Travel and Hospitality (TnH) - February 2022 by Prem Sagar

ISSUE 5 / VOLUME XIII / FEBRUARY 2022 Rs.350 / Pages 45

EDITOR'S NOTE

Budget 2022, Travel & The Future In the best of times, preparing a Budget that pleases the majority of the population, especially a population as large and diverse as India’s, is very difficult, but when a finance minister has to do that in a completely unpredictable environment, it becomes several times more so. That’s what Finance Minister Nirmala Sitharaman has done for the past two years. While I sympathize with her as she carries out this impossible task, as a member of the travel industry I also feel snubbed by the previous budgets. Considering our industry was one of the worst hit by the pandemic, the government hasn’t done enough to aid the sector’s recovery. Nevertheless, in our cover story, Budget 2022 and the Travel and Hospitality Industry(pg 08) we take a close look at what this budget has in store for the industry. Sitharaman’s solution to the economy’s foe appears to be a mammothspending plan and simultaneously marginally trimming the country’s steep fiscal deficit. Consequently, the

best way to finance the government’s spending is disinvestment. In this regard, the sale of ailing national carrier Air India to the Tata group was an important breakthrough on privatisation, and a serious signal that the government was finally keen to push its disinvestment/privatisation agenda. Our story What’s In Store for Air India?(pg 32) discusses the possible effects of this sale. On a lighter note, we’ve rounded up a whole list of international destinations that are safe and convenient to visit (pg 26). There is also a feature on Madhya Pradesh (pg 20), so we don’t forget that there are always so many wonderful things to see right here at home. Enjoy the issue!

Publisher & Editor Srishti Jindal

CONTENT 08.

20.

Budget 2022 and the Travel and Hospitality Industry

Khajuraho Dance Festival

14. The Ineffectiveness of Lockdowns and Travel Bans on the Spread of Corona

26. Safest International Vacation Locations for Indians

32.

38.

What’s In Store for Air India?

How Do You Explain (and Justify) Prices in a Price-Sensitive Industry

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Budget 2022 and the Travel and Hospitality Industry

The Coronavirus pandemic has had a monumental impact on the travel and hospitality industry worldwide, bringing it to a screeching halt with lockdowns announced from 2020. In India, the pandemic resulted in the loss of millions of jobs, and insurmountable losses for many travel and hospitality businesses. As the world begins to learn to live with the pandemic 2 years later, the travel and hospitality industry is slowly recovering.

Budget 2022 was hoped to bring about significant improvement and relief for the struggling travel and hospitality industry of India. Released on 1 February by Union Finance Minister Nirmala Sitharaman, the Budget 2022 did feature a higher allocation for the tourism sector. However, the travel and hospitality industry has received the Budget 2022 with great disappointment. While longterm goals are planned for, there were found to be few relief measures for the short-term.

Budget 2022 Allocations

The remaining tourism budget would be used for funding of additional schemes such as the Champion Service Sector Scheme and capacity building for service providers. It will also be used for the establishment expenditure of the Tourism Ministry and India Tourism Offices within and outside India. There is a dedicated allocation of Rs 227 crore for the development of tourism in the north-eastern states of India, and Rs 98 crore for creation of tourism infrastructure in tribal areas.

The Union Budget 2022 has allocated Rs 2,400 crore for the Ministry of Tourism, an increase of 18.42 percent from the allocation of 2021-22. From the total allocation, around Rs 1,644 crore is specified for the infrastructural development for tourism, while Rs 421.50 crore is earmarked for promotions and publicity. The tourism infrastructure budget includes Rs 1181.30 crore for the Swadesh Darshan Scheme, and Rs 235 crore for the Pilgrimage Rejuvenation and Spiritual and Heritage Augmentation Drive (PRASHAD) Scheme. Another Rs 130 crore is meant for development of iconic tourism sites

February 2022

ECLGS The Emergency Credit Line Guarantee Scheme or ECLGS was extended to March 2023, with the guarantee cover extended by Rs 50,000 crore for a total cover of Rs 5 lakh crore. The additional corpus is exclusively allocated for enterprises in hospitality and related sectors.

