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13 June 2009

Remember Aakriti?

A month or more after the shocking incident of an asthmatic girl's death inside a Delhi school for its authorities' negligence, the pressing need for sensitisation of the schools to the issue seems to have been relegated to the backburner
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Nithin Sridhar
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The Government had, on 19 November 2007, set up the National Commission for Protection of Child Rights as a statutory body which would be authorised to summon and enforce the attendance of any person from any part of India and examining them on oath. Under the Commissions for Protection of Child Rights Act, 2005, the national commission would have all the powers of the Civil Court while inquiring into matter under the CPC.

The national commission, while inquiring into a matter, could warrant any document and receive evidence on affidavits from authorities concerned. It could also requisition any public record or copy thereof from any court of office. Apart from having the power to forward a case to a Magistrate, the commission is also authorised to issue commissions for the examination of witness the documents. What has been the efficacy of this commission?

On April 23, The Indian Express reported: "A leading private school in New Delhi faced the wrath of angry parents and fellow students of a girl who died due to an asthma attack in school premises forcing the authorities to order an internal inquiry into the alleged death due to "negligence". Trouble started when the parents along with fellow students of 17-year-old victim Aakriti Bhatia disrupted a press conference organized by authorities of Modern School, Vasant Vihar, to clarify the stand of the institution on the issue."

It was further reported that Aakriti Bhatia (17), student of Class XII, Modern School, died on her way to the hospital. She had complained of breathlessness to her teacher around 10 am, but she was not taken to hospital till 10:40 am. Instead of calling for ambulance or making arrangement for taking her to hospital, the principal waited for Aakriti's family to send their car. This shows the callousness of Goldie Malhotra, the principal of the said school. Aakriti’s friends say when she first complained of discomfort, the principal did not take the matter seriously and later the nurse said she couldn't come over to take a look at Aakriti. One of the close friends of the dead girl said the nurse refused to come down and asked her to come up instead, explaining, "Later, when her condition deteriorated, we forced her (the nurse) to come down. No one in the school was concerned,” This is a typical case of death of a teenager due to rash negligence of school authorities.

But this is neither the first nor the only case of premature end of a promising life due to negligence of school authorities. On 18 April, CNN-IBN had reported the death of 11-year-old girl student, Shanno Khan, allegedly due to corporal punishment. She was a second grade student at a Municipal Corporation school of Delhi. She was allegedly beaten by her school teacher on Wednesday, 15 April. The teacher Manju had reportedly banged the child’s head against a table before making her stand in the sun for over two hours. In 2005, Pratik Khanolkar, a nine year old student Ram Ratan Vidya Mandir at Uttan, drowned in the swimming pool of his school. In a similar case in 2007, Harekrishna, a six-year-old student, drowned in the swimming pool of Janki Devi School in Versova due to negligence.

It's a sorry state of affairs that, rather than ascertaining how much the schools have been successful in playing their ideal role as temples of learning, aided by gurus who remove ignorance with knowledge; we have been forced to discuss whether our children are safe at all when in the custody of their teachers. In the name of discipline, the teachers of this era harass students.

Discipline should be a self-imbibed value and not imposed by others. In my own school days, I was at times punished or I saw students being punished because we had soiled the floors with muddy shoes or because we had not clipped our nails or we were late to school or because the home work was not done or even simply because we did not perform some exercise the way we were supposed to. The punishment varied from heavy beating on hands and legs to making us stand in sun or on backbenches, making us clean the whole school, running many rounds in our school ground.

It is not that students were right in not doing things properly, but as children we were too innocent and did not understand why we were being treated harshly. We neither understood discipline nor needed it. All we needed was love and care and someone to explain us everything. But all we got was atrocious treatment. These punishments did not make us disciplined; it created a fear psychosis in us. One of my classmates would be constantly treated so badly and taunted repeatedly for years because of a single mistake he had once committed. If today he keeps wrong company, the whole blame lies with our teachers.

For teachers and school establishments, education is no longer a service but a business. They have no responsibility nor any care for children. There was a time when teachers used to mould students' character; today they are only concerned about their salaries. This is clear in Aakriti's case, where principal needed her parents to send their car to take her to hospital.

It’s time strict actions were taken against school authorities for negligence and harassment of students in the name of discipline. It should be pointed out here that often teachers who expect students to follow certain rules and discipline are themselves not practicing them. That is, they fail to lead by examples.

The then Union Minister for Child and Women Development Renuka Chaudhary had gotten away, paying a token visit to the house of the dead girl who was better off even as she blissfully forgot to be equally courteous to the family of the poorer girl, Shanno. And to her, the setting up of the NCPCR in itself was a great achievement of her government in this regard! One fails to understand if the commission in itself is an achievement, why it took more than a month of young Aakriti's death for the Delhi Government’s Directorate of Education to direct the Vasant Vihar branch of Modern School to suspend its nurse and discipline in-charge. The school management has also been directed to appoint a full-time medical officer as per the Delhi School Education Act, 1973. For Aakriti's family that may be too little, too late.

For the rest of us, the vigil must not end. It is true that the DoE had already sent an advisory to all recognised schools to appoint a full-time or part-time medical officer as per their requirements. Moreover, the Government of Delhi issued guidelines pertaining to medical facilities to all aided and unaided schools in the city to deal with any emergency. The guidelines were being prepared in consultation with the health department and were to be issued "in a couple of days' time" as per Delhi's Education Minister Arvinder Singh Lovely as on 22 May.

Strangely, however, no news source reported on 24 May whether those "couple of days" were over. And no one has discussed Aakriti ever since — not newspapers, not television news channels, not people at large. At the moment, ‘racist’ Australia is where the news is! This notorious short memory of the candlelight-protest generation will prove society's bane some day.

With inputs from Surajit Dasgupta

The writer is a Mysore-based student of civil engineering

07 June 2009

New Tension Scheme

The awareness about the just-launched New Pension Scheme is abysmally low. That is unfortunate because the NPS may turn out to be the best long-term investment product

From May 2009 onwards, Indians have had access to another investment avenue to plan for retirement in the New Pension Scheme (NPS). The scheme had been in the pipeline for at least five years but it finally took shape in 2007-08. Although the government was pushing for the scheme after a law providing statutory backing to the regulator was enacted, the Left parties, which were supporting the UPA government, did not allow the passage of the Bill. So, last year, the government decided to go ahead by allowing the NPS Trust to enter management agreements with fund managers. What benefits does the NPS offer? Who is eligible? Business Standard provides a ready-reckoner.

Who can join the New Pension Scheme?
Any Indian citizen between 18 and 55 years. At present, only tier-I of the scheme, involving a contribution to a non-withdrawable account, is open. Subsequently tier-II accounts, which permit voluntary savings that can be withdrawn at any point of time, can be opened. But to be eligible to open a tier-II account, you need a tier-I account.

How do I enrol?
You will need to visit a point of presence (PoP), fill up the prescribed form with the required documents. Once you are registered, the Central Recordkeeping Agency (CRA) will send you a Permanent Retirement Account Number (PRAN), along with telephone and internet passwords.

How much can I invest?
There is no investment ceiling. But the minimum investment limit has been fixed at Rs 500 a month or Rs 6,000 annually. Subscribers are required to contribute at least once a quarter but there is no ceiling on how many times you invest during the year.

What is the penalty for failure to make the minimum payment?
You will have to bear a penalty of Rs 100 per year of default and will need to pay it with the minimum amount to reactivate the account. Also, dormant accounts will be closed when the account value falls to zero.

Are my investments guaranteed?
No. There is no guarantee since NPS is a defined contribution scheme and the benefits depend on the amount contributed and the investment growth up to the time of exit.

