During the pandemic, there was a tectonic shift in Indian tourism. One that not only affected our tourism industry but also had deep repercussions on the Indian economy for years to come. But I sense very few see this. Am I crying wolf? Am I overreacting? Or will time vindicate my fears? This piece was inspired by a comment someone made about the condition of a luxury hotel she recently stayed at. My piece is about how attitudes have changed about domestic tourism and how the peripheral vision around this is limited.
Rajeev Kohli, CIS, CITP, DMCP,
Joint Managing Director, Creative Travel
Over the past months, while travelling across the world on sales, one thing I have shared with great pride was how our tourism infrastructure held fairly strong during the pandemic. Hotels were mostly full, restaurants worked on deliveries, and flights did take off. Unlike many other countries, our infrastructure did not face the level of damage that others saw.
This was a direct result of the 25 million+ Indians who travelled abroad every year staying in India. This was a result of destination weddings staying grounded in the country. Unquestionably, the Indian hospitality industry benefitted, thanks to the spending power being transferred to domestic consumption.
Anyone who says Domestic Tourism is a new phenomenon is wrong. Domestic travellers have always out-numbered international incoming tourism by a fair number for years. In the pandemic, this suddenly became a lot more visible. The sudden shift in spending patterns brought much-needed relief to an industry devastated by the pandemic. (Aside from high-touch activities like tourism, hospitality, and entertainment, most other economic segments actually flourished during the pandemic. Tax collections attest to that).
One of the biggest challenges with tourism administrators worldwide is how they view tourism as one unitary subject. This is especially true for India, where the national government at all levels is unable to differentiate between the sub-segments that make this mammoth of an industry. Inbound, outbound, domestic, adventure, incentives, meetings, congresses, religious, VFR, hotels, guest houses, homestays, transport, railways, the list goes on and on. The tourism industry is a huge ecosystem of unique and complimentary services, each with different customer base and delivery system. When we get looked at as one, we lose the story about the needs and opportunities of each segment.
During the pandemic, we saw a deep shift in the thought process of our government that made them adopt domestic tourism above all else as their singular targeted activity. Our hospitality industry jumped on the bandwagon, don’t get me wrong, I am grateful that domestic travellers saved our hotel infrastructure from decay, I truly am.
But here is what concerns me. It’s not the short-term pain of supply and demand imbalances. It’s not about the imbalances in pricing strategies. It’s the long-term consequences of overreliance on a single inward-facing tourism segment. Let me explain.
First, there are the financial implications on the economy. The current lot of senior bureaucrats have been around long enough to remember India’s past BOP and forex reserve problems and how tourism was a key generator of much-needed foreign exchange. Today the Ministry of Finance has woefully forgotten the basics that helped India get to where it is, so has the Ministry of Tourism. Yes, we do have other economic segments today that have made us forex ‘comfortable’, but you cannot put all your eggs in one basket. We need a healthy, diverse portfolio of income generators to keep India insulated from global crises. We need to increase our foreign exchange reserve coffers and not be complacent with what we have. We risk losing a stable stream into our national savings by relegating inbound tourism to the deep background.
Tourism earnings are not as dependent on trade laws and pacts. Tourism will not be replaced by ChatGPT, which our software and business processing industry will be hit by. Tourism will not be outpriced by cheaper labour. India is already uncompetitive in manufacturing exports and is also getting outpriced in business processing services. A lack of a long-term vision for hedging our risks is dangerous for the nation. We should be pumping up our forex reserves from all sources, China has been the most successful at it. We need to use our coffers as a tool for economic influence. Undermining tourism is not going to help us; it just hurts us.
The second is about quality. This article was inspired by the comment I got about how a luxury hotel was showing wear and tear from the staying habits of the domestic traveller. Travellers are different and use services based on their cultural, economic and lifestyle differences. There is no doubt that domestic travellers are ‘harder users’ of hotels. There is nothing wrong with that; it’s a fact. But what frustrates me as a professional is that our hotels seem to have no SOP on how to clean a room when a domestic traveller leaves. How to react to their usage styles of a property. There is no change in cleaning practices. No adjustment to how to renew facilities from this volume of business. To add, I have seen hotels that have even dumbed down their service plan for this segment. Cheaper buffets, lower quality inputs, differing staff attitudes. It’s a shame! When you drop your standards in a chase of money, you tend to tread on a slippery slope that is hard to recover. Once you lose your reputation, you don’t get it back very quickly. Consequently, some of our finer resorts and hotels are now showing wear and tear resulting from poor maintenance and systems. We at Creative have termed these as ‘Shaadi ka hotels’. Hotels we no longer can use for discerning travellers.
This brings me to a third point, weddings. Yes, these are the golden goose, and more. I know hotels which have transformed their entire game plan to be around weddings. The revenue makes owners happy. But let’s take a realistic look at the sustainability of this segment. Weddings took place before the pandemic as well, in the same numbers. Expenditures were always high on these celebrations. So, what simply changed is that destination weddings moved from overseas locales to staying in the country. That shift was a direct result of pandemic-related travel restrictions.
But this is not a permanent shift. The world has reopened. Visa availability is still an issue but will get resolved. Every major tourism destination in the world has representations or sales actions in India vying to pull the traveller out. It’s an aggressive market. Even destination fatigue will set in. So, the Indian hospitality industry needs to take a long-term look at the competitive landscape. It’s not a Jaipur v/s Udaipur v/s Goa. It’s India v/s the world.
There needs to be a better appreciation for achieving balance in the source market mix. This is how professionals work. I learned something interesting from hotels in Las Vegas. At the beginning of their annual planning cycle, they decide how much business they will take from each market segment and even drill down as to how much they will take from each nationality. There is a conscious direction not to be over-dependent on any one type of business or country. This mitigates risk and ensures they don’t get labelled as a Chinese Hotel, Indian hotel, or a Shaadi ka hotel in our context. Protect the reputation.
Here’s where I stand.
Life is about balance. Life in our businesses can be no different. Today, there is a new favourite child – Domestic Tourism. The elder siblings have long been forgotten. The simplistic approach taken is worrying. Our government needs to balance the economic needs of the country by taking a long-term strategic look. Our Tourism Ministry must remember that tourism is more than one fad. Our hospitality industry needs to remember past successes and work on a holistic strategy rather than creating a reliance on one segment. The incoming tourism industry was instrumental in making India a service exporter. We helped build the nation. We were consistent and growing. We generated jobs across all income levels. Tourism’s trickle-down effect is undisputed. So, learn from the past and adjust and adapt for the future.
Great things are not accomplished by those who yield to trends, fads, and popular opinion. Fads are born to die. We need to learn and work on stability for the future. Not just for today!