Under the Parvatmala scheme, 8 new ropeways covering a distance of 60 km are proposed for development, increasing connectivity in hilly areas that are high in demand from tourists. The ropeways will be a sustainable alternative to traditional roads in difficult terrain, promoting tourism.

LGSCATSS

Villages along the northern border of the country will be included under a new Vibrant Villages Program. Construction of village infrastructure will take place along with creation of housing, tourist centres, and road connectivity to promote tourism.

From the current financial year has started the LGSCATSS or Loan Guarantee Scheme for Covid-affected Tourism Service Sector. Under this scheme, travel and tourism stakeholders approved by the Ministry of Tourism can avail of a guarantee-free loan of up to Rs 10 lakh. These stakeholders include travel agents, tour operators, and tourist transport operators. Regional Level Guides (RLGs) and Incredible India Tourist Guide (IITGs) approved by the MoT can avail of guaranteeloan of up to Rs 1 lakh each. Tourist guides approved by state governments and Union Territory administrations can also access the scheme with loan amounts of up to Rs 1 lakh each. The LGSCATSS scheme is supported by around 10 commercial banks, for which the Budget 2022 has allocated Rs 12.50 crore.

Infrastructural Improvements

e-Passports International tourism has also been negatively impacted by the coronavirus pandemic, with the number of international tourist arrivals in India reducing to 6.33 million in 2020 from 17.91 million in 2019. The Budget 2022 announced the introduction of e-Passports, improving the convenience of travel for international tourists by cutting down long lines at immigration counters. In line with international standards, the e-Passports will feature futuristic technology with embedded chips and will be rolled out in 2022-23 financial year. The digital passports will also support greater security for personal data.

As a part of the PM Gati Shakti plan, the Budget 2022 has a greater focus on large-scale infrastructure development, with a focus on roads, railways, airports, waterways, and ports. The infrastructural improvements will help in development and economic growth, while also supporting the tourism sector. In this fiscal year, the development of 25,000 km of new highways is planned, improving last mile connectivity in India to many tourist destinations. In the next 3 years, 400 new Vande Bharat trains are to be developed and introduced, offering a better passenger experience and efficiency. A total of 5 river links have been finalised for Daman Ganga Pinjal, Par Tapi Narmada, Godavari Krishna, Krishna Pennar, and Peenar Kaveri Rivers.

February 2022

Industry Response to Budget 2022 Although the Budget 2022 did feature a higher allocation for the Ministry of Tourism, it received a lukewarm response from the travel and hospitality industry. Many of the requests put forth by the industry were not met. The focus of the Budget 2022 was found to be more on medium to long-term infrastructural growth rather than immediate relief for the highly stressed sector. Relief measures hoped for in the Budget 2022 included direct wage support to employees of the tourism, travel, and hospitality industries. Domestic income tax travel credit for Indians could have helped support the pickup of the domestic travel market. Granting infrastructure status to hotels regardless of location or size could support capex growth. Abolishing the tax collection at source or TSC on outbound travel could help prevent the shift of travel expenditure from Indian to offshore travel companies. Waiving of e-Visa fees for tourist visas could support inbound international travel. GST review over the GST pain points for the travel and hospitality industry could also have lessened the pressure on the market.

Moving Forward The tourism and hospitality industry have a pivotal role in the economic development and growth of a country, serving as a major employment sector, and revenue generator. As travel and tourism regain lost ground after 2 years of the Coronavirus pandemic, the future is bright for the tourism and hospitality sector. The lack of immediate relief packages in the Budget 2022 is a disappointment, however, extension of ECLGS will help the travel and hospitality sector revive its position. The infrastructural allocations will take time to show results, but will be a useful boost to tourism upon their completion.

