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Outward Bound

Thanks to discounted fares, aggressive marketing, disposable incomes, and a new spirit of adventure, Indian holidayers are becoming globetrotters

Outward Bound
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FASHION, they say, will be replaced by waterproof, sun-proof body paint or palm-sized T-shirts that can be stretched into any shape. The day isn't far when C-borg kind of contraptions clamped on foreheads would slingshot your consciousness into Mars travel or bungee jumps off San Fransisco's Golden Gate bridge. But for the conservative-minded, who value the old world experience, the clock may be ticking—they could well be the last of a generation to savour a drink of brandy on a balcony in Mombasa, a cable ride to Sentosa, or even bite into a pizza under the watchful eyes of the Sphinx.

Some Martian may possibly be beaming this futuristic scenario to Indians, for they are travelling abroad like never before. "This year is going to be the biggest in outbound," says Subhash Goyal, chairman of STIC Travels and president IATO. Adds Munisha Couto of ITC Holidays: "The Indian outbound growth rate is among the highest in Asia. Over a third of these are leisure travellers. In essence, India has terrific potential." Since 1993, leisure travel out of India has grown by over 12 per cent annually—and growing, evident from the number of tourism promotion bodies mushrooming in India. Strangely, in what is a numbers game, the Department of Tourism (DOT) hasn't any statistics to help identify where the Indians are headed. Neither has immigration. So one has to depend on foreign tourist bodies, airlines, visas issued, and overall statistics from the Airport Authority of India and Immigration.

While in 1994 the number of Indians travelling abroad was 2,734,840, in '97 it rose by over 36 per cent to 3,725,820 (DOT figures). And '98 could well see another 10 per cent plus jump. Of these, 45 per cent embarked from Mumbai, and 24 per cent from Delhi. If one takes into account figures from the Government of India's immigration department, the total number of passengers who left Indian shores in 1997 was 6.1 million. Minus the foreigners, one arrives at a figure of 3.8 million outbound Indians.

A reliable gauge of the Indian tourists' new spending power is the new aggressiveness with which foreign tourist boards are targeting them. At the second INIT travel exhibition in Delhi in April, a high-ranked tourism official from Turkey accosted Umak Apang, Indian minister of state for tourism. With an apologetic posture, he stuttered: "Me from Turkey. Come from very far for tourism." Apang nodded but kept silent. The exhibition boasted 12 stalls by foreign tourist bodies—Austrian, Turkish, the Baltic Sea Tourist Commission, Dubai, Indonesia, Greece, Italy, Mauritius, Spain, Singapore, Switzerland, and Tirol—all wooing Indian outbound operators. Says Mukesh Sharma, MD, ITE India, which organises INIT: "We had 214 exhibitors, and representatives from 33 countries. Over 70 per cent of our stalls were occupied by foreign sellers." This year, Sharma sold 5,000 sq m of space at Pragati Maidan at the rate of Rs 8,000 per sq m. And he's almost through with bookings for next year too.

SUCH enthusiasm isn't misplaced, going by the spiralling outbound numbers. Australia saw 26,000 Indian visitors in '97, up from 18,000 in '96. Says Nidhi Sharma, manager at the Australian Tourist Commission: "Forty per cent of them were holidayers. Indians perceive Australia as the upper end of the market. Overall 'comfort' levels here are judged to be higher than those in the West. Two other distinct advantages over Europe: no borders to be crossed once you're in, and the language—English." In '96, Qantas Airlines resumed services to India after six years. They're into a big promotion spree. One ticket free on the purchase of two, and special hotel packages on Qantas holidays. With the devaluation of the Korean Won, Australia has seen a sudden drying up of Korean travellers. Says Ian Phillips, director (sales), Marriott hotels: "With the south Asia crash, we're looking at new markets. India and Russia fit the bill."

