Travel Trade Landscape v0103may13

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INDIA: TRAVEL TRADE LANDSCAPE
In 2012 India accounted for 15 million outbound visits. The UNWTO predicts that India will account for 50 million outbound tourists by 2020.
In 2012 there were 339,000 visits to the UK by Indian residents, 5% down on 2011. The long-term trend has been one of consistent growth, though with a
pause in this growth since 2006, due in large part to the slowdown in business travel affected by global recessionary conditions. Business travel is significant
between India and Britain in correlation to the trade and commercial ties between the two countries. In 2012 business travel accounted for over 27% of all
outbound visits and 49% of a total spend of £333 million.
In 2012 the average length of stay per visitor was about 22
nights. This figure is high due to a large proportion ofvisitors
visiting friends and relatives in Britain, who stay an average
of over 31 nights per visit. However, this category of visitors
have low spends per day averaging £17 per night.
The average visitor from India spends £981 in Britain. The
VFR category spent £533, Holiday visitor spent £484 &
Business visitor £1790 at an average spend of £17, £ 86
and £82 per night.
57% of visitors on holiday to Britain were part of a packaged
itinerary in 2012 as compared to 45% in 2011. It is
interesting to note that Britain welcomed 51,000
independent travelers in 2012 that stayed an average of 10
nights while spending £50 million during their trip; while a
total of 68,000 visitors as part of a package spent £8 million
staying an average of just over 2 days. The average per
night spends for visitors on a package tour was £51 and for
independent travelers was far higher at £95.
339 £ 333
22
£ 45
Visits (000) Spend (£ million) Average Nights per Visit Average Spend per
Night
0
50
100
150
200
250
300
350
400
2012 - Snapshot
Visits (000)
Spend (£ million)
Average Nights per Visit
Average Spend per Night

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The Indian economy has seen rapid expansion over the pastdecade, with many millions ofcitizens seeing their income grow substantially. This newly wealthy middle
class is likely to have a higher propensity to travel, increasing India’s importance as a tourism source market. India boasts of having over 100 million internet users –
a figure that is growing rapidly. India is a growing economy with approximate growth of over 8% per annum.
Currently India has 31.4 million middle-class households,translating into around 160 million individuals. A middle-class household is defined as one earning
between £4,300 to £27,000 per year. (NCAER Macro Consumer Research report 2011). Our target audience from this grouping is the upper middle class
households which would be the ones earning in excess of £20,000 per year. By 2015-16 there will be 53.3 million middle-class households, translating into
267 million people.This middle-class is and will continue to drive India’s ascendance as an economic power to reckon with. It will also be the main driver of
outbound visitor growth in terms of both numbers and spend.
The “pyramid” structure of the Indian market is slowly collapsing and being replaced by a “diamond” – a relatively large affluent class at the top, a huge
middle-class atthe center and a small economically disadvantaged class atthe lower end. This diamond represents increasing volume and value across all
classes of the Indian consumer market.
The number of high-income individuals (defined as those having financial assets worth US$1 million or more) has risen steeply over the last 5 years to a
current figure of 153,000 households, which ranks India among the top 12 HNI populated nations (FTKMC).
In absolute numbers India’s wealthiest will total around 24 million by 2025, more than the current population of Australia. By that year too, India’s affluent
class will be larger than China’s comparable segment (projected around 19 million). Overseas vacations are well entrenched among these tastes.
The vast majority of visitors from India are male, with the 25-43 year cohort generating more visits than do other age groups. One of the major reasons for
the large proportion of male visitors is that most of the business travel from India is undertaken by males, and this forms a significant chunk of the total
outbound pie. Half of holiday visitors are travelling with a spouse or partner and nearly 1 in 3 are travelling with adult family me mbers.
The vast majority of traffic originates from the commercial capital of Mumbai in the west and the political capital of New De lhi in north India.
Taken together, north and west India (and in particular Delhi and Mumbai) account for around 70% of outbound visitors to Britain, according to travel trade
sources.
UKBA visa figures which show the number of visas issued annually in Mumbai and Delhi accountfor around 72% on average. South India (primarily Chennai
and Bangalore) makes up roughly 15% of the total number and the rest originates from eastern (primarily Kolkata) and central India.
India’s directcontribution to the GDP is projected to be the 4th fastest growing marketwith 7.8% annualized growth over the next10 years.
Business travel spending will increase by US$33 bn over the nextdecade from US$26.4 bn to US$59.7 bn.
In 2011 leisure spending was nearly US$70 bn and is expected to more than double to over US$ 154 bn