February 2022

The Ineffectiveness of Lockdowns and Travel Bans on the Spread of Corona

Widespread travel bans and stringent lockdowns were the first tools used to combat the coronavirus pandemic since it began as an epidemic in Wuhan, China in January 2020. The first quarantine and travel ban were implemented in Wuhan from 22 January 2020. Worldwide, nations shut down their international borders, and subsequently issued lockdowns within the country.

Despite all efforts, the Covid-19 virus spread to nearly every country across the globe, resulting in stronger lockdowns and movement restrictions inside countries. While initially, the lockdowns do seem to have had a controlling effect on the pandemic spread, two years later experts are questioning, were the lockdowns and travel bans worth it?

Lockdowns and Mortality A recent study by John Hopkins University found that in the US and Europe, lockdowns had little effect in reducing the mortality rate from Covid-19. The study was based on a meta-analysis of 24 studies examining the mortality rates of the SAR-CoV-2 virus in the beginning stages of the pandemic. According to statistical models, the number of deaths in the US that took place even after extensive lockdowns was virtually the same as would have been expected without the lockdowns. However, the study did note that closing down of non-essential businesses, such as bars and pubs, did lessen the mortality rate from the Covid-19 virus.

Pre-Travel Covid Testing A study for the International Air Transport Association and Airports Council lnternational – Europe was conducted by Oxera and Edge Health on the testing prerequisites for travel. Examining the testing restrictions placed by Italy and Finland in December 2021 on all incoming air travellers, they noted that there was no distinguishable difference in Omicron transmission. The restrictions and limitations on movement of people did however, result in a substantial and avoidable economic hardship for the travel and tourism industry and the overall European economy. The delay in discovering new variants and the high transmissibility of the virus means that often transmission has already taken place by the time travel restrictions are implemented. Requiring mandatory testing for fully vaccinated passengers was found to be ineffective in controlling spread of the virus, and instead damaged the confidence of travellers and created hassles.

February 2022

The Cost of Lockdowns and Travel Bans Initially, there were relatively few treatment options and a functional vaccine was still under development. Lockdowns, stay-at-home orders, and travel bans seemed like the best option to combat the spread of the Coronavirus.The WHO declared Covid-19 as a pandemic on 11 March 2020, and within March/April, countries sealed their borders and implemented varying degrees of lockdowns. Regardless of all the efforts, till date there are an estimated 404 million cases of the coronavirus worldwide with over 5 million deaths. Lockdowns and travel bans may have slowed down the initial transmission of Covid-19, however, they had a catastrophic effect on economic growth. With borders and non-essential businesses shutting down, millions were left without jobs, and further millions at the risk of poverty. Supply chains witnessed breakdowns, resulting in disruptions in supplies to major cities and unexpected shortages. The travel and hospitality industry were massively hit, with many going out of business, and others struggling to survive. The IMF reported a global growth contraction of 3.5% in the year 2020. India’s GDP contracted by 7.3% in 2020-21, crashing by 23.9% as a result of the sudden lockdowns, in the worst performance of the economy since independence.

Spread of Covid Despite Lockdowns and Travel Bans The harshly implemented lockdowns and travel bans aside, the coronavirus pandemic still continued to spread with an exponential number of cases. Coming in waves, healthcare systems struggled to keep up with the new cases. Mental health of people plummeted and many struggled with financial hardships. In India, the first nationwide lockdown was announced from 25 March 2020, followed by multiple phases of lockdowns. New cases continued to rise, reaching a high of 97,000+ cases in September of 2020. A key component of all lockdowns was to follow social distancing with a distance of 2 metres or 6 feet between

February 2022

people, and to wear masks. Penalties were announced for not following social distancing and mask wearing, but often social distancing was not followed, particularly in markets.

