Travel sector to keep soaring: Thomas Cook's Madhavan Menon

How was 2023 for India’s travel industry?

There is enough and more written about 2023, and it has been a great year, despite challenges of higher airfare, travel and hotel costs. We’ve seen a great year. Indian tourists have left their mark on the world in 2023, and the sort of travel we have witnessed is the start of a long-term trend. There was something that happened during the pandemic that has led to this. Thomas Cook has also had a decent year, and I can’t complain.  

Did the marquee travel events this year not have a big role to play in the domestic and in-bound travel success?

While they may have had their rub-off effect, marquee events did not have too much to do with the entire upward trend. Other than the (ODI cricket) World Cup, the Khelo India Games, G20 (summit) or the National Games had some participation but not high-level participation. Some of the spending around these events—which in my opinion is about ₹2,000 crore—is not going to change the way forward in the industry, which is doing well in any case.

How does 2024 look for the industry?

We all tend to believe that every good year must be followed by a bad year, but I don’t agree with that. The reality is that something has changed in the traveller. The average age has dropped significantly, and we can see that in the data in our group’s travel bookings. Connectivity across the country has gone beyond pre-pandemic levels and there are a larger number of flights and seats, despite the large number of grounded aircraft. For instance, India registered on a particular day 4.5 lakh travellers—this number is not small by any definition.

What about airfare and hotel rates? Will the price pressure on the consumer ease?

They will remain at the current levels. I don’t see them going up from here, because inflation is under control. Petroleum prices are looking down, and all economic reports are saying that India’s GDP is growing. GDP has its trickle-down effect in terms of demand generation. There is not going to be a change in these trends. We are in a medium-term cycle right now, and our expectation is that this upward trend will stay, at least for a couple of years.

This is not a temporary movement, but an uptrend across all segments. The general economic environment has a “feel-good" factor and that’s not going away anywhere. Fortunately, geopolitics does not impact us directly right now.

Were visas an issue in 2023?

In 2023, we saw a lot of demand around short-haul travel, which is essentially domestic travel and demand on the Indian Ocean periphery. We also saw demand for long-haul travel, but visas were a problem still. In 2024, I expect that long-haul business (travel) will come back in full swing. So, demand will come from all aspects.

Many countries now offer visa-free travel for Indians. Has this given a further impetus to travel?

The latest added to the list is Kenya. Malaysia, Vietnam, Thailand too have announced it. My expectation is that a couple of more countries will also announce visa-free travel for Indians for a short time because of the delay in the return of Chinese tourists into Asia and the Middle East as anticipated. Therefore, the Indian tourist is reaping the benefit of that. This is a multi-year trend. We are seeing a similar movement in the Central Asia region, with countries like Uzbekistan, Kazakhstan and others welcoming Indian tourists. The GCC (Gulf Cooperation Council) has also introduced a one-visa-fits-all kind of policy, which will ease travel into the Middle East.

The travel trends are sustainable and will continue the way they are, albeit with higher airfare and input cost. With low-cost airlines and Vistara beginning to fly out to some of these destinations, there will be more interest. This is being driven to a fair extent by interest from the Indian traveller. The Indian traveller is no longer looking for a trip but an experience.

While outbound travel is soaring, in-bound travel that contributes heavily to our forex earnings is still not fully back. Your view?

It’s still early days, but the in-bound traveller is coming back. The numbers are almost there. The rupee has depreciated since the pandemic and I think going forward, we will see a stable rupee that will attract more travel into India.

The rupee has depreciated since the pandemic and I think going forward, we will see a stable rupee that will attract more travel into India. When the tourist sees a 15% depreciation in the rupee, it’s significant enough for them to plan travel.

The numbers we are seeing in our in-bound travel company Sita, in terms of volumes, are almost at pre-pandemic levels. We are witnessing that trend in India already. Ethnic Indians are also travelling to India as tourists now. In reality, we are seeing a lot of that effect. European tourists have begun to travel to Thailand, Vietnam, Cambodia, etc. They may not be doing very long travel, but that is still good news for us as well. I had visibility of the fact that the coming quarter will be very good for our in-bound travel company, Sita.

How did the ₹7 lakh limit on outbound travel and TCS (tax collected at source) impact the travellers looking to book tour packages abroad?

There was no impact. The ₹7 lakh limit per head took care of the issue. The government was realistic enough to recognize this.