Thailand saw 1.02 lakh Indian tourists in '94—that climbed to 1.35 lakh in '97. Says Vasudha Sondhi, deputy general manager at TRAC, former representatives of the Thai tourist board: "Our focus was to popularise lesser-known destinations like Chiang Mai and Krabi to attract family traffic." Traffic of the Captain Ajay Achutan kind. A Mumbai-based marine HRD consultant, he travelled to the Southeast to familiarise his daughter, Divya, with different cultures. Says he: "At Pattaya we saw Children of One God, a show performed by transvestites. It was a mind-blowing experience. In Singapore, all the races live together. It's my idea of a benevolent dictatorship."

Hong Kong too, in spite of the transition, has seen a remarkable growth in tourism from the subcontinent. From 78,911 Indian travellers in '93 to 105,838 in '96. And Indonesia, for all its forest fires, had 39,421 in '96, compared to 15,359 in '93. Even Malaysia, which saw a big drop in Indian visitors in '93, mainly due to visa curbs, has picked up tremendously. Says Rafidah Idris, assistant director at the Malaysian Tourism Promotion Board: "We had 31,000 Indians visiting us last year, up from 14,401 in '93. They are mostly from Chennai, Mumbai and Delhi—staying 11 nights on an average. The important thing is 55 per cent come on vacation and we have 33 per cent repeats."

In the UK alone, 200,000 Indians came visiting in 1997, up 10 per cent from 1996. Says Prem Subramanium, a British Tourist Authority (BTA) representative: "While 35 per cent came for holidaying, a big chunk, 38 per cent, were on business travel. There's a lot of leisure travel camouflaging itself as business travel for tax purposes. Right now, we are focusing on the 30 per cent repeat travellers. We can't get the first-timers to do things like Scotland. They would rather do Paris.... There's no point in competing with Dubai on prices. We have to concentrate on value."

Austria and Switzerland are the other hits. Says Barbara Diethart-Forcher, marketing manager, Asia, of the Vienna Tourist Board: "1997 saw 30,000 Indians in Austria, a big growth. This year in January alone we had 1,000 Indians in Vienna—thrice that of last year, and that's in low season." Exotic destinations like Seychelles saw 1,900 Indian visitors—thrice that of last year, up from 500 in '95. But the archipelago, which had a total of 1.3 lakh visitors in '97, is not interested in anything over 5,000 from India. Its USP is that it's a destination for the 'discerning' frequent traveller.

But Singapore takes the cake. From a figure of 188,524 in '95 the graph shot up to 226,612 in '97. The island state earned a whopping S$ 277.2 million from Indians with average per capita spend being S$894—the highest for any nationality in Singapore. Says Vimal Harnal, director, Singapore Tourist Promotion Board: "For Indians, it's still a great shopping destination."

Mohammed Mustafa, a department store in Little India, Singapore, is perhaps the single biggest buying spot for Indians. Symbolised best perhaps by people like V. Selvadurai, partner in a Madras-based trucking firm which owns 140 LPG carriers. Says he: "I travel abroad once in two years with my family. This time I travelled with five family members. Each of us took $2,000 for shopping. We spent roughly $500 on clothes in Thailand. The rest we spent in Singapore on electronic items."

South Asia apart, Europe's been a big attraction. Come summer, escaping from the heat, it seems, adds immensely to the incentive. Also, says Neeraj Ghei, president of the Travel Agents Association of India (TAAI): "Indians are aware of the Southeast as a destination. But Europe adds to the snob appeal. It adds value to your travel stories."

And value comes in various ways. For Amak Dhru, an Ahmedabad-based chartered accountant, who travelled abroad with his family for the first time this year, it means expanding the horizons of his children. Says Dhru: "We Gujaratis regard travel as an investment for the future. If our children go to study abroad later, it wouldn't be a totally alien culture."

 For Ashank Desai, CMD Mastek Ltd, a Mumbai-based software firm, the value was determined by the time available for a holiday. Says Desai: "I went to the US three years ago. I chose Southeast Asia this time as Europe needs a minimum of 15-20 days. You don't want to go that far just for 10 days. Besides, Europe isn't the place for children. There's only sightseeing. The Southeast is more fun."