Travel Bans & Domestic Migrant Movement Travel bans had the opposite of the desired impact in curtailing the spread of the coronavirus pandemic due to migrant movement. Initially, Covid-19 cases were concentrated in larger cities. When migrants left due to lack of job opportunities because of the lockdowns, they ended up carrying the virus back to smaller towns, increasing the spread of Covid-19. In India, the World Economic Forum estimated there to be around 139 million migrants. The International Labour Organization predicted that around 400 million workers would be poverty-stricken due to the pandemic lockdowns. Most migrants originated from larger states such as Uttar Pradesh and Bihar, followed by Rajasthan and Madhya Pradesh, and were employed in cities such as Mumbai and Delhi. The Indian government estimated in 2020 that around 10 million migrants attempted to return home in the first wave of the Covid-19 pandemic and subsequent lockdowns. The mass exodus of migrants took place in May 2020, beginning with an independent movement that witnessed many accidents. The Indian government finally launched a series of special trains and buses, to help migrant workers reach their home states.

Lifting of Travel Bans Faced with the monumental economic impact of the lockdowns and travel bans, they were slowly phased out. In India, the ‘unlocking’ took place in multiple phases, starting from June 2020. Interstate travel was reopened and movement began. International flights opened with the creation of air bubble agreements with selected countries for direct flights. Precautions and Covid prevention measures have increased manifold, with airports, airlines, and countries requiring proof of negative Covid test results.

February 2022

The Vaccine Impact Development of vaccines was heralded as a change in tide, and hope at the end of the tunnel. While the vaccines did not stop transmission, they were found to be effective in reducing the severity of Covid-19 cases. Multiple suppliers provided vaccines, and countries launched aggressive vaccination programs.

WHO advised that measures such as pre-travel testing, quarantine, and vaccination should be mandated according to risk assessments, and be adapted to change in circumstances.

Covid Variants The first wave of the coronavirus pandemic barely subsided, variants of the Covid-19 virus emerged, launching fresh waves of the pandemic. The most prominent variants of the Covid-19 virus so far are the Delta variant and the Omicron variant. The Delta variant was designated a variant of concern in May 2021, and has greater severity of symptoms. The Omicron was designated as a VOC in November 2021, and has a higher transmission rate but lower severity. In the wake of new Covid-19 waves and variants, some countries re-implemented lockdowns and travel bans, for example, Australia, and China. However, most countries focused on increasing pace of vaccination and dispensing booster vaccine doses, rather than travel and movement bans.

Latest WHO Recommendations The World Health Organization is urging governments to withdraw or ease travel restrictions and blanket travel curbs, terming such restrictions as “not only ineffective but also counter-productive”. Based on new evidence surrounding the rise of the omicron variant, WHO observed that travel restrictions have had little effect on stopping the spread of new strains. Instead, the restrictions cause economic and social harm, particularly in developing countries. Extensive travel restrictions can also discourage the public from timely and transparent reporting of new potential Variants of Concern.

February 2022

Khajuraho Dance Festival

The centuries-old temples of the world-famous UNESCO World Heritage site Khajuraho catch everyone’s attention for their exquisite architecture. However, the month of February comes as a chance for the tourists to see the temples all decked up and give way to the graceful event that is Khajuraho Dance Festival.

This mega festival is a spirited celebration of classical dance forms, art, and culture wherein renowned exponents of Indian classical and folk dances are performed throughout the week. Apart from the graceful dance performances, there are also other highlights that can be enjoyed simultaneously. Activities and events like art exhibitions, panel discussions, interactive sessions, adventure sports, village tours and much more will keep you entertained throughout. The choice is yours to opt from a wide range of multidimensional activities.

Nepathya Nepathya is the cultural showcase and voyage of Indian dance styles. It is an exceptional thematic presentation of Indian art form highlighting the traditional costumes, artifacts, and culture of a different state each year. There is also an exhibition based on the regional costumes, jewellery, and headgear. Nepathya is one segment that gives a holistic format to this international event.

February 2022

Kalavarta- The art dialogue It is a platform where dancers, painters, art critics, intellectuals from dance and visual arts interact with the audience. It is a very creative and interactive dialogue session that gives space for serious discussion over Indian art and art forms. Come, grab this opportunity to listen and interact with the experts.