How should I select my investment option?
You can choose the investment mix between equity or E (high risk but high returns), mainly fixed income instruments or C (that come with medium risk and returns) and pure fixed investment products or G (which offer low returns but have very low risks associated with them). Equity investment is capped at 50 per cent.

At present, the equity investment consists of index funds that replicate the Sensex or Nifty portfolio. The C segment includes liquid funds, corporate debt instruments, fixed deposits and public sector, municipal and infrastructure bonds. The pure fixed investment instruments include state and central government securities.

There is a trade-off between risk and returns, with a younger investor placed better to take risks.

If you are unable to decide the investment mix, the default option will kick in.

What is the default option?
The default option, called auto choice lifecycle fund, will see the investment mix change according to the age of the subscriber. At the lowest entry age of 18 years, auto choice entails an investment of 50 per cent in E, 30 per cent in C and 20 per cent in G.

The ratios will remain unchanged till the subscriber turns 36, when the ratio of investment in E and C will decrease annually, while the proportion of G rises.

By the time the subscriber is 55 years, G will account for 80 per cent of the corpus, while the share of E and C will fall to 10 per cent each.

Who will decide the fund manager?
At the moment, the Pension Fund Regulatory and Development Authority (PFRDA) has selected six fund managers — State Bank of India, UTI, ICICI Prudential, Kotak Mahindra, IDFC and Reliance — on the basis of a bidding and technical evaluation process. You have to select one fund manager at the time of deciding your investment option; later, PFRDA may allow subscribers to choose more than one fund manager.

Can I change my investment mix and the fund manager?
You can shift from one fund manager to another from May 2010.

What happens if I relocate to another city?
The PRAN remains the same and you can access a toll-free number (1-800-222080). The details of your PRAN and the statement of transactions will be available on the CRA website (www.npscra.nsdl.co.in).

How can I exit the scheme?
The normal retirement age has been fixed at 60 years. At 60, you will be required to use at least 40 per cent of your accumulated savings to buy a life annuity from an insurance company. A phased withdrawal is also allowed but the lump sum benefit has to be availed of before you turn 70 years.

For those looking to exit before turning 60, there is an option to withdraw 20 per cent of the accumulated savings but buy an annuity with the remaining 80 per cent.

If the subscriber dies before he or she turns 60, the nominee can receive the entire pension corpus. Alternatively, a subscriber can exit if the account value falls to zero or if the citizenship status changes. The age of exit will be reviewed by PFRDA from time to time. There will also be the option to select an annuity that will pay a survivor pension to your spouse.

Are there tax benefits for NPS?
At present, the investment is covered under section 80CCD of the Income Tax Act and a tax will be levied if you withdraw the money. You can avoid paying tax by transferring the entire corpus to the annuity service provider. PFRDA has, however, approached the government to treat investment in NPS on a par with instruments like Employees Provident Fund and Public Provident Fund, for which no tax is levied at the investment, accumulation or withdrawal stage.
Sources: The Economic Times, Business Standard and Hindu Businessline

A new pension system (NPS) for the unorganised sector has been launched on 1 May 2009. The scheme is meant for any individual who can start a pension account to enable him/her to save for retirement. The NPS is open to private individuals as well as all central government employees who joined service after January 2004. What are the pros and cons of joining the NPS? Are there better ways of saving for your retirement? Will the NPS also go the way of mutual funds – good only when the wind is in the sails but marred by poor application, at other times? After all, in the US, a decade of poor returns destroyed the expectation of retirees of being able to live a peaceful and comfortable life. In fact, considering costs, time and investment strategy, NPS may be a better than any long-term investment option available. Most people, though, have not yet understood this. They see NPS only as a retirement option.For instance, Vikas Vasal, executive director of consulting company KPMG begins his assessment of the NPS as follows: “The idea is commendable. There should be a scheme available to ordinary citizens so that their expenses are taken care of when they retire. Today, when we look at the retirement funds, what are the options available? Whatever they are, they are for the people who are in the organised sector, not for the rest.” His positive introduction, however, soon gives way to scepticism: “There are several points that need to be addressed before NPS becomes popular.” The NPS has two distinct disadvantages compared with conventional retirement options:

a. Sovereign Guarantee: First, the existing retirement schemes, like provident fund (PF) and public provident fund (PPF), are associated with some sort of a sovereign guarantee of capital as well as the returns on it.

b. Tax Exemption: Second, such conventional post-retirement schemes in the organised sector have the ‘Triple E’ or EEE (Exempt-Exempt-Exempt) status. That is, they are tax exempt at all the three stages: the contribution stage, the earning stage and at the withdrawal stage. But the NPS falls into the EET category – exempt at the first two stages but taxed at withdrawal.

However, the NPS has its own advantages vis-à-vis the conventional schemes, points out Mr Vasal. Today, you do not know the exact amount lying in your PF account – the balance, the accumulated interest, etc. The data that comes to you is old. And getting back the money is a big hassle. On the other hand, in the NPS, it’s all online, transparent and up-to-date. Is that enough?

Dhirendra Swarup, chairman of the Pension Fund Regulatory & Development Authority (PFRDA) concedes that “the NPS does not have tax advantages, and that is a negative.” Then he assures, “We have sought tax exemption from the government. There is no reason why the government, in the next Budget, will not accede to our legitimate demands.” The ultimate USP of NPS is, as Mr Swarup puts it, that “when you consider that a person is 25 or 30 when he invests in it and then continues with it for the next 30-35 years,” it is “the longest-term contractual saving scheme” for all those who are not in the government sector.

It is a great, probably the greatest long-term investment scheme available as, we shall see. But how do potential investors see the NPS? Unfortunately we have discovered that ignorance about the true merits of NPS is absolutely widespread. Shyamal Chakraborty is a senior manager (accounts) at Devyani International Ltd, the sole Indian licensed marketer for KFC and Pizza Hut. He is 39 and has a degree from the Institute of Certified Financial Analysts of India. For him, the picture was still hazy. “It seems the NPS has two phases. The first deals with creating the corpus fund by investment and the second with re-investing the accumulated amount after maturity into an annuity scheme which will pay a monthly/annual pension,” he says. He does not think the second part is clear. “Does the investor have to re-invest the accumulated fund on his own or will the regulator decide on that?”

Mr Chakraborty inquires and wonders if “a matrix can be formulated taking a hypothetical figure and plotting the same into that by showing the monthly pension amount that one might get after maturity of the corpus fund.” It is clear he is looking for guaranteed returns.

Mr Chakraborty is not likely to go for the NPS, as yet. His seniors in the office had asked him to prepare a presentation on the Scheme and explain it to the employer as well as employees. He has come up with the following doubts in the process:

1. There is no guaranteed return and no alternative plan at the time of maturity;

2. The market conditions are volatile; they do not favour any investment whether in debt or in equity;

3. The tax benefits offered by the NPS are not in line with PPF or EPF; and

4. Prima facie, it looks like any other equity/market-linked investment plan floated by various financial institutions like insurance companies.

A big issue is how people react to the ‘government’ tag attached to the NPS. It may mislead people.“Because it’s by the government,” opines Srilekha Sahu, “it must be guaranteed, my husband says!” Ms Sahu is 30. Her husband, Sabyasachi Sahu, is now working with Punj Lloyd as deputy manager (project control) in Doha, Qatar. Years ago, Mr Sahu defended the PF scheme saying, “My father got my sister married with PF money.” He had posed: “Where else would you get an assured 8.5% on your investment in these times?” PF was launched at a time when people hardly had any choice in investment opportunities, compared to the wide array now. But he still expects that the NPS would give him guaranteed returns, since it’s a scheme mooted by a government agency. This is despite the fact that all risk factors were made clear to him through an e-mail before seeking his response!

