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'Taxing Foreign Travel Won’t Promote Domestic Tourism': Travel Body Head Jyoti Mayal

For The Core Report: Weekend Edition, financial journalist Govindraj Ethiraj spoke to Mayal to understand the trends seen in 2023 for both international and domestic travel and how it would pan out in 2024. 

By The Core Team
New Update
Jyoti mayal

Prime Minister Narendra Modi recently urged Indian families holding big destination weddings abroad to hold such ceremonies in the country. He said he is troubled by this trend and urged such celebrations to be held within the country to ensure India's money does not leave its shores. 

His direct urge came after the government introduced several policies that disincentivised foreign travel. A 20% tax collected at source (TCS) is applicable on overseas tour packages above Rs 7 lakh in a financial year from October. If the foreign tour packages cost up to Rs 7 lakh, TCS will be levied at 5%. 

“It is an urge. But if you're increasing the taxes, that doesn't mean it's an urge. That means you're actually being told not to travel outside. I'm a very straightforward person. That's the reason I'm putting it like this,” Jyoti Mayal, president of the Travel Agents Association of India (TAAI) told The Core.

According to Mayal, the government need not have to disincentivise international travel to promote domestic tourism as an opportunity for growth in both domestic and international travel exists. To brand India as a travel destination to the world, Indians too need to travel abroad, as people are the best ambassadors of a country. 

“You cannot survive on one side of travel and it will not happen. It is only because when I, as an Indian, go out and meet people abroad, I'm the best ambassador of my country. And believe you me, so are you. Because everyone who travels, what are we portraying when we go to any country, we are Indians. If we are talking well, walking well, getting ready well, we are portraying India,” Mayal said. 

For The Core Report: Weekend Edition, financial journalist Govindraj Ethiraj spoke to Mayal to understand the trends seen in 2023 for both international and domestic travel and how it would pan out in 2024. 

Here are edited excerpts from the interview:

Let me start with a somewhat broader question. There are constraints on Indians travelling overseas, though the desire to do so seems to be as high as ever. A Skyscanner research report, for example, says that 86% of travellers plan to take the same number, if not more, trips abroad in 2024 versus 2023. And there are other points that I can come to later. What are the broad trends as you're seeing them today and as you're seeing them ahead as well? 

Post Covid in 2023, what we saw was that people were trying to connect with their own family, friends, and suddenly life became very important for them to move out and travel a lot, to reconnect (with friends and family) I would say. I hated the word called revenge travel because I don't think tourism can ever be related to a negative word. 

But going forward, 2024 is looking very bright and I think the trend is that tourism is going to increase. Of course, it did increase in 2023, but when we are talking about outbound firstly, I think there are certain things that people are looking for when they travel abroad. The focus has now changed a bit after Covid and also after travel since 2022. The year 2023 is looking more like sustainable and responsible tourism in most people's minds and we being a youth country, the young ones are totally driven by that. I think that's what they are really focusing on. 

Secondly, they are looking at technology and personalisation in a big format because they are the next gen or the ones who are only glued to technology. They are looking at that change and that change is coming very quickly. We see the AI (automation), we see the chat bots. People are doing itineraries on AI and Chatbots and actually sending it to us to say can you do this for us? We see a huge shift where that is concerned. 

Third, I would also say that the latest trend that has started post Covid is experiential and transformative travel because I think people are looking for experiences now. They are not looking to just go from A point to B and staying in a hotel and just doing the same stuff that they have been doing for so many years, looking at a monument or looking at just regular stuff. They are looking at experiences, how they are going to transform their lives, how they would like to reconnect right to the roots of the people, how they would like to go and try the local cuisine, meet the local people to see what drives them. There are a lot of experiences that people are trying to explore and that's a huge shift, which I'm looking at. 

Also when we talk about tourism, I think the one thing that's moving much more quicker is the rise of remote work. People are looking at long-term stays, people are looking at leisure with business. It's a very strong trend. If they are travelling out also, they want to spend more time, they don't want to make it very short to come back. They would love their families to join in. These are the trends we are looking at.

I would say when we talk about domestic travel, the travel restrictions of course are no longer there. People have actually enjoyed…. during the Covid time, they have really gone out for domestic travel. There is a time for them to shift back to international travel also. And India being such a huge population, we will always have people travelling domestic and international. 

