New Delhi: Around two decades ago, flustered parents started coming to Satish Kumar’s travel agency complaining their children no longer wanted to holiday in pilgrim spots. What were they to do?
That’s when, he reckons, the Indian traveler became a discovered species.
Until then, other than group pilgrimages, tourists stuck to a handful of well-known traditional sight-seeing spots—the Taj Mahal, Red Fort, or Vivekenanda Rock Memorial for instance. A “hill station" would be squeezed in on a much-planned pilgrimage to the Hindu shrine of Badrinath.
Booking the journey took weeks, at least. You saved up for years on end and didn’t spend much on meals. Few would bother to ask about the size of the bathroom in the hotel.
The technology boom that accompanied the economic reforms begun in 1991 changed all that—the Indian traveller was discovered and, in turn, the traveller began discovering more of India and the world outside.
At least that’s what Satish Kumar feels. Kumar has been in the travel business since 1991—in 2001 he launched his own travel agency, The Travel Point which provided “tourist transport" and then diversified to online hotel bookings with Plan My Yatra.
“Till the turn of the century, the concept of tourism was all but unknown to ordinary Indians. People travelled but it was mostly for pilgrimage with sight-seeing incidental to the whole experience," he says. In fact, Kumar says, there was no tourist boom—not even the potential of one—when he started his company.
From Vaishno Devi to Tirupati, it was these destinations that held the sway over the Indian traveller.
According to data released by the ministry of tourism, 1,282 million visits were made by domestic tourists in 2014.
Almost a decade ago, this number was estimated to be 366 million. Now, more spending power and greater exposure contributed to stoking the wanderlust of Indians.
Kumar, however, believes that the credit actually lies with a third entity—corporates. “Corporates brought with them the culture of off-sites, taking employees away for a weekend or so to a resort or away from the city. It is then that a vast majority of Indians started re-thinking their concept of travel," says Kumar.
It also helped that the first post-reforms generation of children was coming of age, fed on a steady diet of television shows and the Internet that made them more curious of the world around them.
“People would come to us because their children were refusing to holiday in pilgrim spots. Now, every summer break people want to explore new destinations," says Kumar.
No longer did planning a holiday need people to make their way to the travel agent’s office. Now everything happens over either the phone or online. “Earlier people would simply ask for a bus or a van, they weren’t into specifics—how comfortable is it, is it air-conditioned or not? Today before they finalize the deal, they want to see photographs of the vehicle, they want to know what amenities are on board and everyone—everyone without fail—asks for a brand new vehicle. No one ever says, ‘Oh, ok, give me a year old vehicle’."
There was a time when a hotel simply meant a place with a room for the night; now the concept has changed radically. The hotel, sometimes a heritage property, itself is a destination for some.
“People were not fussy at all. Now there are certain amenities they take for granted—the tea-coffee maker in the room, a safe, a good clean bathroom. Earlier there were only five star hotels and the rest. The emergence of the other categories has happened only over the past decade or so," says Sanjay Gupta, a colleague of Kumar.
And just like hotels, there are now different categories of tourists. “There is the businessman who has already done the Europe tour and now wants to graduate to ‘experiences’, like safaris etc. Then there are those who are graduating to international travel—countries like Malaysia, Dubai, Thailand are quite dependent on India for tourism. “And then there is the first-time traveler who begins with a honeymoon and then moves up the ladder."
In foreign travel, he pegs Dubai, Singapore and Malaysia as “family destinations" while Bangkok and Uzbekistan are “bachelor destinations." Trips are either annual, centered around school breaks, or twice-yearly, depending on the level of disposable income.
Kumar had worked for almost a decade in tourism when he branched out on his own. At that time he had two cars and one other staff member apart from himself. Today his company boasts of more than 40 vehicles, including cars and refurbished vans and a staff of over 45.
“The profit margin in this business is very limited, probably about 1%, but even then the growth has been good."
The biggest problems are the tax policies vis-à-vis the tourism sector and corruption. “In every part of the country, not just in Delhi, policemen demand ‘entry,’ a euphemism for a bribe. Apart from that there are toll taxes to be paid, which in some cases can take up to an hour or so. This could be easily done online. There are multiple taxes levied on not just the tour operators but also hotels. At the end of the day, this leaves us with little margins."
However, the biggest threat to bricks-and-mortar travel operators comes from online ventures. In 2013, as much as 70% of the business of the e-commerce market in India came from travel portals, according to a report by the Internet and Mobile Association of India. After establishing themselves in the ticketing space, portals have now turned to hotel bookings. “Of course, they have affected our business. They buy rooms from the hotels in bulk and sell them at cheaper rates. We can’t do that. We pass on actual costs to the consumer," says Kumar.
But he feels he scores over online portals in customer service. “They have call centers where you have to explain your concerns over and over again to different executives. Here the buck stops with us. Plus, with online portals, all payments have to be made there and then. We offer the customer the flexibility in that regard."
Cancellations, refunds and changes to bookings are notoriously difficult to do online.
However, both Gupta and Kumar credit online portals with creating new holiday destinations which they too, now push. But they are also certain that there isn’t space for any more bricks-and-mortar travel agents in the business, again due to travel and hotel booking portals.
For Kumar, reforms and the onset of technology have changed the face of the travel sector. From increased disposable income to a more aware domestic traveler to competition, all these factors have helped make Kumar’s business a success.
“There is a new economy of which we are part. And all this has happened because now there are more jobs in the market and better opportunities. Our profession too has benefited from this windfall."
This is the 17th part in a series marking the 25th anniversary of India’s liberalization.