Middle East and Africa to nearly 270 properties and over 60,000 rooms – by the end of the year.

Unwavering Demand for Luxury Brands that offer Unrivalled Experiences

The company is poised to expand its luxury footprint in the region by more than 70 percent by the end of 2023, with more than 25 luxury properties under development.   The company expects to grow its luxury portfolio in 2019 with seven anticipated openings across four brands:

  • With the recent opening of W Dubai – The Palm and the anticipated openings of W Muscat and W Yas Island, W Hotels should double its portfolio in the region.
  • St. Regis anticipates debuting in Jordan and Egypt with the openings of The St. Regis Amman and The St. Regis Cairo.
  • The iconic North Island is expected to of world-renowned hotels and resorts.
  • JW Marriott anticipates marking its entry into Oman with the opening of the JW Marriott Muscat Convention Center.

Substantial Growth across Premium Brands

The growth of Marriott’s premium brands remains steady across the region with more than 30 hotels expected to be added to the portfolio by the end of 2023. By the end of 2019, the company expects to have added four new hotels under its premium portfolio for the region:

  • The Autograph Collection anticipates marking its debut in Kenya with the addition of Sankara Nairobi.
  • Marriott Hotels and Marriott Executive Apartments strengthened its presence in Saudi Arabia with the recent openings in the Diplomatic Quarter of Riyadh.  Marriott Executive Apartments is also expected to open a new property in Madinah later this year.
  • Marriott Hotels is also planning to open its second property in Algeria, in the capital city of Algiers

In addition to the openings in 2019, Marriott is also focused on the transformation journey of Sheraton Hotels & Resorts, the company’s most global brand.  In the region, Sheraton Jeddah Hotel and Sheraton Grand Hotel, Dubai are currently undergoing renovations that represent the brand’s vision for the future.

Regional Demand for Select-Service Hotels Continues to Fuel Growth

Currently representing over 40 percent of the company’s development pipeline through 2023, select-serve brands continue their rapid growth trajectory across the Middle East and Africa.  Building on the momentum from 2018 – with ten properties added across the region, including four Aloft hotels in the UAE – the company expects to add seven new properties by the end of this year:

  • Four Points by Sheraton anticipates expanding its portfolio with a total of four openings in 2019.The brand recently opened properties in in Sharjah (UAE) and Setif (Algeria) and is on-track to open two more properties this year including, Four Points by Sheraton Dar es Salaam New Africa in Tanzania and Four Points by Sheraton Lahore in Pakistan.
  • Residence Inn by Marriott expects to make its debut in Algeria with the opening of Residence Inn by Marriott Algiers
  • Protea Hotels by Marriott plans to expand the brand in Uganda with the opening of Protea Hotel by Marriott Naguru Skyz.
  • Element Hotels is set to launch its first property in Africa with the opening of Element Dar es Salaam in Tanzania.

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Tourism for Tomorrow Awards: WTTC makes the 2019 announcement

April 4, 2019 by Forimmediaterelease

The World Travel & Tourism Council (WTTC) is delighted to announce the 2019 leaders in sustainable tourism at the Tourism for Tomorrow Awards ceremony. The Awards, now in their 15th year, took place at a special ceremony during the WTTC Global Summit in Seville, Spain, to celebrate inspirational, world-changing tourism initiatives from around the globe.

The 2019 WTTC Tourism for Tomorrow Award Winners are highly commended and recognized for business practices of the highest standards that balance the needs of ‘people, planet and profits’ within the Travel & Tourism sector. Our 2019 Winners promote inclusive growth and illustrate a strong commitment to supporting change and transformation in business practices and consumer behavior towards a more environmentally conscious sector.

The Winners of the 2019 Tourism for Tomorrow Awards are:

  • Climate Action Award – Bucuti & Tara Beach Resort, Aruba
  • Investing in People Award – Lemon Tree Hotels Limited, India
  • Destination Stewardship Award – St. Kitts Sustainable Destination Council, St. Kitts and Nevis
  • Social Impact Award – Awamaki, Peru
  • Changemakers Award – SEE Turtles, USA

The Awards are judged by a panel of independent experts, led by Prof. Graham Miller, Executive Dean, Professor of Sustainability in Business, University of Surrey.  The panel included academics, business leaders, NGO and governmental representatives who narrowed down the list of 183 applications to just fifteen finalists. The three-stage judging process included a thorough review of all applications, followed by on-site evaluations of the Finalists and their initiative.

