The Hindu Business Line : Pilgrims' progress

Foreign budget travellers to India often have to make a choice between steeply priced hotels and poorly maintained guesthouses. But some hospitality players are trying to fill this gap.

Olga's tryst with the Orient began with a low-cost tour of India. Her sojourn took her to a rustic home in Hampi, a three-star hotel at Varkala and monasteries of Dharamsala. She had to rough it out in second-class sleepers and like many other foreigners fell ill. "If you are very careful, it is possible to manage with $200 a month; with $300, you can live like a king in India," says the Tel-Aviv based marketing professional.

Thijs, a Dutch engineer, did quite a bit of sightseeing during his internship in Chennai. Much to his chagrin, he lost his brand new digital camera on a tour bus in Delhi and often found himself bargaining with auto drivers. Recalling how he clung tight to his Lonely Planet guide and mineral water bottle, he says, "I was scared to get sick and I looked out for clean and affordable hotels."

Olga and Thijs are among the many travellers who traverse the exotic landscapes of India and South America without swiping cards at ritzy accommodations.

Value for money

"An average foreign budget tourist is in the 20-40 age group and looks for budget accommodation of less than $50 per day," says S.M. Korde, Secretary General, Hotel and Restaurant Association (Western India). While cash-strapped backpackers can make do with rundown lodges (which are aplenty in Old Delhi), many mid-budget tourists are unable to find `value-for-money' hotels.

Two-star and 3-star hotels in India, in fact, are over-priced compared to those in Sri Lanka, Thailand and Malaysia, says Himmat Anand, COO of SITA In-bound division (Kuoni India). "Decent hotels charging $20-30 a day are a rarity. The tax laws have proved to be a deterrent for the hotel industry." This often leaves the budget traveller in a catch-22 situation, as he has to choose between steeply priced hotels and poorly maintained guesthouses. But some hospitality players are trying to fill this gap.

For instance, budget hotels in western India, where on an average foreigners make up 10 per cent of the clientele, have upgraded safety and hygiene standards. The Taj Group's budget-hotel chain IndiOne is also bullish on the tourist segment. IndiOne, which currently has a hotel in Bangalore, caters mostly to corporates. About 15-20 per cent of its clients are foreign tourists.

"Many have shown interest in IndiOne abroad. There is a huge need for value-for-money hotels and infrastructure for India to become a large tourism destination," says Partha Chatterjee, General Manager - Sales and Marketing, Roots Corporation (the company that launched IndiOne).

On the cards are branches in Haridwar, Nashik and Varanasi, which may smoothen the foreign pilgrim's progress. Prior to liberalisation of the Indian economy, foreign tourists were of two extremes — the high-flying executive and the unruly hippies, says Nirvan Buhari, the proprietor of Buhari Blue Lagoon Resort, a seaside resort in Chennai.

"Only in recent years, more mid-income tourists have been heading to India besides other popular destinations like Mauritius," he points out. During the peak tourist season (November to February), 20 per cent of the resort's clients are foreign budget travellers.

Home away from home

With nearly 140 three-star and two-star hotels, Kerala has turned into a major hotspot for both high-end and budget tourists. Kerala Tourism mostly promotes up-market resorts, but also operates several budget hotels, says U.V. Jose, Planning Officer in the Department of Tourism. The organisation grants approval for home-stays — rooms rented out by families to tourists.

Homesick travellers experience local customs and delicacies at such settings. "Tourists look for home-stays with a clean environment, good amenities and friendly hosts," explains Jose. The bonhomie between tourists and Indian families is not only bridging cultures, but also spawning a market, with over 300 homes across the State offering this facility. But SITA In-bound's Anand feels that the home-stay segment is not well organised. "To develop a strong mid-budget tourist market, home-stays must be promoted continuously," he says. In fact, privacy-loving flat owners in Mumbai and Pune are not keen on having tourists as paying guests.

No-frills travel

Back in 2003, Olga found air travel within India too pricey and opted for train travel. At the end of her trip, she flew from Chennai to Delhi, as a three-day train journey on that route would have been too strenuous. "Even the air ticket was a present from my parents!" she says. Some domestic carriers also levy a higher fare for foreigners, which has made India a less tourist-friendly destination. SITA In-bound has launched $-200 eight-day packages with overnight train journeys for this segment. Westerners usually find the train reservation system rather mind-boggling, says Anand.

But now, budget travellers can take to the skies, thanks to low-cost domestic carriers. The recently launched SpiceJet charges a similar fare for foreigners and domestic passengers. Low-cost carriers (LCC) such as Ryan Air are gaining prominence worldwide. As Sanjay Kumar, General Manager, Sales and Marketing, SpiceJet, puts it, "All travellers in Europe and South-East Asia are more familiar with the functioning of LCCs." He also hopes that SpiceJet can tap more foreign budget tourists with its low fares.

The higher capacity of international airlines and the launch of no-frills services to India has increased the inflow of foreign tourists, says Korde. The tourist traffic, in turn, has enabled budget hotels to reduce their average room rates. Joshua Murali, the sales manager of STIC Travels, ascribes the influx of tourists to the recent open sky policies. Alitalia has flown in almost a million passengers into India this year and 30 per cent of them were budget tourists.

The road ahead

Most travel industry officials agree that the facilities in South-East Asia are far superior to those of India. While tourist spots in northern and southern India are seeing high tourist inflow, other parts of India need a bigger push, points out Alitalia sales officer Monaz Billimoria. On the brighter side, campaigns such as Incredible India (which has also been launched in European languages) have boosted the country's image abroad.

The low cost of sports facilities is also luring more travellers. Several Japanese golf buffs head to Chennai and Kodaikanal since golf membership is prohibitively priced in their home country, says STIC's Murali. Still out of the two million South Koreans who travel abroad every year, very few come to India. The CEO of Thomas Cook, Ashwini Kakkar, is not so gung-ho about the advent of budget tourists.

While 15-20 per cent of the agency's clients belong to this category, he points out that high taxes, unhygienic hotels and lack of sight-seeing information are keeping travel enthusiasts away from India. "Once the three-star hotel market is well developed, India can hope to double its tourist traffic in three years' time," says Anand.

Picture by S. Subramanium