In this age of online bookings, few offline tour operators are recording growth and positive returns. The customised and personal touch of an offline tour operator sets them apart from online aggregators.
Kolkata-based Diamond Tours and Travels is a leading tour operating company in eastern India. They have been in the business for over 25 years. Saurav Agarwal, Director, Diamond Tours & Travels, spoke to BE’s Saptarshi Deb on the emerging trends of the tourism sector, on the newer tactics employed by budget hotels to stay in the market, and on their competition with online players.
Q. What are the main selling points of offline tour operators like your organisation?
A. For the past 25 years, we have been involved in the sector and this has given us the knowledge and expertise to understand the exact needs of clients. Nowadays, the internet is providing a lot of choices and reviews on destinations and hotels. Travellers might get confused when it comes to choosing according to their budget and expectations.
We are revamping our role and are marketing ourselves as travel consultants. In this new avatar, we help the clients to design the tour itinerary, select the destinations, choose the hotels, and also advise them on the preferred means of transportation. We often set up the total tour budget for our clients. While purchasing a tour from us, clients have personal interaction with us. Online Travel Agents (OTAs) lack this. To overcome this, many online providers have opened physical offices in various cities, which act in an offline mode to generate more business.
Travel packages are high-value products. For example, if a family of four are going for a tour for a week, they will definitely have to spend more than `50,000. We believe that before spending an amount of that scale, a consumer will definitely look for personal interaction and valediction and seek detailed information and advice. In case of any deficiency or problem arising during the tour, it is easy to reach the offline operator than the online ones who will direct the call to a call centre.
We have designated staff to deal with our clients and this gives us a definite advantage over our online competition that has non-personal call centre voices to redress the problem.
Many of our clients have informed us that in times of crisis, they had to repeat their problem more than once as they were directed to a new employee in the call centre each time they called.
Our long stay in the sector has enabled us to forge excellent relations with hoteliers and transport providers. Due to such established and long standing relations, we are better poised to resolve any problem, which may arise during a tour. Similarly, we can provide our clients with highly competitive rates due to the special relationship we share with the providers.
I must also emphasize that through our numerous interactions with clients we know that refund on cancellation of services booked through OTAs may take a lot of time and the customer has to contact them numerous times for redressal.
Some OTAs don’t refund in cash or even transfer the sum to the customer’s bank account but prefer to credit points in the customer’s online account. Some OTAs charge separately for cancellation of air tickets apart from airline cancellation charges. Cancellation procedure is much easier with offline providers.
Q. What are the new concepts, which are being designed by offline operators to explore the market?
A. Many offline players are now following the Bypass Strategy to ensure their survival and growth. They are not focusing on the traditional product, which is being sold online through OTAs. They are exploring more off-route and less explored destinations where OTAs have not reached. Some are also investing to develop accommodation infrastructure in off-route and not-soknown tourist destinations. Here our long standing relationship with hoteliers comes in handy as they can capitalise on our detailed knowledge to build new properties. Like OTAs, even some big offline players are going for pre-purchased room inventory during peak season. Small offline players often buy from them and even sell among themselves.
Many offline operators have foraged into the business of group departures apart from family-based customised tours. We are focusing on this segment as OTAs so far have not been very successful in group departures. One or two OTAs operate group departures with airfares but they are very expensive and do not provide end-to-end services.
As personalized tour operators, we can provide specific services in the case of these group tours. For example, a band of Bengali tourists travelling with us to Gujarat will be provided their favourite fish curry in the Gir forests. Such services cannot be provided by OTAs.
Facing stiff competition from online operators, we are also bargaining hard with the suppliers to get special rates to provide services at competitive rates. Every developed tourist sector has big offline agents having special rates working on B2B module. Small offline agents buy from them and sell the products at competitive rates.
Till now, offline operators were providing free consultancy and surviving on the profit generated through sales. With the advent of OTAs, a section of the consumers have shifted to book hotels/tours online but they still look for personal consultancy. Here offline players should provide consultancy in exchange of fee. Paid consultancy can be a major source of income for offline players. I must also mention that this intense competition has forced our segment to move a step upward on the supply chain as a lot of us are procuring hotels.
Q. How has the customer base evolved over the years?
A. Now consumers have more disposable income and thus, can spend more on holidays. Even youngsters are spending a good amount on travelling. Now customers are more aware and educated due to the internet. The tourism market has become more transparent. It is increasingly difficult for those who have the habit to over-price the products as the internet has enabled customers to sit at home and compare rates. Expectations of customers have increased. Now customers demands services like Wi-Fi, indoor games, buffet breakfast, lift, coffee shop, swimming pools, lockers, parking and others. We are recently noticing a disparity between the amounts a section of the customers is willing to pay with the services they are demanding.
The size of the tourism market has increased due to the massive advertising by OTAs. Low and middle income groups are saving to spend on a vacation, which is quite a new trend. Due to the increase in disposable income and expectations, growth percentage of star hotels is more than budget hotels.
Q. How has the advent of online aggregators changed the market?
A. The online aggregators have initiated a stiff competition in the market. Small offline operators are fast diminishing. They have also greatly eased transaction of travel products. Due to the massive advertising undertaken mainly by these players, the total size of market has expanded benefiting the operators who are capable of grasping this expansion. Online operators have given more choices to the customers and have infused transparency.
Q. How are budget hotels reinventing themselves to cater to this evolving market?
A. With the increase of disposable income and expectations, even budget hotels are upgrading their facilities. Nowadays, Wi-Fi is a common service provided even in budget hotels.
Even the room tariff for budget hotels has gone up at unprecedented proportions. Budget hotels are investing heavily on their infrastructure. Some have improved in order to compete with the facilities provided by star hotels. Now most budget hotels have their own websites for online presence.
Even budget hotels are keeping track of the guest feedback provided in online platforms. To increase their sale during the slack period, they are also offering good discounts.
Q. Are hotels still open to choose offline tour operators or are they embracing the online aggregators?
A. Hotels are open to both offline and online aggregators.
Many hotels have set up their reservation units in a way to serve both offline and online operators. Many budget hotels are yet to be equipped to cope with the technological upgradation required to work with OTAs and as a result, they are falling behind or are witnessing overbooking.
Q. What sort of services or travel consultancy are customers expecting from offline tour operators?
A. Customers are expecting us to plan their tour keeping in mind their special needs. Today, a section have emerged who have extensive travel budgets but are too busy to plan their travel and do their tickets. We as offline operators have to organise their trip keeping in mind their demands. Often there are special demands like wheel chair or food for infants who are traveling to which we are expected to cater to.
Q. What are the major tourists destinations preferred nationally by your customer base?
A. We are mainly focusing on the outbound tourist from eastern India. However, Sikkim and Darjeeling remain a favourite. The Silk Route, exploring high altitude regions of North Sikkim is also a preferred destination for young travellers. Apart from this, we generate a lot of business from tours to Kerala, Andaman Islands, Himachal Pradesh, and Laddakh. Internationally, Bhutan and South East Asia (Thailand, Malaysia and Singapore) generate a lot of interest.