Art Mart If you are someone who adores art then art mart is the segment you should explore during this fest. The objective of art mart is to promote Indian contemporary art form. The art mart incorporates all streams of art- be it visual, performing, craft, and other traditional art forms. The entire venue turns into a kaleidoscope of innumerable visuals and experiences.

February 2022

Hunar- A rendezvous with sculptures This segment showcases the artistic talents in the form of pottery, jewelry, and other mediums. Do witness how clay is shaped into a beautiful sculpture or a simple fabric turning into a kaleidoscope of colors. This segment will allow you to take a sneak peek into how various artworks turn into beautiful masterpieces and the efforts that go into making these.

February 2022

The Chalchitra section- A cinematic tribute to art traditions and creators This includes the screening of movies, documentaries, along experimental cinema of famous artists so as to help the viewers understand the dynamics of arts, music, literature, vocals, dance instrumental music, and various art forms. Plan a trip to this picturesque destination in Madhya Pradesh and be a part of the Khajuraho Dance Festival where all these multi-dimensional segments are waiting for you to explore.

February 2022

Safest International Vacation Locations for Indians

Jet setting off to an international location holds its own charm and allure, even when compared with the most picturesque domestic tourism destinations. Travelling to a new country is an entirely different experience, immersing you into a new environment, culture, and surroundings. The Coronavirus pandemic put a halt on international travel worldwide, as countries strived to contain transmission and outbreaks with mandatory quarantining and lockdowns.

As the latest Omicron wave of Covid is starting to ebb, international travel is reopening, coming as a breath of fresh air for eager travellers. The pandemic precautions differ from country to county, with varying requirements for vaccination proof, quarantines, and RT PCR covid tests. For a hassle-free travelling experience, it’s important to consider the security measures the destination country has in place. Here are some of the safest international vacation locations for Indians in March and April 2022.

Switzerland

In March and April, snow can still be found, particularly in higher altitudes while the weather warms up for lower altitude attractions. The Matterhorn is famous for its pointed peak, and one of the highest mountains in the Swiss Alps. Lucerne is a sparkling lake amidst mountains with a mediaeval town and sunny plazas, and Lake Geneva is the largest Alpine lake in Europe. Currently, tourist visas are available for Switzerland, and there is no mandatory quarantine period. While vaccinations are advisable, a negative Covid test 72 hours before arrival can suffice. Masks and social distancing are recommended, with specifications depending upon the county.

A favourite destination of yesteryear Bollywood, Switzerland is a timeless tourism locale with gorgeous scenery, majestic mountains, and plentiful spots for relaxation and sightseeing. The landlocked nation has quaint villages, luxurious resorts, historical cities and activities such as skiing, hiking, paragliding, climbing, and tobogganing. Popular cities are the capital Bern, and Zurich, Geneva, and Lausanne.

February 2022

Maldives The archipelago of Maldives in the Indian Ocean has been the preferred quick getaway for numerous Indians, including celebrities. Located nearby, Maldives is a tropical paradise with over 1,100 coral islands and serene ocean waters. With white sandy beaches and plenty of water activities, Maldives is an ideal destination for leisure and action.

before arrival, with a random antigen test upon arrival. No quarantine is required with a negative Covid-19 test, and masks outdoors are not obligatory.

Currently in its dry season, from November to April, Maldives has clear skies and calm seas, with a plethora of hotels, resorts, water villas, and more. An excellent change of pace from busy city life, there are water sports such as snorkelling, parasailing, surfing; fun markets for shopping, and scenic cruises and seaplane rides. Top attractions are the Male City, Sun Island, Banana Reef, President Palace, and Addu Atoll. Vaccination is not necessary to travel to the Maldives, and there is no longer any mandatory quarantine period applicable. However, a negative Covid-19 test result is required 96 hours before departure. Symptomatic travellers may be required to test upon arrival.

