TravTalk TAFI day2

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Time to reinvent & stay ahead The Indian travel agent is now reinventing himself. To recreate and re-establish his belief in the industry, the annual Travel Agents Federation of India (TAFI) Convention 2013 in Durban (South Africa) is chalking out strategies for the way forward. speaks to TAFI committee members to gauge more... selves updated about the latest products and services in the market,” he adds.

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apid penetration of Internet, proliferation of online travel agencies (OTAs) and availability of travel products online... All this underline the fact that technology is playing a vital role in the growth of travel industry. Consequently, the conventional travel agent has become a mere facilitator or provider of tailor-made packages. However, not all is lost.

Winning the Battle for Relevance Darshan Shah, Treasurer, TAFI, believes that travel agents who reinvent themselves and their business models have a solid future. “It has been difficult for travel agents to adapt to the digital landscape and the ensuing changes in consumer behaviour. New business models are evolving. Yes, gone are the days when travel agents used to ‘control’ the Indian tourism

Darshan Shah Treasurer TAFI

The travel industry is always at the leading edge of business revolution industry. However, I remain convinced that the travel industry is always at the leading edge of business revolution. There is enough scope for travel agents to reinvent themselves. If you can adapt, it is a wonderful future,” he

through follow-up and added value. “Travel agents should throw away their brochure racks and give customers a

ping the tech-savvy travellers by offering travel products at a ‘click’. Travel fraternity needs to understand the

Basheer Ahmed Joint treasurer TAFI

Travel agents need to get innovative in their approach and think out of the box says. With the burgeoning travel products and increasing use of Internet by end consumers, it is difficult to choose a particular travel plan. In this scenario, the role of travel agent is of utmost importance. “Travel agents deliver their services with trust and recommend the best available deals to their travellers. But along with this, agents need to be more aware and should keep them-

Jayesh Tharani

Promod Kohli

Committee Member TAFI

Committee Member TAFI

Agents should find new ways of earning besides ticketing in the form of insurance, car rentals etc Beyond 2013 According to A. Basheer Ahmed, Joint Treasurer, TAFI, the bottom-line advice is to change the business model, acting like a concierge providing a full range of services rather than an agent for an airline or hotel, add value

Urvashi Dogra Committee Member TAFI

With countries eyeing India as a potential market, India is only growing as a destination

Weekly settlement was forced upon us.

We managed to delay it with much persuasion

simple menu of services that outlines what the travel firm provides to its customers.

They need to get innovative in their approach and start thinking ‘out-of-the-box’ to expand their business horizons,” he points out. Technology helps to get innovative and start tap-

changing needs of the Indian traveller and the global travel trends, he adds.

Room to grow Knowledge is power and travel agents are now re-branding themselves as travel consultants, Contd. on page 8

TECHNOLOGY

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Special rates to agents via ITQ & ResNet InterGlobe Technology Quotient, a strategic business unit of InterGlobe Enterprises and the official distributor of Travelport Galileo and Travelport Worldspan, through Calleo Distribution Technologies, has announced their partnership with ResNet World, to launch a promotion for travel agents.

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his promotion will run from February 15 to May 14, 2013 and would offer travel agents the opportunity to avail special rates and incentives on participating

J B Singh President and CEO, InterGlobe Technology Quotient

hotels of Resnet World on the Travelport Worldspan and Travelport Galileo platform.

Talking about the association, Sandeep Dwivedi, Chief Commercial Officer, InterGlobe Technology Quotient said, “This promotional idea not only empowers

Sandeep Dwivedi Chief Commercial Officer InterGlobe Technology Quotient

the travel agents with convenient means to book ResNet World hotels at special rates, but would also help them provide a wide range of choices to the end consumers.”

ResNet World provides online presence and e-distribution services to partner hotels in the Middle East, India, Africa, and South East Asia regions. Zubin Billimoria, Managing Director

ResNet World said, “Our commitment to our hotel partners has always been to maximise revenue and profitability by increasing online presence and e-distribution revenues.

We also work very closely with our hotel partners to

help them process travel agency commissions to the Global Travel Trade.”

In today’s economic climate, it is critical for hotel operators to maximise their global visibility and to take advantage of booking channels

that fill empty rooms.

Hoteliers today are bombarded with a maze of technologybased solutions in these arenas. Accessing these powerful tools is only the first step in realising revenue goals. A successful internet marketing and

e-distribution strategy is based on properly utilising these tools to drive your sales and marketing efforts. With its headquarters based in Dubai, ResNet World offers the local knowledge and support necessary todrive this power-

ful electronic sales and marketing machine.

Benefits The new idea empowers the travel agentsto book ResNet World hotels at special rates

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INTERVIEW

TRAVTALK TAFI DAILY 2013 - DAY 2

Travel agents need practical solutions The convention committee is expected to build sound content that bring insight and perspective to members by introspecting the past and projecting the future trends…

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ravel agents are confronted by a plethora of old and new challenges, which have led to diminished importance of travel services.

Here, Ajay Prakash, Immediate Past President, TAFI said, “Grandiose, sweeping themes need to be backed up by clear, on-theground solutions or, at least, practical suggestions if they are to prove meaningful.

The first step is to identify the immediate challenges, and then to assess the longterm impact.”

“Extended credit and rampant undercutting remain the chief concerns for our industry, which should be among the first issues to be addressed. It's a pity that agents are competing amongst themselves on the basis of how much credit and discount they can offer. From specialised service providers, they've downgraded themselves to cut price order tak-

ers and/or financiers. That's not a recipe for success.”

According to Prakash, the biggest challenge before agents today is to re-establish their relevance. “The entire system of IATA accreditation and its evereroding value is another

meaningless, since 80% of agents are unable to issue tickets under their own validation. A new model needs to be found urgently. Unless these critical issues are addressed, forget navigating - you're adrift without a rudder,” added Prakash.

It's a pity that agents are competing amongst themselves on the basis of how much credit and discount they can offer.

They've downgraded themselves to cut price order takers and/or financiers.

That's not a recipe for success major cause of concern.

Some airlines have disenfranchised hundreds of agents - preferring to deal only with a select few; others compete openly with their own accredited agents; zero commissions coupled with back-end productivity-linked incentives have effectively rendered IATA accreditation

Highlighting the achievements of the past TAFI Conventions, Prakash said, “In the past, we have brought in business leaders, writers, thinkers, legal and management experts and colleagues from other international travel associations as guest speakers who made an impact with their talks and

Ajay Prakash Immediate Past President TAFI

presentations. I look forward to the speakers and sessions at this convention, too and I hope the Convention committee has expended serious thought on formulating the various Business Sessions which to my mind constitute the core of any Convention.”

