Year 2014 a mixed year for travel and tourism industry

Posted On Jan 22, 2015

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“Even though, the year 2014 was very challenging in terms of inbound tourism to India due to various reasons including visa problems, security issues etc., yet we manage a growth of about 9 per cent compared to last year.” (Subhash Goyal Travel President, IATO)

“It has been a challenging year for the inbound industry in general. Business does seem to be down across the board. But one has got used to ups and downs of our industry over the years, as it is more resilient to externalities.” (Rajeev Kohli Joint Managing Director, Creative Travel)

“The Union Budget 2014, with its emphasis on tourism, has definitely been a significant achievement. The provisions in the Budget will certainly attract foreign tourists and boost inbound tourism,”
Neelu Singh COO, Ezeego1.com (Year 2014: a mixed year for travel and tourism industry)

The biggest achievement of the industry in 2014 was the launch of Visa-On-Arrival enabled by Electronic Travel Authorisation (ETA) in the month of November, which immediately came into effect, and getting good response from foreign tourists. E-visa had been announced by Finance Minister Arun Jaitley in his budget speech in July, 2014. Speaking about achievements of the travel & tourism industry in 2014, Subhash Goyal, President, Indian Tour Operators Association of India (IATO) said “Even though, the year 2014 was very challenging in terms of inbound tourism to India due to various reasons including visa problems, security issues etc., yet we manage a growth of about 9 per cent compared to last year.” He added that India could achieve this with hard work of IATO members and the excellent support from the Ministry of Tourism, Govt. of India. He said that during the last one year, IATO made all sincere efforts based on the inputs given by its members.

“With our persistent efforts of over 20 years, we became successful when government of India introduced on 27thNovember, 2014, Tourist Visa on Arrival enabled by Electronic Travel Authorization for 43 countries for the tourists arriving at 9 international airports in India to begin with. More countries will be added in phases,” said Goyal. In the last month, MoT launched much awaited ‘Tourist Help Line’, which had been a constant demand of IATO. Goyal further said, “With the active participation of members of IATO and hard work of its team, IATO has become the real voice of the entire tourism industry.” According to Neelu Singh, COO, Ezeego1.com, “2014 was certainly a better year for the travel and tourism industry as compared to 2013. As per MoT, FTAs during Jan–Nov 2014 stand at 6.58 million, with large numbers expected in December, as compared to 6.97 million during Jan-Dec 2013. India’s outbound tourism sector also performed well, with India being one of the key source markets for various destinations such as Dubai, Britain, Singapore, amongst others.” Neelu Singh added, “The Union Budget 2014, with its emphasis on tourism, has definitely been a significant achievement. The provisions in the Budget will certainly attract foreign tourists and boost inbound tourism. The line between peak tourist season and off season is gradually diminishing as popular domestic destinations have been attracting foreign as well as domestic travellers throughout the year. Goa, which is considered to be the most happening year end party destination, reported high hotel occupancy rates during this monsoon season, which is generally considered to be an off season. These achievements are stepping stones towards placing India on the global tourist map as a desirable destination.”

