Description
The impact tourism on economy, marketing strategies for promoting tourism, Price Discrimination in travel industry, Impact of foreign Exchange on travel Agencies.
Indian Tourism Statistics
Figures No. of Foreign Tourist Arrivals Annual Growth Rate No. of Domestic Tourist Visits Annual Growth Rate Foreign Exchange Earnings (FEE) In INR terms Annual Growth Rate In USD terms Rs. 64889 crores 18.1% $14.16 bn 5.58 mn 8.1% 740.21 mn 10.7%
Growth Drivers
Increased inbound tourist arrivals Increased business travel due to growing economy Favorable Government Policies
Growth Drivers
Rising domestic leisure travel High demand for quality rooms Increased medical tourism
Inbound tourist arrivals
?
?
Foreign tourist arrivals (FTAs) in India have increased as India continues to be a favoured tourist destination for leisure, as well as business travel. FTAs have increased at a CAGR of 8.1 per cent between 2004 and 2009.
Top 10 countries for FTA in India
Percentage share of States in India
Foreign Exchange Earning from Tourism in India
Impact on Indian Economy
GDP Employment
Shreenathji Holidays – Catering to Dubai Only
• Caters exclusively to retail travel agents • Exclusive tie up with DTCM ( Dubai Tourism Govt Body ) •Enjoys a virtual monopoly in dubai market for Indian clients.
Government policy
Easy Visa for Tourists
Government Policy
DTCM funding Tax free income
Marketing Strategies
Off Season
Kids get to for free ( Under 14 ) 2 Kids with 2 adults get to go free ( a Dubai govt initiative) Tie up with Atlantis which gives a room for $ 400 during offseason and $ 700 during peak season
Peak Season
Book the room 6 months in advance getting in a discount of 14.14% Create Awareness about the packages amongst the clients mainly through fliers
Surprise gifts, discounts etc
Tie ups with Radio city where in their advertisements cum in radio FM
Pricing
Off Season
May to Sept
Peak Season
Remaining Months
RS. 20K
Rs. 26K
Peak Load Pricing
Price Discrimination in travel industry
Opportunity Cost
Shreenathji paid $ 600 initially
Hotel cost after 6 months, $ 700
Net Savings, $ 100. NRR of 14.14% for 6 mth
Shreenathji Deposits $ 600 initially
Rate of interest, 10% for 1 year
Net Return, $ 30
Competition
Cartel Pricing
Competitors:
Raj Travel World SOTC Cox N Kings Thomas Cook
Cartel Formation
• Suppose the rate going on in the market is Rs. 95, the cartel will bring the price to Rs. 100. then we charge the client Rs. 98 to gain a price edge. This way we benefit by Rs. 3 and also on volumes • Other players also do the same, hence it is very tough to follow a cartel pricing mainly because of lack of trust amongst competitors.
Impact of foreign Exchange on travel Agencies
• • • 1. 2. 3. 4. • 1. 2. 3. Foreign exchange is an important component for travel agencies with O/S operations All the foreign exchange transactions are routed via a bank Bank charges its own commission while facilitating a transaction based on following factors: Rate charged by other bankers Currency in which payment has to be made/ received Awareness of the agency Volume of the transaction Agencies can pass on the cost to the O/S party in the following conditions: Agency is in a better bargaining position O/S party is not aware / price sensitive Amount is fixed in INR (Invoice value)
Outflow of Money from India
Scenario 1 : Indian Party Bears the Banking cost
IBR : Rs. 44.8/ USD Rs. 4500000
Travel Agency in India Banker of the agency
USD 100000
Deposit Bank Rate : Rs. 45/USD
Banker of the overseas party (say Hotel)
This 20 paise/ Dollar has to be borne by travel agency in India
Scenario 2 : O/S party Bears the Banking cost
IBR : Rs. 44.8/USD Travel Agency in India Rs. 4480000 Deposit Banker of the agency USD 99555
Banker of the overseas party (say Hotel)
This 20 paise/ Dollar has to be borne by O/S Party
Bank Rate : Rs. 45/USD
Drawbacks
• Net income= Total Expenditure –Leakages • Leakage= taxes, profits, and wages that are paid outside the destination spot • About 80% of travellers' expenditures go to the airlines, hotels and other international companies, and not to local businesses or workers. • Smaller trickle-down effect on local economies
Leakage
Solution
•
Training
evising local training programs and establishing educational projects. One should train the local people instead of foreigners to become guides due to their knowledge of the area and resources. Local Inputs: A proper examination of local resources available will be beneficial for both the industry and the local residents. Loans on low interest rates: The industry should also promote and support local communities to start tourism-related businesses and grant access to low interest loans. Legal Contracts: Empowerment of residents at tourist destinations by providing written and legally binding contracts between local people and tourism investors
• •
•
The Road Ahead
Investment in Smaller Cities Acquisitions, Alliances and Partnership Promotion of Eco and Medical Tourism
doc_552689108.pptx
The impact tourism on economy, marketing strategies for promoting tourism, Price Discrimination in travel industry, Impact of foreign Exchange on travel Agencies.
