epages News [Travel Agents, January 2004]

Cabotage laws eased for cruise liners

Jan 05, 2004: New Delhi: It’s a smooth sail from now on for foreign luxury cruise liners that choose India as a destination. To promote cruise tourism, in the absence of Indian flags sailing in this segment, the shipping ministry has altered cabotage laws to allow foreign flag cruise vessels calling at more than one Indian port to sail without obtaining permits or licences from the director-general shipping. Permission to set up high standard international cruise terminals at Mumbai, Cochin, New Mangalore and Tuticorin has also been given by the minister to respective port trusts. This season there has been some improvement, with double the number of liners including India in their itinerary. Large cruise lines such as Queen Elizabeth II, Silver Shadow Deutshland, Seaborne Spirit, Europa and Star Princess are reportedly visiting Indian ports during the cruise season that commences in November 2003 and ends in April 2004.

According to Section 407 (i), no ship other than an Indian ship or a ship chartered by a citizen of India shall engage in the coasting trade of the India except under a licence granted by the director-general shipping. Clause 3 allows the Centre powers to revoke this provision for any part of India’s coasting trade by a general or special order. The term ‘coasting trade of India’ means the carriage by sea of passengers or goods from any port or place in India to any other port or place on the Indian subcontinent. With these fresh incentives, especially the relaxation of existing cabotage laws, cruise tourism in India appears set for better days ahead.

Tourism finds its season in the sun

Jan 07, 2004: Mumbai: A record 27.5 lakh tourists — the highest inflow ever visited India during ‘03, an increase of 15.3% against a 9% decline in ‘02. The increase in arrivals was largely witnessed during the last five months of calendar year ‘03, with the SARS epidemic and the Iraq war impacting arrivals in the first half of the year. The previous high in tourist inflows was witnessed in the millennium year ‘00, when 26.5 lakh travellers visited the country. The term tourist refers to any foreign passport holder entering India, and includes business travellers. India is, however, a minnow as far as the world tourism industry is concerned. Compare this to China, which attracted around eight crore tourists in ‘00, though around seven crore of them were from Hong Kong and Macao, according to the data from the China tourism ministry website. Thailand attracted 90 lakh visitors, and France 7.4 crore visitors in ‘02. Industry officials say business travellers fuelled the growth in ‘03. Growth in the services sector as well as the increase in foreign trade has led to more foreigners entering India. According to trade figures, business travellers account for 50-60% of the total inflows in ‘03. Travel operators say that besides increased business travel, an increase in air seat capacity and direct connectivity between India and the Asean countries such as Singapore, Indonesia and Thailand has also helped attract tourists to India. According to the ministry of tourism, India’s maiden advertising campaign ‘Incredible India’, launched in January ‘03, too has helped the country compete as a tourist destination with other Asian countries.

Travel firms gear up for human race across LoC

Jan 08, 2004: Bangalore: With peace at the end of the Indo-Pak tunnel, the Indian travel and tourism industry is now avidly waiting to cross the next big frontier the P2P line. India can expect at least a million more people every year from Pakistan by air, rail and road transport, say tour operators. Travel trade majors like Thomas Cook, Kuoni and Travel House are already firming up their plans for a massive people-to-people cross-border movement. While the case for medical tourism and coming together of sundered friends and relatives has hogged quite a bit of the national limelight, travel experts are looking beyond. Cricket, Bollywood, fashion, pilgrim destinations and an opportunity to jus’ plain live it up and make whoopee is expected to draw a huge wave of visitors from Pakistan.

To start with, travel companies are exploring the possibility of initiating a large cricket tourism movement during the Indo-Pak matches this March. Thomas Cook India, which is the administrative head for its Pakistan outfit, is already planning a major expansion of its business once relations between the two countries are back on track. The economy of Kashmir on both sides of the border may also experience a dramatic upswing, given the strong role played by tourism in the region. Even under the less-than-friendly relations between the two countries, the spice trade is estimated at Rs 1,200 crore. Normalcy and peace can obviously multiply these numbers several fold.

Common man can stride the clouds

Jan 10, 2004: Foreign travel tax (FTT), the Rs 500 levy that was ostensibly collected to spruce up airports, has finally been abolished. Although the amount will not make much ofa difference to international air- travellers, the travel industry has been making demandsfor its scrappingfor several years now. The revenue implication from the abolition of inland air travel tax (IATT)and removal of FTT is about Rs1,500 crore. The abolition of IATT and FTT as a ‘historic’ move may finally make it possible for the common man to travel by air. The measures announced by the government will make aviation a part of the economic infrastructure and the nation will benefit from the spin-offs. Air Sahara said the package would provide the much-needed thrust for rapid growth in domestic aviation traffic. Relief for the industry was awaited for years and the demand of airlines has been finally fulfilled, while exuding confidence about growth prospects. The reduction in taxes will lead to a sharp increase in corporate air travel. The impact will benefit the country’s economy. The fares were expected to go down by 20% while business travel will boom. There will be a boom in the Indian travel industry, leading to an overall growth in the Indian economy. The committee had suggested cut invarious taxes like IATT and FTT.