France France was ranked as the number one country with the maximum number of tourists in 2019 by the United Nations World Tourism Organisation. The ‘City of Love’ Paris is the capital of France, with the iconic Eiffel Tower, classy cafes, bustling bistros, high-end fashion, and remarkable architecture. There is chic city life, rural regions with natural beauty, small French villages, beaches, the French Riviera, and glamourous resorts . Among the top attractions are the Notre-Dame de Paris, Basilique du Sacré-Coeur, Louvre Museum, Palace of Versailles, Centre Pompidou, Musée d’Orsay and the Arc de Triomphe. Beyond the sites for the eyes, the cuisine is an experience in itself, with the choicest wines and French delicacies. Nightclubs have started reopening and standup concerts are also permitted to resume. Full vaccination is mandatory for entry into France, and a negative PCR or antigen test is needed less than 48 hours

February 2022

UAE The biggest tourist destination in the Gulf, the United Arab Emirates or UAE is considered a luxury holiday destination with fancy malls, statuesque skyscrapers, impeccable resorts, and flavourful culture. A natural desert, UAE is charming and has a vast coastline. There are a plethora of museums, malls, palaces, and forts. For adventure enthusiasts, there is kayaking, hiking, surfing, desert safaris, mountain biking, and zip lining. In the UAE, the most famous cities are Dubai, Sharjah, Abu Dhabi, Al Ain, Fujairah, and Ras Al Khaimah. The nightlife is booming, and there are many beaches and theme parks to explore. Some of the top attractions are the Burj Khalifa, Fujairah Fort, Sheikh Zayed Grand Mosque, Al Fahidi, Sharjah Art Museum, and the many Souks. Although vaccination is not mandatory to enter the UAE, many public places have started requiring vaccination certificates to enter. Travellers need a negative RT PCR test no more than 48 hours before departure, and another RT PCR test upon arrival. There are no quarantine requirements if the arrival RT PCR test is negative. Covid-19 precautions and protocols can vary between the different emirates.

Verify Before Your Visit International travel is opening up and made easier with the air transport bubbles India has with other countries. However, with the evolving nature of the Coronavirus pandemic, it is important to verify your travel plans in advance. While vaccination is not mandatory in all countries, completing your vaccination can help you with hassle-free travel. Take full precautions and plan carefully for an enjoyable and refreshing international trip, and most importantly, have fun!

February 2022

What’s In Store for Air India?

The erstwhile national carrier of India, Air India has once again returned to the fold of the Tata Sons Group, after its historic privatisation in January 2022. The challenge is now upon Tata Group to bring success to Air India.

Air India had been facing consistent losses since 2007 after the merger of Air India and Indian Airlines, and talks of privatisation have been rife for nearly a decade. A study commissioned by the Corporate Affairs Ministry recommended partial privatisation in 2012. Subsequently, the then-Civil Aviation Minister in 2013 stated that privatisation was the key to the survival of the airlines. In June 2017, the privatisation of Air India was officially approved by the Government of India, and a committee was set up to begin the process. Starting from a goal of selling a 76% stake of Air India, along with all its debts, there were no responses from private firms. In late 2019s, approval passed for selling 100% shares of the airlines. Both the Tata Sons group and a consortium led by Ajay Singh of SpiceJet expressed interest. Tata Sons won the bid for Rs 18,000 crore, acquiring Air India, Air India Express and 50% of AISATS under its SPV Talace Private Limited. The airline was officially handed over to the Tata Group on 27 January 2022.

Tata Group Origins The airline was founded in 1932 by JRD Tata as Tata Air Services and was later renamed as Tata Airlines. Starting out by carrying air mail, later on passenger services were also added. During World War II, the Tata Airlines also aided with troop movements, shipping of supplies, and other transportation needs. After the war, Tata Airlines became a public limited company in 1946 under the name of Air India. Following the independence of India, 49% of Air India was acquired by the Indian government in 1948, and majority stake was acquired in 1953, completing its nationalisation. JRD Tata continued as the Chairman of Air India after its nationalisation, and the growth of Air India continued with fleet expansions and new travel destinations.

