Can inbound really rebound
TRAVTALK Digital Conclave session on ‘When will inbound bounce back? What action can tour operators take in the interim?’ brought to the fore concerns of tour operators, hoteliers and even the MOT. In addition, it saw the forthrightness of the industry to come out of this crisis and work towards a better future, while making sure that businesses survive.
Opening Remarks Rupinder Brar ADG, Ministry of Tourism
Even before COVID-19 struck us, there has been a dialogue about should we only be focusing on the famous Golden Triangle in India or go beyond to showcase so many other products across the country. We need to look at the paradigm of what people are looking for in tourism, especially the millennials, and do we have different offerings in terms of adventure, sports, yoga, meditation and other immersive experiences.
The COVID-19 crisis has created a lot of challenges at the economic level for the countries that are going through lockdown, including our own. Hence, to get the markets back, to speed up on a relatively discretionary spending component which tourism is, would get a bit more challenging for us. When we look at data, we
see that interestingly, countries in South America, like Brazil, can be a promising market, as well as a country like Japan, which is in emergency mode today. Hence, we need to re-align our promotions and marketing campaigns. We are still in the middle of the crisis and Q2 would require us to sit down on the drawing board and work towards re-aligning some of our marketing plans. What is going to come in handy at this time is the Global Media Plan that we worked out in November-December last year, which focused on the need to expand our footprint. We've already started our campaign in Latam. We have even identified some countries from Africa, where the campaign will be featured.
The Ministry would need many inputs from the industry, including the kind of products that we should be pitching in these markets and the segments within those markets that we should be looking at. I have been working closely with my social media team and we are studying trends.
While we are using technology in a big way at this time, there would be a slight 'going back to the basics' movement, where technology detox is already picking up. In this situation, may be India as a country can consider the fact that if we are still a very face-toface or human-driven hospitality industry. Perhaps these are the strengths that we should be leveraging on in coming times. However, that doesn’t mean it is going to be an easy journey
because the impact is no less than a World War situation, and the only difference apart from the bloodshed is that we are all common in our fight against COVID-19. Still, this could result in new visa regimes, countries coming up with new norms on the kind of medical certifications one may require travelling across borders. Hence, we need to be focused on the various country moods and look at our promotions and marketing plans accordingly in the coming months. Hopefully, by Q4, we should be looking at bouncing back in at least some of the markets, if not all of them.
Himmat Anand Founder – Tree of Life Resorts & Hotels
In our industry, layoffs and salary cuts are a given and will happen. However, this will depend on individual hotels and individual management companies to see with how much compassion they can handle it looking at their financial stability. However, I guesstimate that about 50 per cent of the workforce will be laid off in some way or the other in Q1 and Q2, and I think a slow recovery or slow re-employment will happen Q3 onwards.
Coming to government assistance, for which everybody is clamouring, I think in all fairness, this virus has hit every industry and it’s only a matter of degree as to which industry has been hit harder. It would be naïve for any of us to think that the government will come out and dole big money, as they don’t have the capacity and have other priorities, like the underprivileged,
I think, the medical support system is also taking a lot of finances from the government, and so I don’t really see any major help coming in dole-outs from the government.
Then, there are questions that hoteliers have to answer. We are talking of social distancing, hence, we should think how services can be provided from a distance, what will the new norms of the industry be and if spas would still operate. We should think of what will happen to wellness and Ayurveda centres? Would guests
still go there? Hence, I think the industry must grapple with these situations rather than worry about the loss of jobs, the loss of business, etc.
Homa Mistry CEO – Trail Blazer Tours
If we do not get oxygen at the right time, I can assure all of you that many of my colleagues and people from the industry will lose their jobs, even though the employer doesn’t want that to happen. This is the time when we want a little bit of empathy and oxygen for survival. If it is given later, it won’t be of any use.
