Tourism makes for 6.8% of India’s GDP and the government has big plans to expand this share. The country has 30 world heritage sites, 25 bio-geographical zones, 7,517 kilometers of coastline for leisure travelers and rapidly growing cities for business travelers as well. The current government wishes to develop a number of tourism zones and the mid-market hotel industry is gearing up to tap into this growth.
Even though the country drew just seven million foreign tourists 2013, and is ranked 42nd in world tourist arrivals, the Indian government continues to focus largely on international tourists. In an attempt to boost the number of international arrivals, the government recently introduced a policy of ‘visa on arrival’ for travelers from 43 countries. This is additional to the 13 countries which were initially eligible. It is hoped this will increase earnings for the third largest foreign exchange earner in the country.
But foreign travelers are susceptible to the vagaries of more complex aspects like political situations, diseases and government advisories. A case in point is the tiny state of Goa located on the west coast of India. This state has seen many waves of international travelers. In the 90’s it was the Germans, later it was the Brits and more recently the Russians. The industry however was hard hit this year when 400 or so Russian charter flights were cancelled due to the political instability in the country and devaluation of the ruble. Now the Goa tourism industry is actually evaluating the idea of changing focus and marketing to newer feeder destinations not affected by economic slowdown and political instability like China, Singapore and Australia. But while governments chase foreign exchange, could they be ignoring a significantly large domestic feeder market that is better positioned to boost the tourism industry?
Discovering the Domestic Tourism Market
India has a billion domestic travelers and 600 million of them are millennials (twice the population of the United States!). Millennials is that population of young Turks between the ages of 18 and 34 years. This population segment is well-documented for their likes, dislikes and bold tastes, especially with reference to the travel and hospitality industry.
The advantage of tapping into this sizable Indian travel population is obvious; we do away with the punishing vagaries of international events, and grow the tourism industry on domestic revenue. The ripple effect would be circling right within the large boundaries of India.
Preparing for the Indian Millennials
But getting the hospitality industry in India to cater to the domestic leisure traveler would require a fair bit of reorientation. This is because domestic tourists are looked upon as price conscious, almost like budget tourist. The Indian hospitality industry also needs to better understand their millennial guests before effectively catering to their needs.
The Indian millennials have an ongoing love affair with their mobile phone, which is swiftly being upgraded to a smartphone. They are hungry for information and social interaction. But being rural India has a mobile internet penetration of less than 10%. This is an excellent growth opportunity that the tourism industry can tap in and cash on to.
Millennials are confident, have strong leadership traits, are technology savvy, love to travel especially to exotic places, are always on the lookout for a wow experience, are demanding of high quality personalized services, loud about their opinions- so make sure they are always happy, and have the spending power to meet their whims.
Serving the millennial guest requires panache, finesse and of course technology. It is here that hospitality, the ‘people and service’ centric industry could face a hurdle. The hospitality industry has historically been a laggard at adopting technology, but with their potential guest tapping away on their smart phone and tab, they hardly have a choice.
New Age Technologies for New Age Guests
Technologies like mobile, cloud, and social media can enable the hospitality industry to transition from a reactive to a proactive service provider and attend to their guest in a real-time and personalized manner. For example, imagine your front desk staff greeting a person by name and letting them know that the hotel is currently hosting a Kerala food festival even though the guest has checked into your hotel for the first time. Well there are solutions being made available that gathers information on your guest after the reservation, this information is made available to your front desk staff, and voila, you are not only building loyalty before the guest has even entered their room, but upselling as well.
Now, there are also mobile apps that allow hotels to check-in a guest even as they are on their way from the airport, or check them out while walking them to their cab. Many large hotel chains already have apps that allow guests to interact with the hotel by making requests or ordering services. But technology is being democratized rapidly, and now, you don’t have to be a large five star hotel to access mobile, cloud and social media technologies, these are being made available to independent, mid-sized and small hotels as well. Planned as plug and play solutions, digital technologies are allowing hotels to not only leverage the internet, but also the sizable in-house database of guest information to create a comprehensive guest profile and take service to a new level of personalization for the millennials. Is your hotel ready for the big change?