Sanket Dash, analyst at Deloitte LLP’s Indian office in Hyderabad, says, “It’s a good idea to invest in NPS as it gives a mix of security and returns. More importantly, one can choose his own mix. The fund is expected to give a higher return than the current interest rates on pension as Indian equities are expected to give good long-term returns, despite short-term volatility.” But do most investor’s have the ability to monitor their investments? Dash is not sure of that. Why is it better than other mutual funds? “First, NPS will invest in risk-free government securities and, second, the investor can change fund managers.” Shoaib Daniyal, business analyst at Evalueserve, a KPO in Gurgaon, argues: “NPS is a step in the right direction. It gives us more options. The consumer can choose his risk profile according to his needs, rather than being straitjacketed into a one-size-fits-all model. It’s also a significant move by the government wherein it can slowly start dissociating itself from the PF system. In India, where millions are deprived of even the basics, it’s criminal that the government wastes crores on subsidising the middle class.” Palak Mathur, a software engineer with Infosys Technologies, Pune, says: “At first glance, this seems to be just like any other mutual fund scheme available in the market. I will think about its pros and cons before making an investment. I find two demerits. This scheme does not guarantee my capital, let alone the returns on it. Tax is levied on withdrawal of money that makes it less attractive than schemes like PPF. On the other hand, NPS offers a lot of flexibility. Whenever one wishes to contribute, he can. Suppose I skip a month or two, it can be adjusted, as long as my minimum annual contribution is intact (one is required to make a contribution at least once in a quarter). The minimum annual investment is Rs 6,000 which is much less than what is required in mutual funds. There is no upper limit for investment. The number of times one can invest is not limited. So, in my opinion, if the scheme is made tax-free on maturity, like PPF and EPF schemes are, then it would be a coveted scheme. Everything considered, I am investing in NPS.” As we can see, there are huge misconceptions about the NPS in the minds of employees. Maybe they have not had the time to examine the details. Maybe nobody has bothered to explain the features of the NPS to them. Some even question the government’s intention behind the Scheme. Why has the government launched the Scheme now? Mr Chakraborty thinks: “People are holding on to their money and so are companies. It’s not that everybody is flush with funds. But they are all apprehensive at the moment. The government wants to take money out of our pockets.” This view is echoed by another accountant who works with a telecom company. On condition of anonymity, he says, “Maybe it’s another way for the government to make more money flow into the financial markets by extracting money from stingy people. And right now, we are all stingy.” Whether this is accurate, bizarre or somewhat close to the truth is not the point. The PFRDA certainly has a huge perception battle on its hands.

The NPS made a quiet debut on 1st May and there has not been much of an awareness campaign by the PFRDA. Those who are interested have so far had to depend on newspaper reports and articles. In a country where financial literacy is pathetic and many people working in the financial sector too are unaware of all the financial/investment options available to them, how will the NPS take off? Mr Swarup asserts, “We can only have pull factors and no push factors.” He says that his selling model is not – and cannot be – like that of, say, insurance companies. Yet, he adds that the advertising campaigns to publicise the Scheme will be scaled up “as soon as a new Budget is passed.” Then he advertises the Scheme: “You must look at the Scheme in terms of its flexibility of investment options and portability of switching from one fund manager to another.” Mention the word ‘fund manager’ and a host of new issues come up – track record, competency, malafide actions and so on that have kept pre-tax returns from equity mutual funds unattractive. If fund houses have been unable to sell a credible story over the past two decades of existence, what additional skills will they bring to the table to manage pension money? And how would investors choose their fund managers? Mr Vasal says it would be a ‘learning experience’. Except that the learning never seems to stop. How can it? Even a financial expert like Mr Vasal seems to live in a different era when he argues that “people may initially have more faith in public sector undertakings though the only difference that these managers have vis-à-vis the private ones is that they have more stringent risk assessment procedures.” The fact is that it was the mutual funds promoted by public sector banks in the 1990s and the old Unit Trust of India, under direct control of the ministry of finance, that destroyed investors’ wealth the most.

There are many ifs and buts about the NPS but it is a giant step in methodical investment planning for the long term. If the government does remove the tax anomaly, either making PF, PPF and mutual funds taxable or making NPS returns tax-free, the NPS will be the best investment option ever for Indian citizens even without a government guarantee.

The NPS Jargon: Who and What
Regulator: Pension Fund Regulatory & Development Authority.

NPS Trust: A trust, set up under the Indian Trusts Act - responsible for taking care of the funds under the New Pension Scheme and protecting subscriber interests.

Points of Presence (PoPs): It is the first point of interaction. The 22 registered PoPs have authorised branches to act as collection points and extend services to customers.

Central Record-keeping Agency (CRA): The back office for maintaining records, administration and customer service functions. National Securities Depository Ltd has been designated the CRA.

Pension Fund Managers: At present, there are six fund managers: State Bank of India, UTI, ICICI Prudential, Kotak Mahindra, IDFC and Reliance.

Trustee Bank: Bank of India is the designated agency to facilitate fund transfers across various entities such as subscribers, fund managers and annuity service providers.

Asset Allocation
The key to building long-term wealth is asset allocation. How you distribute your assets, between equity, bonds and other assets and when you buy them, determines how much money you will have, years from now. The conventional idea is that when a person is young, he can take more risk and go for a higher component of equity. As he crosses middle age, he is supposed to reduce his equity investment and shift more of his money to fixed-income instruments like bonds. As he gets closer to retirement age, he wants return of capital rather than return on capital. Investors in the NPS will be able to follow this conventional – and simplistic – notion of asset allocation.

Under the NPS, one can choose between a few simple, standard schemes with different proportions of equity or E (high risk but high returns), fixed-income instruments or C (which have medium risk and returns) and risk-free instruments or G (that offer low returns but protection of capital).

Equity investment is capped at 50% under the NPS and will consist of index funds that replicate the Sensex or the Nifty portfolio. The C segment includes liquid funds, corporate debt instruments, fixed deposits and public sector, municipal and infrastructure bonds. Pure fixed investment instruments include state and central government securities. Investors can select an auto choice option to shift from one mix of asset allocation to another mix, as the years go by.

Will such asset allocation work? It probably will. The NPS will force fund managers to simply create a mirror portfolio that follows the Nifty or the Sensex. They will also have to automatically rebalance the portfolio, moving from debt to equity, according to the needs of the investor as he gets on in years (see Table). That means the NPS fund managers will not be allowed to use their brains to pick stocks or time the market as they do for mutual funds. In that case, the NPS may turn out the best investment returns among all available instruments for the long term – especially if they are made tax-free as well.

Costs: The Silent Killer
It is hard to assess what an investment will do for you over the long term. One factor is how much you are spending on having fund companies manage your money. Costs can eat up your returns like termites. By and large, investors pay far too little attention to the costs of investing. When so many costs are hidden (transaction costs, front-end sales charges, taxes incurred on realised gains) or when the stock market returns are high or when investors are focused on short-term returns, the impact of cost over an investment lifetime is ignored. But costs can kill. Here is how. Assume that the stock market generates an average return of 10% a year over 30 years. Now let’s assume that the costs of the average mutual fund are 2.5% a year. Result: a net annual return of just 7.5% for the average fund.

Now, if someone invests Rs 10,000 in year-1, it will grow to Rs 1,74,494 in 30 years, a remarkable illustration of the magic of compounding returns over a lifetime of investment. In the early years, the line showing the growth at 7.5% annual rate doesn’t look all that different from the growth in the stock market returns. But slowly, the lines begin to move in different directions, accelerating at a dramatic rate in the later years. By the end of 30 years, the value accumulated in the mutual fund totals just Rs 87,550, an astounding shortfall of Rs86,944 to the cumulative return delivered by the market.