With all the positive things in 2014 for the industry, the year was also a challenging year for the industry. “It has been a challenging year for the inbound industry in general. Business does seem to be down across the board. But one has gotten used to the ups and downs of our industry over the years, as it is more resilient to externalities,” said Rajeev Kohli, Joint Managing Director, Creative Travel. “However, we did get some great victories, especially with the Visa on Arrival which will be a true game changer for the Indian inbound industry,” added Kohli. Ravi Gosain, Managing Director, Erco Travels said, “This year has been mixed for Indian travel and tourism industry. There were lots of internatonal as well as domestic problems which hinders growth of tourism, like tragedy of Malaysian airlines which developed fears in mind of international travellers, problems in Middle east and various social problems in India. But despite of these problems, business has been steady but no major growth has achieved as expected. For Inbound there was a good news at later part of 2014 in terms of TVOA through ETA, which enabled 43 countries in the world to get Indian visa through Electronic Travel Authorization. This is one of the major achievements what Inbound tourism industry in India could get. However we are still hopeful to include few more countries which are important source market for India.” The last year NDA Government led by PM Narendra Modi came to power at the Center, which sees tourism as key economic sector for socio-economic development of the country. “2014 saw a new government at the Centre which has positive mindset regarding tourism,” said Amaresh Tiwari, MD, A. T. Seasons & Vacations Travel, adding, “I am very confident about the government’s commitments to promote tourism.” Tiwari said that the Year 2014 was mixed year for travel and tourism industry. According to Tiwari, the key achievements of the industry in the last year included the launch of Tourist Visa-On-Arrival enabled by Electronic Travel Authorization (ETA), which is going to help a lot in near future. “CENVAT credit was another big step by the finance ministry to help tourism industry on tax burden,” said Tiwari. Lauding the launch of Clean India campaign, Tiwari said that these are good measures, adding “I am very confident about the government’s commitments to promote tourism.” According to Arun Anand, Managing Director, Midtown Travels, “the key achievement of the Indian travel and tourism industry in year 2014 was that for the first time, any Government has accepted the importance of Tourism and the new Government has been pro-active for inbound tourism.

The second key achievement is Tourist Visa-on-Arrival (TVoA) which itself confirms that the Indian Government is very keen to increase the inbound tourism to our country.” 2014 has been year of challenges as well as progress. Tony Marwah, Managing Director, Indian Travel Promotion Company said, “2014 had been a mixed bag. My main market is the United States hence I cannot comment for other markets. It started slow but with the US economy picking up, business too had picked up in the last quarter.” Expectations from the New Year Neelu Singh said that she expects the domestic sector to grow further as short weekend trips become a trend amongst Indian families. “Today, each of the metro cities has at least 15 destinations that can be identified as popular weekend getaways. We are coming up with exciting domestic as well as international products specifically targeted for this audience, which looks for a quick getaway every once in a while, just to break the monotony of everyday routine,” said Singh. As regards his expectation from the New Year, Kohli said, “The new government is sending some great signals for our industry and we have a very business oriented Tourism Minister. We have a very positive outlook for the New Year.” Expressing his expectation from 20154, Gosain said, “Industry has lots of expectation from 2015 because our tourism industry has been suffering with many problems since 5-6 years. We hope to get several expected favourable decisions from govt for Indian travel and tourism industry in 2015, which will certainly help tourism to grow multifold in India.” On his expectation from 2015, Tiwari said, “Our expectation from 2015 is waiver off on service tax on next budget; tourism needs to be given Industry Status to promote tourism, better infrastructure and major Convention centres to be announced in all major metros.” Marwah said, “We are excited about 2015 and hope to see an increase in business. This is thanks to a more visa friendly regime in the form of e-visa. Modi’s visit to the US and visit of US president to India in January will surely evince some interest in India. We still have challenges in the form high rates, poor infrastructure, and irregular tax regime but are hopeful with the government’s priority to tourism.” According to Anand, with better political environment and with the support of the Government, the inbound tourism is going to increase by at least 15 to 20 percent during 2015 as more and more countries will be added to the list for TVOA.

Three things that made travel & hospitality industry of the country smile in 2014 were: 1) coming of NDA government led by PM Narendra Modi into power at Centre in May as Modi’s economic policy has been pro-tourism industry, 2) Announcement by Finance Minister in his budget speech in July that e-visa will be implemented in phased manner, and finally, 3) the e-visa in the form of visa-on-arrival enabled by electronic travel authorization (ETA) was launched in November for 43 countries in first phase.

The Union Budget 2015 will be the most important occasion the Travel & Tourism Industry of the country is looking forward to in 2015. The industry expects that Union Budget 2015 to address its long pending demands.
One long standing demand of the industry has been the rationalization of taxes applicable to this travel & Tourism industry. The existing tax structure applicable to this industry has been very exorbitant and complicated.

 

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