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The Indian traveler will research destinations online but the desire for a strong service culture means the final choices will usually be made face to face.
11.5 million Indians travelled abroad in 2011. 20% of these travelled to Europe.
Favorite destinations are Singapore, Malaysia, Thailand and U.A.E due close proximity.
The outbound travel market is expected to grow to 50 million travelers in 2020.
Group travel is the preferred mode for mostleisure travelers and accounts for approximately 60% ofoutbound leisure travel; however the FIT segment is fast
increasing.
Indians prefer multi-destination trips. A general pattern is about 20-30% single destination and 70-80% multiple destination itineraries.
Shopping is a major activity of India travelers. It is reported that for about 30% of the travelers it is the primary motivation.
The top four information sources used for planning by Indian travelers were – Travel agency (50%), corporate travel department (24%), personal computer
(17%) and friends/relatives (13%).
Indian travelers tend to delay travel bookings till as late as possible. The average lead time for holiday bookings ranges from 3 to 6 weeks.
In Europe, 44% of trips are made for business purposes and 40% on holiday travel. The balance 16% is for other purposes (UNWTO).
Visit familyandfriends abroad – Indianstend to prefer destinationswheretheyhave
familyandfriends when travellinginternationallyfor the first time
Duration of travel is generallybetween 2 – 4 days
Lookold andnew attractionswithshoppingandfood beingmostimportant Higher spend per person as compared to a leisure traveler
Importanceofwordof mouth Indian food
Indian food Look for variety in terms of sightseeing options and a full itinerarywith verylittle free time
Ease of access – air connectivity, visas, hotels, local & inter-citytransport Ease of access – air connectivity, visas, citycenter hotels

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The Indian travel trade consists of approximately 3000 IATA agents and about 10,000 non-IATA agents. 80% of the trade consists of retail agents handling 80% of
the travel market while 20% consists of large agents with a 80% market share. The distribution system is fragmented and varied across the country. Until now a
majority oftravel agents in India were predominately only ticketing agents. With commissions going down and increased competition, these travel agents have b een
working towards becoming a one-stop shop for all travel needs. Apart from air tickets they have started offering their clients hotels, holidays, insurance, visas and
foreign exchange all under one roof. This has led to increased competition between agents offering holiday packages resulting in lower rates as well as agents trying
to be one up on each other with new and innovative itineraries. Over the past few years air ticket consolidators have strengthened their position by working on low
margins and high volumes. A number of agents have been shutting down since airlines are cutting commissions drastically with an aim to make air tickets a zero
commission offering as well as offering lower fares on their websites directly. Most agents are members of an association like TAAI, OTOAI, TAFI, IATO etc.
India is a vast country with various cultures leading to agents in different parts of the country having different styles for functioning. Agents in the north cater primarily
to a FIT and luxury segmentwith fewer people opting for a group series itinerary. They tend to do online research on destinations before making a final choice. North
Indians have a tendency to stay in higher category rooms and tend to be one up on their peers while making travel decisions. A large South Indian population resides
out of India, hence, one sees a large proportion oftravel from the south in the VFR category. South Indians also tend to be more reserved and therefore optfor group
itineraries rather than FIT. Due proximity and costthe Far East is very popular destination from the south. The travel market from East India consists largely ofpeople
opting for group travel. The Far East is very popular from EastIndia as well. Most of the large agents are headquartered in Mumbai – the main hub for air travel from
Western India. Travelers from the west tend research a destination before getting in touch with an agent with his destination preferences. There is a mix of market
share in terms of group and FIT travel, wherein majority of first time travelers opt for group departures while others prefer to travel on their own.
These are large players and have a national or a strong regional presence with their own offices as well as preferred agents who promote their packages. Large tour
operators in India have centralized operations and product departments based in their head office. All branches and PSAs send in bookings to them. Most large
agents invest in printing brochures seasonally and market their own programs. They take bookings either directly from the consumer or through their network of
‘Preferred Selling Agents’ (PSA). They engage in group tours/fixed departures, MICE, retail, air ticketing, visas, insurance as well as foreign exchange - offering all
travel related services to their clients under various departments/verticals. These agents invest in printing brochures for their group tours and retail offerings every
year which are distributed by November/December with itinerary details and costs for the coming season. They also have huge advertising budgets. Most of the
advertising happens via the print media in popular dailies and trade publications. The average commission level or margin that a large agent works with is 15%.
The large tour operators in India include: Thomas Cook, Kuoni India, Cox & Kings, Vacations Exotica, Mercury, Kesari Tours, and Club 7 Holidays.

