In times of trouble the best way is to offer value-adds. Tour operators, fearing a slide in outbound travellers because of the falling rupee, are wooing the wanderlust Indians with new value-adds.
The idea is to ensure that the flow of outbound tourists or foreign travellers remain constant even if that means introducing new packages.
Cox and Kings, one of the major tour operators in the country, for instance has recently introduced an “all inclusive” package that takes care of meals and includes arrangements for sight-seeing.
“We did not have it about 2-3 years back, but we introduced it primarily to cater to Gujarati and Maharashtrian customers who prefer to travel in community and want everything to be built into the package,” Mr Karan Anand, head – relationship, Cox & Kings Ltd told
Typically, summer travel in India is between April and June and as per market sources, the market is pegged at nearly Rs 8800 crore ( $1,760 million).
Cox & Kings maintains that it has a plain-vanilla package at a minimum base price and customers can pick and add destinations to it depending upon their preferences and budget.
According to Mr Anand, the rupee devaluation has led to some trade down on the part of customers. Though they have not deferred or cancelled their travel plans, they are going for shorter packages, settling in for a 4-star hotel (instead of 5-star) and cutting down shopping expenses.
Thomas Cook, the other major tour operator in India, maintained that a “conscious decision was taken to launch outbound products across every consumer price points.”
“Our value products have stood us in good stead for that segment that is price conscious. Packages offered by Thomas Cook India are well within the reach of every budget conscious traveller,” said Mr Madhav Pal, Chief Operating Officer – Leisure Travel (Outbound), Thomas Cook India.
Incidentally, both these major operators confirmed an increase in outbound travellers. While Thomas Cook said it has seen a 35 per cent jump, Cox & Kings saw a 30 per cent increase.
Smaller Players
“Some of the mid-segment operators have seen a hit in their foreign traveller base,” Mr Debmalya Banerjee, group Vice-President, corporate affairs, I-Nova said. The group manages a travel company called Travo.
Some tour operators confirmed that the change in exchange rate has played havoc on hotel booking rates especially in the economy or mass market segment.
The rupee started rising from Rs 45 a dollar in August, 2011 to an average of Rs. 54.38 in May 2012. The average in June so far is Rs. 55.45 a dollar.
“It is only the hotel rates where these operators can adjust or tweak. But with rupee falling significantly that chance has also been minimised,” Mr Banerjee said, adding that operators were incurring losses in the outbound travel segment.
Market sources say several smaller and mid-segment operators have taken losses in pre-booked packages. Stiff competition and fear of bigger players eating into their share has affected the market.
Ideally, a larger tour operator has the economies of scale and has the flexibility in bookings. This is not the case in the price sensitive mass market segment, a tour operator pointed out on conditions of anonymity.
“We have seen a substantial slump in foreign bookings while domestic market bookings have gone up,” Mr Hari Nair, CEO of a Bangalore-based travel portal HolidayIQ, said.
Domestic Travel
All operators confirmed an increase in domestic travel – specially in areas such as Sikkim, Manali, Leh and Ladakh.
Thomas Cook confirmed to a 30 per cent rise in domestic bookings.
“The rush for domestic destinations came in late. Had it been earlier, the increase would have been higher,” Mr Kaushik Ghosh, partner, Zest India Tours, said.