“The right speakers, given the right topics, can help to bring insight and perspective to our members who are often caught up in the day-to-day business that they really have no time to look beyond. A convention pro-

vides the opportunity to ponder the past and project into the future, using insights and experiences from other fields and other markets - but for that to happen, the selection of speakers is critical.

Conventions have sometimes been derided as mere occasions to party. When you're away from your mundane existence, there's bound to be some partying, but, to me, intellectual content has always been the most important part of a travel convention,” he added.

One of the beneficiaries of the TAFI convention is the host destination, as delegates get first-hand experience of the destination and opportunity to build relationships with their peers and colleagues in the host destination.

“Travel and tourism is a 'people' business. It gives them the chance to experience the destination for themselves. It's an opportunity to sample the various

tourism products on offer at first hand and it better equips them to promote a new destination with confidence to their clients,” said Prakash.

“With 14 million plus outbound tourists and growing, India remains a prime market for nations seeking to increase tourism. The dramatic increase in Indian tourists to Chiang Mai, Kota Kinabalu, Macau- all TAFI Convention destinations - is ample proof of how destinations benefit for hosting a TAFI Convention. I'm sure KwaZulu Natal will soon see the difference, too,” he added.

Host of Benefits There has been a dramatic increase in Indian tourists to Chiang Mai, Kota Kinabalu, Macau- all TAFI Convention destinations TAFI is hopeful that KwaZulu Natal will soon see the difference too

High, higher, highest: Airfares shoot up With the international and domestic airfares rising northwards, the travel trade needs to get more savvy while providing services to their corporate clients. steady increase in inflation, reduction in capacity and flight network disruptions leading to reduced supply in the market, are some of the contributing factors for the increase in airfares. We believe the environment will continue to remain dynamic and to stabilise expenses on business travel, companies should look at cost effective travel programmes and execute multi-year contracts with key domestic and international carriers.”

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s per the findings of the recent American Express Business Travel Monitor, airfares in India across domestic and international travel saw an overall price rise of 9 per cent QoQ, with domestic fares within India witnessing a considerable increase of 29 per cent.

Moreover, fares from India to the EMEA region as well as the Intra-Asia Pacific

Business Bargain Companies should look at cost effective travel programmes Execute multi-year contracts with key domestic and international carriers

Source: American Express Business Travel Monitor

fares saw a 5 per cent increase. Similarly, fares to the Americas saw an overall marginal increase of 2 per cent.

As per Sandeep Shastri, Vice President and General Manager, Global Business Travel, American Express India, “The increase in travel demands,

Source: American Express Business Travel Monitor

“As the sharp rise in airfares continues to add extra

pressure on company expense, there is a need for greater compliance as well as transparency in managing travel expenses,” he added.

In the last quarter, India observed a strong 5 per cent rise in airfares for both IntraAsia Pacific and EMEA destinations. There was a significant increase in business class airfare for Intra-Asia Pacific travel by 13 per cent in full fare and 9 per cent in discounted fare QoQ. Airfares from India to the Americas region have seen a marginal increase of 2 per cent QoQ and travel to this region remained flat in full business airfare as well as in full economy segments with no increase QoQ in fares.

Meanwhile, Asia-Pacific region witnessed an overall increase of 3 per cent in the airfares across all categories.

Domestic airfares saw a 5 per cent price increase in the second quarter of 2012 compared with the other tracked fares in the Asia Pacific region, according to the report.

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AVIATION

TRAVTALK TAFI DAILY 2013 - DAY 2

Revamped airport in Kolkata President Pranab Mukherjee inaugurated the brand new integrated terminal in the Netaji Subhas Chandra Bose International Airport in Kolkata. It has a capacity to handle 20 million passengers annually as compared to the present 7.46 million. The state-of-the-art facility has

IndiGo launches 14 new flights With 63 brand new Airbus acquisitions, it is set to operate 391 flights, connecting 33 destinations. It recently launched its first daily non-stop flight between Bengaluru and Guwahati.

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been built by ITD Cementation India Limited in a joint venture with its parent Italian-Thai Development Public Co Ltd, Thailand. With 128 check-in counters, plush VIP lounge and in-line baggage handling facilities, Terminal 2 can accommodate more than 7,000 passengers per hour. Touted as a green building with five tiers, Terminal 2 is also a monument to Bengal's leading icons Rabindranath Tagore and Subhash Chandra Bose.

stablishing the growing importance of emerging domestic sectors including North Eastern market, IndiGo has announced the launch of 14 new flights on its domestic network. India’s largest carrier will now operate its first new daily non-stop flight between Bengaluru and Guwahati and between Bengaluru and Agartala via Guwahati. Additionally, 6E will operate its seventh daily flight between Bengaluru and Mumbai, the sixth daily non-stop flight between Hyderabad and Bengaluru, fourth daily non-stop flight between Ahmedabad and Mumbai.

IndiGo also recently launched TrivandrumDubai and Mumbai-Dubai flights. There are new flights connecting Bengaluru, Goa and Kolkata and others con-

necting Chennai with Singapore.

The new flights highlight the airline’s expansion plan, and the month-onmonth growth IndiGo has seen in the domestic network. Both corporate and

Aditya Ghosh, President, IndiGo says,

Aditya Ghosh President IndiGo

leisure customers travelling from northeastern destinations and other metros will now have the opportunity to experience hasslefree, on-time travel.

Speaking on the launch of new flights,

“We are delighted to launch 6E’s first new daily non-stop flight between Bengaluru and Guwahati; between Bengaluru and Agartala via Guwahati effective this month.

These new flights will allow many students from North East to travel to key metros at low fares.

IndiGo will also operate its new additional flights between Bengaluru and Mumbai, Ahemdabad and Mumbai, Hyderabad and Bengaluru.”

Ghosh further adds, “IndiGo will continue to expand its network to meet the requirements of both business and leisure travellers, wherever they demand it. It is our constant endeavour to provide more flexibility of choice

for our customers as IndiGo continues to offer them on time, hasslefree and always affordable flying experience.” It also gives its passengers the freedom to pre-assign seats and choose seats with extra legroom and avoid check-in lines with the use of Q-busters.