 Veteran travellers, such as K.G.C. Nayar, 72, formerly in the UN, try something new each time. This year, he decided on a cruise with his wife: "This is the first time I have travelled in a group. I have always holidayed independently before." First timers like Cyrus Dalal, 20, a BCom student from Bhavanipore College, Calcutta, was sent by his father with an SOTC group to experience Thailand and Singapore first hand. The cost to his father: Rs 50,000.

Then there are the adventurous entrepreneurs like Sundeep Gupta from Bangalore, who deals in industrial hardware. He caught the bug from the Internet. "I hired a caravan home for $1,500, and travelled through France, Switzerland, Italy, Austria, Holland, and Belgium for five weeks. I drove with my wife and friend. Next year, we plan to take the children too."

THE spirit of travel is best epitomised by people like J.M. Barucha. An 80-year-old widow, this Mumbai-based Parsi lady loves to travel. Last month, she took her first cruise and has been travelling with SOTC since 1981. Says she: "This year, I had a problem. For two months, I wasn't getting a partner to avail the discount. But SOTC finally found one."

The major factor fuelling outbound flow is low air fares. A Delhi-Bangkok return ticket is priced at Rs 13,000. From January to March, Lufthansa halved its fares to Frankfurt down to Rs 24,000. A New York return on all airlines was going for Rs 28,000, on occasion even for Rs 23,000. Both Singapore Airlines and Air India continue to peddle Mumbai-Manchester for Rs 20,000. For about six weeks, fares to London varied between Rs 16,000 and Rs 26,000. Travel was possible on those fares till April 15. Says Ranjit Malkani, CMD SOTC-Kuoni, tonguein-cheek: "Now, it's better to travel free in summer rather than cheap in winter." Adds Rupen Vikamsey, corporate marketing manager at Orbit, an outbound travel company: "Because fares to Europe started dropping, travel picked up in a big way, a little at the cost of the Southeast." On April 15, just when westbound traffic concessions dried up, those to the east began. Singapore Airlines reduced its Delhi-Singapore fare to Rs 14,000 from Rs 22,000, making it nearly as cheap as going to Bangkok. Says TAAI president Ghei: "Prices were changing every two hours. It was like, which airline could sustain the maximum losses. We have been asking airlines to announce reductions in advance. To make them more transparent. But the airlines say that it would take the sting out of the bite."

Since the air fare component is the main obstacle, as long as fares are high there isn't going to be any growth. Says Viktor Pompe, regional director, Lufthansa: "We have 15 flights a week out of India. We want to increase that to 21 by end-millennium. A high load factor works more in favour of high prices. Here, it's the other way round." But that's only a half-truth. Says Gautam Chaddha of Discover the World Marketing: "Apart from brief periods, all foreign airlines are milking the Indian market. If you buy a Delhi-New York ticket now in India, it would be 40 per cent more than if you bought the same in the US. There's very little rationality."

The fact that demand still exists, despite illogical fares, is another indication of burgeoning growth. And for outbound operators, this year looks more promising. Says Inder Raj Ahluwalia, veteran travel writer: "By the end of '98 they might break the double digit barrier." The reasons for the boom are manifold. Says Malkani of SOTC-Kuoni, which was the first to take the bull by its horns early this year by starting aggressive media campaigns: "We're the biggest in outbound package tours. Over the last three years, we have carried over 100,000 passengers and enjoy a growth of about 15 per cent each year. Despite the single limitation that packaged tours have, because of structured sightseeing, the concept is still delivering value for money because the tour operator is doing the homework in advance and getting good hotel and airline rates for bulk."

As a rule, tour operators get discounts on fares depending upon the number of passengers, starting from 15 per cent per 1,000 clients and 10 per cent less for every additional 1,000 seats on the same route. Says Chaddha: "SOTC leads the outbound rush. The rest—TCI, Cox & Kings, SITA—do everything. Incentives, inbound, business, the works. But SOTC is focused on outbound and it's paid off."

