The transition to 2017 has been a rather bumpy ride for India, especially in Kerala
Text: Akshaya Ashokan Photos: Jinson Abraham
The tourism and hospitality sector is one among the key drivers of Kerala’s economic growth. Last year alone, the contribution of this sector to the state’s GDP was 9% and the government is aiming at 20% growth within the next five years. With the kick start of New Year, some of the major players in the market are gearing up for the road ahead and are hopeful that industry will continue to flourish despites certain hiccups in 2016. The transition to 2017 has been a rather bumpy ride for India, especially in Kerala. With the withdrawal of 1000 and 500 rupee notes, Kerala’s economy especially the tourism sector has witnessed a slump in the arrival of both domestic and foreign tourists in the last season. The Kerala State Tourism Department has witnessed a loss of rupees 1000 crores in wake of demonetization and has seen 10-15% dip in the arrival of foreign tourists and 20-30% in that of domestic tourists.
According to Simon Chacko, Asst. Manager Public Relations & Marketing, Le Meridien Kochi, despite the hike in the digital transaction, the safety concerns revolving online transactions are causing worry to travellers worldwide, “The online spending habits are on the rise, at the same time it’s erratic too. The everpresent security threat is acting as a dampener for the travellers worldwide. This has seen a rather dropping impact on the leisure traveller’s count accounting to the rather non -friendly market policies,” he said. While currency crunch is believed to be one among the problems that Kerala’s hospitality sector faced, the state government’s very own decision on liquorrestriction policy in 2016 resulted in a backlash of the industry. This is a far cry to the government’s actual vision of turning Kerala into Meetings, Incentives, Conferencing, Exhibitions (MICE ) destination which envisages a greater inflow of corporate crowd and promoting God’s Own Country as the ideal wedding destination. Strict notice by the Excise authority on serving alcohol in conferences, corporate function and social gathering, saw hoteliers witnessing last minute cancellation.
According to Kerala Tourism Trends 2016, factors like stringent Excise Tax and Luxury Tax were other reasons which contributed to the downward slump of tourism and hospitality sector. However, both the government and business entities felt that the need for improving destination based infrastructure to be a crucial element in ushering in more tourists to the state. However, Shuvendu Banerjee, GM, Crowne Plaza is of opinion that this development of infrastructure without proper planning on the part of hoteliers could inversely affect the growth prospect. “The uncontrolled and unplanned developments of many destinations are really a challenge, this would negatively affect the guest experience as well as the quality of life of local communities,” he said. According to him, the only way to attract holidaymakers across the globe is by offering innovative products, “Kerala needs to constantly innovate its product offerings by adding new destinations, unique experiences, unheard stories and unusual events. Kochi Muziriz Biennale is a good example for the same,” he added.
Maintaining that both demonetization and liquor policy posed a challenge for the sector, Banerjee says that 2016 in other regards have been good for the industry. “The year 2016 was a fantastic year for hotels, at least in Kochi city. Growth in corporate business, Large MICE movements, City-wide medical and sporting events have contributed significantly to the performance of many hotels. The leisure traffic from Arab market during pre and post Ramadan months also registered significant growth,” Bannerjee said. While some of the other positive trends that we have seen towards early 2016 was a larger dependency on online air ticketing within India. According to a study released by Indian Brand Equity Forum (IBEF) on tourism and hospitality, 70% of flight ticket booking were done online in the previous year. With the onset of demonetization marking a greater shift to the online transaction, this trend is likely to go up in the coming years.
Highlighting the positive side of demonetization, Shimon said, “There has been a sweep of changes in the industry starting from demonetization which is a step forward for the changeover to ‘Going Digital’. The numerous start-ups, apps and newer distribution platforms are constantly redefining the way one looks at the travel and hotel booking experience. Not all positive, not all negative but turbulent markets create opportunities and our focus for 2017 would be to target the same.” to see a breakaway from traditional to more nuanced business delivery model; that is marrying of technology with the hotel’s working so as to provide a seamless stay for your guest thus staying abreast in the game. With apps updating guest about the rush in a banquet hall to personalization of the room ambience, the possibility of incorporating technology in hospitality sector so as provide a unique experience for your guest, are many.
The Union government’s plan to include 150 countries under e-visa scheme last year was a welcome change to improve tourism and hospitality growth in the country. Latest reports show that more tourists availed this scheme in December 2016 compared to 2015, marking a growth of 56.6%. With increased Free Trade Agreements (FTAs) and tourist movement having a direct impact on the growth of hospitality industry, personalization by parties will be an essential game changer.
“The corporate and leisure segments are expected to grow, especially the traffic from Arab countries during Monsoon season. However, the absence of any confirmed mega city-wide events may further affect the MICE business.” – Shuvendu Banerjee, GM Crowne Plaza.
“The numerous start-ups, apps and newer distribution platforms are constantly redefining the way one looks at the travel and hotel booking experience. Not all positive, not all negative but turbulent markets create opportunities and our focus for 2017 would be to target the same” – Shimon Chacko, Assistant Manager, Le Meridien
Takeaway
On the whole, even though there have been certain setbacks, tourism and hospitality sector will witness a surge from the gloom state. With the recent budget more focused on successful implementation of GST, the unified tax structure would bring in more efficiency. With the United Nations announcing 2017 as the Year of Sustainable Tourism, the industry in Kerala is taking many initiatives with the support of state government and local bodies to support the responsible tourism initiatives. “On a positive note, both the Central and State Governments are pro-tourism and pro-industry in their approach. The Green Carpet mission of Kerala Tourism and the Agenda 9 initiative of Kerala Travel Mart Society are good examples for the same,” concludes Banerjee.