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A large number of retail agents exist in India. The distribution of travel product in India is fragmented and predominately through retail agents. Retails agents are
small, independentbusinesses who mainly deal with people known to them and referral contacts. They have a limited access to large corporate houses and MNCs
who work with large agents for their business travel needs. These agents have small corporate clients who deal with them for their business travel as well as leisure
travel requirements. The agent’s opinion and advice is highly valued by the client because of a long term relation between them. In most cases the agent works on
credit wherein the client books the product and pays the agent after returning home. Average commission level for retail agents is 10%.
Travel Spirit International
Amazing Vacations Faraway Places Ashman Travels Flexi Tours Riya Holidays Jagdish Tours
Avesta Tours Fourways Travels Abercrombie & Kent International Travel House Hi Tours Atlas Hoppers
Compact Travels Gem Tours Apex Travels Dove Travels The Marks Tours Vision Comfort Leisure
Blue Star Tours Hind Musafir Agency Blue Moon Travels Sagger World Holidays GNS Leisure Travels Akbar Holidays
East West Tours & Travels Holidays @ Leisure Club 7 Holidays Sagger World Holidays Viking Tours Travels Designer Destinations
Intime Travels Krisia Holidays D Pauls Dewan Travels Hansa Holidays Tourism DNA
Kulin Kumar Tours Master Holidays Discovery Vacations Regency Tours Viceroy Travels Globus Cosmos
Tulsidas Khimji Holidays Orbitz Corporate & Leisure Flight Shop Weldon Travels The Travel Company TMIC
Travel Mart India Star Holidays N Chirag Horizon Dream Vacations Jaihind Travel Tours Asia Pacific Tours
Uniglobe Keshav Travels Wanderers High Flyer Travel Oytser Hoysala Tours Spaceline World

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This segment can be broken down into two types – ticketing and hotel/tour package.
a. The ticketing consolidators work with a network of smaller agents by offering them better airfares compared to what would otherwise be available to them.
They not only work with the normal commissions offered by airlines butalso earn high Productivity Linked Bonuses which the share with the smaller agents.
These agents have now started expanding their portfolios by offering holiday packages as well other travel related services under one roof to their network of
agents and direct consumers. Average commission including PLB: 20%
Major ticketing wholesalers: Akbar travels, Riya Travels, Nijhawan Group
Akbar Travels Mumbai 57 IATA
36 Non-IATA
2300 Ticketing | Leisure – FIT | MICE | Education NA
Riya Travels Mumbai 50 Offices
4 Overseas Locations
1900 Ticketing | Leisure – FIT | MICE | Education NA
Nijhawan Group New Delhi 39 Offices 600 Ticketing | IT | Representation | NA
b. The hotel/tour package wholesalers work with the travel trade in offering competitive rates for hotels and tours packages for retail customers that the
smaller agents cater to. The consolidator works with a local operator or hotel directly in procuring seasonal rates which they print in their brochure which is
distributed to their sub-agent network and offered online for agents to book. These consolidators tend to deal with agents only and not a direct consumer.
Most tour operators also fall under this category as their preferred agents deal with them. Average commission level: 15%
Major Hotel consolidators: Saltours, GTA, Rezlive
Saltours International Globus & Cosmos Sabre
GTA (Kuoni Group) RezLive.com Travco
Amadeus Etravel.co.in DOTW

