In an exclusive interaction David Scowsill, president & CEO, World Travel & Tourism Council (WTTC) shares his views on the resilience of travel and tourism sector and why travel advisories need to be geolocation specific By Sudipta Dev
Recently many countries have been issuing travel advisories for their citizens travelling to India, what should be the do’s and dont’s?
When foreign offices put in places travel advisories they need to be very specific, geolocation specific. It is not acceptable to say that a state or even a country is off limits for Germans or Brits or Australians. Most countries are ensuring that these travel advisories are specific because if you think about it every country receiving inbound tourists have some problem areas. There cannot be a blanket ban on a country. Our industry at global level is very robust, people are still travelling, we will grow 3.1 per cent this year, which is the same as last year. We will continue to grow and support the countries where terrorist attacks happened and help them recover.
India has introduced the e-visa, but the inbound tourist numbers have not really gone up as expected, what should be the focus areas for the government?
The first great thing is that prime minister Modi has made a very clear statement of intent that the travel and tourism industry will be one of the key pillars of Indian economic development. That is really key because when the prime minister makes that move, other things fall into place as a direct result. The things we have to focus on for domestic tourism is building out of the infrastructure. Mumbai airport and Delhi airport are great airports now but there is a lot more investment required in other airports, roads and rail systems. Infrastructure for us is also about telecom, banking and financial services. I am delighted that electronic visa process has been introduced. It needs to be spread to more countries. Even from terrorism point of view investing in electronic visa is more safer. An important part of inbound growth is the Incredible India campaign because it is a fantastic brand campaign and positions India beautifully, but it needs more funding. There are two ways to it – use the visa fee like the US does and put some of it in marketing fund; and ask the private sector to match the government fund to create a much bigger fund. Brand USA created a US$ 200 million marketing fund from zero. Another important factor is about taxation, there is a big debate about GST, it is better that our industry is in lower band from 9 to 14 per cent, that way we will stimulate the market in a better way. The final focus area is need for an overall plan for aviation development. The domestic aviation market is the fastest growing in the world, we need five-10-15 years strategic plan including both public and private sector.
There are lot of challenging issues with the aviation sector in India, are there any markets worldwide we can learn from?
The aviation sector here is buffeted by a number of difficult factors – the taxation on fuels is very high, airport handling charges are high and fares are low because of amount of competition going. You have to look at aviation markets like China and the US. The Chinese government for the last 25 years has been very focused on travel and tourism and domestic growth in China. There are a lot of things to learn from what is happening in China in terms of infrastructure. In the US, the taxation on aviation is nothing like the level in India. And the way the airports and airlines interact with each other is more partnership oriented than here. Airports have moved their focus from landing charges to retailing and car parking for their income streams.
What is your perspective about the hospitality market in India?
The market will grow about 7.5 per cent a year, so growth is there. More and more people are travelling for business and leisure in India. The hoteliers have not been able to up their rates and occupancies, they have had a tough time. My sense is now it is beginning to change, the supply and demand equation is coming much closer. What needs to be developed is more mid level properties where business roadrunners stay when they travel for work.
How will the established brands compete with internet accommodation aggregators and providers like Airbnb?
The customers will make a choice – Airbnb is growing dramatically around the world but I do not see big hotel brands suffer. Hotel brands will put properties in locations where they will get a good
return, but alongside there will be smaller entities, B&Bs, which will stimulate the market. From our perspective, Airbnb and Uber operating globally are consumer driven technology platforms, are part of the travel and tourism industry and here to stay.
Your views on OTA space and the consolidations happening worldwide?
There has been a lot of consolidation in OTA space globally – Expedia, Tripadvisor have made many acquisitions. Indian market has many similarities with the Chinese market there are some great online businesses. Within India you will see more consolidation, along with consolidation between companies in India and China and other parts of the world.
What is your perception of the efforts by the government for skill development at grassroots level?
The more training that is done, the better it will be. The shortage will not be at the managerial level but entry level. It is a great way of taking people out of poverty, putting them in their first job in the services industry. We know there will be a shortage of people, and training is really important. Primarily, domestic travel and tourism in India is by far more important than international travel and tourism.
WTTC has been at the forefront of sustainable travel and tourism, what are the key areas?
Climate change is an important aspect and the aviation sector comprising one-third of travel and tourism industry has got its act together on that in terms of new aircraft design, better air traffic management, etc. The other segments are not so focused, like destination management. Our Tourism For Tomorrow Awards honours big and small companies to showcase what they have done, we need to encourage more companies in India to showcase their initiatives in sustainable tourism.