Plans for the Future Air India is a well-known brand, and brings with it global brand recall, bilateral rights to fly to many countries, extensive assets, and hangars. It also has parking bases and slots at important airports, and well-trained staff and pilots. However, as a legacy full-service carrier, Air India is said to have a high cost structure, particularly in comparison to competitors. The interiors will also likely require an upgrade.

February 2022

The Tata Group certainly has high hopes for Air India, with plans for expansion domestically and internationally. Addressing employees of Air India, Chairman of Tata Sons N Chandrasekaran said that for the airline to become the best again, there will be an organisational redesign. Core areas for improvement were outlined as providing bestin-class customer service, technological advancements, upgrading and modernising the fleet, and upgrades inflight and off-flight.

New CEO Amidst much curiosity and speculations about the new CEO of Air India under the Tata Group, Ilker Ayci was announced as the Managing Director and CEO of Air India. Former chairman of the Turkish Airlines, Ayci is hailed as an aviation industry leader, credited for leading Turkish Airlines to its current success. Selecting a foreigner to lead an Indian airline is a common trend followed by airlines such as Vistara, GoAir, and IndiGo.

Competition in Aviation Industry As a domestic and international airline, Air India faces competition on dual fronts. The Air India fleet may be the largest amongst Indian carriers internationally, but prior to Covid-19 flight restrictions, other foreign airlines had a larger market share. Smaller airlines with modern fleets and a focus on millennials compete with Air India at a domestic level. The aviation industry is slowly recovering with more flights opening up after the third wave of Covid-19. However, due to its high operating costs Air India may have difficulties in facing competition without making major changes. Air India currently has a mixed fleet with 5 different engine types, and nearly 75% of the fleet has lease terms that are not desirably competitive. The cost per available seat kilometre (CASK) of Air India is estimated to be 18-22% higher than its competitors. Even with higher costs, the Air India planes are in need of an upgrade, cabins have inferior products, and the reliability of their flights is low.

Role of Technology Technology can have a transformative effect on nearly any industry, and for an older airline like Air India, upgrading technology is a high priority to regain past glory. As newer airlines leverage technology to gain customers, Air India cannot afford to fall behind. With a self-proclaimed goal to become the ‘most technologically advanced airlines globally’, Tata Group is placing heavy emphasis on technology upgrades. Among their plans is incorporating technology into every aspect of Air India, including apps, websites, mobile interface, social media, Tata NEU app, and other channels for digital reach. Artificial intelligence and machine learning would be deployed to mine data, gain real-time insights, and offer airline passengers personalised experiences. Modern cloud infrastructure would be used for support and internal processes, wherever possible would be digitised.

February 2022

What Does the Industry Think? The landmark integration of Air India back into the fold of Tata Group has set the aviation industry abuzz. While the Tata Group does have a big challenge ahead of them, they are well equipped to run the gauntlet. Interglobe Technology Quotient (ITQ) is the leading technology platform for proving airline and hotel inventory options to travel agents. TnH spoke with the COO of ITQ Mr. Sandeep Dwivedi on how the Air India takeover will impact the industry at large. “It’s a homecoming for Air India into Tata – a remarkable move in my opinion. The demand in aviation space is higher than the supply, and we are very hopeful that this acquisition would help in reinforcing Air India to add capacity besides improving supply and efficiency. However, with two full service carriers and a LCC, Tata will disrupt the airline business and the market share too,” said Mr. Dwivedi. Regarding the future of Air India he said, “Air India is going to accelerate with strength, its brilliance and potential. From technology to financial improvement, the airline would adapt new operational and service standards in addition to in-time performance measures. Commercially, it is expected to be profitable and successful in future.”

