India has become one of the world’s fastest-growing travel markets and have key characteristics of an emerging tourism market. According to the UNTWO’ figures for 2008 India ranked 25th worldwide in terms of the international travel expenditure. There are many positive factors that influence Indian demand, for instance, Indian national
economy is getting stronger, with GDP growing by around 8.5% every year. This growth can be explained by the waning of trade and investment restrictions in 1990es as well as due to the new economic policies on the foreign investments, privatization and liberation of the market in India (PATA, 2001).
According to Sharda and Pierce (2006, p.342), economic growth in India and “freeing up of the basic travel quota in 1996 have resulted in a rapid expansion of outbound travel following an earlier surge in domestic tourism”.
UNWTO (2009) estimates that India will account for 50 million outbound tourists by 2020 and will make it one of the leading outbound destinations globally. Currently 40%
of all outbound trips done by Indians are for business purposes, while leisure, visiting friends and relatives and other reasons each account for 20% of outbound trips from the country. Additionally, middle-class disposable income has been rising very fast. A large number of foreign national tourism organizations are establishing their presence in India, starting an extensive promotion towards Indian customers, and trying to increase outbound tourism demand.
Indian Ministry of Tourism (2010) suggests that leading outbound tourism destinations in 2010 were Singapore, Middle East countries (e.g. Bahrain, Kuwait, Saudi Arabia), Malaysia, Thailand, China and Hong Kong, United Kingdom and Switzerland.
Additionally, for many Indians dual destination visit is common, for example – Australia and New Zealand.
According to the European Travel Commission (2010), the growth of the low-cost carriers and familiarity with the new technologies in general and specifically the internet are encouraging Indians to make direct bookings more frequently of their future trips.
Nevertheless, due to the overwhelming and unstructured current information present online, traditional dual visits of tourism destinations along with the visa barriers, make the work of the travel agents more valuable in India and the majority of bookings are still made through traditional travel agents. Furthermore, it is believed that Indian customers rely on travel agents for a very high level of servicing and often make multiple changes to their travel plans.
The research on the Indian tourism profile, which has been undertaken by the European Travel Commission (2010) suggests that, in 2008 70% of the Indian leisure travellers to Europe relied on family and friends for the decision process and the information source.
60% of them relied on the internet, 55% on the travel trade, and 25% on media (various publications, radio and TV programs, etc.).
Indian tourists in general prefer word-of-mouth and personal recommendations, including those of travel agents, rather than detailed reading or browsing through web pages before making their travel decisions. Although they may value literature for browsing through their leisure time, this reading is not as relevant for their travel decisions.
Travel industry in India is booming, though travel market is very competitive. Indian travel distribution system is very fragmented and varies across the country. According to the European Travel Commission (2010) there are over 20.000 retail travel agents spread across the country. Most of them are small and independent businesses that are issuing tickets and focusing largely on the domestic travel market and on selling tickets on pre-packaged tours. Few of those agencies are able to cater to the demands of independent travellers going overseas.
Tourism trade in India is categorised as follows:
- Three big international tour operators, which have an extensive presence in India – Cox and Kings, Thomas Cook and Kuoni.
- Medium sized operators: wholesalers or retailers, catering for Free Independent Travellers (FIT) and travel groups, operating regionally with moderate marketing budgets and specializing in 8-10 destinations: Kesari, Club 7, Dewan Travels, Holiday Representations, International Travel House, and JTB Travel.
- Small operators are the retailers that work in a single city with minimum marketing budgets and catering largely for FIT customers. Although they are usually not very good product planners and in most cases copy the itineraries of the main three tour operators in the destinations in which they specialize.
- Niche operators: retailers providing detailed itineraries in single destination for more sophisticated traveller’s (FIT or business travellers).
- Ticketing agents supporting small and niche operators, and working just with the ticketing issues.
Indian Ministry of Tourism (2012b) divides travel trade in the country into five categories:
- Domestic tourist operator.
- Adventure tourist operator.
- Inbound tour operator.
- Tourist transport operator.
- Travel agent.
It is relatively easy to set up a travel agency or a tour operator company in India, as the travel agent's license is not required. According to the European Travel Commission
(2010) there are around 700-1000 start-ups every year. Nevertheless, there is a voluntary certification scheme, which is proposed and implemented by the Government of India – it’s Ministry of Tourism to become an Approved Travel or Trade Operator. The scheme is open to all bonafide travel agencies with the main motivation of the scheme is to bring travel agents in an organized sector, to encourage quality standards within the industry as well as to promote tourism in India. In 2009, Indian Ministry of Tourism has approved 1246 providers of the travel trade services.
A travel agency that applies for voluntary certification status should meet the next requirements (Indian Ministry of Tourism, 2012a, pp. 2-3):
“i)Travel agents (TA) should have a minimum Capital employed of Rs. 3.00 lakh for rest of India and Rs. 50, 000/- for the agencies located in the North – Eastern region, remote and rural areas duly supported by the latest audited Balance Sheet / firm’s Statutory Auditor’s certificate.
ii) TA should be approved by International Air Transport Association (IATA) or should be General Sales Agent (GSA) / Passenger Sales Agent (PSA) of an IATA member Airlines.
iii) TA should have been in operation for a minimum period of one year before the date of application.
iv) The minimum office space should be at least 150 sq. ft for rest of India and 100 sq. ft for hilly areas, which are above 1000 meters from sea level. Besides, the office may be located in a neat and clean surrounding and equipped with telephone, fax and computer reservation system etc. There should be sufficient space for reception and easy access to toilet facilities.
v) TA should be under the charge of the Owner or a full time member who is adequately trained, experienced in matters regarding ticketing, itineraries, transport, accommodation facilities, currency, customs regulations and tourism and travel related services.
Besides this, greater emphasis may be given to effective communication skills, knowledge of foreign languages, other than English. There should be a minimum of four qualified staff out of which at least one should have Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or an institution approved by AICTE. The owner of the firm would be included as one of the qualified employees.
The academic qualifications may be relaxed in case of the other two staff members who are exceptionally experienced personnel in Airlines, Shipping, Transport and PR agencies, Hotel and other Corporate Bodies and those who have worked for three years with IATA / UFTA agencies and also those who have two years of experience with MOT approved Travel Agencies.
For the Travel Agents / Agencies located in the North – Eastern region, remote and rural areas, there should be a minimum of two staff out of which one should be a qualified employee with a Diploma / Degree in Tourism & Travel Management from a recognized University, IITTM or an institution approved by AICTE. The owner of the firm would be included as one of the qualified Employees.
vi) TA should be an income-tax assesse and should have filed Income Tax Return for the current assessment year.”
Singh (1997) has discussed the development of human resources for the Indian tourism industry, where she suggests that generally secondary school or vocational school degree is acceptable in India for different positions within the tourism and hospitality industry.
She suggested that in 70’s and 80’s a few universities have started offering formal tourism programs, although industry applied knowledge is lacking in most of the programs. No previous empirical research has been found on the level of education, training or certification needed to enter to the travel agents position in India.