John Bogle, writes in The Little Book of Commonsense Investing: “In the investment field, time doesn’t heal all wounds. It makes them worse. When returns are concerned, time is your friend. But where costs are concerned, time is your enemy.” This is underlined when we consider how the value of the Rs10,000 investment is eroded with each passing year. By the end of the first year, only about 2.5% of the return has vanished (Rs11,000 Vs Rs10,750). By the 10th year, 21% has disappeared (Rs25,937 Vs Rs20,610). By the 30th year, 50% has vanished (Rs174,494 vs Rs87,550) from the market returns, thanks to the killing impact of costs. As Bogle would say, the investor, who put up 100% of the capital and assumed 100% of the risk, earned only 50% of the market return. The longer the period, the worse is the return. “The system of financial intermediation, which put up zero percent of the capital and assumed zero percent of the risk, essentially confiscated 50% of that return. What you see here – and please don’t ever forget it! – is that over the long-term, the miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”

This is where the NPS scores. The investment management fee is a ridiculous 0.009% per annum while mutual funds charge you 2.5% a year! Besides, the annual cost of record-keeping in the NPS is Rs380 and each transaction will cost Rs6. Thanks to such low costs, over the long term, compounding will make a massive difference to your returns. All else being equal, an NPS investor can make at least 50% more than a fund investor over 25 years only due to low charges. ULIP investors will fare worse than mutual fund investors.

!ncredible India... Indeed

The Indian tour and travel industry is by and large unaffected by the global economic downturn
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MoneyLIFE Bureau & Surajit Dasgupta
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Has the economic slowdown decided to leave the tourism industry alone? Or are things looking good because, as the song says, everybody wants a summer holiday? It is a bit of both. Outbound tourism is booming. The worldwide economic slowdown has seen many countries offering never-before discounts and incentives to attract international tourists; this has meant a big increase in foreign travel. Ashwini Kakkar, executive vice chairman of Mercury Travels says, “Actually, outbound travel is doing even better than last year. Because of the fall in prices internationally, a holiday in Bangkok is cheaper than a holiday in Kulu. So where would you go? You can get a great five-star property at Bangkok for $40 a night, while in Kulu, you can’t get it even at $200 a night because of limited availability. And then there is no requirement of a visa in most popular countries.”

So, amazing as it seems, we are boosting the economies of some of our more tourism-savvy neighbours, because Incredible India doesn’t have adequate tourist infrastructure which leads to higher tariffs and more expensive holidays. In fact, we have only two truly global tourist destinations – the Jaipur-Jodhpur-Udaipur circuit popular with the high-end foreign tourists, and, of course, Goa. Both have local economies that are dependent on foreign tourists and are now offering incredible deals to attract domestic travellers. Mr Kakkar tells us that Goa is offering discounts of 30%-35% in the peak season, while Udaipur and Jodhpur are offering an average tariff cut of 40%; even Kerala, which is less affected, has taken as much as 25% off from its regular tariffs for the summer season. But outbound tourism is where the excitement is. Turkey is a hot destination while countries of the Far East – Bangkok, Bali, Malaysia, Hong Kong and Singapore – are drawing a larger number of tourists from India than ever before.

Within this broad picture, the impact of the economic slowdown is evident in other ways. As Mr Kakkar says, Mercury’s research shows that “people are taking shorter, closer trips and are making their decisions later – closer to the date of travel.” Zelam Chaubal, director of Kesri Tours Private Limited, Stuart Crighton, CEO of Cleartrip.com and Deep Kalra of MakeMyTrip.com also endorse this view. Kalra also says that there is a marked reduction in long-haul destinations, especially people travelling to Europe and the Americas.

“This means that those who used to take a three-week vacation have cut it down to two. Those who travelled to Europe, which is more expensive now, prefer to holiday in the Far East or Turkey. And domestically, those who could splurge on a trip to the Himalayas are finding that they get a greater bang for their buck by seeking out the azure waters of the Far East,” explains Mr Kakkar.

Clearly, the economic slowdown needn’t slow down your plans for a summer holiday. All you need is some smart planning and the ability to sniff out the best deals and you can give yourself a great holiday. Tourism-savvy countries are working at three levels to attract travellers – at the policy level, they are easing visa restrictions or scrapping visa fees; airlines are reducing fares and hotels too are chipping in with incredible offers.

Ashwini Kakkar says, “Countries, which are facing economic problems, have made a few important changes. Thailand, for example, had ‘visa on arrival’ for Indians. Now, they have also scrapped the visa fees. Even Mauritius is offering a visa on arrival to attract tourists.

We find that in the travel business there’s no rule that fits all budgets or choice of destinations. For instance, Mr Kakkar’s typical customer at Mercury Travels has deeper pockets than those of Zelam Chaubal’s Kesari Tours – a travel company that is the favourite of upper middle-class Maharashtrian tourists. She says that Europe remains a big destination, although the numbers have dropped 25%-30%. Also, since Kesari Tours doesn’t exactly go for five-star accommodation, the Kulu-Manali-Simla segment remains a big draw for her company, albeit with cost-cutting and lower budgets.

Stuart Crighton, CEO of Cleartrip.com says, “After three years of high pricing, we are seeing more promotions in the hotel market, driven by properties directly and in partnership with the travel community, to stimulate purchase decisions of undecided customers”.

Similarly, the factors that affect Goa, Jaipur or, to a lesser extent, Kerala, have no impact on the cooler Himalayan destinations, because inadequate infrastructure, in fact, keeps tariffs high. Moneylife looked at different aspects of the summer travel rush to get a sense of what is going on in the industry. We found that even the slowdown in tourism does not apply across the board. “A 5%-6% growth is not a recession; it’s a slowdown,” says Manish Nagpal, managing director, Golden Wings. This is a seven-year old, full-service travel company based in New Delhi which professes to ‘guide travellers on how to combine the best of business and leisure through tailor-made holiday packages’. He echoes Mr Kakkar’s view when he says, “The high-fliers are travelling more in these ‘bad times’!” How come? The answer: “They have shut down a few of their loss-making ventures and now they have time to tour the world; something their ‘neglected’ families were pressing for, for ages.” The section that has thinned are corporate managers who used to be offered incentives in the form of ‘joy rides’ round the globe; also, their business-class travel and five-star indulgences have been downgraded to economy-class travel and three- or four-star lodgings. The recent incidents of terrorism in India have affected inbound tourism, but for outbound traffic, it is ‘business as usual’. In fact, Mr Nagpal claims that his business in January-March 2009 has bettered the corresponding year-ago figure by no less than 40%. His hot destinations are Germany, China, US, UK, France and south-east Asia.

Emerging out of the office of Golden Wings, still with some difficulty to come to terms with its owner’s buoyancy, this correspondent searches for a hotel-oriented business and chances upon the idea of Walkers Tours. I head for its non-descript office at a basement in Kilokri, opposite the posh Maharani Bagh.

This correspondent thinks of the name as he recalls Walkers Tours Ltd (the leisure arm of the John Keells Group) having recently won three bronzes — one each for “Country Roads – Promoting Eco Tourism in Sri Lanka”, “Your Travel Partner in Sri Lanka” and “Gathering” in the travel photography category — at the third annual Asia Travel and Tourism Creative Awards 2008, organised by AdAsia, a leading magazine in the advertising and marketing field. Walkers Tours had the distinction of being the only Sri Lankan Destination Management Company (DMC) to participate in the competition.

Further, John Keells Hotels is the largest hotelier in Sri Lanka since 1979 and one of the leaders of present-day tourism in the country offering travellers one of the finest business and vacation destinations available in Sri Lanka and the Maldives.
“In January-February this year, we witnessed up to 17% downfall in the business as compared to the same period last year,” informs Jyoti Monga, Business Development Manager, Northern Zone, Walker Tours. Her senior being placed in Sri Lanka, she is effectively the head, northern zone, India, with her compatriot looking after the south zone from Mumbai.

