SOTC Travel expects to grow by 15% in 2020

NARAYANAN V Chennai | Updated on January 24, 2020

Daniel D’souza, President and Country Head, Leisure, SOTC

Leading tourism company SOTC Travel expects its business to grow by 15 per cent in 2020 after witnessing a sluggish year marked by a host of demand- and supply-side challenges.

The company expects increase in experiential travel, demand uptick and rise in travellers from smaller towns and Tier-2 cities to drive business growth.

The year 2019 was a lacklustre one for both domestic and outbound tourism industry. While economic slowdown and nation-wide protests against the Citizenship Amendment Act (CAA) resulted in a demand slump, grounding of Jet Airways and the collapse of Thomas Cook threw supply-side challenges.

“2019 was a challenging year with Jet Airways and one of the largest tour operators going down. Overall, we saw demand sluggishness in parts, but we also saw the typical festive seasons still doing well. So, we were able to compensate and drive demand,” Daniel D’souza, President & Country Head, Leisure, SOTC Travel told BusinessLine recently.

“We would have closed the year with 10-11 per cent of growth over the previous year,” he added.

The short supply of flights to Europe and the consequent rise in ticket price after the Jet Airways episode also affected SOTC Travel, which counts 90 per cent of its business volumes from outbound tourism.

“Normally, a west bound flight would cost ₹40,000-45,000, which went up by 25-30 per cent. We had to manage customers who had already booked. Airfares have not softened yet,” D’souza said.

Changing destination

However, the slowdown in demand is only for a specific period or destination. “So we were able to drive demand by changing the destination. For instance, if there is a bushfire in Australia, we try and move customers to different destinations,” he added.

D’souza added that the company is witnessing growth in experiential travel from Indian customers. “Normally, Northern Lights are done from Norway and Scandinavia, which would cost around ₹2.5-3 lakh, but we launched Northern Lights from Russia at ₹1.35 lakh and saw a tremendous response for that.”

Currently, domestic tourism accounts for 8-10 per cent of business volume and the company expects it to grow by 3-4 per cent in the next year.

D’souza also added that with the last-mile connectivity offered by low-cost airlines, customers travelling from smaller towns and Tier-2 cities are growing significantly.

“Metros still contribute a significant sum because the volumes are far higher, but in terms of growth, the smaller towns have grown ast 25-30 per cent a year compared to the metros which are still slower,” D’souza added.

Published on January 24, 2020

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