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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.

Travel News | eTurboNews

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.

Travel News | eTurboNews

What is the discussion at the UNWTO / ICAO Ministerial Conference on Tourism and Air Transport?

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A Panel discussion is ongoing and a packed program are planned today for delegates in Sai Island, Cabo Verde attending the First UNWTO/ ICAO Ministerial Conference Tourism and Air Transport.

Air Transport and Tourism Policies: Regulatory convergence to maximize and balance their benefits

Air Transport and tourism depend heavily on each other and are essential engines of trade and economic growth for both developed and developing countries.

Despite the synergies, there can be conflicts between aviation and tourism policies due to the difficulties of States in balancing the interests of their airlines and the optimum development of their tourism industries. Separate sectorial policies result in a fundamental disconnect, which constitutes a severe deterrent towards the development of both sectors. How do we enhance policy coherence between the two sectors, harmonize the regulatory frameworks, and prevent separate sectoral policies? How can we strike a balance to maximize the overall benefits of tourism and air transport in the national economy?

What is the current status of Africa’s regulatory framework and what is its impact on tourism and air transport (the Lomé Declaration and the related Action plans both for Air Transport and for Tourism?

How can Africa benefit from and implement the joint UNWTO and ICAO Medellín Statement on Tourism and Air Transport for Development? How can the African Governments promote cooperation and compatible decision-making among transport and tourism authorities and other ministries in charge of related portfolios, including finance, economic planning, energy, environment and trade?

What are the challenges encountered by tourism stakeholders in reflecting tourism business interests in national and regional air transport policies?

Connectivity and Seamless Travel: Best practices to serve tourists and passengers

Aviation and tourism are a customer-focused economic sector.

While there is no single definition of air connectivity, it can be viewed as the ability of a network to move passengers involving the minimum of transit points, which makes the trip as short as possible with optimal passenger satisfaction at the minimum price possible. The realization of seamless travel can improve overall travel experience, which in turn fuels tourism demand.

With the recent launching of the Single Africa Air Transport Market (SAATM), open skies over Africa may soon be a reality, building the necessary regulatory framework to increase international intra-Africa travel.

How do we optimize the flow of passenger traffic through the air transport system? How can we generate sufficient demand for direct air services between African sub-regions, especially between the East-West coasts?

How well do current air service agreements (ASAs) contribute to connectivity and what are the prospects of air transport liberalization? What constitute the bottlenecks and slowdowns of seamless travel in the air transport system? What regulatory schemes can be used or developed to assure essential air services to Least Developed Countries (LDCs), Landlocked Developing Countries (LLDCs) and Small Island Developing States (SIDS)?

What are the existing best practices and how could they be extended and adapted to other regions? What are the factors influencing airline choices for different market segments (the intercultural dimension)?

Funding and Financing for Development: Pragmatic measures to build a transparent, stable and predictable investment climate

Infrastructure deficiencies in the aviation and tourism sectors have long been an issue in Africa. While plans are in place to develop and modernize aviation infrastructure, relief is years away at best.

In the meantime, there will be lost opportunities for creating jobs and spurring economic growth. Another issue is the proliferation of taxes on tourism and air transport despite the fact that the industry recovers a vast majority of its own infrastructure costs through payments of user charges, rather than being financed through taxation.

Revenue raised by taxes can often be outweighed by the relinquished economic benefits as a result of dampened demand for air travel.

This Session will focus on

a) the creation of good governance and enabling the environment to build business confidence and encourage investments, and

b) the consolidation of planning and development efforts for aviation and tourism infrastructure in multi-modal and urban planning initiatives. What are the challenges of financing development projects related to the tourism and air transport sectors, particularly in LDCs, LLDCs, and SIDS?

What are the success stories in financing tourism and air transport projects? How do consumers perceive taxes, charges, and others levies and how to ensure transparency of taxes and charges to passengers and tourists?

Why is the limited volume of international public finance and assistance for development currently available for aviation and tourism infrastructure projects?

Travel Facilitation: Advancing visa facilitation in supporting economic growth 

Travel facilitation aims at maximizing the efficiency of border clearance formalities while achieving and maintaining high-quality security and effective law enforcement. Allowing passengers/tourists to cross international borders safely and efficiently contributes significantly to stimulating demand, enhancing the competitiveness of States, creating jobs and fostering international understanding.