Our immediate need is to survive, but then we have basic problems, day-to-day issues, that are really hurting our cash flow. We have paid a lot of advances to the airlines. We have ticketed, but unfortunately, everything closed in one day and the Foreign Tour Operators (FTOs) are refusing to pay that amount because we did not let them come. The airlines are now saying that there will be no cancellation charges, provided the same client travels. This indirectly means that they are not returning what we had given to them. There are losses on airlines, there are losses on all advances that we have given for safaris
in MP and Ranthambore, which are very expensive. Now, we won’t get those advances back. Hence, it’s a double whammy for us. We don’t have the business, plus we are paying for the cancellations. I think this is where the government can step in and help us with either the airlines or the safari bookings or the luxury train bookings, where our money is caught.
New methods and out-of-the-box ideas Homa Mistry
Whenever there is a difficult situation, the Indian tour operator manages to bring the business as per the requirement of that time. Hence, we are quite positive that when it happens, we will be able to bring back the clients, but for that also we will require support from the government.
Earlier, there used to be a Section 35(B), wherein when tour operators went outside the country and whatever they spent, 50 per cent of that marketing cost was paid by the government. If something like this is re-introduced, all of us will immediately start travelling to promote the destination, as we would know our costs are being subsidised. We would do the right marketing because now, health and wellness tourism is what is going to be sold in the future.
New marketing strategy and profiling of travellers Rupinder Brar
We are thinking of including some key industry members as we work on the data plans, because it’s them who really drive the business and we can be there to support or take inputs. A lot of homework is required on a few aspects.
Then, I think the oxygen will come to domestic tourism and then around Q4, we will get inbound from other countries. Therefore, we need to work on the metrics of the impact of COVID-19 in different countries to identify markets and also see in those countries what kind of disposable income is available, which age bracket is willing to travel and accordingly, pitch the marketing plans to those countries. We were already thinking of using different marketing ideas instead of only doing travel marts, because some of the travel marts have been in existence for a long time and they probably need a different take in terms of the products that we are carrying because India has developed a lot over the years. Hence, we need to be more creative in our offerings and now, of course, we will be pushed to do that.
Addressing industry issues Rupinder Brar
Indeed, the first issue is of survival because when we survive, only then can the next phase of building back and repositioning happen. A lot of the support that is being looked for either concerns the Ministry of Finance or the Ministry of Civil Aviation, which are the domain ministries for these issues. We’ve already
We are still in the middle of the crisis and Q2 would require us to sit down on the drawing board and work on re-aligning some of our marketing plans. What is going to come in handy at this time is the Global Media Plan
– Rupinder Brar
This could result in new visa regimes, countries coming up with new norms on the kind of medical certifications one may require travelling across borders
– Rupinder Brar
If we do not get oxygen at the right time, I can assure all of you that many of my colleagues and people from the industry will lose their jobs, even though the employer doesn’t want that to happen
– Homa Mistry
had some dialogues at different levels. The Tourism Minister has already met the Finance Minister. We are open to receiving more requests and would continuously be taking them up at the Central government and state government levels, because the number of permits and licence fee & levies are in the domain of the state governments. Regarding Section 35 (B), I would say that since these are challenging times, we are open to looking at ideas that can work. I am sure we can work far more proactively on some of the suggestions on how to keep the industry going, even if it limps back to normalcy.
Help from the government is vital Homa Mistry
We are looking forward to the government helping us come out from this situation. Apart from that, SEIS is very important and we have already worked for it. We know we are going to get it, but if instead of 7% it can be made 10%, that 3% will help us a lot to give out salaries. It is best for whoever has applied for it, but a large part can get covered just by changing it from 7 to 10%. It will help us with cash flow to take us through these few months that lie ahead of us.
Apart from that, at many forums, people are saying that there is a huge opportunity for domestic and therefore, inbound operators can do domestic. However, I would like to differ over here because over the years, it has
become very professional. The main vertical is tourism, but inbound, outbound, domestic, M!CE, wellness and adventure are different things. It’s just not possible that an inbound guy can just jump in and do domestic. It’s very specialised and a separate segment. Domestic is huge and it should be promoted, but for an inbound operator to suddenly do domestic is difficult.