“Customers are holding on to their money,” Ms Monga explains the downturn, clarifying, “Of course, the operators dealing directly with the customers can tell better. We don’t approach individual clients or corporate houses directly; we deal with travel agents.”

A silver lining to the crowd appears in the form of the improving political situation in Sri Lanka, with the outlawed LTTE virtually breathing its last. “People are citing this situation while inquiring how that country would fare as a tourist destination,” Ms Monga says. Walkers Tours also caters for tours to the Maldives.

So, how is ‘Walkers’ meeting the challenge? To serve the customer better, it has embarked on an innovative re-branding and re-positioning strategy by launching two indigenous brands – Cinnamon Hotels & Resorts and Chaaya Hotels & Resorts. “Cinnamon Hotels & Resorts, an exclusive franchise, is the foremost of its class while Chaaya Hotels and Resorts, an experience-based value proposition, is setting a new trend in the region offering travellers like you a diverse range of travel experiences based on adventure, history, culture and nature,” Ms Monga gives the details.

“We have also tied up with new tour operators and are offering new (affordable) packages in special arrangements with Sri Lankan Airlines,” Ms Monga tells me, adding, “We have also floated promotional packages in collaboration with two big international travel companies.” John Keells is offering five-star lodges in Colombo in the range of $60-$70. It has slashed down the rates for its properties in Kandy, Norah Alia and Habarana too.

As Ms Monga was reluctant to share the names of the “big international travel companies”, this correspondent had to scan the market to know who they are. They turned out to be Thomas Cook and Cox & Kings.

Thomas Cook (ref Box Item 2 for more) actually had never given up on the Sri Lankan market though while the international travel agency used to bring around 26,000 visitors per annum, in the ratio of 80% German and 20% British up to the time of the 2004 tsunami, it has seen these numbers drop down to 5,000 at present.

“This is the time to promote new destinations near India. We have the opportunity to showcase both theme based and experimental holidays in this country,” says Nalini Gupta, President & Head – Marketing, Thomas Cook (India). Sri Lanka recently relaxed its visa rules to make itself a more attractive destination. “The country realises that it has a cultural background that has its roots in India, which makes it attractive to Indians, who also want to experience history.”

Ms Monga expects the business to look up again on account of business travels. In January, the company arranged for a trip of 650 employees of an MNC followed by a trip of 110 employees of another in February. According to a reliable source, it was known that the MNCs were Max New York Life and GM Motors respectively.

Ramandeep Singh Taneja of Flexi Tours, a New Delhi-based travel agent-cum-tour operator, also says, “People are still travelling, albeit differently.” According to him, the hot destinations this year are Thailand, Australia and different parts of Europe. Indians are travelling mostly to the Far East or Europe, while travellers with money to spare are visiting South Africa to watch the Indian Premier League. With the holiday season in full swing, foreign travel is up, compared to a couple of months ago. Flexi Tours’ records show that, even today, for the affluent Indian, Himachal Pradesh, Uttarakhand, Jammu & Kashmir, the Northeast, and spots of Buddhist importance are no less attractive than destinations overseas.

Among the hottest destinations this year is Turkey – mainly because it spells exotica. Another favourite destination this year is Malaysia. The country is home to some of the most beautiful and relaxing beach resorts in the world and the Malaysian government actively promotes tourism by partnering with hotels and Air Malaysia to offer sensational travel packages from several Indian cities. This is combined with an evocative advertising blitz. Its slogan, ‘indulge your senses’, aptly covers the diverse tourist experiences including lush rain forests, local culinary delights, top-flight infrastructure, entertainment programmes and incredibly courteous people. Cleartrip.com’s data throws up Goa as the hottest domestic destination while the Far East scores on the international front.

The website of Cox & Kings is very interesting for those looking for deals. It has celebration discounts on most holiday packages. This includes domestic and foreign destinations as well as exotic ones (such as several holiday packages to Finland, with a competition to celebrate its 250 years of existence by offering 250 free tickets to the country). It also has a section titled Holiday Dhamaka through which it offers a comparison of its tour rates with those of leading rival tour operators with similar itineraries.

What factors influence the choice of destination? Is it the price or the distance? According to Stuart Crighton, “For first- or second-time travellers, the main influencer is value-for-money combined with a degree of familiarity. It helps if the travel time is within five hours of home and ‘a strong taste of India’ exists. That is why south-east Asia or Dubai do so well. More experienced travellers are open to exploring newer destinations and experimenting with their travel. This could mean moving away from the comfort of group travel to family or individual travel.

Mr Kakkar concurs and says, even for the high-end traveller, there are spectacular deals that offer a once-in-a-lifetime experience that would otherwise be beyond reach. For instance, “the Westin Hotel at Bali, which used to be a $400 a night property, is currently available at $90 a night and that includes breakfast. So if you assume that the average cost of a breakfast to the hotel is $15, and for two people occupying a room $30 goes for breakfast, then they are pretty much offering the room for virtually nothing. What is the chance you would be able to spend a single night at Westin during an economic boom?”

Similarly, Dubai’s Atlantis is among the most expensive hotels in the world at $500-$600 a night – rooms there are currently available at $280. The Atlantis, they say, is not a hotel, it is more of an experience – it has rooms that provide a wall-to-wall view of giant aquariums, undersea restaurants, dolphin bay and a variety of other exotica. Until the Atlantis opened, it was the sail-shaped Burj Al Arab that was a landmark in the city. You couldn’t enter the Burj without a confirmed reservation at the hotel or at one of its restaurants. Yet, there used to be a steady stream of visitors who came only to gawk at the astonishingly opulent interiors. With Dubai being badly affected by the economic slowdown, the imposing Burj has tied up with Emirates Airways to lure the high-end traveller. A first- or business-class ticket on the Emirates allows you a complimentary two-day stay at the Burj with goodies such as gift vouchers, 96-hour visa and personalised welcome at the airport.

Clearly, it is raining opportunities and deals for anyone who wants to travel – irrespective of one’s budget. All it needs is some discernment and some research to bag a deal that ensures a better-than-ever summer holiday!

The Far East Is Attractive
Ashwani Kakkar, executive vice chairman Mercury Travels, offers some great tips

ML: Has the industry been affected by the downturn?
AK: It has definitely been affected by the downturn. That is why many international airlines such as Singapore Airlines, Air Malaysia, and Emirates are offering cheap fares. Lufthansa, for example, is offering an economy-class fare of Rs13,000 plus taxes to Europe. There are also spectacular deals happening at the hotel level. If you look at Bali, for example, The Westin Hotel, which used to be a $400 a night property, is currently available at $90 a night and that includes breakfast. Similarly, the Atlantis in Dubai which normally is a $500-$600 a night property is currently available at $280. The Atlantis is the newest hotel in Dubai and it is more of an experience rather than a hotel, with large underwater restaurants and rooms with unique views of aquariums. What is the cause of all this? The cause is that airlines’ peak load factor is down and hotel room occupancies are lower. The GDPs of countries are suffering, so the countries are taking interest in attracting tourists.

ML:Have these promotions yielded results?
AK: Generally, all our research has shown that people are taking closer, shorter trips and booking later. They want to be sure of their job, that they have the money and that they are getting the best deal – that is the new trend.

ML:So what according to you is the hot destination this year?
AK: There are a lot of really hot destinations – some new destinations have emerged, that are dictated by the trend (closer, shorter, later). Turkey is one such destination. Earlier, people used to go to Europe; but that is more expensive now. Also, they used to visit two or three countries in one trip. Now, people are just going to one destination – they go to Turkey and come back. The numbers have really shot up – if there were 4,000 or less people who travelled to Turkey last year, there were 25,000-30,000 this year. There is a 10-fold increase and that makes the destination really hot. The Far East is also very attractive. The numbers to Thailand are up; the numbers to Malaysia are up. Air Malaysia has offered some absolutely spectacular prices.