To have the thought that we should not be travelling out, I don't think is very correct, the way we look at tourism. Domestic travel is now here to stay. It came with the full-service carriers and the low-cost carriers too. When low cost carriers came in, we realised that the people who were travelling on the low cost carriers were the ones who were actually traveling by train earlier. And that's the shift we saw. And then of course, the others got an opportunity to start travelling by train. As and how the exposure is becoming more, infrastructure is getting better, we've realised that now domestic tourism is always going to be a growth issue, growth related, and it's always going to be there. But international travel, you cannot hold people to say just travel domestically. That's one of the things. 

And yes, when I'm talking about low-cost carriers, I would say the train travel has also gone up a lot. It's not only by air. Then of course, the last two, which I would say is people who are looking at experiential, are also looking at health and wellness retreats because that's what Covid has taught them, that they need to look after themselves and their families. That's another holiday that people are looking at beyond regular leisure, and of course multigenerational and group travel is also on the rise. 

These are the few changes we have seen from 2019 to Covid time, (and) then 2022. And now this is where the people are really heading for.

You said that you don't want to use the word revenge and that's a good point about revenge being a negative term. And did you say responsive travel? What's the ideal word, response? 

I said reconnect travel—That time you wanted to reconnect, which was very important for you.

That's a good word. If you were to look at the post-pandemic surge now, across the consumption that's happened. People are still trying to figure out what's the base that we're coming back to. What's your sense? In terms of travel. Let's say people did a lot of reconnecting late 2022 and 2023. Would that continue? Is that the new base? Where are we settling down is really my primary question.

I think that would always stay at the back of our minds. Covid. We are not going to forget Covid so easily, because I think Covid has touched each and every family and each and every person. There's no one who's actually not been affected by it. And we've gone through challenges. Somehow it's like when India had 1947. That thing is something that our parents carried with us. I think Covid is going to carry at the back of our minds. We will always look for a comfort level when we are travelling. We will always want our families around. We will think three or five times, unless it's really driven by family again, to travel very far from home if we are going alone. 

I think these things are in people's minds, and that is how they are taking travel forward. If they are traveling far off places, they certainly want their family to be travelling with them. And if they are traveling alone, they want to travel low so that they can come back if something happens. 

You're saying that people are travelling more because they realised what they lost out in that period that they could not travel? 

Yes. And also, I think family time, the value time that you spend with each other, somehow that disconnect had happened. I think during Covid, we all got much closer and we wanted to spread out. And typical Indians, we are very family oriented, but we also want our families to be safe. And we are those types who will always sacrifice for our family and friends. I think that's inbuilt in us, it's nothing like it's come after Covid that's come out more. 

That is reflected in more families traveling together as far as your industry is concerned. That's what you're saying.

Yes, families and friends. 

The other point you mentioned, which is interesting, you're saying that a lot of people are travelling for longer outside for two or three reasons. One is the health and wellness experiential. And you also mentioned that people are looking at long term stays because they want to work outside. They continue working outside for maybe a couple of weeks. But is that reflected in the duration of tickets booked, the amount of time? Let's say, pre-Covid, it may have been four to five days and now you're looking at maybe 7-14 days?

Yes, that is happening. The stays have become longer for people, and especially if it's within India, it's become much longer. Some people are just going off for 15 days and saying, just book us and our families will join us, or whatever it is. Even internationally, we've seen that there's an increase in the duration of stays. Yes. 

Could that be the reason why the outward remittances data, that the Reserve Bank (of India) put out a few months ago, showed that it increased because people may not be doing more trips? Because in terms of absolute number of people or trips, we are still less than pre Covid,  but the time that people are spending outside has increased,  I'm sure the cost also has increased and therefore the value is much higher. 

Yes, you're right. The cost has increased, of course, because the airfares are very high. They are skyrocketing, so are the hotels. I think they are making the best of the time. All the hotel prices everywhere in the world have gone up. I think all these things are affecting the growth and the spending of a traveller. And of course, when you're travelling at such high cost on an airline or the hotel, especially the airline, then you want to stay for a longer period because you don't know if you'll be able to afford it. 

There are a lot of people who cannot afford a second trip quickly. So they will have to really plan out the travel to say, okay, let's drive the value… that if the ticket is costing much higher, we might as well avail the opportunity of spending more time in that place. So we are a family. We are travelling together with friends and family. The cost has already been borne by us, so let us spend more time. So all these things are actually instrumental in the increase of expenses and spending outside. 

And you talked about sustainable tourism. And is that something that is really big or is it only for a certain class of, let's say, young people? I mean, is it really showing up in your own numbers? 