Rupinder Brar
This is already in the list of proposals, although we have not given a huge list. We had shortlisted things which seemed more critical and I am sure we will be happy to re-send it and re-enter the dialogue with the concerned ministry officials to steer this through.
I’ve always been a firm believer that extreme situations require extreme actions to counter them. You cannot pussyfoot at this time and if you do, you will go under. Hence, I think if hotels cannot manage their cash flows for the next 3-6 months, and I say that with a lot of responsibility, I don’t think we should wait for the government to step in. It will take a lot of time and by that time the crisis would probably be over.
Hence, we should help ourselves. The question is - do you all want to sink or you
want to give people a sort of floating chance that after 5-6 months, when things get normal, that they can come back.
Apart from that, hotels will have to re-define standards of service. The standard operating procedures of most hotels will have to go out the window for now. They’ll have to do more of multi-tasking. Staff distancing could be considered, and hotels will have to see if they would still be welcoming guests with a garland, something they have been doing for last 30 years. Would the new welcome be with a mask? Now, sanitisers and masks are going to become a part of in-room amenities. They should think of methods to dispose them off every second day. I think the industry must start looking at these factors. Things like elevators in 100-200room hotels have to be looked into.
I firmly believe that tourism is not going to be about monuments anymore, but about tourism products. For the next 1-2 years, tourism is going to be about how safe am I going to be to travel to your country or to your city. Hence, all our promotions and way forwards must first be from a human safety point of view, in perception and reality. Thus, we have do the job on the ground and then we go to the next steps of business losses, etc. I don’t see any major debate on that.
We have been locked down for two months; it is difficult for me to pay the salary. Do I let my whole business close or do I lay off, or do I at least give everyone a fighting chance that after six months, they have the option to come back? However, this is each to their own, and everybody has to take their own decision on this.
What will turn the industry around? Rupinder Brar
New markets and advertising the right products will be the focus for MOT. A narrative we will need to build in our promotional campaigns, at least for a couple of years, is that India is safe in terms of the COVID-19 impact. That kind of subtle and direct messaging will be required in the coming times.
Hopefully, the number of COVID-19 cases in India does not escalate much. If we can really contain the numbers, and if we can handle this whole crisis as a country really well, that itself would have created a huge messaging because just like we are studying other countries, they are studying us.
Homa Mistry
The only thing we want to focus on is that while the salaries will go down, we want the kitchen fires of our staff to keep burning. We will reduce the salaries, but we want all of them to survive,
and that is the only oxygen we want right now. We will together sort out every problem, but right now, we need the support of the government.
Himmat Anand
We are an over-crowded country and our healthcare system is not up to the mark. Hence, when we see it from a tourism point of view, these two things go against us. On the positive, compared to other countries, COVID-19 has not taken a huge toll on India as it has elsewhere, and I think the country has moved very quickly into trying to keep it as low as possible. We should not just talk of tourism in the traditional way, but promote the fact that India has contained the virus spread very well and that we are much safer as compared to other destinations. We need to dovetail that thought process with our tourism product campaign.
I would also recommend that all of us in the country must speak the same language, including hotels, MOT, tour operators, and travel agents. MOT should come up with a template that could incorporate this thought process of being safer compared to other countries on COVID-19, with our tourism product. Let’s move away from promoting monuments. Let’s talk about our open spaces, vastness of the country, mountains, adventure tours, etc. Also, through MOT, we should insist that every state government come up with a tourism campaign of its own in print, TV and Social Media, elaborating on the vastness of what their state offers. This will create a feel-good factor for the country because only a few states like Kerala, Rajasthan, MP and a few others have dedicated tourism campaigns. This will create a positive impact on the international market.
We are talking of social distancing, hence, we should think how services can be provided from a distance, what will the new norms of the industry be and if spas would still operate
– Himmat Anand
It’s a double whammy for us. We don’t have the business, plus we are paying for the cancellations. I think this is where the government can step in and help us
– Homa Mistry
I guesstimate that about 50 per cent of the workforce will be laid off in some way or other in Q1 and Q2 and I think a slow recovery, or a slow re-employment will happen from Q3 onwards
– Himmat Anand