Lower airfares boost domestic tourism

Jan 10, 2004: Following the reduction in airfares, domestic tourism should get a major boost in ’04. For ’03, the growth in domestic tourism (that is Indians travelling within India) was up by 10% to 300m travellers against 273m travellers in ’02. Because of high domestic fares, the cost of foreign travel, especially to the Far East, was cheaper than travelling within India. This led to a huge gap between outbound (Indians travelling abroad) and inbound (foreign tourists coming into India) travellers. As of ’03, around 4.5m Indians chose to travel outside India and against this, there were 2.8m tourists entering India.

Tourism ministry officials said the gap between outbound and inbound travel could reduce drastically. According to official estimates, Indians travel largely to Malaysia, Thailand and Singapore owing to attractively priced packages. Besides domestic tourism, tourists from neighbouring SAARC countries are likely to fuel growth. Ministry officials said India needs to learn a lot from competing Asian countries. None of the regions in India can boast of reasonably priced and attractive packages. The public and private sectors will have to come together to make India a lucrative destination.

Dental Care, the latest buzzword for tourism

Jan 12, 2004: Kochi: Kerala Tourism’s soul stirring kichdi of products — back waters, beaches, ayurveda and hill stations now has a new ingredient. Dental care! More and more tourists from the US, Europe, Australia and West Asia are travelling to Kochi to take benefit from the tremendous cost advantage in dental care. The services sought range from smile design, tooth jewellery, implants to root canal treatment. A typical one-week tour of these visitors would consist of an ayurvedic rejuvenative therapy and a dental care plan with a rice boat cruise squeezed in between, to make the holiday exotic. Says Dr. Rajkrishnan, an endodontist who has received nearly 100 patients from the US, Europe and West Asia. Dr Rajkrishnan promotes his clinic abroad through his website, interactive CDs etc. And the number of patients are picking up. He is also planning to build a few guest rooms along with the clinic. Sterilisation is another area where the clinic has invested heavily in the wake of the new diseases that are spreading. According to him, with the right incentives from the government dental care tourism will gain momentum in the state.

Tour operators set for a scorching '04

Jan 12, 2004: Mumbai: After being bogged down for three successive years by a bearish stock market, earthquakes, the Gulf war and finally SARS, travel companies are gunning for growth in the summer of '04. Top market players are aiming for a 30% growth in package tour numbers this year. Most will launch their nationwide holiday package campaigns this week. The major players are readying to woo summer travellers and sales teams have just finished special marketing training sessions to hone their capabilities. The large players in the market are SOTC, Thomas Cook, Cox & Kings and TCI. In the second rung are Raj tours and travels, Kesari travels and Club 7, who have a more regional appeal.

Market leader SOTC, a division of the Kuoni (India) group, has announced Rs 99,990 European holiday deal for a family of three (two adults and one kid). The price per individual works out to Rs 33,000, which is roughly equivalent to the air-fare to Europe, company sources said. The nine-day holiday price includes return airfare, accommodation, sightseeing, daily breakfasts and buffet Indian meals. SOTC also has other family packages like a 14 day ‘Grand’ tour of Europe for Rs 1.49 lakh and a 19 day ‘Classic’ tour for Rs 1.89 lakh. A majority of the tours on offer will be to Europe and the Far East. Tough US visa norms and heightened security measures like finger-printing are a damper for holiday tours to that country, industry sources said. However Indians visiting friends and relatives in the US often opt for holiday packages while on the trip.

'Feel Good' to drive tourism up by 50%

Jan 13, 2004: Bangalore: When the sensex touched its all-time high of 6,249 points, not just the punters, but a host of potential beneficiaries like the $3.5-billion tourism industry were celebrating. Travel trade and hospitality pundits say that a significant share of the profits booked in the market by individual investors is likely to flow into the leisure market. A buoyant economy, better pay packets, steps taken recently by the government to make air travel cheaper, easy finance from banks for taking holidays and the stock market boom will all help drive domestic tourism traffic, estimated at 220-250 million in 2003, up by nearly 50% in 2004. This number includes all forms of travel, including self-drive, for both work and leisure.

Trade experts say the five million-strong upper middle class families, who are among the largest individual investors in the Indian bourses, are also the target audience of travel and holiday companies. In fact, during peak seasons like mid-March to July (school holiday cycle), travel will zip up by 50%, and it will be near impossible to get seats on international flights. Despite a 1-2% drop in overseas traffic in 2003 (Amadeus estimates at 4.7 million), 2004 is expected to see a significant rise in numbers. The US, which has stricter entry norms for visitors this year, is likely to find itself further down the pecking order at three or four for people holidaying or visiting friends and relatives.

Ad blitz bears fruit

Jan 16, 2004: Mumbai: The online poll survey by the travel guide Lonely Planet has come as a pleasant surprise to the tourism ministry as well as the domestic tourism and hospitality sector. “Along with other countries, India, too, focused on its culture and heritage. India was, however, able to break parity and stand out from the crowd owing to its aggressive marketing and effective advertising campaign,” said ministry officials.