Additionally, IndiGo today is the only Indian airline with a boarding ramp.

QUICK READ Blyde River Canyon in SA is the third largest canyon in the world – and the largest green one. The Grand Canyon in the US is the biggest, and the Fish River Canyon in Namibia the second, but both are dry as bones.

AGENTS

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MSC Cruises to align with travel trade This year, MSC Cruises aims at enhancing its visibility in India. To start marketing the products in Tier II cities, it plans for organising sales missions and educational seminars for the trade.

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fter establishing its presence in India in 2010, MSC Cruises focussed on group segment with a little focus on FITs. But with increasing awareness about cruise holidays and high spending power of Indian travellers, the company started focussing on FIT segment from early 2012 and has exceeded the growth expectations last year. This year, the cruise liner will strength-

Amit Mathur Country Head – India MSC Cruise

Our focus, this year, will be to associate closely with the trade through our key partners, conduct educative sessions from across the en its focus on FIT with enhanced relationship with the travel trade in metro and Tier II cities in India.

According to Amit Mathur, Country Head – India, MSC Cruise; from over 160 cruising itineraries, the most popular ones among Indian travellers are in the Mediterranean regions which are expected to perform better in 2013.

Mathur informed that the cruise business in India is growing at 15-20 per cent and

MSC Cruises is also on the same growth level. However, with immense growth recorded from FIT segment in 2012, the company expects to grow more than the industry average in 2013. He said, “Our focus, this year, will be to associate closely with the trade (tour operators, TMCs and

cruise consolidators) through our key partners, conduct educative sessions from across the country to ensure our travel consultants are comfortable selling our products. I think the travel trade recognises and appreciates the transparency in business that we have maintained with them.”

Talking about the focus markets in India for this year, he said, “Metros have traditionally been our major markets, having said that, a lot of potential lies in tier II and III cities and they just cannot be ignored. There are multiple cities in states like Punjab, Gujarat, Central India, Tamil

Nadu, Karnataka etc., which have immense potential that needs to be unlocked.”

Adding further, on increasing the visibility of MSC Cruises in India, Mathur informed that the company plans to showcase the product through roadshows and trade fairs. Talking about the

growing popularity of cruise holidays in India, Mathur said, “It’s such a great concept; you see multiple countries/cities without any worries of packing and unpacking. I think the Indian travellers are now realising it, we can already see an upsurge in the enquiries we handle.”

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MOT

TRAVTALK TAFI DAILY 2013 - DAY 2

Go and innovate...

Contd. from page 1

Promod Kohli, Committee Member, TAFI opines. While close to 90 per cent of the international tickets continue to be routed through travel agents, a major setback has been on the domestic airline ticketing with market share of agents reducing to may be 40 per cent. With commission having been an issue, the travel industry paradigm has undergone a massive change.

As a way forward, Kohli emphasises on the importance of new markets, new segments and new technologies.

“Diversification has been the key, leisure travel (both international and domestic) has increased and creation of niche

products has seen a quantum leap,” he adds.

Herculean tasks ahead The travel agents need to understand where they stand, the opportunities available and how to move forward. Laments Jayesh Tharani, Committee Member, TAFI, “Travels agents have to constantly find new ways of earning. The association ought to hold regular dialogues with airlines, DGCA, Service Tax authorities, etc.”

Reiterates Urvashi Dogra, Committee Member, TAFI, “Weekly settlement was forced upon us. With lot of persuasion at different levels, we managed to delay its implementation. This is a big challenge. Agents will have to take it up with corporates and reduce credit facility they can offer.”

India ready with a new approach The new initiative includes developing world-class infrastructure and training manpower. It also includes undertaking aggressive promotional and marketing activities…

Tourism also draws strength in India from its diverse wildlife, breath taking mountains and vibrant festivals. In fact, India bagged three prestigious World Travel Awards (WTA), namely World’s Leading

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ncredible India has lined up a multi-pronged approach to aggressively promote tourism in India, said K Chiranjeevi, Minister for State for Tourism with Independent Charge to the global audience that had gathered to witness the grand finale of the World Travel Awards in India.

“Our ministry has prepared a multi-pronged strategy to increase India’s share in World Tourist Arrivals. It includes the development of the world-class infrastructure and manpower and undertaking aggressive promotional and marketing activities. The recently launched phase two of Incredible India campaign indicates a paradigm shift

K Chiranjeevi Minister for State for Tourism

with the focus now being on consumers. The emphasis is on the fact that international tourists can find their destination or product of desire in India,” said Chiranjeevi. India offers a wide variety of travel attractions, which exhibit our traditional culture, ethos and modern outlook.

economic growth. It’s also reckoned as the best tool to promote sustainable development and address the inclusive growth concerns.

Tourism has the potential to stimulate other economic factors through its linkages

Our ministry has prepared a multi-pronged strategy to increase India’s share in World Tourist Arrivals Destination- India, World’s Leading Tourist BoardIncredible India and World’s Leading Tourist Attraction- Taj Mahal.

“Tourism is now recognised as the driver of the

with a host of sectors like agriculture, manufacturing, etc. Another unique aspect of the tourism sector is that it provides employment even to the unskilled and semi-skilledmanpower,” said Chiranjeevi.

Team MOT taps feet on tourism beat To highlight the tourism potential of the North East region in the domestic and international markets, the Ministry of Tourism, Government of India organised an International Tourism Mart in Guwahati from January 18- 20, 2013. The overseas delegates included Deputy Tourism Minister from Lao PDR, executive heads of National Tourism Organisations from Cambodia, Singapore, Bangladesh and Bhutan, 55 tour operators, 9 hoteliers and 14 media representatives.

Besides foreign delegates, there were approximately 70 domestic buyers from other parts of the country and 108 sellers from the nine participating states.

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STATISTICS

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Hotels taking recovery route in India Fuelled by the rise in demand for hotel rooms from domestic travellers, the hotel tariff went up by 12 per cent in the first six months of 2012 in India. This has been revealed by the Hotel Price Index (HPI) report which says that the hotel industry witnessed a promising start in first half of 2012 for most of the hotels.

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n India, the overall rate rose 12 per cent following a surge in demand from domestic travellers as overseas destinations became more expensive. For the first time in five years, travellers paid more for their hotel rooms during the first six months of 2012, in all parts of the world and globally average hotel prices rose by four per cent over the last year indicating the hotel industry is staging recovery. Launched in 2004, the HPI looks at prices that people actually paid for their hotel rooms around the world.

