A broader menu of choices for increasingly affluent travellers may help improve overburdened tourism services at home
PRASHANT Yadav scouts for locations for the well-heeled. As the India head of a destination-management multinational, his job used to be mostly about introducing global clients to exotic vacation spots in his own country. Nowadays, he spends nearly all of his time on taking rich compatriots abroad — for leisure, conferences, and, of course, big, fat, Indian weddings.
No surprise, then, that Malaysia’s recent scrapping of visa requirements for Indians and Chinese citizens visiting for 30 days or less has made Yadav a happy man. The move follows similar decisions by Sri Lanka and Thailand. Yadav will soon organise a wedding with 250 Indian guests on the Vietnamese resort island of Phu Quoc, which doesn’t require visas for short stays.
All Asian economies that rely on tourism for jobs and incomes are pinning their hopes on their proximity to the world’s two most-populous nations. The recovery in Chinese visitors’ global expenditure to its pre-Covid-19 level of US$277 billion (RM1.29 trillion) is taking longer than expected. Hence, the overture to the only other country with more than a billion people.
Visa-free entry is a carrot to expand the US$28 billion that 27 million Indians spent overseas in 2019. Those numbers had swelled eightfold and sixfold respectively, in the two decades before the pandemic.
Easier and cheaper access to vacation venues in the region will no doubt expand choices for outbound Indian travellers. It may also benefit inbound traffic and domestic Indian tourism if some of the peak-season pressure on local hotspots — like Goa in December — gets diverted to rival destinations outside the country.
The hospitality industry in India has its hands full with domestic tourists. Families that would take one holiday a year two decades ago are nowadays going on six shorter ones, making full use of new highways and increased middle-class car ownership. After the pandemic, it has also become professionally acceptable to mix vacation time with WFH — work from hotel.
Above all, a narrow group of people has acquired enormous wealth. With the stock market hitting a record US$4 trillion in value, this affluent class helped push the number of visits within the country last year to 1.7 billion, 21⁄2 times the previous year’s figure. The 2019 high of 2.3 billion trips will be surpassed very soon.
That’s not all good news. To have to fight for business would create some much-needed breathing room for Indian hospitality players. “Assets are looking tired now because if I’m doing very high occupancy through the year, where is the opportunity to spruce things up?” says Yadav, a former hotelier in New Delhi and Mumbai before he switched to advising clients at Liberty International Tourism Group. “It would be good for Goa if it had to work a little harder to compete against Langkawi, Hoi An or Krabi.”
Overseas destinations have by now gotten a good idea of how lucrative it can be to land a splashy Indian wedding.
Sure, if live Bollywood entertainment is involved, a big chunk of the US$1 million to US$10 million budget typically goes back to India. But rents for a fleet of 250 Mercedes E-class sedans? That stays in the local economy. Some Eastern European countries now have their ambassadors in India actively scoping out opportunities, offering to help with visas and access to historical sites.
For rich Indian hosts, a foreign venue for a wedding is a no-brainer. In New Delhi and Mumbai, five-star hotel tariffs around saya dates — auspicious for marriage according to the Hindu calendar — could easily exceed US$1,000 a night. One can negotiate a comparable room at an overseas location for a quarter of that amount. Even in flower arrangements and food and drinks, Southeast Asia offers better value for money.
This needs a course correction because India — thanks to legendary hoteliers like Prithvi Raj Singh Oberoi who died last month at age 94 — is known for its top-notch hospitality. However, leaving aside the rush of activity during New Delhi’s recently concluded G20 presidency, tourism hasn’t gotten the attention it deserves. The highly successful “Incredible India” campaign is now more than 20 years old. Safety concerns, particularly for women traveling alone, have given India a bad rap.
Between January and April, more than 3 million foreigners came to the country, a 166% jump over the previous year. But those numbers include business travellers, non-resident Indians visiting family, and Bangladeshi citizens coming for medical consultations or procedures. So-called “paying files” in a continent-sized geography stretching from the Himalayan peaks in the north to the Indian Ocean in the south don’t even match up to Dubai, which has 40% more hotel rooms than all of India.
Behind the apathy, there’s abundant demand. It used to be that Goa hotels would fill rooms one year in advance with Russian tour groups at deep discounts. Now they don’t need to. Plenty of domestic travellers are queuing up to book one week ahead. While that’s a testament to rising prosperity, surely, it’s also a signal to build new capacity? “We have failed to develop another Goa,” says Yadav. “We haven’t taken advantage of our massive coastline.”
Investment needs to accelerate. Indian Hotels Co, the nation’s largest hospitality company by market value, invested 3.3 billion rupees (RM174.9 million) on greenfield projects and renovation in the 12 months that ended on March 31. This is more than double the previous year’s outlay on capital expenditure, but unchanged from just prior to the Covid-19 outbreak before adjusting for inflation. If local chains like Indian Hotels, the operator of the Taj brand, take the lead, their foreign rivals will be bound to follow suit. More Indian states should formally recognise tourism as an industry to bring down funding costs for projects.
That’s the only way to stay competitive when countries in the neighbourhood are scrambling for the same Indian tourism dollar. The jostling getting a little more hectic with visa-free entry will be good for everyone. — Bloomberg
- This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
- This article first appeared in The Malaysian Reserve weekly print edition