5 Challenges that India's, Inbound Travel Industry Faces
The B2B travel industry in India is a highly cluttered market offering homogenous range of choices and highly customized services
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Tourism can be explained as travel for recreational, leisure or business purposes. The travel and tourism industry is one of the largest and major industries of the world. An important aspect of economic life, the industry is closely associated with a diverse set of sub major sectors such as travel, food, and accommodation. India as a country has immense potential for travel and tourism.
Tourist destinations spread from Kashmir to Kanyakumari, from Arunachal Pradesh to Gujarat; each and every region of the country boasts of its own uniqueness, flavour, and culture. The diverse landscape in the country offers a range of choices from the cold and hot desert (Ladakh/Rajasthan), rivers (Ganges and Brahmaputra), forests (Nilgiri & North East), and the islands (Andaman and Nicobar). Each landform, each region and culture has the potential to mesmerize tourists from across the world.
Despite the rampant availability of tourist destinations, India has one of the lowest international tourist arrivals. However, the tourism industry is one of the most volatile industries. The industry is far from being immune to economic, political, and social shifts. While these are challenges that lay outside the control of the tourism sector, here is a list of 5 challenges that the industry is currently facing:
The diverseness and expanse of India makes it a difficult place to travel, but the lack of good infrastructure in terms of certain quality of hotels and poor connectivity make it that much tougher for a traveller. Yes Rajasthan and Kerala and few other states do have great hotels and roads and airport and train connections, but there are still lots of room for improvement in other regions. A prime example would be connectivity from Varanasi to Agra or even Khajuraho to Anywhere in India (these cities are riddled with poor flight connectivity and often large delays in train journeys, and of course a very long drive). By making conscious efforts in implementing a robust infrastructure for travel and accommodation we can look towards boosting the country's international tourist arrivals.
B2B Pricing Wars:
The B2B travel industry in India is a highly cluttered market offering homogenous range of choices and highly customized services. Due to which most destination management companies in India are proposing and selling trips by pricing out competition. This has led to the advent of extremely low margins and a growing dependence on what is known as the shopping culture (agents making margins by taking clients shopping and making commissions from sales).
Hence, instead of differentiating between experiences and value-added-services; cheap and affordable pricing has become an important attraction got purchasing a trip to India. This is witnessed more at a B2B level as compared to a consumer level. With more and more companies now selling curated trips to India with a strong focus on the service and product first; the scenario has become less gloomy and promises to steer away from despair.
One of the most effective situations would be making B2B brands realize that standing out in an over-competitive market requires the strategic plan of the business to focus on suppliers, and value-added services that further aid in elevating the viability of the business.
Technology and Funding:
With the advent of technological advancement, well-funded big companies are thriving through the deployment of state-of-the-art technology and innovation. Lack of proper infrastructure, funding, and research data acts as a major disadvantage and tends to leave the smaller companies at the mercy of big-companies. At present, in India, well-funded companies such as MakeMyTrip and ClearTrip have done really well in cementing their positions in the travel industry, however, the inbound travel industry in India, is still not very large and is dominated by a few large B2B companies.
Smaller travel companies led by innovation have not received the recognition that they deserve. Contributing to the reason is the restriction on investment and funding for certain innovative service providers for not being an ecommerce travel companies (with different economies of scale). So if angel investors or even a few equity players do start participating; they along with the entirety of the industry could profit from the growth and development in the Indian travel industry.
Perception of India:
One of the major challenges the industry faces is the perception that the country has attained internationally. As one of the most diverse and culturally rich countries, India is the dream destination for avid travellers with a myriad of promising adventures and experiences. Yet, we still only record approximately 10 million visitors annually as compared to a whopping 20 million tourists in Bangkok, Thailand. Government led the most popular and phenomenal - Incredible India Campaign – over the past few years has aided in positioning India as a leading travel destination. However, lack of cohesiveness across various state-led tourism campaigns has limited India as clichéd, and stereotypical spiritual destination for finding our true selves and attaining Nirvana. We can refer to this tourist section as the Eat-Pray-Love crowd.
In my opinion, there is a dire need to push for tourism to India. The Travel & Tourism industry in India stands to empower the country by providing various opportunities, in terms of employment, investments and global perceptions. As a travel destination, we have lots to offer such as ancient culture, historical heritage, spiritual experiences, beautiful landscape, natural diversity, adventure, wildlife and so on. However, the tourism growth rate can be tackled by well-planned marketing strategies along with better leisure and tourism atmosphere in terms of safety, security, and quality in accommodation, logistics, and infrastructure.
Competition and Taxes:
Last but not least, another big aspect of contention compared to other destinations in South East Asia or South Asia is India is perceived as a slightly expensive country for a luxury traveller. The Value-for-Money across hotels in countries such as Thailand, Cambodia and Sri Lanka is much better for a luxury traveller. The current reduction in GST rates should help the industry, but the competition and ease of travel which other countries have provided is something that India needs to match up to.
Overall, Tourism as an industry operates on a massive broad scale: it embraces activities ranging from the smallest sea-view hotel; to domestic and international air-lines, multinational hotel chains and major international tour operators. For an international traveller, India is an exotic destination but also one of the destinations they are afraid to travel to. For a foreign traveller, it is easier to travel to South-East Asia that acts as less of a culture shock.
Tourists take into account various factors in terms of facilities, local attractions etc.before choosing their destination. Local attractions, accessibility, facilities are some of the factors that generate tourist flow to a particular location. Absence of any of these facilities may deter tourists from travelling to enjoy the attractions of India. Hence, India needs to reinvent itself from a marketing and infrastructure point of view. Steps have been taken in the right direction, but this would involve the entire tourism industry to stand up and make them counted in every small way possible.