ML:What about the domestic market? Isn’t it a fact that tariffs are not really down?
AK: Domestically, rates have not dropped at the large metros because the availability of rooms is also less. But, if you look at big tourist destinations such as Udaipur or Goa, then rates have fallen by around 35%. For people going to Goa, there is great availability and prices. Similarly, in Udaipur, the lake is completely dry and it is burning with temperatures rising to 44 degrees Celsius. So, the larger properties have a big problem getting occupancy when foreign visitors are not coming – this is, Jaipur, Jodhpur and Udaipur. Rates are down 40% there. These are three cities that have the maximum tourist infrastructure; so the pressure is greatest there. Kerala is affected, but not that much. Maybe the water, the green cover and slightly lower temperatures have helped. The rates there are down 20%-25%. But inbound tourism has completely collapsed after the terror attacks last November. The traditional inbound months are December to February, and because of the travel advisories issued by various countries against travel to India, the inbound season completely collapsed.

"Many have postponed their plans”
Says Zelum Chaubal, director, Kesari Tours

ML:Has the downturn led to better deals and more offers for the Indian traveller?
ZC: Travel agents are offering low prices to grab tourists; they are cutting costs by curtailing sightseeing and frills and also negotiating hard with suppliers to get better deals. Hence, the individual traveller definitely has good options.

ML:Which, according to you, is the hottest destination this year in India and abroad?
ZC: We find that, in India, Kashmir, Simla and Manali continue to be all-time favourites this year too. Among overseas destinations, Europe is the favourite; but that is probably because this decision is taken six to seven months in advance. So those who had decided on the holiday early are travelling but the rest may have postponed their plans to next year.

ML: What are travellers looking for?
ZC: This year, people are pretty price conscious. They are looking for good deals but, with high inflation, it is not always easy to get very cheap prices. We have introduced low-priced tours to south-east Asia and Europe, which did well in the January-March period. But, in the peak season (which is summer), premium products are in demand. So there are many classes of travel for the masses to suit various budgets.

“Go Macau”
Says, Deep Kalra, CEO, MakeMyTrip.com

ML: Has the economic downturn led to better deals and more offers for the Indian traveller?
DK: The downturn has, indeed, benefited outbound travellers, since hotel deals are better and airlines are also cutting fares. The outbound packages being offered by MakeMyTrip are 10%-15% cheaper, but there is no significant difference in the domestic packages compared to last year. For middle class Indians, price is a major factor in the purchase decision, but high net worth individuals are more concerned about the location and the experience being offered.

ML: What are the hot destinations this year?
DK: Hottest overseas destination this year would be Macau, which has seen a 90% growth in tourist traffic from India from last year. The hottest Indian destinations are Darjeeling, Gangtok, Goa, Ooty, Munnar, Thekkady, Simla and Manali. hotels in the world at $500-$600 a night – rooms there are currently available at $280. The Atlantis, they say, is not a hotel, it is more of an experience – it has rooms that provide a wall-to-wall view of giant aquariums, undersea restaurants, dolphin bay and a variety of other exotica. Until the Atlantis opened, it was the sail-shaped Burj Al Arab that was a landmark in the city. You couldn’t enter the Burj without a confirmed reservation at the hotel or at one of its restaurants. Yet, there used to be a steady stream of visitors who came only to gawk at the astonishingly opulent interiors. With Dubai being badly affected by the economic slowdown, the imposing Burj has tied up with Emirates Airways to lure the high-end traveller. A first- or business-class ticket on the Emirates allows you a complimentary two-day stay at the Burj with goodies such as gift vouchers, 96-hour visa and personalised welcome at the airport. Clearly, it is raining opportunities and deals for anyone who wants to travel – irrespective of one’s budget. All it needs is some discernment and some research to bag a deal that ensures a better-than-ever summer holiday! – inputs from Surajit Dasgupta










Original story:

A story, with an expected conclusion, rarely begins with an anti-climax. This report on the state of the travel and tourism industry — in the light of the current economic slowdown — however, is one such story. An emphatic announcement of a substantial increase in business in the first interview was much louder and confident than the admission of a little slump in the next two.

“A 5%-6% growth is not recession; it’s a slowdown,” begins Manish Nagpal, Managing Director, Golden Wings, an established travel company based in the Jhandewalan area of New Delhi. The company provides all services like ticketing, hotel bookings, surface transfers, meals, services of experienced tour escorts and foreign exchange to the traveller. To mix business with pleasure, it provides tailor-made holiday tour packages. It claims to guide travellers as to how they can combine the best of business and leisure in an optimum manner.

The promoters of the company, Mr Nagpal and his friend Gopal Sharma, used all the knowledge and expertise they had gathered in their previous profession of forex trade, in which they remained for 11 years, to make their present seven-year old enterprise a success. “Somewhat connected to the money changing business, our tours and travels enterprise was a natural follow-up step; you may call it backward integration.”

Mr Nagpal says the high-fliers are travelling more in these ‘bad times’! How come? The incredulity on the face of this correspondent is addressed forthwith: “They have shut down a few of their loss-making ventures. And now they have the time to tour the world, something their ‘neglected’ families were pressing for, for ages. The businessmen needed to unwind too, but had been postponing it all these days under the pressure of compelling itineraries of their businesses.”

The co-owner of Golden Wings admits that there is a section of travelers that has thinned in the last quarter: the corporate managers, whom he refers to as the middle segment, who are no longer being offered incentives in the form of ‘joy rides’ round the globe. “The managers who are still on tour are being given economy- instead of business-class air tickets and they are staying in four-star or three-star lodges, a clear downgrading from their erstwhile five-star indulgences.
Besides the economic slowdown, Mr Nagpal finds the recent incidents of terrorism in India a dampener of travellers’ spirit. But that has affected inbound tourism alone; “the outbound traffic is business as usual.”

Overall, throughout the interview, Mr Nagpal stays upbeat, rather beaming! He says his business in January-March 2009 bettered the corresponding figure last year by no less than 40%. Buoyed by the customer interest, he even launched three new segments of travel, the most remarkable of them being “Pink Holidays”. It’s a unique concept where women travellers worldwide will be attended by women-exclusive staff of the industry.

“We noticed this distinct category of travellers comprising single women, divorcees, lonely wives of rich businessmen, etc, who were looking for a different treatment, which men were perhaps not capable of delivering. Hence our new, niche package — Pink Holidays!” The other niche segments the company is looking up to are corporate travel for exhibitions and trade fairs, and outbound leisure tours. “The hot destinations are Germany, China, the US, the UK, France and south-east Asia,” Mr Nagpal informs.

Mr Nagpal says that India has witnessed outstanding growth only in recent years. If there is a problem now, it’s rather a teething problem. “We can’t give up so soon,” he counsels.

As to how his contemporaries should face the current economic situation, Mr Nagpal advises, “Go aggressive!” He advocates constant innovation in the travel packages offered to travellers, based on thorough study of the respective strata of society they belong to.

Emerging out of the office of Golden Wings, still with some difficulty to come to terms with its owner’s buoyancy, this correspondent searches for a hotel-oriented business and chances upon the idea of Walkers Tours. I head for its non-descript office at a basement in Kilokri, opposite the posh Maharani Bagh.

This correspondent thinks of the name as he recalls Walkers Tours Ltd (the leisure arm of the John Keells Group) having recently won three bronzes — one each for “Country Roads – Promoting Eco Tourism in Sri Lanka”, “Your Travel Partner in Sri Lanka” and “Gathering” in the travel photography category — at the third annual Asia Travel and Tourism Creative Awards 2008, organised by AdAsia, a leading magazine in the advertising and marketing field. Walkers Tours had the distinction of being the only Sri Lankan Destination Management Company (DMC) to participate in the competition.