I know I've been on a lot of platforms and we've been discussing sustainable tourism. Is it a buzzword only or is it really going to happen? But we have to come to a realisation ourselves of where the world is going. And we've seen that if the people don't understand sustainability in the long run, but they understand the change of weather, the way we are, the weather is increasing, changing, the winters are more, the summers are more, whatever. We see that and we see the pollution, we see so many things happening. 

I think the basics are in everyone's mind. The youth of course because they are googling more, they have got Dr Google to tell them, they have AIs to tell them what is happening globally. They are getting more and more glued onto it. And looking at that lot of airlines and a lot of hotels you see are changing their format of existence. Lot of hotels are saying we are sustainable, we are using these sustainable things, even we go for a lot of classification of hotels as TAAI. We have seen the change coming into the hotels that everyone is getting into the sustainability model of recycling carbon imprints or whatever it is and so are the airlines. 

We did a survey recently with the private sector… What are the young looking at? They are willing to pay that one dollar extra or that Rs 500 extra, if the airline is controlling the carbon emission. They are youngsters. The airlines are coming out with a model that is saying and reiterating that and making people aware. I think all these things are for the youth to understand more but it's with everyone. I think you and me also understand it. I mean you are young but even as a person like me I understand it. We are saying no to plastics effectively. But I think the only thing that we are missing out there is that we need to educate people more about what is no plastic. Is it single plastic use? We just quickly say that no to plastic means a water bottle. That's not true. You can always refill your water bottle and walk around the whole day. That is not a single use of plastic. You have to have clarity on what is sustainable in all formats. That is what education needs to be more.

Let's talk about outbound travel for a moment and let's pick up on the interesting trigger, which is the most recent one being that Malaysia has joined Thailand and Sri Lanka in giving visa-free arrivals or travel for Indians and of course Chinese and others. Malaysia is new. Thailand had some form of visa on arrival earlier. A lot of Indians obviously go to Thailand. Malaysia has now joined it. Sri Lanka is also part of it. Vietnam is also considering visa-free arrival. What does this mean in your mind? I mean both from the demand side and from the supply side? Does it make life easier for them to just go to Bangkok or Kuala Lumpur as opposed to going to Goa or Jaipur? 

I think it's a wonderful move. I really applaud the countries who are looking and looking at the future like that. Because, one thing I feel is especially for Indians, we are the late risers. We are the ones who love to party and we are the ones who, on a Friday evening, decide, it's a long weekend, we didn't realise it and we need to get out. What visa do we have? And we look out for countries which don't have visas. It's like saying we are wooing you and you feel very important. I think it's a huge opportunity for the countries to woo more Indians. And it's very effective for the Indians especially, who are always the late risers that need to travel. 

A lot of countries are looking into it. Of course, India and China have the largest population. Everyone is wooing India today. And with the economy going so strong, and our infrastructure getting good, we have much more disposable incomes, the youth earning much more, I think they are wooing us. And why not let us feel very important, proud of ourselves, that they want us everywhere. 

Recently TAAI had taken a delegation of 570 people. We had a convention in Sri Lanka and they were actually supposed to announce it while we were there because we were very much in touch with the president himself. And he was very much wanting to woo India more. And believe you me, they have already overcome the 2019 figure. That's amazing. And when TAAI goes anywhere, these things happen. Wherever we go, the footfalls multiply. And we've seen that growth and we've seen it. And that's why we said we need to develop regional tourism. We really need to focus on regional tourism. 

And I would say not only going by the region, I would say we should go beyond the region to any flight, which is within the 5 hours flight time. There should be a connection and no borders for all of us, leaving a couple of countries where okay, we can stay away from them, but otherwise it should be and that's one way of sustaining even if anything happens tomorrow. Every day we hear a new disease coming, pneumonia coming today, tomorrow it was maybe something else. 

We within our region must treat this region as one country, so that it becomes an extension of domestic tourism. And we actually see the growth not stopping and give employment to people and not really struggle the way we did in Covid. So all these reforms and I think India should also follow this for certain. 

I'll come to the Sri Lanka point, because that's interesting. But this is really people going from India, this is outbound. We don't see that much inbound, because these are small countries. So does it really help us beyond on a point? 

It helps us to travel, for sure. But India needs to decide if they want them to come in or not. India needs to be more liberal where their e-visas are concerned. I think they should also have e-visas. Thailand also had e-visas. I just came back from Cambodia yesterday. They also have e-visa, but it takes three days. But they also have a visa on arrival. I had to go just immediately and I realised they had a visa on arrival. So for me it was not difficult. And believe you me, I got my visa in 3 seconds. When I landed there, it was literally 3 seconds. 