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India has a large consumer base of internet users and is growing rapidly as connectivity in rural areas improves.
OTAs have increased their market share by offering the convenience of comparing airfares sitting at your
convenience on a single website and booking online itself. OTAs have not only set up call centers for customer
interaction but have also set up shops/offices in locations that are central and easy to access. People are
comfortable booking air tickets online, butwhen it comes to designing an itinerary Indians prefer human interaction.
Also, an Indian passport holder requires a Visa to travel to most countries which requires the agent to advise
travelers on documentation. They offer discounts on bookings as the startup cost is not as high as a conventional
travel agent and provide consumers information on destinations and tourist attractions. They work on low margins
and have huge advertising spends to increase awareness oftheir site. Apartfrom television advertisements, they have a huge online presence on social media sites.
Over the past few years they have started offering agents access to book on their sites as well. Commission levels range between 5% - 15% based on product.
Major OTAs: Makemytrip, Cleartrip, Yatra, Expedia, etc.
Most companies offer travel rewards to their clients and employees. To cater to this market which has been growing at approximately 12% year on year the tour
operators have MICE divisions who focus on incentive travel for companies. They look atnew destinations that offer high value. Trips are generally 3-4 days with the
itinerary being action packed with little or no free time for the participants. People from differentparts of India have different palates and catering for food becomes a
challenge, especially if it is an all India movement. In most cases the company would have a gala night where they would book a restaurant or venue with local
entertainment and a cocktail dinner. The eventcompanies work with agents in providing logistics and options to the corporate for the event. In some cases the event
company works directly with the company for the project in cases like a product launch, an off-site etc. There are also a number of religious groups in India, these
groups have their Guruji (priests) at the helm and they form a group to attend Kathas (sermons) given by the Guru.
Major MICE and Event companies: Kuoni India, Thomas Cook, Orbitz, Cox and Kings, TUI, Percept, Fountainhead, Mercury Travels, Makemytrip, Riya, Encompass
There are a few companies that specialize in inbound services to India. This is the core of their business and they work with state tourism boards across India to
increase foreign visitors coming in to India. They work with outbound agents based abroad to develop and grow visitor numbers from these markets.
Major Inbound Operators: LPTI, Tamarind, Designer Holidays, Swagatam etc.
Makemytrip.com Goibibo.com Ixigo.com
Yatra.com Expedia.com Ezeego1.com
Cleartrip.com Hotels.com Journeymart.com
Tripadvisor.in Travelguru.com Via.com

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TAAI – Travel Agents Association of India
TAFI – Travel Agents Federation of India
OTOAI – Outbound Tour Operators Association of India
IATO – Indian Association of Tour Operators
IAAI – IATA Agents Association of India
ETAA – Enterprising Travel Agents Association
PATA – Pacific Asia Travel Association
ATOAI – Adventure Tour Operators Association of India
Travelbiz Monitor TravTalk India MICE Talk Cargo Talk
T3 – Travel Trends Today Travel Trade Journal Express Travel World Asian Traveller
Travel News Digest Travel Daily Media Travel Techie Destination Worldwide
Tourism & Trade Hospitality India Explore the World Travel n Hospitality
Safari India Media India Group
HolidayTalk Cone Nast Traveler Outbound National Geographic Traveler
Outlook Traveler Time Out Travel + Leisure Executive Traveler
Discover India Airports India Lonely Planet Guide Air India Magazine (Inflight – Air India)
Spice Route (Inflight – Spicejet) Jetwings (Inflight – Jet Airways) Hello 6E (Inflight – Indigo) GoGetter (Inflight – Go Air)