February 2022

How Do You Explain (and Justify) Prices in a Price-Sensitive Industry

Everyone loves a bargain, especially Indians; for us haggling is the norm. However, when tables are turned and you’re the one being bargained with, it proves to be quite frustrating. After all, margins for most in the travel business are slim, the pandemic has hit earnings further, and trade stakeholders still need to make a living! Considering all these factors, it can be intimidating to demand money and remember your worth. You can’t help but consider the consequences of a potential client pulling away because of your pricing. For some insight into how to conduct this difficult conversation, we have spoken to three industry stakeholders about how they explain (and justify) their rates.

Our Panel: Sanjay Datta, Managing Director, Airborne Travels, Travel Agency Owner Komal Seth, Director Of LINKIN Reps - Tourism PR Expert Ravi Gosain, Managing Director , Erco Travel Pvt. Ltd. – Travel Agency Owner

Q. Tell us what you love about your work. What do you find tricky? Datta: Having been trained and surviving even during the trying times, the passion for Travel & Tourism is unparalleled and main stress being on SERVICES - which are managed professionally as am in direct contact with most of our clients. Relationship building and maintaining

the same is a challenge and we have managed to survive as a stand-alone organisation for almost 30 years in operations now. Seth: What I love is that we meet people of different nationalities and cultures. We understand people as humans and not based on their race. Travelling and meeting people teaches you the art of living and giving. The tricky part is to always perform as we are in client service. There is no Sunday. There is no holiday. Gosain: I believe most of us who are working in tourism sector have an intense love and passion for travel. So I am no different, and thoroughly enjoy my work. There are people who are able to combine their passion and work together, and fortunately I am one of them.

February 2022

Q. How have you come up with your prices? Datta: ‘If you need services than you have to pay for the same’ is our outlook and we have been lucky with our clients who value services. We have never ever sold discounts; our USP is services and discerning clients are ready to pay for the same. Seth: Given how badly the industry has been hit, we have gone down on prices. We want to reassure our clients that we are there for them and want to grow their business. It is time to perform consciously and not worry so much about pricing.

down on the frozen prices with our client is loyalty of our client towards us. Gosain: Lowering your prices doesn’t always mean you get clients because unless you are sure about what you can offer in a particular price, you may not able to justify services which can finally lead to dissatisfied customers. Rather, the goal should be offering appropriate prices for your product which can maintain quality and satisfaction. Exceptionally, I will only lower prices when I want to showcase my products and get some publicity, so it will be a part of a promotion.

Gosain: So, with our travel experience and in-depth knowledge of places, the way we tell stories and narrate destinations to our client, even before they actually go onboard, makes us different from others. In my opinion, price only matters if you lack in details and unable to value your products. We are very cautious about the value we create for the clients and then price tag became just a reflection.

Q. Do you break down your prices for your clients? Datta: No. Seth: Absolutely, we work on clear transparency and a strong agency fee. It’s important for clients to know where they are spending and how many verticals are involved. Gosain: There is no harm in breaking up prices or giving add-ons to your clients in order to make it easy and flexible for them to buy your products.

Q. In what circumstances will you agree to lower your prices, and how do you communicate this? Datta: We work backwards once we have the budget; we work backwards and accommodate but the service standards are never compromised. Seth: The only circumstance we allow ourselves to go

February 2022

Q. What have you learnt about pricing since you started? Datta: Pricing is important and from an ERA of commissions we are now on a ZERO commission regime, and competition have increased only, so have costs. Pricings have been an important factor but we changed to a service fee concept long time ago. We work on margins which are sustainable and healthy at the same time. Seth: One line- you pay peanuts, you get monkeys! Pay your staff well and get your clients to pay you well in order to get a great product. Gosain: In no case you can run a successful business on lowering your prices. Although, as I said above pricing is a very important factor in any venture and to adjust appropriate pricing is key to success, this is what I have learnt in over two decades of doing sales and marketing for my organisation.

February 2022

DL-SW-01/4211/20-22 | DATE OF POSTING: 5-6 OF MONTH | RNI NO. DELENG/2010/33723 | DATE OF PUBLISHING: 4th OF THE MONTH