Reports from the Sixth Annual Brand USA-led trade mission to India suggest that all of the hyperbolic reports one might have seen in the past year about the strength of the market from India are not hyperbole. They are real.
The Brand USA trade mission to India, held from September 10 to 15, visited two largest cities—Mumbai (estimated population of 12,691,836, according to the World Population Review), Delhi (10,927,986) and, this year, adding Chennai (4,328,063), India’s fourth largest city. There were 37 companies and 51 delegates from destinations, attractions and other travel suppliers¹, and they talked business with a large number of agents and operators. So intense was this interest in the market this year that, there was a waiting list of 10 suppliers waiting to take the place of anyone who might cancel.
In 2016, there were 1.17 million visitors from India to the USA, making it the 11th highest-ranked country by arrival numbers. Spending by Indians was the 6th highest – more than some countries with higher arrival figures.
To get a first-hand perspective on both the trade mission and the Indian market , the Inbound Report spoke with Robert Y. Graff, corporate vice president of marketing and international sales for the Las Vegas-based Papillon Group who’s spent years developing the market on both trade missions and through his presence at SATTE (South Asia Travel and Tourism Exchange), which is held annually in late January in India; and tour and travel industry veteran Stefan Merkl, founder and owner of Explore Marketing, who represented several U.S. travel suppliers on the trade mission.
“India is growing, secondary cities are becoming more important, and major tour operators represent 18 percent of USA visitors,” said Graff. “FIT and online activity are growing.” He also believes that traffic will increase as lift capacity continues to increase. For instance, he noted, the number airline seats to the U.S. are expanding as Middle East carriers and Air India move ahead with more non-stop services to the USA. Faced with stiff competition on U.S. routes, Air India recently launched a new recent flight from Delhi to San Francisco. At the same time, Qatar Airways has added a new flight from its based in Doha to Las Vegas. And that carrier has said that it plans to buy 100 aircraft to better service the India market.
The preferred routes for Indian travelers to the U.S. are via the Middle East Gulf states such as Doha, Dubai and Abu Dhabi, noted Graff, explaining that the UAE carriers provide superior service, with mostly new aircraft. (Hamad International Airport in Doha, Qatar is the home base of Qatar Airways; Dubai International Airport in Dubai, UAE, is the headquarters base of Emirates airlines; and Abu Dubai International Airport is the base for Etihad Airways. In Abu Dhabi, U.S. Customs and Border Protection operates the only pre-clearance facility in all of the Middle East and Continental Europe for U.S.-bound travelers.)
On the matter of air service, Merkl agreed. “The Middle East carriers such as Emirates continue to be a preferred connector to the U.S., as well as the increasing number of nonstop flights with Air India. Also Lufthansa continues to be strong in this market,” he told us. As for the overall condition of the market, Merkl said “it’s interesting to see how the market is switching quite rapidly from being group-based to being increasingly FIT-focused. Particularly younger travelers want to be independent, while some of the older ones still continue to want a lot of hand-holding. So, for example, they would call themselves FIT, but then would expect transfers all along, even when they travel within a city and could easily take public transit or walk.”
Looking toward 2018 and beyond: In addition to an increase in FIT traffic Merkl and Graff told the Inbound Report, is that there seems to be a building demand for destinations and experiences that are “Beyond the Gateways,”
Said Graff: “Growth from secondary cities is interesting. We’re experiencing more visitors from Chennai, Bangalore and Hyderabad. We all cover Mumbai and Delhi, but there is so much more out there. There is also a lot of growth among the smaller regional tour operators. … 2018-19 should be a good year for Indian visitation to the USA; expect double digit increases as Brand USA plans on pouring more resources in the market. Ironically, we hear that fewer visas are being issued to Chinese—however, this is not the case in India.² A record number of 10-year visas have been issued and the us government plans to exceed that number for this year. MICE is up, GIT is flat, and FIT is through the roof.”
“The Indian economy is strong,” said Graff, noting that the nation’s goods and services (GST) tax introduced on all services including travel has been decreased to just 5 percent. “So, assuming there is no change to U.S. supplier costs or exchange rates, the same U.S. vacation could cost less next year.”
We heard much the same from Merkl regarding 2018. And for the long-term, Merkl is decidedly optimistic: “The market will continue to grow as GDP grows at 7 percent quite consistently and the market is very optimistic about the future of India and their potential for becoming a global player.”
Merkl: “Some of the operators that we spoke to very much said that they want to look beyond the big gateways, and are encouraging fly-and-drive vacations and experiential travel. So from my perspective, this is a good time to start working with FITs. My understanding is that 2nd and 3rd tier cities are becoming increasingly important, as there’s a lot of money there now, with farmers selling land to big developers and then swimming in cash that they want to spend on travel.”
He added, “Student travel continues to be an important aspect of the Indian market, as Indian parents want their kids to see the world, learn from it, and most importantly bring home certificates of any educational experiences that they attended. A certificate on the wall is golden, and parents are more apt to paying a lot of money for an educational trip for their kids than for themselves.”
Graff, meanwhile, gave us a slightly different take, saying that he detected “a lot of interest in new attractions,” but pointing out, “Basically any itinerary that feeds off existing main destinations is of interest. It almost seems like Indian travelers want to explore more, stay longer … but the main iconic cities need to be part of their itinerary.” (Graff wanted to note that Papillon is introducing its Heli Skywalk Tour with VIP Dining Package, which includes a round trip flight to the West Rim of the Grand Canyon, with a stop at the glass-bottom Skywalk Bridge and lunch. The experience takes 6½ to 7 hours.)
¹ U.S. delegates included representatives from: 7M Tours; Budget Rent-a-Car; Choose Chicago; Destination DC; Empire State Building Observatory; Experience Kissimmee; Georgia Tourism;
Grand Canyon Tour & Travel & Rodeo Restaurant; Greater Miami CVB; Hornblower Cruises & Events;
L & L Tours; Lake Tahoe Visitors Authority; Las Vegas Convention & Visitors Authority; Leisure Pass Group and Tour Operator Land; Los Angeles Tourism & Convention Board; Massachusetts Office of Travel & Tourism; Maxim Tours LLC; MGM Resorts International; NYC & Company; Papillon Helicopters/Scenic Airlines; Philadelphia Convention & Visitors Bureau; Red and White Fleet;
Red Carpet Travels USA LLC; Roaring Camp Railroads; San Francisco Travel Association;
SeaWorld Parks & Entertainment; Tours Limited LLC; Travel Nevada; Travel Oregon;
Tualatin Valley Washington County Visitors Association & Mt Hood Territory; Universal Studios Hollywood; Visit California; Visit Fairfax; Visit Florida; Visit San Jose; Warner Bros. Studio Tour Hollywood;
Wyoming Office of Tourism
² The U.S. National Travel and Tourism Office reports that, for visas, the average annual growth of about 8 percent disguises the wildly fluctuating issuance levels for any year. Growth of 18 percent, 2.3 percent, and 8 percent from FY 203-15 was followed with a 2.2 percent growth in FY 2016.