New Delhi Madhavan Menon, chairman and managing director of travel services firm Thomas Cook India, said the sharp jump in domestic travel and tourism following the lifting of Covid-related restrictions is here to stay.
In an interview, Menon said that both business and leisure travel have almost reached pre-Covid levels or surpassed most of the demand coming from domestic travellers. Edited excerpt:
What is the status of corporate travel in the country now?
Business travel has seen a big bang. We are currently running at 90% pre-covid levels. However, the mix of international travel to domestic travel is believed to have changed, with 70% of travel being domestic and 30% international. Sales volume is high because airfares are high. In fact, in the month of April, the business travel unit actually returned to profitability at both SOTC and Thomas Cook. During the year, we have acquired the business of several large corporates.
What types of firms are sending their executives on tour?
Most of the corporates we deal with are back in travel mode. Most of them are traveling domestically and around 30% are traveling internationally. Looking at the current situation, international travel is a bit cost prohibitive in terms of cost, so I guess it will take a little more time to get back. But domestic travel is filling some gaps.
Aren’t rising airfares a deterrent?
While domestic airfares have increased as a result of the rise in oil prices, international airfares have increased dramatically and airlines are yet to return to pre-Covid schedules.
What about hotel booking? Reports suggest that demand has slowed down in the first two months of FY13.
We have seen hotel rates increase due to demand. Sterling Holiday Resorts, a group company, mirrors this phenomenon. Average room rates have increased by about 30% from pre-pandemic levels. The occupancy rate is running at 70%. While the occupancy in the December quarter was apparently higher than the March quarter, the reality is that in the March quarter, resorts were open for about 45 days due to the Omicron wave. Despite this, occupancy rates and turnover came in relatively close to the previous quarter. Sterling Holiday Resorts has been in profit since March 2021.
Will it take time for international tourists to come to India?
Long-distance tourists anywhere in the world were expected to take a little longer to get back. Mainly because the focus of holiday travel around the world is on short-haul destinations. This is reflected in the data coming in from the US, Europe, India and Australia.
Visa for Indians is proving to be a long stretch. your comment?
As far as Indian tourists are concerned, we have seen a demand for vacations in Europe and America. However, delay in obtaining visas for these destinations is a hindrance. We expect visa issuance to become easier during the second half of 2022. As an alternative, we are offering destinations in Southeast Asia such as Thailand, Singapore, Malaysia, Cambodia and Vietnam that are fully opened and visas are easy to obtain.
So, for now, are firms relying on domestic travel?
Domestic travel is the fastest growing segment and in the current environment, whether we call it Badla or whatever, we are at around 110% of pre-Covid levels. The destinations are fully booked- Kashmir, Goa, Kerala and Andaman. We are seeing more interest in places like Himachal Pradesh, Uttarakhand, Northeast and religious tourism like Char Dham.
Despite the rising cost of vacations?
The cost of vacations has gone up on high cost costs such as airfares, ground transport and hotel rates and the weak rupee exchange rate. On average, the cost of vacations has increased by 25-30%.