20 Jan, 2013
India Outbound Boom Lifts SATTE, Heats Up Asian Travel Fair Competition
New Delhi: The South Asia Travel & Tourism Exhibition (SATTE), which ended here on Jan 18, was launched in 1993 as an inbound show but is now veering heavily towards outbound. Bought by UBM India in 2011 and first executed under the new ownership in 2012, this year’s well-attended show will heat up competition among exhibition giants Reed, UBM and Messe Berlin in the burgeoning Asian travel market. Regional events such as PATA Travel Mart and ITB Asia, run by Messe Berlin, will also face some heat. So will global shows such as WTM and ITB Berlin. Both flourished thanks to the once-booming UK and German markets and the strength of their respective tour operators. Today, as European economies stutter, costs tighten, market shares shift and Asian shows rise, the value for time and money factors are set to assume new directions in the emerging Asian Century.
Travel Impact Newswire reports on SATTE are supported by UBM, the event organisers, and Creative Travel, India. Click on the logo for more details.
The promise of Asia-Pacific travel & tourism is well-known. According to the UNWTO, in 1980, Europe accounted for 63% of global visitor arrivals. This is projected to shrink to 41% by 2020. The Asia Pacific’s share of total visitor arrivals is projected to grow from 8% to 30% in the same period. India is a major contributor, with 2012 figures of 8.5 million inbound, about 15 million outbound and 600 million domestic travellers. Although the country’s outbound numbers are expected to double in the next few years, the inbound potential is less promising.
Countries which exhibited for the first time at SATTE 2013 included the USA, the Seychelles, Bulgaria and Ethiopia. The USA used SATTE as the first trade show in Asia to launch its tourism promotion campaign with a glitzy dinner. ASEAN countries led the list of foreign exhibitors, Thailand with 52 and Malaysia, 45. Even Singapore’s Changi airport was present for the first time, to promote its linkages with 12 Indian cities by seven airlines. The Israelis, too, gave a media briefing on their marketing plans.
Group Director of UBM India Mr. Sajid Desai said the show covered 16,500 sq m of gross area occupied by 590 exhibitors from 35 countries and 23 Indian states, up from about 500 in 2012. The outbound sector took up most of the growth, while the domestic and inbound India pavilion has remained more or less flat. Mr. Desai said there were 149 hosted buyers from 43 countries and 640 hosted Indian buyers from 74 cities, many of whom had simultaneous inbound, outbound and domestic lines of business.
Indian travel trade association leaders publicly voiced satisfaction. Industry pioneer Mr. Subhash Goyal of STIC Travel and President of the Indian Association Tour Operators, said that when the show was launched by “a number of young tour operators” they had dreamed of developing it into “something like ITB and WTM.” From that “humble beginning,” he said, “SATTE has become an event known all over the world and now marked in the calendars worldwide. With the strategic and financial backing of UBM group, SATTE will be as important as WTM and ITB Berlin and can even surpass them in the times to come.”
Mr. Iqbal Mulla, President of the Travel Agents Association of India, described SATTE as “a unique networking platform” which has “surpassed the benchmark.” He complimented Mr. Desai for “doing a great job”. Mr. Guldeep Singh Sahni, President of the Outbound Tour Operators Association of India hailed India’s growing recognition on the world stage, especially for its huge travel potential. He called for outbound tourism to be also recognised for its job creation, noting the millions of marketing dollars spent in India by foreign NTOs and the jobs created amongst travel agents and technology companies, especially in Tier Two and Three cities. As travel is not a one-way street, foreign airlines which start flights to Indian cities will also have to bring inbound visitors.
