Heavy taxation hindering outbound
The Indian outbound market is amongst the fastest growing segments globally, yet faces basic challenges like high taxation, unethical practices and closed sky policies. TRAVTALK finds out what sells amongst the Indian travellers and what plagues this indu
Popular destinations
“For the first time travellers going abroad, South East Asian countries like Thailand, Singapore, Malaysia, Hong Kong and Indonesia are very popular. For the well-travelled, there is a growing demand to explore European regions and the US,” says Riaz Munshi, Managing Director, N. Chirag Travels. Dubai, France, the UK, and Switzerland continue to top the charts amongst Indians. “They are popular because of various reasons like visa on arrival facility or ease of procuring a visa, availability of Indian or vegetarian food, safety, value for money and direct flights or comfortable connections are a booster,” says Guldeep Singh Sahni, President, Outbound Tour Operators Association of India.
Emerging destinations
Indian travellers are looking for experiential holidays in unexplored destinations. Russia, Portugal, Bhu- tan, Georgia, Iceland, Korea, Eastern Europe, Greece, Coatia, Japan, islands in the Indian Ocean, and Myanmar are some of the des- tinations gaining popularity. "Future travellers would be enthusiastic about off-beat itineraries like a wildlife safari trip to Kenya, cruising to Alaska, spending weeks on the island of Ibiza or road-trips exploring wildlife of the US (Colorado, Wyoming, Montana). I also see potential for the South Ameri- can region — Mexico (Cancun, Cabo San Lucas), Brazil (Rio and Sau Paulo), Peru, Uruguay to name a few,” says Munshi.
Trends
“Indians are looking at short-haul international destinations as an extension to weekend destinations and with improved air connectivity and increase in low-fare airlines, this trend is set to increase,” says Hussain Patel, Director, Atlas Travels Online. com. "There has also been an increase in interest in holidays during the peak summers and the enquiries have increased manifold," informs Surpal Singh Deora, Director, Maxx- fun Holidays. Special group movements are another new trend like ladies group, groups with food habits, groups with common interest amongst others,” adds Sahni.
Challenges
According to Deora the challenge for outbound industry is due to the closed sky policy as countries then face accessibility issues. Other challenges include volatile foreign exchange, political upheaval in some countries and long visa processing time. Sahni says, “The new biometric system for Schengen countries gave ulcers to tour operators during the summer vacation rush. Some online portals in their endeavour to increase the customer base sell products cheaper than they source it but tour operators cannot go below the purchase cost to match that. As a result, travellers buy products online but when faced with issues of visa and cancelation costs, tour operators are left to do the fire fighting, thus creating a lot of confusion in the market.” He also adds that the government of India is not engaging outbound tour operators in the tourism policies. Munshi says, “Service tax on outbound tourism is the biggest challenge. A substantial amount of business is going to overseas agents, hotels, other service providers, who do not have to pay service tax on the same product. The services are being consumed outside India and yet we bear the brunt of taxes.”
Government Support
Munshi points out that concrete laws are needed to protect the interests of small and mid-sized tour operators as, today, the focus has shifted from building sustainable businesses to maximising customer acquisition by increasing one’s own burn rate.