Forecasting 2014 travel trends in India

INDIA (eTN) – The year 2013 once again brought world economies to its knees, a situation reminiscent from 2008 when world economies saw huge downturns. India was no different, with the exception of a couple of industries like information technology and fast-moving consumer goods, growth has been stagnant, sluggish, and nothing much to shout about. Unmatched inflation with an 18% rise in food prices (result of supply not keeping pace with excess demand) added to the consumer’s dilemma of matching expenses with income. The travel and tourism industry fared no better, with domestic airlines declaring losses for three quarters in 2013, hotels recording lower than ever average room prices, transporters burdened by increasing fuel prices and scarcity of quality drivers; finally tour operators and travel agents (with few exceptions) saw margins being eroded with high taxation, and increasing competition between online portals and three dimensional travel offices. While consumers gained, service providers shed profits to stay afloat. A perfect recipe for FDI investment and overseas players (from desert sands) to step in!

How will 2014 shape out for the Indian tourism & travel industry, in a year when national elections in May decides who will govern for next five years in India and World Cup Soccer Finals will be held in the Mecca of football crazy fan followers – Brazil? While 2013 was a year in which the world stood and watched a wind of change sweeping our lives, with innovations in mobile technology, revolutionizing of search engines and the manner in which we sought, processed, and analyzed data; the year 2014 will witness productive uses of data from information gathering systems, a high increase in creation of packaged commodities especially in highly perishable fixed departure escorted tour sector, increasing products in land plus air, cruises, luxury and experiential segments and consumers factoring in inflation while drawing out travel plans (one can’t live at home forever!).

Notwithstanding increased offerings from service providers, a niche segment wanting to-do-it-all by themselves will increase by a great percentage. In days gone by, they were called backpackers, in today’s parlance they could be termed, “well-informed individual traveler,” relying on information from social networking sites to travel books, read on kindle. Backpackers of yesteryear and the WIIT of today are all joined together by a common thread –the freedom to make and live by their own travel plans with little or no assistance from external sources (by and large they don’t believe in middlemen!). With gigabytes of information freely available, this segment will make great inroads and dominate the way travel is defined over next few years, be it in bundling of holiday experiences or creating a new range of adventure sporting activities. Corporate houses involved in production and merchandising of consumer goods, accessories, and travel products stand to gain; with limited success for travel agents.

It’s also the age of branded products, 2014 will see a tremendous increase in purchase of branded travel products ranging from all inclusive packages with/without escorts, luxury cruise, adventure travel, incentive travel, all produced and marketed by reputed tour organizations. This will happen mainly because mid-age segment ranging from 35-55 and having limited time at their disposal would rather choose a holiday package from well-known companies rather than trying to firm up arrangements on their own. Paying an extra amount doesn’t really hurt the pocket as long as arrangements and a good time are guaranteed. Increasing demand for domestic tourism will ensure steady demand for all service providers be it a river rafting organization in Shivpuri or a resort in Nakathrana. How destinations cope with this unprecedented demand during the holiday months needs to be seen. 2014 will no doubt see more regulations being passed to preserve sanctity of tourist hotspots, especially with regard to conservation of environment, protection of local cultures and local traditions. A right move, “coz that’s what the tourist arrives to discover. If it doesn’t exist, it’s more likely she/he will not return nor recommend.”

With barely 2% of India’s population travelling overseas and India receiving a meager 6.00 million plus international tourists each year making us 44th on the list of arrivals and likely to go up to 40th by the end of this year, the world realizes the tremendous potential India has to offer. This will also ensure healthy growth for tourism and travel in 2014 and at least for the next decade. Verticals for selling are bound to change with deeper penetration in Tier III and II cities becoming the norm rather than an exception. It’s here that branded products, local tour agencies as well as online portals will do exceedingly well, with ample scope for growth on all these three fronts. National tourism organizations have understood the importance of these markets and will make spare no efforts in boosting travel from these segments, spending huge amounts in marketing and advertising (great news for media). In terms of incoming traffic, inbound tour agencies also are likely to reap benefits where overnights per visit are in the range 15-21 days. Transparency and sourcing new markets will ultimately prove the winner for local tour operating companies.

Global factors likely to affect travel to and from India in 2014 could range from unpredictable weather patterns making last minute cancellations inevitable, collapse of financial markets in countries riding high on debt, civil wars and disturbances (less likely in 2014 as compared to 2013), inadequate seat capacity on international airlines leading to prohibitive airfares, destinations becoming less competitive due to high taxation, and destinations not being able to live up to expectations. On the local front uncertain political climate, delay in processing of visas and high inflationary patterns could prove detrimental and effect travel plans.

Far from being a luxury, vacation/splurging/incentives travel to and from India has evolved and is now deemed a necessity. This changing perception augurs well for the Indian tourism and travel industry in 2014.