Set­ting the track for lux­ury trains

The lux­ury trains busi­ness in In­dia is val­ued at ` 80 crore but the tapped mar­ket is pegged only at ` 20 crore, in­forms Naveen Kundu, Founder and MD, Leisure Corp. Kundu de­tails the path for growth of rail tourism in In­dia and the ex­pected role of the gov

TravTalk - India - - AGENTS - ANKITA SAX­ENA

While 2016 was a slow year for The Rail Jour­neys, the lux­ury trains di­vi­sion of Leisure Corp., 2017 brought in bet­ter busi­ness. In 2016, The Rail Jour­neys sent 450 pas­sen­gers on the five lux­ury trains in In­dia which in­creased to 750 pas­sen­gers in 2017. The com­pany is hop­ing to send at least 1000 pas­sen­gers on var­i­ous trains this year, in­forms Kundu.

“We have rev­o­lu­tionised the con­sol­i­da­tion of lux­ury trains in In­dia. We are try­ing to spread the mes­sage that In­dia is a lux­ury desti­na­tion, not a mass desti­na­tion and the only coun­try which has five lux­ury trains. On the third an­niver­sary of The Rail Jour­neys, we want to ac­knowl­edge the lo­cal desti­na­tion man­age­ment com­pa­nies who pro­mote the lux­ury trains over­seas to their for­eign tour op­er­a­tors and get in­bound busi­ness to In­dia,” Kundu says.

Draw­ing the pro­file of the lux­ury train pas­sen­gers, Kundu points out that the UK and the US are the largest source mar­kets for lux­ury trains in In­dia, shar­ing 70 per cent of the to­tal busi­ness. The pas­sen­gers are mostly af­flu­ent NRIs and re­tired per­sons who have the time and money to spend on ex­pe­ri­ences. Kundu says, “The av­er­age cabin cost is $6000$7000. The largest sell­ing lux­ury train is Palace on Wheels since it’s the old­est and most es­tab­lished. The lux­ury trains busi­ness is worth ` 80 crores and cur­rently the five trains are oc­cu­py­ing only ` 20 crores mar­ket share.”

Elab­o­rat­ing on the USP of the com­pany, Kundu ex­plains that Rail Jour­neys buys its in­ven­tory, con­sol­i­dates it and then gives it for dis­tri­bu­tion to the lo­cal travel agents to fur­ther sell to their FTOs. He adds, “We do not sell di­rectly to the FTOs as we be­lieve in in­creas­ing the fair share of the mar­ket and not just the com­pany’s mar­ket share in the busi­ness.”

Iden­ti­fy­ing the path of growth for lux­ury trains in In­dia, Kundu elab­o­rates, “The gov­ern­ment has to give up own­er­ship of the trains and give its op­er­a­tions to the spe­cial­ists. It should not be put up for PPP model and thus bid­ding for any cor­po­rate as they may or may not be ex­perts in the lux­ury trains busi­ness. The gov­ern­ment needs to be a fa­cil­i­ta­tor and help pro­vide good poli­cies and re­duce in­fras­truc­tural and op­er­a­tional cost to make lux­ury trains more af­ford­able. Let the pri­vate play­ers sell and run the trains and the prof­its can be shared with the gov­ern­ment. Cur­rently, the trains clock about 35-40 per cent oc­cu­pancy which can be raised to over 90 per cent.” He fur­ther says that there is a po­ten­tial to start 4-5 lux­ury trains in In­dia—one in Pun­jab, two in South In­dia, Shimla and Dar­jeel­ing, etc.

The gov­ern­ment needs to be a fa­cil­i­ta­tor and help pro­vide good poli­cies and re­duce in­fras­truc­tural and op­er­a­tional cost to make lux­ury trains more af­ford­able

Naveen Kundu Founder and MD Leisure Corp

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