India’s travel & tourism industry will witness high growth over the next two years as there is a strong desire among local travellers to explore new destinations, Vishal Suri, managing director of SOTC Travel Ltd, tells Arshad Khan of TNIE. Unlike the general perception that foreign destinations such as Thailand, Vietnam and Dubai are impacting the popularity of domestic centres such as Goa or Kashmir, Suri says there is enough room for growth for everyone.
Excerpts:
How has been the recovery for you after the lull during the pandemic?
Before the pre-pandemic struck, the market was growing at a CAGR of 10-12%. Then Covid happened. However, the recovery has been phenomenal. Last year (2023), business travel was more than 110% compared with 2019 and MICE business was 120% of 2019. Leisure, holidays, and domestic businesses grew 30-40% in 2023 over pre-pandemic levels.
While domestic and short-haul destinations led the recovery, the long-haul part of our business, which is North America and parts of Europe, due to stringent visa policy and diplomatic tension with Canada, faced challenges last year and was only 66% of the pre-Covid year.
Do you expect the growth to continue in the summer season? What are the factors prompting Indians to travel more?
For the next two years, there will be a very strong desire to travel. However, things like Covid and geopolitical tensions can impact the industry. Many in short-haul destinations have realised the potential of Indian travellers as Chinese are not travelling much. They know Indians are affluent and can spend. Thailand, Malaysia, Sri Lanka and others have gone visa-free for Indians. This reduces cost and also removes a big barrier.
The other reason is the improvement in connectivity within the country and outside. The number of airports has doubled in the past 10 years with two big airlines — IndiGo and Air India — adding almost one plane every week. This summer is expected to be one of the best for us. Our booking trends are very encouraging and higher than that of pre-pandemic years.
As a lot of short-haul destinations such as Thailand, Dubai and Vietnam have become popular, has it impacted your domestic travel business? Also, is it making destinations such as Goa or Kashmir less attractive?
In our portfolio, domestic business this year will be close to 15-18%. In my mind, over the next two-three years, it will be 20-25% of our portfolio. It used to be sub 5% during pre-pandemic times. If you look at our domestic business, we will be five times larger than what it was in the next two years.
Anecdotally, say that if I have to go to Kashmir, I’ll spend `75,000- 80,000. I can go to Thailand with that money. However, the reality is Kashmir is full. While improved connectivity and easy visa norms have added a lot of options to choose from, it is not that one is cannibalising the other. For example, there are a lot more hotel inventories coming out in Goa and the place now has a secondary airport. Prices obviously will correct at some point in time based on the demand-supply situation.
The number of foreign tourists coming to India is much lower than Indians travelling abroad. What can be done to put India back on the global tourism map?
India has less than 1% of the international tourist arrivals. While distress in the global economy is one factor, I think India needs to go back and ease the visa regime for inbound travellers. At present, a Visa for India is an expensive and lengthy affair and this discourages many from planning a trip here. We also need policies around creating some kind of tourism activities, such as skydiving, and snorkelling, and all of those have to be high quality. There also has to be nightlife and a supportive liquor policy.