In spite of the great strides made in recent decades in facilitating tourist travel in Africa, there is still room for considerable progress. For example, electronic visa processes and delivery could make travel more accessible, convenient, and more efficient without a diminution of national security.

States should also look into increasing cooperation on bilateral, regional and international travel facilitation regimes. How can new technologies be used to make travel more accessible, convenient and efficient? How to define and implement policies which facilitate international travel and tourism while ensuring the security and integrity of traveler identification and border controls?

How well do e-passports, e-visas and other documentation deal with emergent threats to security? How could the African States learn from other effective best practices?

Travel News | eTurboNews

New Delhi welcomes new Qatar Visa Center

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At the new Qatar Visa Center in New Delhi, India, work visa applicants for the State of Qatar will be able to sign on work contracts digitally, enroll their biometrics, and undergo mandatory medical test all under one-roof. This will save time and make it hassle free for applicants.

Mandated by the Ministry of Interior, State of Qatar, Qatar Visa Center was inaugurated by His Excellency Mr. Mohammed Khater Al Khater, Ambassador of the State of Qatar to the Republic of India in New Delhi. The opening ceremony was attended by Major Abdullah Khalifa Al Mohannadi, Director of Department of Visa Support Services, Ministry of Interior of the State of Qatar.

The move to get work visa applicants to complete the most essential and critical part of their visa processes in the country of origin (India in this case) is aimed at guaranteeing prospective employees their rights in a manner consistent with the best international standards.

The visa center is in sync with international standards guaranteeing greater transparency, traceability and improved anti-fraud measures and security screening mechanisms for the visa applicants. The center will operate between 08:30 am to 04:30 pm from Monday to Friday.

As part of the visa application process, the employer in Qatar will ensure all necessary procedures and make the visa payments on behalf of the applicant. The applicants will only need to book an appointment online and visit the Qatar Visa Center fifteen minutes prior to the scheduled time on a given day. Once at the center and after the identity of the visa applicant is verified and the list of required documents are checked a token gets issued. Once the token is being referred to, the respective visa applicant will be explained the contract terms and can thereby digitally sign the work contract. Biometric enrollment and the mandatory medical tests will be done at the center. Upon completion of the processes at the visa center, the visa applicant then can choose to track the status of his application online or through their employer in the State of Qatar.

On this occasion, the Ambassador of the State of Qatar in India, His Excellency Mr. Mohammed Khater Al Khater, stressed that the State of Qatar, under the wise leadership of His Highness Sheikh Tamim bin Hamad Al Thani, Emir of the State of Qatar, has witnessed a speedy growth and development over the past years and the Indian community in the State of Qatar has contributed significantly in the development process. His Excellency further stressed upon the keenness of the State of Qatar to protect the rights of the expatriates and facilitate their work procedures while recognizing the contribution of the Indian community. He added that in order to provide better facilities for the Indian community and further strengthening the distinguished relations between the two friendly countries, it has been decided to choose India as one of the most important countries to open the “Qatar Visas Center” in seven different cities of India including New Delhi, it is certain that, a large number of Indian expatriates, travelling to the State of Qatar for work and tourism will benefit through these centers, which will facilitate smooth and hassle-free recruitment process and ensure speedy completion of procedures to obtain the visas and residence permits for the State of Qatar.

His Excellency added that the opening of Qatar visa centers in India comes with celebration of the year 2019 as Qatar-India year of Culture. He also expressed thanks and appreciation to the officials in Ministry of External Affairs, Republic of India, for their continued support to achieve this step goal, and noted that this step reflects Qatar’s keenness to ensure the protection and safety of expatriates, as the Qatar Visa Centres in India will enable the completion of recruitment procedures through one channel easily within a shorter period of time.

“As part of Qatar’s willingness to facilitate the work process and protect the rights of expatriates, Qatar Visa Centers will be opened in a number of countries which include India,” said Major Abdullah Khalifa Al Mohannadi, Director of Visa Support Services Dept at the Ministry of the Interior, Doha, Qatar. “Medical examinations, biometric data enrollment and the signing process of employment contracts will be done through the Qatar Visa Centers in the expatriate country of origin at the 7 Indian centers including the one in New Delhi. All of this, reflects the extent and depth of Qatar’s endeavors to ensure the protection and safety of expatriates under a simplified and effective recruitment regime upheld and facilitated by the visa center,” he added.