Further, John Keells Hotels is the largest hotelier in Sri Lanka since 1979 and one of the leaders of present-day tourism in the country offering travellers one of the finest business and vacation destinations available in Sri Lanka and the Maldives.

“In January-February this year, we witnessed up to 17% downfall in the business as compared to the same period last year,” informs Jyoti Monga, Business Development Manager, Northern Zone, Walker Tours. Her senior being placed in Sri Lanka, she is effectively the head, northern zone, India, with her compatriot looking after the south zone from Mumbai.

“Customers are holding on to their money,” Ms Monga explains the downturn, clarifying, “Of course, the operators dealing directly with the customers can tell better. We don’t approach individual clients or corporate houses directly; we deal with travel agents.”

A silver lining to the crowd appears in the form of the improving political situation in Sri Lanka, with the outlawed LTTE virtually breathing its last. “People are citing this situation while inquiring how that country would fare as a tourist destination,” Ms Monga says. Walkers Tours also caters for tours to the Maldives.

So, how is ‘Walkers’ meeting the challenge? To serve the customer better, it has embarked on an innovative re-branding and re-positioning strategy by launching two indigenous brands – Cinnamon Hotels & Resorts and Chaaya Hotels & Resorts. “Cinnamon Hotels & Resorts, an exclusive franchise, is the foremost of its class while Chaaya Hotels and Resorts, an experience-based value proposition, is setting a new trend in the region offering travellers like you a diverse range of travel experiences based on adventure, history, culture and nature,” Ms Monga gives the details.

“We have also tied up with new tour operators and are offering new (affordable) packages in special arrangements with Sri Lankan Airlines,” Ms Monga tells me, adding, “We have also floated promotional packages in collaboration with two big international travel companies.” John Keells is offering five-star lodges in Colombo in the range of $60-$70. It has slashed down the rates for its properties in Kandy, Norah Alia and Habarana too.

As Ms Monga was reluctant to share the names of the “big international travel companies”, this correspondent had to scan the market to know who they are. They turned out to be Thomas Cook and Cox & Kings.

Thomas Cook (ref Box Item 2 for more) actually had never given up on the Sri Lankan market though while the international travel agency used to bring around 26,000 visitors per annum, in the ratio of 80% German and 20% British up to the time of the 2004 tsunami, it has seen these numbers drop down to 5,000 at present.

“This is the time to promote new destinations near India. We have the opportunity to showcase both theme based and experimental holidays in this country,” says Nalini Gupta, President & Head – Marketing, Thomas Cook (India).

Sri Lanka recently relaxed its visa rules to make itself a more attractive destination. “The country realises that it has a cultural background that has its roots in India, which makes it attractive to Indians, who also want to experience history.”

Ms Monga expects the business to look up again on account of business travels. In January, the company arranged for a trip of 650 employees of an MNC followed by a trip of 110 employees of another in February. According to a reliable source, it was known that the MNCs were Max New York Life and GM Motors respectively.

It was finally time to meet a player who dealt directly with customers — both individual and representative. This correspondent, feeling the necessity to get the views of a travel agent cum tour operator, heads for Lajpat Nagar to meet the head of Flexi Tours, Ramandeep Singh Taneja. Mr Taneja runs sector-specific businesses, Indian Horizons, and Elite Tours and Travels too. I happened to be his customer in early 2008.

What’s impressive about this group, to stay apace with the technology, it maintains its own software development team and continues to develop innovative travel products for better and quick service to its clients. Mr Taneja attributes his success to a “committed approach to tourists’ requirements, anticipating their needs and working towards providing them with their money’s worth”.

“Travellers are still travelling, albeit differently,” says Mr Taneja, explaining, “The hot destinations this year are Thailand, Australia and different parts of Europe.”

Indians are mostly travelling to the Fareast, followed by Europe. “Travellers with money to spare are also visiting South Africa to catch up with the IPL,” informs Mr Taneja. A South African peer of this correspondent informs, “Tickets for two IPL double-headers in Cape Town this weekend have sold out in two hours. More than 30% of the buyers are Indian travellers.”
This month, the foreign travel is up as compared to the situation that was prevalent a few months ago. Mr Taneja does not share this correspondent’s observation that airlines have reduced their price, nor have hotels abroad. “Destinations such as Hong Kong, Macau and Thailand continue to be as expensive as they were before.” In India, “few sectors have reduced their rates as this is a seasons of the inbound traveller,” Mr Taneja opines.

Flexi Tours’ records show that for the affluent Indian traveller, tourist spots in Himachal Pradesh, Uttarakhand, Jammu & Kashmir, the Northeast, and spots of Buddhist importance are no less attractive than destinations overseas. Needless to add, the mood in this office was seen as upbeat as that in Golden Wings.


I
Malaysia
After meeting a host of tour operators, Malaysia emerged as one of the most favourite destinations this season. For one, the country is home to some of the most beautiful and relaxing beach resorts in the world. With this in mind, the players in the trade coined the slogan, “Indulge your senses,” and are cashing in on the mood. Its chief attractions are visits to the rainforests and getting acquainted with its inhabitants as the tourist experiences a wide variety of exciting adventures. What’s more, there are local culinary delights to savour, eclectic cultures to amuse oneself with and a variety of entertainment programmes organised by the tour managers.



Tourist arrivals and receipts to Malaysia
Year ......... Arrivals (travellers in millions) ......... Receipts (RM in millions)
2008 ......... ......... 22 ......... ......... ......... ......... ......... 49,561.2
2007 ......... ......... 20.9 ......... ......... ......... ......... ...... 46,070.0
2006 ......... ......... 17.45 ......... ......... ......... ......... ..... 36,271.1
2005 ......... ......... 16.4 ......... ......... ......... ......... ....... 31,954.1
2004 ......... ......... 15.7 ......... ......... ......... ......... ....... 29,651.4
2003 ......... ......... 10.5 ......... ......... ......... ......... ....... 21,291.1
2002 ......... ......... 13.2 ......... ......... ......... ......... ....... 25,781.1
2001 ......... ......... 12.7 ......... ......... ......... ......... ....... 24,221.5


However, from Malaysian authorities this correspondent learnt that it’s the Chinese people and not Indians on whom their tourism department is focussing. This is obviously keeping in view the sizeable percentage of ethnic Chinese people in the Malaysian population. During Visit Malaysia Year 2007, Chinese tourists totalled 783,788. This rose to 949,864 last year. This year, they are expecting it to rise by another 100,000.

The rise in tourism to Malaysia from India owes to royalties and free and discounted tickets, which are arrangements Malaysian Airlines has with Air India for the three cities: Bangalore, Hyderabad and Mumbai. As for the other major cities, private flier AirAsia is taking care of them even as it is waiting for 1 January 2009 to start operating from the three cities above too as the MAS/Air India agreement lapses on 31 December 2009.


Airline ......... ......... Flights per week ......... Type of aircraft ......... Sector
Malaysian A/L ......... ......... 3 ......... ......... A330 ...... K'Lumpur-B'luru-K'Lumpur
– do – ......... ......... ......... 3 ......... ........– do – ...... K'Lumpur-H'bad-K'Lumpur
– do – ......... ......... ......... 7 ......... ......... B772 ...... K'Lumpur-M'bai-K'Lumpur


II
South Africa
The business for Thomas Cook (India) looked average before the Indian Premier League (IPL) started. The dampener for the tournament, general elections in India, is not affecting those who, rightly or wrongly, have never found politics an important part of their lives. Now, Thomas Cooks records show that the number of tourists whose trip to South Africa the company has arranged for, has doubled after the IPL.