“The hotel industry bounced back in the first half of 2012 from a number of natural and political crises in 2011 and it is encouraging to see growth in the sector,” David Roche, President, Hotels.com said. The first six months of 2012 have proved a promising start for most hotels. However, the second half of the year, with increasingly mixed economic signals, will be interesting to watch, he added.

Travelling overseas With an average figure of 7,353 INR, Indian travellers were the 19th in the table of the biggest

Average hotel room prices by star rating during H1 2012 in INR

David Roche President, Hotels.com

spenders abroad for the first half of 2012. The Top 10 biggest spending nations remained the same but there was much movement in the table. The Japanese spent the most away from home once again on 9,599 INR, followed by the Australians on 9,153 INR, moving up from third place to second, bumping the Swiss down to third place on 9,016 INR. The Chinese moved up one place to sixth, parting with an average 8,418

Destination Bangkok Dubai Hong Kong Las Vegas London MUMBAI NEW DELHI New York Singapore

** N/A 4,957 3,479 N/A 5,074 2,806 1,749 9,295 4,652

*** 3,176 4,512 7,700 4,265 7,486 5,347 3,730 12,333 7,660

INR and the Brazilians climbed three places from tenth to seventh, paying 8,351 INR.

Travelling at home Indian travellers once again had the best eye for a bargain, being the nation, spending the least for a hotel room at home on an average 4,709 INR a night, followed by the Spanish on 4,884 INR and the Chinese on 4,974 INR. At the other end of the table, the top three held their places in

**** 5,206 7,494 10,026 7,161 12,441 7,876 7,984 16,242 10,702

***** 9,526 14,304 N/A 12,238 N/A 11,112 11,198 N/A 19,582

the first half of 2012 with those from Switzerland paying the most when travelling domestically on 10,410 INR, followed by Norway on 9,572 INR and Singapore just behind on 9,551 INR. The Australians again moved up the table from seventh to fourth on 9,114 INR. The South Koreans moved into the Top 10 at No 6 on 7,962 INR. Foreign travel became more expensive for Indian travellers as the Rupee fell in value against many

major currencies, particularly in the latter half of the period. Other factors also had an impact. For instance, areas that were facing serious political or natural upheavals in the first six months of 2011 recovered their equilibrium, leading to prices in areas such as the Middle East and Japan, returning to more normal levels.

These factors also had a marked influence on the cost of a hotel room as prices increased in all but one of the destinations included in the HPI.

Top Destinations for overseas travellers 1 2 3 4 5 6 7 8 9 10

New Delhi Mumbai Bengaluru Chennai Goa Jaipur Agra Hyderabad Calcutta Cochin

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AVIATION

TRAVTALK TAFI DAILY 2013 - DAY 2

Regional way for ‘Subha’ 5% for agents: Mihin Lanka After dominating the air charter industry, Subha Aviation From increasing flights to Delhi to offering five per cent is now working on a plan to develop its regional airline. IATA commission, SriLankan Airlines along with their The company spokesperson speaks to about his regional carrier Mihin Lanka is investing in their most plans and the big aircraft the company offers. important market- India.

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ubha Aviation has been in the industry since 1998 and has seen endless growth.

Pioneers in air charters and especially for big aircraft, the company has seen a year-onyear growth of 35% since 2005. “Till 2000, we saw excellent growth in this industry in spite of the fact that charter flights were a very raw concept at that time in India. We saw a slowdown after 9/11 and 2005 onwards, the industry picked up again.

We have recorded a 35 per cent growth each year. Now again, there has been a slowdown in the business because of the high percentage of service tax; it’s over 12.36 per cent. This high tax bracket has affected the whole industry,” says Madhukar Kher, Head, Ops & Business Development, Subha Aviation.

Upset with this elevated service tax, Kher added, “Aviation is the backbone of the tourism industry and if they want to promote this segment they have to provide

some cut-backs to the aviation sector. Some relief is required and the Government seriously needs to look into these factors.”

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Subha Aviation works with large number of DMCs in India and offers great deals especially for big bird charters. They deal with a minimum 20 person charter and the largest so far has been 340 people.

“We are in a sound position but continue to aim much higher and are planning to further expand and launch a regional airline based in New Delhi.

We have ambitions to take this forward, but at present, the market is too volatile and liaisons have kept ridiculous conditions for the Indian market. Leasing an aircraft is becoming very difficult and we’ll watch the market and then decide,” he adds.

Madhukar Kher Head, Ops & Business Development Subha Aviation

Kher further praises the company saying, “We have a vision and with the knowledge and experience of our Managing Director, Gautam Sahni, we are bound to achieve greater heights. We are also looking at the corporate segment and increasing our foothold in this area. We offer reliability, confidence and experience. Sahni has been involved in schedule planning for over 20 years and know his work well. We also don’t compromise on service levels.”

riLankan Airlines have grown rapidly in India and are steadily increasing their presence in the country.

“When we started four-five years back, we only had a few flights to India. And now, we are flying to Chennai four times a day. We just started flights to Madurai, we have double-daily flights to Trichy and we fly daily to Trivandrum and Delhi once a day. From February, we will add five more flights a week to Delhi operating 12 flights a week. I also look after Mihin Lanka and these are flights for both the airlines as they both operate under one umbrella”, says Nishantha Wickramasinghe, Chairman, SriLankan Airlines group.

From February 1, Sri Lanka-based airline Mihin Lanka has increased its IATA commission and is now offering a five per cent commission for sales conducted by travel consultants, online travel portals, travel management companies and consolidators in India only.

Working with travel agents from across the country is priority for the airline.

Discussing their USP, Wickramasinghe says, “Our in-flight service is up to

adds, “This demonstrates the market (India) and its growth potential. There is not much point-to-point traffic from India and we aligned our strategy to offer the best connections to transit passengers. A lot of passengers are transiting through Colombo and go to either the Far East or the Middle East. We are also a popular choice for a lot of the work traffic to the Middle East. Around 60 per cent of the passengers from India are transit.”

He further highlights the importance of the India market for the airline by adding,

Nishantha Wickramasinghe Chairman SriLankan Airlines group

scratch and good connectivity make us an ideal airline. We sell at very affordable and competitive prices and still offer five per cent IATA commission. We work very closely with IATA and feel our agents are our most important.”