Suhail Shaikh. Business Head, said: “We are honored to launch the first Qatar Visa Center in India in New Delhi on behalf of Ministry of Interior, State of Qatar. We take great pride in being able to provide transparent, standardized and streamlined visa services for Indians seeking work visas through a simple process managed by our capable colleagues.”

Six other visa centers in Mumbai, Kochi, Hyderabad, Lucknow, Chennai and Kolkata will be operational shortly.

Qatar Visa Center maintains robust multi-lingual information services for the benefit of visa applicants across multiple touch points. Information on appointment scheduling, requirements and steps at the visa center can be found in English, Hindi, Marathi, Telugu, Bengali, Tamil and Malayalam through a dedicated website, call center helpline (+91 44 6133 1333) and walk-in at the reception.

Travel News | eTurboNews

Alternative Airlines Now Accepts Amazon Pay As New Payment Option

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Today (November 29, 2018), Alternative Airlines, a flight search website, has implemented Amazon Pay as a new payment option, allowing customers to complete transactions in just a few clicks. This option will let passengers select their chosen flights with Alternative Airlines and pay by using the information already stored in their Amazon account.

This means customers can simply enter their Amazon account login details rather than re-entering their card and address details to pay for flights. This results in a swift and smooth payment process with a reputable company that customers will recognise and trust with their purchases.

Sam Argyle, Alternative Airlines’ Managing Director, commented on this new method of payment: “We’re delighted to offer Amazon Pay to our customers as it is one of the most secure ways to pay for flights, as the user doesn’t have to re-enter their card details. Amazon is also one of the most trusted brands in the industry.”

This new option expands on the ever-growing payment options that Alternative Airlines offers. By giving customers the option of completing transactions using Amazon Pay, it allows passengers to use a familiar, secure and quick service to pay for flights. Alternative Airlines currently has over 20 ways to pay, including PayPal, Alipay, Apple Pay, Google Pay, Visa Checkout and now Amazon Pay, in addition to more unusual and region-specific methods such as M-Pesa, Airtel, Sofort and Tigo.

New research shows the under-appreciated back office as crucial driver of success in travel

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• The travel industry understands the strategic value of payments – 84% viewed payments as a strategic priority

• But it has a long way to go – just over a third of respondents (36%) knew how much payment transactions cost the business

• And paper still dominates – not just the use of fax but also cheques: 33% of respondents are still using cheques.

London, UK – Travel providers that seize the opportunity to use technology, offer flexible payment solutions and exploit data gathering tools to create stress-free customer experiences, will reap rich rewards. But, according to new research, there is still a long way to go in an industry where the fax and cheques are still a regular occurrence.

The launch edition of the Ixaris Megatrends Report finds that while 84% of respondents to an industry wide survey viewed payments as a strategic priority, just over a third of them knew how much payment transactions cost the business.

The research conducted by travel technology provider Ixaris, combines insights from 18 industry stakeholders, innovators and intermediaries with the results of a survey conducted from over 100 travel leaders across the US, Europe, Middle East, Africa and South Asia.

The key findings focus on 3 areas, namely 1) Processes– the link between payments and the back office and customer experience, 2) Products– how innovation and digitisation of the back office can drive product development, for example through better customer experience, payment flexibility and 3) Pathways – the route to the customer which requires joining up the pieces of the travel value chain, underpinned by data and analytics, including payment and transaction visibility

The report highlights that there are other opportunities for savings from payments efficiencies apart from direct costs. Larger travel company treasury teams, for example spend up to 44% of their time managing payments in their business.

In addition, overlooking the back office impacts budgets for innovation. Smaller companies are up to 50% more likely to pay higher transaction fees than their larger rivals and are around 50% less likely to use advanced payment formats like virtual cards – at a time when travel, particularly digital and online travel is becoming more and more concentrated among a handful of small players.

“Adoption of virtual cards is slow. Around two thirds of small companies are not using them – and the interviews show that the travel industry doesn’t understand them or their value to the business very well,” points out Alex Mifsud, founder and chief strategy officer at Ixaris.

“At a time of massive focus on data and analytics, transaction data barely registers with only 14% of respondents indicating that they collect such data as part of their analytics programs. Travel providers that seize the opportunity to dismantle their operational legacy – making use of new payments services and data gathering tools along the way – to create stress- free customer experiences, will reap rich rewards. In the digital era if you want to leap forward, you’ve got to keep looking at what’s happening in the back,” says Mifsud.