These things do make a difference and of course it will impact tourism a lot. We as Indians and our government has to decide, are they wanting?  They could always be screening, they could always be everything, they could always be with technology moving, you could know the person coming in but this should become more viable and (there should be) more ease of travel happening. 

That's an interesting point because we all talk about the power of the Indian passport and you're saying that that power that we feel actually makes us book or we like the privilege of booking late as opposed to maybe people in other countries who may book several months in advance. And we obviously also feel good that we don't have to go and pay that visa fees, and that incentivises us in some ways to one is book late and then obviously go wherever we want in the region. 

Yeah, that's right. That's how we are. That's the way we are. We love that one freebie for ourselves. But I think it's a huge opportunity to travel, firstly. Secondly, we should start thinking beyond tourism only. This should be the extended arm of domestic tourism for us. If we can go to Kerala, I can also go to Almaty, I can also go to Azerbaijan. And we've seen a huge growth in these countries. Azerbaijan, Almati, where the new flights have started. Vietnam during Covid is the time they really educated all our members. We had, I don't know, maybe 20 zoom calls with them and how they actually started marketing Vietnam. And now you see all flights full and you find maximum Indians there because they are exploring new destinations. It's a spread out destination. It's not an overcrowded destination till now. So people are enjoying themselves and tourism is growing. 

I want to come back to Sri Lanka as well. You're saying that one reason why we are seeing more tourism to Vietnam from India is because they've marketed themselves also. It's not only because all Indians or people like us suddenly said oh, I saw this on Google and let me go to Vietnam. You're saying there was a concerted effort by Vietnam to work with organisations like yours to attract tourists. 

Two things that always go well with the client, with travel agents and the clients in the end is of course marketing. Marketing always will play a very big role, even though it could be social media. But marketing is marketing. And secondly is a direct flight. A direct flight between countries will always enhance tourism because it's the ease of travel. Again, I don't have to transit through any other country and because now it's becoming a long-term stay, I think we've seen that people don't mind going to only one country, but spending a good time there. That's how these countries are actually benefiting out of the way Indians travel. 

And another thing which you just remarked was advanced purchase. After Covid, we've seen there's a decline in the advanced purchase earlier. We all have relatives, like I'm saying in Canada, Australia, where Indians live a lot or America, people whose parents are going to visit the children and they would book at least a year in advance because they know they have to go in June or the summer holidays. It was like a given thing. They would come literally a year before too. We don't see that happening immediately. There are certain who are still following it, but the maximum has had a shift because the cancellation is a huge process and people don't want to lose out money. And everyone has hard earned money and post Covid, a lot of people have literally started again from ground zero.They want to be the last. I mean, they would love to have the cheap fares, but they are still booking in the end. Closer to the date, maybe three months in advance, four months. But the majority still says the bookings majorly are being done 45 days in advance, not beyond that. these changes have come in, yes. 

You mentioned Sri Lanka. It's not just Covid, Sri Lanka also had political trouble and they had protests and all of that. You're saying Sri Lanka has come back to its pre-2019 traffic, tourist arrivals, despite all of this? 

Yes. They've overcome the 2019 number in June. You can imagine they had half a year left. And I know people who are booking…. mean there's a huge increase in footfalls for Sri Lanka. And I must say they are a very effective outgoing country. The President himself, he's very effective. The tourism minister is very outgoing. Call them anytime in India, they'll come, they'll look into everything. I think the way they behave is wooing them, wooing people going there. And they are very nice people, very soft people, very much like Indians. And I think it's really a destination value for money. 

You mentioned Azerbaijan and Kazakhstan. There are direct flights now, including from Delhi, so people are going there. Last year, I saw that Azerbaijan had some 60,000 visitors from India. I think this is the 2022 number. This is the Mastercard figure, I think, where they also talk about how India is the new China and so on. But how does this work? Where does the pull come from? Is it the airline which finds out potential markets and then everything follows? Or are people like you working on trying to say, okay, what could be the next destination? And then airlines follow. 

Yeah, so there are both sides to it. We also work very collectively and closely with all the tourism bodies of different countries. We keep looking at new destinations and we'll keep meeting. We also started interacting with all the governments and during Covid we interacted with a lot of governments. Vietnam was one of them, Kazakhstan. We ourselves, 73 of us went to Almaty. We look at destinations and we promote them. We support the international governments, but we also push it with our own ministries. Like Cambodia is wanting a direct flight and we are pushing it with the government. We keep looking at this and of course it has to be mutually driven and we all work together towards that growth.