Discussing the reason for their continuous rapid growth, Wickramasinghe

“India is the market of today, tomorrow and the future.

Our two countries have a very close relationship.

India is a growing economy and is least affected by world crises. Traffic is growing from the region and we are increasing our frequency to the region. India is the market of the future and I put my money on it.”

How Budget 2013 can be a treasure trove The tour operators and hotel industry want relief from high rate and instances of double taxation in general, while expecting relief on specific issues pertinent to their respected sectors. has more details…

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he annual Union Budget is a mixed bag for the stakeholders in the tourism industry, who look upon the budget presentation

HAI & FHRAI

with baited breath. brings to you the key sectoral perspective proposals put forth by the leading travel trade associations.

Here are selected excerpts…

Vivek Nair President, FHRAI

Subash Goyal

Guldeep Singh Sahni

President, IATO

President, OTOAI

Hotel industry eyes stimulus for additional 1,80,000 room inventory in the 12 th Five Year Plan Period The

hotel industry is eyeing stimulus for creating additional room inventory of over 1,80,000 rooms spread over the 12th Five Year Plan Period. It is in line with the government’s target to double the inbound and domestic tourists’ arrivals and meet the demand of projected 12 million foreign tourists and 1.5 billion domestic tourist visits, which presently stands at 6.31 million and 850 million in 2011 respectively as per provisional data of the Ministry of Tourism.

The Hotel Association of India (HAI), in its pre-budget memorandum, has built a strong case for grant of Infrastructure status to hotel industry in the Budget 2013-14, highlighting the need of additional room infrastructure in line with the government’s target to double the number of foreign tourist arrivals in the 12th Plan Period. HAI estimates that the hotel industry is required to create additional hotel accommodation infrastructure of 1,81,752 rooms to cater to the needs of the additional 5.66 million tourists by 2016, which will require the industry to mobilise financial resources of Nakul Anand the magnitude of ` 20,00,000 crore. HAI also wants benefits of President, HAI Sec 80-ID of Income Tax to be extended to all cities, which presently is available to hotels located in National Capital Territory, Faridabad, Gurgaon, Gautam Buddh Nagar and Ghaziabad presently for five years.

Further, both The Federation of Hotel & Restaurant Associations of India (FHRAI) and HAI had highlighted administrative difficulties imposed by Section 194H of Income Tax for hotels, as the payments received from travel agents and credit card companies by hotels are net of commission.

This may be revised to exclude commission payments to travel agents and TDS on commission payments to Travel Agents may therefore be exempted. Similarly, both associations suggest that the hotel should obtain PAN only when the payment is made in cash. It is further recommended that prescribed limit for reporting may be increased to ` 1,00,000 against the existing unit of ` 25,000.

Both hotel industry associations had highlighted that there should be no duplication of taxes.

HAI expects the introduction of Goods & Services Act to help the Industry currently reeling under multiple and heavy taxation, making it competitive as compared to hotels in other South East Asian countries where tax is about 5-10 per cent. FHRAI has also highlighted the difficulty being faced by hotels that had been asked to explain the Eco-Tourism activity in the projects, wherein the hotels had sought deduction under Sec 80IC of Income Tax. As per FHRAI, there must be a suitable clarification issued to allow benefits under the said act to the hotel industry. Further, FHRAI also wished that Income Tax benefits should be extended to players in the hotel industry that supports cause of restoring, or building heritage hotels.

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TRAVTALK TAFI DAILY 2013 - DAY 2

GUEST COLUMN

Tax burden hurting travel industry Incredible India levies one of highest incidence of taxes on tourism in the world, which results in our competitors garnering major share of global tourist arrivals. now the responsibility lies with the principal operator to deposit the service tax availing such services.

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ourism is an Industry which generates millions of job through business houses run by small and medium entrepreneurs, which urgent attention of the Government.

Our tourism products cost much higher than our neighboring countries due to high incidence of multiple taxation.

As a result, Incredible India loses to its competitor destinations a major share of global tourist’s arrivals. Further, question arises as to how we can achieve a target of 1 per cent of world tourism or 12 million tourists by 2016 with lengthy visa process, shortage of International air seats, lack of infrastructure like roads,

Reduce Taxes Our tourism products cost much higher than our neighboring countries due to high incidence of multiple taxation As a result, Incredible India loses to its competitor destinations a major share of global tourist arrivals

Pronab Sarkar

For example transporters who were not liable to or not depositing the service tax in this case, those who are availing the services, have to deposit 100 per cent service tax and those transporters are paying service tax, one has to

Managing Director Swagatam Tours

connectivity, economical hotel rooms, Tourist vehicles, foreign language speaking guides etc.

As per the new service tax rules definition of Service tax replaced as “Place of Provision of Services Rules, 2012, w.e.f.

July 1, 2012 under Reverse charge of service tax notification no. 15/2012 is applicable on Tour Operator & Transport Operators also.

This means those service providers who were liable or not liable under previous law but providing services to the principle operators,

deposit on abetted value.

With the introduction of above notification i.e. July 1, 2012 all tour operators have to pay service tax on services provided by the person located in non – taxable territory and received

by any person located in the taxable territory. For example : A person located in taxable territory and receiving services from a person located in non-taxable territory (Jammu & Kashmir), service receiver (person located in taxable territory) have to pay service tax under Reverse Charge Mechanism. Similarly, all tourism related services are covered under service tax on outbound tours i.e. all foreign countries, Nepal, Bhutan & Sri Lanka.

With this multiplicity of Government taxes following is the chart showing an example that on a tourist spending $100 in India, taxation attracts approximately 22 per cent under various heads in some cases double tax is applicable.

This 22 per cent tourism tax is one of the highest tourism taxes in the world.

(The writer is Pronab Sarkar, Managing Director of Swagatam Tours)

A tourist is charged following Taxes on their travel expenses On Hotel accommodation

– Luxury tax @ 10% on room rent (in some states on rack rate not on selling rate – Service Tax @ 7.42%

Meals

– Sales tax 12.5% – Service tax 4.94%

Transportation

– Service tax @ 4.94% – Interstate road tax (different state charge at different rate some times it is more than/ equal to the transport cost) – Petrol/Diesel cost already burdened with heavy taxes 40-50%

Air Ticket

– Air Turbine Fuel Taxes 4% to 25% depending on state to state – Fuel Surcharge Tax – Airline Service tax 2.48% – Passenger Service fee 4.75% – User development charges–Del, Blr, Bom, Hyd etc – Airport tax International ` 1200 per travel – Service Tax issuing agent 0.618%

Guide charges/ entrance – Service tax 3.09% ON TOTAL PACKAGE TOUR to the monuments/ escort charges / tour operator’s markup On the basis of above calculations each tourist spending US$.100 in India pays approximately US$.22 TO 25 as Government taxes under various heads, in some cases double tax is applicable. This 22% to 25% tax on tourism is one of the highest tourism tax in the world.