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The existing Britain product offer is very London-focused.
A review of the European itinerary brochures ofthe leading Indian outbound tour operators shows that Britain is among the mostpopular destinations offered
but the Britain part of a European itinerary is mainly restricted to London and in a few cases, London & Edinburgh. There are a small handful of operators
who have bespoke Britain itineraries in their brochures, covering London, Scotland and the Lake District and Yorkshire. In a typical European programme of
an established outbound operator from India, if there are 4 or 5 European itineraries in total, Britain will feature in a maximum of two of them.
Holiday catalogues of some of India’s leading Tour Operators (Cox & Kings, Thomas Cook, SOTC/Kuoni, etc) tend not to represent Britain’s product and
regional offerings adequately. They offer predominantly European itineraries with London as one of the points on these. In very rare cases there may be a
day’s schedule in Edinburgh. There is an excessive focus on London. In contrast, destinations like France, Switzerland and Germany may have dedicated
pages for itinerary options covering 2 or more different regions, or combinations of these regions.
The travel trade argue that if they advertise British destinations at their own expense then they will want to recover this cost in the shortest time. As a result
they will only promote popular products (e.g. London). If we want trade to sell other destinations it would help if VisitBritain contributed part of the cost
through co-op activity.
VisitBritain is acknowledged by the trade to have strong online platforms but key decision-makers within the trade still prefer, hard-copy collateral, face-to-
face engagement, in-office training, more familiarization trip opportunities, and direct partnerships with a wider variety of destination products and services.
The Visa application process is perceived to be lengthy and time consuming by the travel trade in general. UKBA takes 15 working days to process visas
whereas; a Schengen visa takes 4-5 working days on a average – giving the traveler access to 25 countries. One can apply for a fast track visa for an
additional fee which takes 4-5 working days to process. Additionally, the cost ofgetting a UK Visa is high – adding to the overall costofthe itinerary in a price
conscious market.
British engagement needs to be proactive in communicating with the Indian travel trade.
The travel trade is near-unanimous in the opinion that there is not enough effort made by UK’s inbound tour operators, ground handlers and destinations to
reach out to the Indian trade and encourage business development. We are engaging with the trade to change this perception and facilitating partnerships
between the trade and suppliers. The trade acknowledges the usefulness ofVisitBritain Sales Missions and hosted buyer marketplace held annually, but
feels more ofthese interactions are required.
UK suppliers do notnecessarily respond quickly enough to queries from Indian buyers on rates or itineraries, and when they do their rates tend to be quite
high, often making the quote unworkable, or the need for the itinerary outdated. There are a few DMCs that have opened offices in India and this has led
buyers to work more with these suppliers as they have tend to have an ongoing relation.
Consistent strategic engagementis crucial. This contributes towards a lesser presence ofUK productin brochures and reduced opportunity to send
customers to Britain rather than somewhere else. We are working with some ofthe large players on strategic partnerships to ensure brochure visibility and
towards creating Britain specific itineraries.

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There are fewer trade missions to India by UK suppliers or ‘fam trip’ opportunities for trade in Britain, when compared with competitors. The opportunity to
increase interaction between UK suppliers and Indian travel trade, MICE and eventmanaging companies is notbeing exploited to its potential.
VisitBritain is increasing engagementwith trade associations like Travel Agents Association ofIndia (TAAI), Travel Agents Federation ofIndia (TAFI), and
Outbound Tour Operators Association ofIndia (OTOAI) to work with the trade on educating them on the product.
Britain has as many products and services catering to families and children as any other competing destination (theme parks, zoos, etc.) but these are not
adequately highlighted to the Indian travel trade. Britain has a lot to offer the family segment. Britain has great theme parks close to London, such as
LEGOLAND, and Thorpe Park but these are less well known than Euro Disney, outside Paris. Engagement of many of the providers of these products and
services with VisitBritain and the Indian trade is inadequate. We need to work towards building relationships with these attractions to harness the potential
incremental business to its fullest.
There are currently over 600 BritAgents in India and we intend to increase this number significantly over the next year ensuring that the Indian travel trade is
educated and empowered with sufficient knowledge on Britain. This will make it possible for them to not only include Britain in their Europe itineraries but
also offer stand-alone itineraries to Britain.

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New Delhi
British Airways 14
Jet Airways 7
Virgin Atlantic 7
Air India 7
Amritsar Air India 7
Bangalore British Airways 7
Chennai British Airways 5
Hyderabad British Airways 6
Mumbai
British Airways 14
Jet Airways 14
Virgin Atlantic 7
Air India 7
Ahmedabad Air India 7

Travel Trade Landscape v0103may13

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