“For the first time in 50 years, India chose to promote itself, and we used this opportunity to position India as a destination for cultural enrichment, spiritual elevation, physical invigoration and mental rejuvenation. Our campaign in the print and TV overseas has created awareness and re-kindled the demand for ‘Destination India’,” said Jagmohan, Union minister for tourism and culture.

India's shining on Top 5 travel destination list

Jan 16, 2004: London: Thailand pipped Italy to be named the world’s favourite destination for independent travellers. The top five in the global survey were Thailand, Italy, Australia, India and New Zealand. Over 7,500 people from 134 countries answered an online survey conducted by ‘Lonely Planet’ guides. Thailand beat Italy to the top spot by just four votes. Despite Sars and the ongoing threat of terrorism, a third of all respondents named Asia as their favourite region, but Europe followed a close second with 30%. When the guides were launched 30 years ago, the average independent traveller was a hippy backpacker. But the guide said today’s independent traveller was a very different adventurer — a professional with a degree or postgraduate qualifications that is aged 25 to 34.

Tourism sets forex counters ringin'

Jan 16, 2004: Mumbai: Indian tourism is on a roll. Foreign exchange earnings from the travel and tourism industry for calendar ’03 were up by 23% to Rs 17,000 crore. This is a substantial jump as forex earnings were stagnating in the region of Rs 14,000 crore for the last three years. The travel and tourism sector is India’s third largest forex earner. Industry officials said increased air seat capacity and rise in the number of travellers from August ’03 particularly high net worth tourists and business travellers have helped improve realisations per tourist.

Tourism ministry officials feel if the current increase in tourist inflows continues, India could see growth in forex income exceeding 40% in ’04, as the government is aggressively promoting India as a global business and tourist destination. Hoteliers said in order to help sustain growth in inflows, the government needs to improve on infrastructure. “To achieve the target of increased forex income and tourist inflows, India will have to generate increase in numbers, as well as sustain the large number of travellers. For this, we have to improve our infrastructure, have direct connectivity between destinations and declare more airports across the country as international airports,” said an official from ITC Hotels.

India third hottest spot for global tourists

Jan 22, 2004: New Delhi: There’s more to add to the feel-good factor. Even as the Indian travel and hospitality industries bask in the euphoria of 2003, the year of resurgence with a record 15.3% jump in tourist arrivals and forex earning up by 23%, there’s more reason to cheer. India has now been placed as the third favourite destination of foreign travellers worldwide. According to Department of Tourism (DOT) figures, the international tourist arrivals to Sri Lanka have gone up by 23.7%, Nepal is second with a growth of 14.8% followed closely by India 14.6%. Interestingly the much hyped destination Malaysia registered a negative growth of 28.1% as compared to last year, followed by Singapore 27.7% and Thailand, which registered a negative growth of 18.6 %.

Despite the SARS scare and Iraq war, Indian tourism has gained in the recent past and is even being touted as a safe destination. Industry officials said that business travellers had fuelled the growth in 2003. Now growth in the services sector as well as the rise in foreign trade has lead to more foreigners entering India. According to trade figures, business travellers account for 55-60% of the total inflows in 2003. In the coming year this sector will witness a real boom. India is the only country in S-E Asia, which was not affected by SARS. Our infrastructure has also been beefed up considerably and all this is showing results. In fact, with tourism set to grow, now the industry should be ready for the real boom which we will witness this year.

Travel industry wants lower excise on ATF

Jan 27, 2004: Bangalore: The winds of change appear to be moving fast this year. The recent removal of inland air travel tax (IATT) and foreign travel tax (FTT) by the government, has encouraged the travel trade and hospitality industry to renew pressure on the government to scale down the high sales tax levied by different states on aviation turbine fuel (ATF) or jet fuel. The net outgo for domestic airlines is in the region of Rs 475 crore annually on this account, and any saving can help in improving their economics as well as further reducing air fares. The fuel bill typically accounts for 25-30% of a domestic airline’s operating expenditure, especially since it is priced close to twice the international rates. Till the government halved the excise duty from 16% to 8%, its impact on the industry was of about Rs 250 crore.

The central government gets to collect a whopping Rs 1,00,000 crore in the form of taxes from oil sales. Bangalore, which is possibly the largest corporate hub after Delhi and Mumbai, charges 28% sales tax. Then there are states like Tamil Nadu which have actually hiked sales tax from 25.2% to 29%, while Orissa has revised it from 20% to 22% (includes a 10% additional surcharge on sales tax). Incidentally, ATF upliftment of Indian Airlines (IA) from Andhra Pradesh is said to have grown by 50% as soon as the tax was reduced. Considering the impact of sales tax on IA in a year is about Rs 255 crore, a sharp reduction in taxes can help the airline break-even. More importantly, there is no sales tax on jet fuel sold to foreign airlines as per ICAO Convention 1944, a benefit which will give IA (and even private airlines in the not so distant future) a level playing field with its international competitors.

 
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