All eyes set on Union Budget 2013 Contd. from page 12

IATO urges for fair tax treatment The inbound sector needs Government support and a fair treatment in terms of avoiding been discriminated in terms of levy of service tax on tour operators. Inbound tour operators, perhaps, is the only service which is being taxed in a manner, which has to bear excessive burden of service tax.

Tour operator’s services were initially brought within the ambit of service tax in the year 1997. Year after year, the Government has extended the scope of service tax, which has resulted in increase in the input costs of the tour operator has increased because of the levy of service tax.

Inbound Tour operator

services are within the service tax net since 1997. Prior to 1st March 2006, while availing such abatement, the CENVAT Credit of service tax paid on input services was also allowed. In Notification No.26/2012-ST dated June 2012, such abatement has been revised in respect of certain taxable services, for instance, renting of hotels, inns, guest houses etc. On the other hand, in respect of certain services such as transport of passengers by air and renting of hotels, inns etc, CENVAT Credit can be availed in respect of relevant input services. However, tour operator service has been discriminated and CENVAT Credit has been absolutely denied even though all its input services have been taxed, while earlier CENVAT Credit of service tax was allowed to the tour operators.

OTOAI expects more clarification on service tax issues in budget FY 2013-14 The members of Outbound Tour Operators Association (OTOAI), in its pre budget memorandum to the Ministry of Tourism, have highlighted the lack of clarity that persists on various provisions that were amended in the previous union budget. This includes significant changes in the method of taxation of services with the implementation of the Negative list regime and Place of Provision of Service Rules 2012 (PPS Rules).

In terms of the provisions in the negative list, prior to the enactment of negative list, service of arranging tours was qualified as tour operator service and was subject to service tax in India. However, outbound tours as the services were performed outside India and the consideration was received by the tour operator in convertible foreign exchange, the same were considered as zero rated supplies.

Moreover, in our understanding as per the PPS Rules made effective from July 2012 that determine the place of provision of services depending on its place of consumption, outbound tours should not be subject to service tax as

place of performance is outside taxable territory. The tax on outbound tours in hands of tour operators makes the services of outbound tour operators less competitive. This for the reasons that an Indian booking a hotel overseas on hotels website will not be subject to service tax, while the same transaction will be subject to service tax if done through an outbound tour operator.

Further, there is an exigent need to provide exemption from service tax to sub agents as to avoid instances of double taxation. The outbound sector involves various stakeholders including agents, sub-agents, and even sub-sub agents, who operate together many times to serve the end user.

The taxation on services provided by tour operators acting as sub-agents leads to multiplicity of taxation, as the same service is taxed at the hands of multiple instances. Here, the abatement rates should be increased for the tour operators keeping in mind the present scenario that has seen erosion net margin due to gradual shrinking of commissions earned on air tickets and challenging global economic environment.

Give industry status to tourism: IAAI

Biji Eapen President, IAAI

The hotels should be included as an Infrastructural facility eligible for benefits under Income Tax Act like Airports, Seaports and Railways. Our Industry should be granted deductions on Foreign Exchange Earnings on the same lines as being given to other foreign exchange earnings Industries. All states in India may be requested to recognise Tourism as an industry. The present limit for quoting PAN Number while making cash payments to Hotels & Restaurants against bills must be increased from ` 25000 -100000.

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AGENTS

TRAVTALK TAFI DAILY 2013 - DAY 2

Early Booking Bonus by Rocky Mountaineer Rocky Mountaineer is offering an added bonus to Indian travellers who book ahead of the 2013 season. It believes that this year is poised for bigger and better numbers and hence is focussing on pushing the Early Booking Bonus in the Indian market.

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his year, Rocky Mountaineer has launched the new Coastal Passage route, which will connect Seattle, Washington and the Canadian Rockies.

This new product marks the first time the Rocky Mountaineer will depart and arrive into the United States.

With over 40% of their guests

Guests on the Coastal Passage route will traverse the coastal shorelines of the

Credit / Value add amounts as below (CA$): Qualifying Package 4 – 6 nights 7 nights or more

Red 150 300

Mountaineer’s award-winning GoldLeaf Service.

combining one of their rail journeys with an Alaskan cruise, Coastal Passage will offer cruisers out of Seattle an incredible opportunity to ride the rails in luxury while witnessing the beauty of the Pacific Northwest through to the destinations of Canada’s West.

Silver Leaf 275 550

Gold Leaf 375 750

Gold Leaf Delux 375 750

Ashish Saran Group General Manager Canadian Destinations Marketing

Pacific-Northwest, the renowned landscapes of British Columbia and the majestic mountains of the Canadian Rockies from the comfort of Rocky

Onboard, they will enjoy luxurious surroundings in a bi-level custom-designed dome coach with panoramic views, gourmet cuisine in a private dining room and personalised service by Rocky Mountaineer Hosts. Coastal Passage will be available on August 24 and 25, both northbound and southbound, with packages allowing for stays in Seattle, Vancouver, and the resort towns of Banff or Jasper, Alberta.

“We, at Rocky Mountaineer, are thrilled to announce details of an exciting new destination - Lake

Added value credits can be used toward: Whistler Sea to Sky Climb Extra accommodation nights in any destination Additional tours in the Rockies Meals, plans and meals Transfers Activities RM Rail & Cruise packages (with the rail portion being the qualifier for the offer)

Louise, Alberta, which will enhance its First Passage to the West route in 2013. This new travel option marks the return of passenger rail service to Lake Louise for the first

time in over two decades and is a first for Rocky Mountaineer,” says Ashish Saran, Group General Manager Canadian Destinations Marketing which represents Rocky Mountaineer in India.

