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Wednesday, 16 November, 2011, 17 : 00 PM [IST]

A Shift in Perceptions

For the Indian middle class, first time traveler, the saying has a twist - East is East, West is West, but South East is the best.
anurag_yadav.jpgHow snob value is shown its place and common sense replaces foolhardiness is clearly evident in the steady progress of Indian outbound to South East Asian destinations. When it comes to the steadily growing fortunes and ambitions of the Indian middle class, the shores of our South East Asian neighbors are proving to be a more natural draw than the lure of the usual West bound vacations.

Tourism to South East Asia is seen to be growing because of several reasons like affordability, hospitality and easy availability of Visas. Travel agents and tour operators report that after the earthquake in Japan, there were hardly any bookings for the Far East and South East Asian countries like Thailand or Malaysia, but the lull did not last for long. Indians are, as a people, less prone to panic over such disasters than those coming from USA and UK. And in recent times, there has been a rediscovery of the cultural proximity and the unique distinctiveness of South East Asian nations. Yet, this change, though welcome, has been in no mean measure, prompted by high travel costs to the Western hemisphere.

Take the case of Macau. Despite its high end status as a big spend destination, it is fast catching on as the ‘Kathmandu’ for the travelers who loved the Himalayan kingdom’s capital solely for the few baby casinos in the city. Clubbing Macao with a day in Hong Kong and a steamboat ride into a different part of China on yet another day makes the destination very positive prospect indeed. If air connections get better there is no stopping the influx of Indian outbound from wading onto its shores.

The general hike in airfare in recent times due to an increase in taxes has not really affected tourism to South East Asia since despite the increase; it is not expensive for the middle class Indian traveler. For example, despite the surfeit of air miles on my Kingfisher frequent flyer program, a trip to London still requires me to cough up 24,000 INR even after blowing up all air miles gathered over a year and more. For the same cost or a bit more, one can avail a trip for two to most South East Asian capitals and in some cases throw in a couple of days hotel stay as well.

While this may spells music to our neighbors’ ears, the growing popularity of South East Asia as a tourism destination could become one of the biggest threats for the domestic tourism industry in India. Outbound tourism to this part of the world has been growing at 10-15 per cent per annum as an increasingly large number of Indians seem to prefer these destinations over domestic travel due to the attractive pricing. The cost of accommodation in most of these countries usually works out to be lower than most of the hotels of similar categories in India. Travelers from India do not mind shelling a bit extra for the flights since it is more than offset by the lower room rates in these countries. However, it is not that the domestic tourism industry is drying up. It has been growing at 15-20 per cent every year. Some experts opine that the approximate value of the domestic tourism industry is a hundred thousand crore per annum.

This is yet another angle to the ever expanding Indian outbound potential. In Western markets, Indians are opting for hotels in higher categories. On an average Indians in Europe, spend marginally more than what their European counterparts are prepared to pay according to some reports. Some resorts in Thailand have seen a 100 per cent growth in Indian occupancy recently. Singapore, Hong Kong and Thailand remain the "stars" of the Asian tourism destination brands, but competition is high as country brands such as Malaysia, Indo-China, South Korea, China, Philippines and Indonesia move to increase their brand recognition and brand.

The strategy is paying dividends. World over, terrorism and threat perceptions have greatly impacted tourism trends. The South East nations have also recovered from their West fixation in some measure. A couple of years back, Bali's tourism industry was  hit badly immediately following the blasts but recovery had been faster than many predicted since while US incoming tourism had seen a sizeable fall, inter-Asian tourism was much less affected. There is also a trend of sharing tourism amongst immediate neighbors which adds more value to incoming tourist’s itineraries and results in a symbiotic growth of the region.

The worry lines on the face of Indian domestic tourism are not getting prominent, given its sheer size, volume and the numbers of potential customers. However, as air connections become smoother, the word ‘domestic’ might need to be redefined.
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