March is not considered a travelling month. So, it’s no big deal that Thomas Cook’s figures for April look better. But there is still a downfall visible in comparison to April 2008. May, the bookings for which are almost over, looks better than what one would expect from an economy hit by slowdown.

It turned out that Thomas Cook’s relative success among the big players in the market owes to (a) its arrangement with Kingfisher Airlines as the tour partner for the DLF IPL 2009, South Africa, and (b) Kingfisher Airlines, in turn, being the official airline and travel partner to the DLF IPL 2009.As per their special collaborative tour packages, Thomas Cook is offering all Indians who would like to watch IPL matches, sitting in South Africa’s stadia, the opportunity to fly to the grounds. The IPL packages by Thomas Cook start from at an attractive price of Rs 43,000 for 3 nights and 4 days including air fare, transfers, accommodation, travel insurance and match tickets.

Not all operators are as upbeat about South Africa’s IPL connection this season though. “The initial interest is lukewarm,” says Subhash Goyal of Sita Travels, adding, “The interest to watch the matches by travelling all the way to South Africa couldn’t have been that high to begin with. But it did pick up slowly.” The SITA team handles over 200,000 incoming tourists every year from all over the world. SITA, a specialist in providing incoming services, operates as an independent brand under Kuoni Destination Management India. The Kuoni Travel Group, India, is the country's largest travel and tourism company and a 100% subsidiary of Kuoni Travel Holding, Switzerland.

The problem is, while IPL might have marginally pushed up travel to South Africa, it has affected inbound travel from overseas as it sent a wrong signal to international tourists. “If we cannot organise IPL, how will we manage the Commonwealth Games?” asks Mr Goyal.

In fact, all the hype surrounding the IPL notwithstanding, it is still no match for the World Cup for which Indians had travelled in hordes to South Africa. “That’s good,” opines a manager with SITA Travels under condition of anonymity, explaining, “It’s good that we are more emotional about our country than some regional clubs!”

On the issue of IPL-specific tour, P Srinivas, Senior Vice President – Special Interest Tours, SOTC says, “Right now, 70% of ticket sales are coming from the corporate sector, sponsors and co-sponsors of the tournament, etc; the rest is from FITs and individuals who are holidaying.”

Most in demand are three-night-four-days packages that cover all the eight teams that are playing in IPL. There is a special package for 1 May – 3 May: Three nights in Johannesburg for Rs 44,900 per person plus $ 65.

The best packages for the two semi-final matches and the final match is by another travel company, SKH Global Travels. In fact, the last leg of the IPL is the only part they are covering: two semi-finals and the final, 21 May – 25 May. It’s Rs 43,850 per person (airfare including taxes, ex-Delhi) and Rs 32,020 (airfare including taxes, ex-Mumbai) and Rs 26,500 on the ground in South Africa, which includes five days’ accommodation on a twin-sharing basis, breakfast, airport and match-venue transfers in addition to match tickets.


III
Ministry of Tourism
The Government of India is not sitting idle either. Under its “Incredible India” campaign, it has been identifying and developing various USPs to make the country an unforgettable experience for the international traveller.

Visit India 2009 was recently launched. Under the programme, the government is working with the travel industry to offer visitors incentives such as two-for-one air tickets on Air India, Jet Airways and Kingfisher Airlines, bonus days at some of the top chain properties and free sightseeing tours.

Officials of the Taj and Oberoi-Trident hotels in Delhi inform this correspondent that the offers by their Mumbai branches are to watch out for. A room at the Taj or the Trident is now available for $ 210 on weeknights, and 10% to 15% less on weekends.

Air India:
The state international carrier is offering a Companion Free Scheme (CFS) on international routes in economy class on IATA full fares (only into India) and a complimentary domestic two-coupon round trip ticket on AI/IC code flights for passengers traveling on IATA excursion fares. The offer is valid till 31st Dec. 2009, exclusive of all applicable taxes and charges.

Deal with Kingfisher:
On any revenue travel conducted on any international in-bound (one-way or return) sector operated by Kingfisher Airlines in calendar year 2009, KFA is providing a companion free offer in calendar year 2010. On any revenue travel conducted on any international in-bound (one-way or return) sector operated by Kingfisher Airlines in 2009, KFA is offering the best operating fares and schemes on domestic travel undertaken during the guest’s travel in India. This offer is being made exclusively to the Ministry of Tourism for the Visit India 2009 plan and cannot be clubbed with any other prevailing offer of KFA.

Deal with Jet Airways:

Jet has a ‘companion free’ offer too. A passenger buying a full fare economy ticket is entitled to a free ticket for his/her companion (excluding taxes). This offer applies to all the domestic and international routes of Jet Airways. The tickets can be bought for travel to India from any of our international routes and/on Jet’s flights.
Exemptions: International – 8 Dec to 31 Dec
Domestic – 9 Octr to 16 Oct; then 21 Dec to 31 Dec
Jet’s “Visit India” Fares have been discounted on business and economy classes; they are valid for unlimited use, in a period of seven, 15 or 21 days. In addition, the fare valid for a seven-day window has been extended throughout the network. The ‘Jet Value Pass’ is now available on discounts of 15%-20% on both business and economy classes, and is valid for FIT travel on a cluster of tickets, ranging from four to eight.


IV
Roundup: India
  • Thullimalli Wilson Sudhakar has been posted in South Africa for the next three years to attract tourists to India through the Incredible India initiative
  • “Niagara Falls sees surge in tourists from recession-proof India,” reports The Buffalo News, adding, “The number of travellers entering the US from India nearly tripled during the last decade, according to the US Department of Commerce… The number of Indian restaurants within walking distance of Niagara Falls State Park has grown from one a decade ago to six today…”
  • The Indian tourism sector is seen generating $42.8 billion by 2017, a 42% surge from 2007, an industry research note by auditing and consulting firm Deloitte Touche has said
  • In 2009, India is seen rising 6.1 percent, compared to the world output, which is seen falling 0.4 percent, according to the Economist Intelligence Unit, an arm of the Economist Group
  • International and domestic hotel chains are rushing to India in order to cash in on the tourist/traveller surge in the country. According to the global authority for hotel real estate, Lodging Econometrics, there are 73,793 hotel rooms in the pipeline of which 11,207 were due to open in 2009 and 22,522 in 2010

V
Roundup: World
  • The number of arriving Chinese visitors broke the 3,000 mark for the first time Wednesday to reach 3,043, according to statistics released that day by the Tourism Bureau of Taipei
  • The number of tourists to Cyprus dropped 16.4 percent year-on-year in March, with a 26.9 percent nosedive in British arrivals. Data on Monday showed 90,434 tourists visited the eastern Mediterranean island last month compared to 108,164 in March 2008. Arrivals had fallen to 56,626 in February. Tourism accounts for about 10.9 percent of Cypriot gross domestic product
  • The Convention and Visitors Bureau of Santa Monica, the US, has announced a new promotion in which 25 participating hotels will offer guests a free room for the third night's stay
  • The Panhellenic Hoteliers' Federation of Greece has predicted a 15 per cent decline in tourist arrivals and a 25 per cent drop in profits in the new tourism season
  • Participants in the UNWTO International Conference on Tourism Statistics (Bali, Indonesia) underscored the importance of public-private cooperation, particularly in the framework of advancing the Decent Work Agenda promoted by the International Labour Organization (ILO, a key partner of UNWTO within the UN family). In this regard it was agreed to both protect and promote the Tourism Satellite Account (TSA) as a powerful brand which should be carefully developed and applied for the measurement of tourism’s contribution to developed and developing economies alike

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Surajit Dasgupta treats no individual, organisation or institution as a holy cow.