Guests booking any seven day package on Rocky Mountaineer can get up to CA$ 1,500 ** per couple in added value which can be availed towards booking additional hotel nights, sightseeing, excursions meals, transfers in Western Canada from a select list of preapproved offers. For details visit www.agent.rockymountaineer.com or www.rockymountaineer.com

1st Indian wedding on cruise Kyrgyzstan Air for expansion As India's leading cruise vacation wholesaler, Mumbaibased Ark Travels now partners with over 1,500 partners across India. highlights the company’s accomplishments this year…

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rk Travels represents Star Cruises, Norwegian cruise Lines, MSC and Silver Sea cruises apart from selling river cruises and luxury yacht vacations. Sharing the USP of the company, Anju Tandon, Director, Ark Travels, says,

“2012 was a fantastic year for Ark Travels as they were declared the No 1 Preferred Sales Agent for Star Cruises for the year, as well as recognised as India's largest seller of cruises

by TAAI.”

Tandon also seems confident of the year ahead, as according to her, the year has started off on a sound track.

Anju Tandon Director Ark Travels

“Starting 2013 off with a bang, Ark Travels just successfully completed the first

Indian Wedding on a cruise ship on board SuperStar Virgo. This was a unique event as it combined the romance of sea and a destination wedding - all in one.

Without the hassle of packing -unpacking , the couple celebrated their wedding in three countries with the Star Cruise itinerary, covering Singapore, Phuket and Penang,” she informs.

Ark Travels proposes to organise more such events on-board luxury liners and continues to innovate. The company makes sure that the travellers get the best experience with the best itinerary made by its professionals, keeping their comfort in mind.

Quick Facts

About SA South Africa has the oldest meteor scar in the world, just across the Vaal River near Parys, called the Vredefort Dome. The meteor plummeted to Earth nearly two billion years ago (Earth is said to be 4,5 billion years old), pre-dating the heady days of oxygen and multi-celled life.

The rocks around Barberton in Mpumalanga are some of the most ancient in the world – over three billion years old.

Because they are also the most accessible such formations, NASA scientists come here to gain an idea of how life might form on distant planets.

From April, the Kyrgyzstan Air Company is increasing its presence in India by adding two additional flights on the Delhi-Bishkek route. Minar Travels has been appointed their GSA for passenger and cargo operations.

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his move will help strengthen connections between the two countries and further open a direct connection between the two Asian cities. The flights will commence from Mid-April and will give an opportunity to the India travellers to explore a new destination.

Kyrgyzstan, also known as the Switzerland of Asia, offers trekking tours, horse safari, fishing, diving and adventure tours which include motor tours, paragliding and rafting.

“Minar Travels has been appointed as a GSA for passenger and cargo operations in India and we

HS Duggal Managing Director Minar Travels

signed an agreement with Jaldoshbek Bekturganov, President, Kyrgyzstan Air Company in Bishkek,” says HS Duggal, Managing Director, Minar Travels (India).

Bishkek, the capital of Kyrgyzstan, has four-star plus hotels and good infrastructure, especially for the MICE segment. It is a relatively new city and has limited historical sites, but it makes a great place to start your trips to the mountains and alpine lakes. Bishkek is an interesting example of a czarist planned city. It is a city of wide boulevards and marble-faced public buildings, combined with numerous apartment blocks surrounding interior courtyards and thousands of smaller privately built houses. Many travellers find Bishkek's nightlife a delight and the people are friendly and very hospitable.

The Tugela Falls is the second highest waterfall in the world, where the water tumbles down 850 metres.

First place goes to the Angel Falls in Venezuela at 979 metres. There are two trails to the Tugela Falls. The most spectacular trail is to the top of Mount-Aux-Sources, which starts at the Sentinel car park.

Kimberley may have the biggest manmade hole in the world, but did you know that the southern Free State town of Jagersfontein has the deepest vertical manmade hole (and that a pair of Verreaux’s Eagles breed in it?

NTO

TAFI DAILY 2013 - DAY 2

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VisitEngland charts out cultural calendar If 2012 was England’s year of sport, then 2013 is shaping up to be the year of culture. VisitEngland plans to celebrate the best of English culture.

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Literature This year January 28, marked the 200th anniversary of one of England’s most popular novels – Jane Austen’s Pride & Prejudice. From the annual Jane Austen Festival in Bath, to special exhibits at Winchester Cathedral and Jane Austen’s House Museum in Chawton, celebratory events are planned throughout the year.

DH Lawrence’s Sons and Lovers, another eminent English novel, turns 100 this year. The annual 10-day D H Lawrence Festival in Eastwood, Nottinghamshire includes a full programme of talks, exhibitions, readings and workshops celebrating Lawrence’s works.

Two other literary anniversaries fall in 2013 – the 50th anniversary of the death of CS Lewis, and the 40th anniversary of the death of J R R Tolkien. These two literary greats were close friends at Oxford University, and The CS Lewis and JRR Tolkien Official Guided Walking Tour conducted by Blue Badge guides is an excellent way to visit the places they knew and loved in central Oxford.

Art Cumbrian-based arts organisation Eden Arts has launched a new visual arts project for 2013, CANOPY, which will result in a spring /summer exhibition of artworks displayed in trees and woodland throughout the Eden Valley.

Norfolk’s Houghton Hall is set to host Houghton Revisited: The Walpole Masterpieces from May 17 to September 29, 2013.

Meanwhile Yorkshire’s ‘Sculpture Triangle’, which encompasses four major sculpture venues within close proximity – the Henry Moore Institute, The Hepworth Wakefield, Leeds Art Gallery and Yorkshire Sculpture Park – has unveiled ambitious plans to make Yorkshire the sculpture capital of Europe.

The joint initiative aims to raise the profile of Yorkshire’s unique sculpture heritage and to establish the area as the best place to see sculpture in the world.

Music Britten 100, marks the centenary of Benjamin Britten (1913 – 1976), the

world’s most performed opera composer born in the 20th century. A new Britten Trail, developed by the Britten–Pears Foundation and local community groups, will link various Britten-associated sites together in a walking tour around the town from Easter 2013. The first ever

Bristol International Jazz & Blues Festival will take place in the city during the weekend of March 1 – 3, 2013.

Theatre October 2013 marks 50 years since the National Theatre Company opened at the Old Vic with its first production of Hamlet starring

Peter O’Toole and Michael Redgrave. A permanent exhibition, Stage by Stage, on the history of the

National is open to the public on the third floor of the National Theatre in the Olivier Circle Gallery.