The year also happens to be SOTC's golden jubilee year and it offered to fly wives at 50 per cent air fare or children free on tours. The offer was, however, limited to a maximum of two children under 21 on tours of Europe and the US and one child on tours of the Far East and Mauritius and smaller European tours. What helped SOTC tremendously was their recent tie-up with Swiss giant Kuoni which gave them access to its tremendous buying power. Says Zuben Karkaria, senior vice president, SOTC: "Previously, you could say that we were a little expensive. But this year, I would say, we are cheaper by 30 per cent."

Though the nature of clientele differs from operator to operator, the bulk of clients are essentially small to medium-rung businessmen. Says Karkaria: "Seventy per cent of our clientele come with an income of Rs 12 lakh per annum and range in the age group of 35-45 years. They want a completely planned and hassle-free holiday, desire Indian meals, and though they are willing to experiment with food, the wives seldom are. For the majority it's the wife and children who influence them in terms of destinations." So important is food to most Indians that SOTC has 'pure vegetarian tours', where cooks are trained by famous cookery expert Tarla Dalal.

THE reasons for the steady growth in outbound traffic are many. Says Ghei: "Foremost is the raise in the Business Travel Quota (BTQ) since liberalisation. This February, it touched $3,000 per person per year. Plus, because of the reduction in fares, leisure has picked up. Business travel is insensitive to price changes." Then, there were the currency devaluations in Southeast Asia. Says Meher Bhandara of the Travel Corporation of India (TCI): "The devaluation of currencies has resulted in a reduction of prices of tourism by more than 30 per cent." Adds Vikamsey: "With the reduction of prices, it's cheaper for me to go to Bangkok from Mumbai and spend a week there in a five-star hotel, than to do the same in Delhi."

Holidays have indeed become cheap in Thailand. A two-star beach property in Koh Samui goes for roughly $210 for six nights per person, meals inclusive. A five-star room in India starts at $200 for a single night. Another sampler: a five-night cruise on the the 550 cabin Sun-Vistas, to the Malacca Straits touching Malaysia, Indonesia and Phuket in Thailand, with all meals inclusive, five-star facilities, and deluxe cabins goes for as little as $399. Says Ricky Ong, director, marketing, Sun Cruises: "Cruises are no more for the old and wealthy. We want to make it big for Asians. In the Caribbean, you're hopping islands with beaches. In the Malacca Straits, there are four countries to experience, at a price the Caribbean can never match."

 Holiday cruises are the in thing. Says Chaddha, who markets the Royal Caribbean cruise: "We sent 4,000 people last year. We're growing at 10 per cent annually." Chaddha estimates the Indian cruise market at anywhere between 7,000 and 8,000. Says he: "Indians are finally coming around. I'm getting passengers from Pune, Indore, Lucknow. Last year, without an office in Hyderabad, I had 100 passengers from there on trips to the Caribbean and Alaska."

Another factor fuelling growth is increased competitiveness among airlines and tour operators, especially after airlines launched packaged holidays. Forty per cent of business travellers in British Airways (BA), for instance, bought into holiday options by BA. So did 25 per cent of the leisure travellers. The catch with airline-sponsored holiday options is that you have to travel with them even if there are cheaper options. Lufthansa, which started its version of tours in '95, initially in Mumbai and Gujarat, did an all-India launch in '96. But it found the scheme uneconomical and shut down last year.

The price of domestic holidays compared to those abroad is another reason for the rise in outbound. A seven-day holiday to Mauritius from Mumbai, including air fare and stay in a three-star hotel with meals and free airport transfers, comes to roughly Rs 32,500 per person. A similar 7-day trip to Darjeeling, Gangtok and Kalimpong, with stay in three-star hotels, meals and airport transfers, costs Rs 39,357. Says Kamal Hingorani, manager, Kuwait Airways: "We're coming to a situation where domestic destinations may not be able to compete with global ones due to air fares."

The other reasons contributing to the surge have been increasing disposable income, media hype and snob appeal. Says Vikas Khan-duri, manager outbound, at Cox & Kings: "This year, there has been a lot of media attention coupled with aggressive marketing. Newspapers, magazines, FM radio. Even Readers Digest did a story." Adds Lynon Alves, travel consultant: "You see, just as nuclear weapons are a sign of virility, so is outbound travel for the Indian.

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