Indian Tourism Statistics
Figures No. of Foreign Tourist Arrivals Annual Growth Rate No. of Domestic Tourist Visits Annual Growth Rate Foreign Exchange Earnings (FEE) In INR terms Annual Growth Rate In USD terms Rs. 64889 crores 18.1% $14.16 bn 5.58 mn 8.1% 740.21 mn 10.7%
Growth Drivers
Increased inbound tourist arrivals Increased business travel due to growing economy Favorable Government Policies
Growth Drivers
Rising domestic leisure travel High demand for quality rooms Increased medical tourism
Inbound tourist arrivals
?
?
Foreign tourist arrivals (FTAs) in India have increased as India continues to be a favoured tourist destination for leisure, as well as business travel. FTAs have increased at a CAGR of 8.1 per cent between 2004 and 2009.
Top 10 countries for FTA in India
Percentage share of States in India
Foreign Exchange Earning from Tourism in India
Impact on Indian Economy
GDP Employment
Shreenathji Holidays – Catering to Dubai Only
• Caters exclusively to retail travel agents • Exclusive tie up with DTCM ( Dubai Tourism Govt Body ) •Enjoys a virtual monopoly in dubai market for Indian clients.
Government policy
Easy Visa for Tourists
Government Policy
DTCM funding Tax free income
Marketing Strategies
Off Season
Kids get to for free ( Under 14 ) 2 Kids with 2 adults get to go free ( a Dubai govt initiative) Tie up with Atlantis which gives a room for $ 400 during offseason and $ 700 during peak season
Peak Season
Book the room 6 months in advance getting in a discount of 14.14% Create Awareness about the packages amongst the clients mainly through fliers
Surprise gifts, discounts etc
Tie ups with Radio city where in their advertisements cum in radio FM
Pricing
Off Season
May to Sept
Peak Season
Remaining Months
RS. 20K
Rs. 26K
Peak Load Pricing
Price Discrimination in travel industry
Opportunity Cost
Shreenathji paid $ 600 initially
Hotel cost after 6 months, $ 700
Net Savings, $ 100. NRR of 14.14% for 6 mth
Shreenathji Deposits $ 600 initially
Rate of interest, 10% for 1 year
Net Return, $ 30
Competition
Cartel Pricing
Competitors:
Raj Travel World SOTC Cox N Kings Thomas Cook
Cartel Formation
• Suppose the rate going on in the market is Rs. 95, the cartel will bring the price to Rs. 100. then we charge the client Rs. 98 to gain a price edge. This way we benefit by Rs. 3 and also on volumes • Other players also do the same, hence it is very tough to follow a cartel pricing mainly because of lack of trust amongst competitors.
Impact of foreign Exchange on travel Agencies
• • • 1. 2. 3. 4. • 1. 2. 3. Foreign exchange is an important component for travel agencies with O/S operations All the foreign exchange transactions are routed via a bank Bank charges its own commission while facilitating a transaction based on following factors: Rate charged by other bankers Currency in which payment has to be made/ received Awareness of the agency Volume of the transaction Agencies can pass on the cost to the O/S party in the following conditions: Agency is in a better bargaining position O/S party is not aware / price sensitive Amount is fixed in INR (Invoice value)
Outflow of Money from India
Scenario 1 : Indian Party Bears the Banking cost
IBR : Rs. 44.8/ USD Rs. 4500000
Travel Agency in India Banker of the agency
USD 100000
Deposit Bank Rate : Rs. 45/USD
Banker of the overseas party (say Hotel)
This 20 paise/ Dollar has to be borne by travel agency in India
Scenario 2 : O/S party Bears the Banking cost
IBR : Rs. 44.8/USD Travel Agency in India Rs. 4480000 Deposit Banker of the agency USD 99555
Banker of the overseas party (say Hotel)
This 20 paise/ Dollar has to be borne by O/S Party
Bank Rate : Rs. 45/USD
Drawbacks
• Net income= Total Expenditure –Leakages • Leakage= taxes, profits, and wages that are paid outside the destination spot • About 80% of travellers' expenditures go to the airlines, hotels and other international companies, and not to local businesses or workers. • Smaller trickle-down effect on local economies
Leakage
Solution
•
Training
evising local training programs and establishing educational projects. One should train the local people instead of foreigners to become guides due to their knowledge of the area and resources. Local Inputs: A proper examination of local resources available will be beneficial for both the industry and the local residents. Loans on low interest rates: The industry should also promote and support local communities to start tourism-related businesses and grant access to low interest loans. Legal Contracts: Empowerment of residents at tourist destinations by providing written and legally binding contracts between local people and tourism investors• •
•
The Road Ahead
Investment in Smaller Cities Acquisitions, Alliances and Partnership Promotion of Eco and Medical Tourism
doc_552689108.pptx