Taking people abroad is big business in Kerala

As more and more people are travelling further and further away, spending more money and time on their vacation, the investment climate for outbound tourism in South India has been booming.

The growth has been so spectacular that we have seen a 400 per cent surge in business volumes during the last two years — since 2008-09, Mr K.C. Chandrahasan, Managing Director of Kerala Travels Interserve, pointed out.

“And we have just tapped the crest of the pyramid while the major potential still remains dormant at the bottom.

“Whether it is Bangalore, Chennai or Hyderabad, travel and tourism is still an urban phenomenon and it is yet to percolate and find a resonance from the huge rural population. They would constitute the bottom of the pyramid and offer the huge potential,” Mr Chandrahasan added.

And with the recent shift in terms of trade and fast growth in prices of agricultural commodities he discerned a visible rural prosperity which would translate into greater spending, including that for travel and tourism.

When the deluge from rural India into travel and tourism commences, it is going to be quite voluminous requiring huge investment, personnel and new infrastructure. And the tourism industry in South India is on a far more safer wicket since the origin of the riches are from safe and relatively more steady sources.

Industry sources pointed out that the source of wealth of most South Indian families are not derived from transitory sources such as the stock markets, trade and commerce, all of which most often have periodic seasons of boom and busts. The new found wealth is from more stable and reliable sources such as agriculture, industry and high paying jobs.

There has also been a demographic shift in favour of travel and tourism. There are more and more older, mature and wealthy people with substantial amount of disposable incomes who have developed an affinity for travel. Their awareness of travel as social medium for expanding their horizons has also helped the industry. The demographic shift is not restricted to the above fifties and sixties alone.

The spunky young IT whiz kids have tremendous amount of money to burn and a penchant for foreign travel. The demand from honeymooners and peer group travel has also been on an upsurge.

Consequentially, the demand for the facilitators, the travel agents and travel agencies is also bound to boom. The frequency and destinations have also been growing.

While in the earlier days people just used to travel within the country, the need for travel agents and agencies were limited.

Gulf impact

Then came the era when the demand for travel for work to destinations such as West Asia and to a limited extent to the US and European countries emerged, the demand for travel agencies mushroomed. When Gulf jobs became passé and the IT revolution boosted domestic pay packets, there was a tremendous demand for travel to South East and East Asian destinations for holidays.

Not to be left behind, the Gulf transformed itself as an emerging tourist and shopping destination, wooing tourists to its spanking new facilities.

The advent of low-cost travel and no-frills airlines further segregated and differentiated the market. The numbers boomed and outbound tourism has now become the by-word in South India's middle class lexicon. The demand was not just restricted to booking airline tickets but extended to services such as procuring visas, hotel accommodation, pick-up and drop facilities from airports and the whole gamut of transport to facilitate the seamless tour itinerary.

The upper echelons of the population have opted for an entirely different circuit. The top of the tourism pyramid has chosen elite tourist destinations such as Paris, Venice, Hamburg and Rome – the European circuit. But differentiation has now arrived among the upper crust of the tourism pyramid. The exotic destinations – North and South Pole, Alaska and Latin America etc. have all opened up, Mr Chandrahasan said, which is now far more expensive and is very much sought after.

Arctic tours

Of the 13 tours planned to the Arctic this year, seven are already sold out. The bookings to the remaining six are quite brisk and can close quite soon. The bookings for Arctic tours have opened in Dubai and Doha and the response have been overwhelming. The Arabs have both money to burn and time to spare.

However, most companies would find it convenient and prudent to straddle across all segments of the tourism market, right from domestic travel to the proximate South Asia and all the way to the exotic poles. This would insure them better against the vagaries of the market and the economic downturn.

The potential demand from the outbound tourism sector in South India remains huge. The demand for tourism services and travel and tour operators continues to grow.

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