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AVIATION

TRAVTALK TAFI DAILY 2013 - DAY 2

SAA keen to spread wings in India South African Airways is keen to expand route network in India by considering destinations which will make commercial sense along with healthy loads. Looking at the rising popularity of South Africa as a destination, the airline has done everything from increasing the flight frequency from four flights to a daily service and from replacing its old Airbus aircraft with the latest A330-400 aircraft which has the capacity of 222 passengers. tion for servicing airline passengers with handling, processing and managing bookings on behalf of the airline.

Khan said, “Travel trade is the integral part of our distri-

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eing the only airline offering direct connections on MumbaiJohannesburg route, South African Airways is considering to further expand its footprint in India.

With growing popularity of South Africa as a destination, the airline increased its frequency from four flights a week to daily services during the end of 2012. The airline also replaced its old Airbus

growth. Khan explains saying, “We are positive about the growth from the Indian market due to certain reasons. Firstly, because of increasing awareness of

South Africa as a tourist and MICE destination, second, our partnership during TAFI Convention, which will provide first-hand experience to the travel trade about our

However, he informed that the biggest deterrent for Indians to keep South Africa in the second option is due to visa issue. South African visas are issued in five working days for Indian passport holders and with India, being a last minute booking market, it is tough to opt for the destination at the last minute.

On the other hand, India, as a destination, has already offered Visa-on-Arrival service for South African residents which South African government is thinking over and will soon announce if it’s accepting this offer or denying it.

Sajid Khan Country Manager – India South African Airways

If Indians get Visa-on-Arrival service to South Africa, I’m sure the number of Indian travellers to the country will double overnight aircraft with the latest A330400 aircraft which has the capacity of 222 passengers (36 business class and 186 economy class). It is now considering to start flying from New Delhi soon to provide direct connectivity to North Indian travellers to South Africa. Additionally, the airline is also looking at on ward traffic from India to South America and USA. Talking about the Indian market, Sajid Khan, Country Manager – India, South African Airways said, “India has always been an interesting market for aviation industry. Despite being an expensive aviation market to operate in, international airlines are operating out of India due to its immense growth and future opportunities. We increased our flight frequency on the Mumbai route from four to seven a week due to the response we received

Quick Facts

About SA

onboard services to help them sell our tickets and last but not the least, because of our excellent connections with US and South American destinations.”

Transit Traffic from India The airline is not just targetting the Indian traffic flying directly to South Africa but is also targetting the passengers flying to North, Central and South America. The airline connects Argentina, Bolivia, Brazil, Canada, Chile, Colombia, Mexico, Paraguay, Peru, USA, Uruguay and Venezuela. The airline is also offering excellent one-stop connectivity with attractive fares and minimum stop-over duration. “We are offering convenient schedules for Indians travelling to US and South America which are long-haul flights. To encourage Indian travellers, we are first increasing interest of our trade partners who have the power to convince end travellers.” from the market. We recorded an average load factor of about 80 per cent in 2012 and are positive to record higher figures this year. We are eager to introduce more routes connecting India with South Africa but it should commercially make sense for us.”

bution channel. All our bookings come via travel agents as our online portal is not yet operational. We rely totally on our trade partners and offer incentives and other schemes to encourage them to continue booking with South African Airways.”

The airline is working closely with the travel trade in India and supporting them with 5 per cent agency commission as their remunera-

Being positive With just one city connection from India to South Africa, the airline is still very optimistic to record

Therapsids are the true ancestors of mammals, and lived over 200 million years ago, long before the upstart dinosaurs of the Jurassic Age (which ended abruptly 65 million years ago). Most of the world’s proto-mammalian fossils are found in the Karoo, a semi-desert natural region of South Africa, along with a 280 million year old fossilized shark.

The world’s largest diamond was the Cullinan, found in South Africa in 1905. It weighed 3,106.75 carats uncut. It was cut into the Great Star of Africa, weighing 530.2 carats, the Lesser Star of Africa, which weighs 317.40 carats, and 104 other diamonds of nearly flawless colour and clarity. They now form part of the British Crown Jewels.

‘SAA to get full support from India’ Being the flag carrier of South Africa, South African Airways is the lead airline partner for TAFI Convention 2013. Expressing appreciation for the support, Pradip Lulla, General Secretary, TAFI said, "This is the first time TAFI is happening in an African country. The biggest challenge for us was putting together the logistics and arranging travel facilities for over 1,000 delegates. South African Airways has really helped us manage the bookings and supported us in a great way to unbundle the logistical issues." The association is also thankful to SATSA and South African Consulate in Mumbai and South African Embassy in New Delhi for supporting the

convention with easy and faster visa services.

According to Lulla, close to 80,000 Indians visited South Africa in 2012 and

Pradeep Lulla General Secretary, TAFI

close to 1,00,000 are expected to travel in 2013. "We will continue to support SAA as they encourage us with healthy five per cent agency commission. Through this

convention, our members will experience the first class services of SAA that will help them sell the product in a better way.

We would like to assure SAA that it will receive full support from the Indian travel trade fraternity once they start a new connection from India to make it a commercially viable route for the airline," adds Lulla.

Weddings & Celebrations in Thailand Tourism Authority of Thailand launched its second edition of the Wedding book ‘Weddings & Celebrations in Thailand’ at a gala evening held at The Leela Palace Hotel on the January 15. The first edition ‘Fall in love in India and get married in Thailand’ was so popular and extremely successful that 2nd edition with more information has been produced. The book showcases the enormous range of facilities and services that Thailand has for hosting Indian weddings. “We are

very pleased to circulate this informative book among our valuable partners: wedding planners, wedding organizers, media and others,” says Runjuan Tongrut, Director TAT New Delhi Office.

Thailand has firmly become established as a perfect venue for Indian weddings. In 2012, over hundred couples from India celebrated their weddings in Thailand.

The popular destinations for Indian weddings are Bangkok, Hua Hin, Phuket, Khao Lak, Pattaya, Kanchanaburi and

Chiang Mai. In a 2011 survey, Indians voted Thailand as ‘The World’s Best Wedding destination’ survey done by Travel & Leisure magazine.

And in Nov 2012 Thailand also received the “Best Wedding Destination” Award at the 8th Annual International Awards 2012 organized by Hospitality India and Explore the World.

This resounding vote of confidence is sure to encourage more couples to plan their weddings in Thailand in the coming years.