And what are the new destinations that you're looking at both international and domestic as sort of potential growth? Growth or new destinations in the next year. 

We are looking at Cambodia. Like I told you, I just came back yesterday, Cambodia is one destination we are looking at because there are a lot of Indians there. There's a lot of Buddhism there. There could be a footfall on both sides and they're also wanting to come to India a lot. Then Laos, the oldest Indian temple is there. We are looking at all the nearby countries where the travel is within 5 hours. I think that should be exploited and come out more. Egypt flights were our push that started Egypt again. Egypt from Delhi. They had a flight pre-Covid from Bombay, but now they have a flight from Delhi and they're starting in Bombay and then they are increasing the flights. We are going to see an increase in Egypt too. 

All these countries will benefit because we have a huge strength. Even if one percent of the population travels to each of these countries, we still have enough to handle. I think there is a place for domestic and international (travel). We should not curb any of those. Of course I'll come to that when you ask me. 

The government is worried. I think this is more from a finance balance of payments perhaps point of view. They're saying, okay, Indians are spending a lot of money overseas. It's not like our forex reserves are crashing or anything. But we've always been concerned that if there's too much dollars going out, then that could be a problem. That's one part. 

And then the Prime Minister says that I urge you to have those big weddings in India. Which I think to me is an interesting question because it's not like there's that much supply available in India to hold that many weddings here. But how are you seeing this? 

I have my own opinion on this as an association president and a personal thing, I feel that, yes, it is an urge. But if you're increasing the taxes, that doesn't mean it's an urge. That means you're actually being told not to travel outside. I'm a very straightforward person. That's the reason I'm putting it like this. 

Like I said, there is an opportunity for both growth, domestic and international. With such a huge population, you can't curb your growth. In one way, you are actually developing your country. You are bringing in everything. And second way, you're saying you can't travel. Unless I travel, how do I really educate myself? I can't be only domesticated and travel and get knowledgeable about the entire thing. 

Secondly, the most important thing I feel when things like these come into the limelight is can an airline survive on a one way traffic? It cannot. Each seat is perishable. One seat goes vacant, which means you've lost a huge amount. That can only happen if there is traffic from both sides. You cannot survive on one side of travel and it will not happen. It is only because when I, as an Indian, go out and meet people abroad, I'm the best ambassador of my country. And believe you me, so are you. Because everyone who travels, what are we portraying when we go to any country, we are Indians. If we are talking well, walking well, getting ready well, we are portraying India. What India is today. We are the new generation. So unless I go out and I actually educate the masses there who are not even coming to India, how will they come to India? 

I see that when I go and interact with people there, their thought process changes. Some of the Americans are the most, I would say, conservative people when it comes to travel. They only know how to travel within their own country. 60% of them don't even have passports. So how do you go and tell them: Hey, we are Indians. We are not a country of snake charmers only. We are the country of charmers. Please come to our country and see what we are, who we are. 

I think this thought needs to be changed. And making it difficult is only going to make you lose out on the actual taxes and the actual payments. It's not going to affect your tourism in the long run because everyone has a family and friends outside, they will still find ways of travelling, paying everything. 

And also not only that, a lot of Indian travel agents have already opened offices out in America and different shores. We are also losing the basic tax that's coming into the country. Yes, our business is getting less. The travel agents are being deprived of business. But believe you me, tourism is not going to go down. And talking about weddings, I think, you know, recently a country and not naming anyone, they wooed me. They said, can you come do an India show in our country? I said, what do you want? Just bring the travelling, the wedding planners here, we want you to portray weddings. They are getting both ways. They want to have weddings in their country, but they're also telling them to go back to India to have their weddings. So it's a two way traffic. And that's what I believe in. 

I always say it very strongly. Tourism has no borders. You couldn't stop the Covid even if you closed the borders. They did not need a passport or a visa to travel. Why do we close down? Why do we restrict ourselves? Why do we restrict our footfalls going anywhere? 

I think the more the merrier. And believe you me, domestic tourism will not go anywhere as long as the infrastructure keeps getting better, as long as the last mile connectivity gets better, as the ease of business comes in, protection of the traveller comes in, insurances come in. We need to develop all that then to say we are scared. You never be scared of any competition. That's what I believe in. Because I think there's space for everything as long as you know what you're delivering is absolutely the best.

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