The Winner of each category was determined by the WTTC Tourism for Tomorrow Awards 2019 Winners’ Selection Committee, chaired by Fiona Jeffery OBE, Founder & Chairman, Just a Drop, and composed of Wolfgang M. Neumann, Non-Executive Director and Strategic Advisory, Global Hospitality, Travel & Tourism Sector; John Spengler, Akira Yamaguchi Professor of Environmental Health and Human Habitation, Harvard T.H. Chan School of Public Health; and Louise Twining-Ward, Senior Private Sector Specialist, Global Tourism Team, World Bank.

WTTC represents the global private sector of Travel & Tourism. Its Global Summit is the most important event in the sector worldwide each year.

Gloria Guevara, President & CEO, WTTC, commented: ‘The finalists in this year’s Tourism for Tomorrow Awards showcase the many ways in which our industry is dedicated to sustainable growth. In 2018, the Travel & Tourism sector contributed 10.4% of global GDP and supported 319 million jobs across the world. It is therefore essential that we continue to grow in the most sustainable and responsible way possible. The new award categories for this year are aligned with WTTC strategic priorities and illustrate that all members of this industry play a key role in driving the sector forward to a more responsible future. I congratulate them all on their fantastic accomplishments and leadership.’

 Fiona Jeffery, OBE, Chair, WTTC Tourism for Tomorrow Awards, said: ‘The aim of the WTTC Tourism for Tomorrow Awards is to showcase some of the most exceptional examples of sustainable tourism practices in the world, and inspire and encourage our industry to make a positive impact for both current and future generations. Over 15 years, we have seen the industry make great strides towards achieving these goals and we can see positive change happening. Our recent survey results show that 67% of travellers would consider a travel company’s sustainability agenda when booking a trip, whilst 48% of travellers would now pay more money to travel sustainably. Whilst there is still more to be done, we must harness the momentum for change to protect the product that sustains our very own industry.’

Jeff Rutledge, President and CEO, AIG Travel, Headline Sponsor of the Awards, stated: ‘From socially-inclusive employment initiatives to establishing one of the first rewilding projects in the Philippines, this year’s WTTC Tourism for Tomorrow Awards finalists have proved to be an incredibly diverse group of changemakers from around the world. They have demonstrated that, regardless of the size or purpose of business, all members of the Travel & Tourism industry can afford to make sustainability a priority, and become part of our collective journey towards a greener future.’

For more information on the Tourism for Tomorrow Awards and all the Winners, please visithttp://wttc.org/t4tawards

Full list of Winners and Finalists:

Climate Action Award, for organisations undertaking significant and measurable work to reduce the scale and impact of climate change:

  • WINNER: Bucati & Tara Beaach Resort
  • FINALIST: The Brando, Tetiaroa Private Island, French Polynesia
  • FINALIST: Tourism Holdings Limited, New Zealand

Investing in People Award, for organisations demonstrating leadership in becoming an exciting, attractive, and equitable employer in the sector:

  • WINNER: Lemon Tree Hotels Limited, India
  • FINALIST: Reserva do Ibitipoca, Brazil
  • FINALIST: Shanga by Elewana Collection, Tanzania 

Destination Stewardship Award, for organisations helping a place to thrive and bring forward its unique identity for the benefit of its residents and tourists: 

  • WINNER: St. Kitts Sustainable Destination Council, St. Kitts and Nevis
  • FINALIST: Grupo Rio da Prata, Jardim and Bonito, Brazil
  • FINALIST: Masungi Georeserve, Philippines

Social Impact Award, for organisations working to improve the people and places where they operate:

  • WINNER: Awamaki, Peru
  • FINALIST: Intrepid Group, Australia
  • FINALIST: Nikoi Island, Indonesia

Changemakers Award, this year focused on organisations fighting the illegal wildlife trade through sustainable tourism: 

  • WINNER: SEE Turtles, USA
  • FINALIST: Kelompok Peduli Lingkungan Belitung (KPLB), Indonesia
  • FINALIST: The Cardamom Tented Camp, Cambodia

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