The exhibition’s two sections are distinctly divided between inbound Indian exhibitors and outbound foreign suppliers targeting the Indian market. The outbound section was so packed, getting through the aisles took some effort on Days 1 and 2. By contrast, the inbound section was lacklustre. The Thais, Malaysians and Turks, who had the largest pavilions, reported booming business. Outbound business is bolstered by the fact that several countries do marketing roadshows around the SATTE dates. This year’s SATTE Principal Partner Country Malaysia did a pre-SATTE roadshow to the four Indian metro cities, while Thailand targeted the secondary cities of Coimbatore, Pune and Cochi. The Malaysians were keen to clarify the recent revocation of visa on arrival facilities (due to a sudden spurt in illegal immigrant numbers) and announce alternative outsourcing services in eight Indian cities to expedite visa issuance. The Thais were keen to thank the Indian travel trade for making India the sixth country to generate more than one million visitor arrivals for Thailand in 2012.
This year’s booth rate was IR 14,500 per sq m and IR 13,750 for bare space. Mr. Desai said the rate is largely based on the rental levied by the International Trade Promotion Organisation, the owner of the Pragati Maidan fair-grounds. He said next year’s rates will be up by about 10%, which would be about in line with both the rental increase by the ITPO and general inflation in India.
Mr. Desai said that SATTE is now well-positioned in the calendar of the global international trade shows. “Just as everyone knows that March is ITB Berlin and November is WTM London, we believe the industry knows that SATTE falls in January.” He said the show’s other unique selling proposition was that it had so far been the only B2B show, although that may be reviewed. One major improvement made this year was to increase the set-up time for booths and create pre-scheduled appointments to facilitate the buyer-seller meetings. A passport scheme was created to ensure that appointments were met; Hosted buyers had to prove that they met all appointments in order to get full reimbursement for air-fares. This year, students from local schools of hospitality were allowed to visit the show. There were also dozens of onsite business visitor registrations.
Mr. Desai said the plan for 2014 is to target more international buyers in cooperation with more airlines. This year, carriers such as Malaysian Airlines flew in buyers from Australia, and Qatar Airways from Europe. For next year, airlines will be requested to source more new buyers from new destinations keen to promote the inbound Indian market. The same airlines will benefit from the booming outbound Indian market. Mr. Desai said SATTE will also attend more international trade fairs to promote the event.
Asked how UBM’s takeover had helped the event, Mr. Desai said it had combined the global processes and best practises with local perspectives. The exhibition giant runs more than 25 shows in India and has strict regulations about everything from the choice of suppliers to management. At the same time, professional Indian managers who understand the local markets and culture manage the often intense politics and ego-massaging requirements amongst both the private and public sectors. UBM uses the show to cross-sell its other travel-related events such as Routes, the airline event to be held this March. As UBM also runs Confex, the UK MICE event, it plans to use that event to source specialist MICE buyers for SATTE.
The biggest future challenge will be to boost traffic for the inbound Indian exhibitors, many of whom complained about buyer no-shows and mediocre business potential. Their evaluation is unlikely to be as rosy as that of the outbound exhibitors. India’s Tourism Ministry Secretary Pervez Dewan stressed the yawning gap in the inbound:outbound ratio. Today, it is one inbound for 2.5 outbound. In the case of Thailand it is one visitor from Thailand to 16 outbound Indians to Thailand. “We have to get more visitors. We have to make things attractive for inbound travel,” he said. He also provided a sneak preview of the possibility that the visa on arrival facilities will be expanded to cover more countries, as well as improved conveniences that will allow VoA applicants to pay the visa fee with credit cards, rather than cash Indian rupees. A “transit visa” scheme is also being planned that will allow visitors changing planes in any of the metropolitan cities to take “quick trips” to nearby cities.
Another big challenge is the rundown state of the Pragati Maidan fair grounds which, in this editor’s view, are a disgrace. Unless they are upgraded, India will lose out big-time in attracting its fair share of global exhibitions and conventions. Mr. Desai said the halls allocated to SATTE are better than the others. However, it rained heavily during the morning of our interview and the roof began leaking right above our heads. Mr. Desai said the numerous convention organising companies in India have come together to press the government to start improving convention and exhibition facilities nationwide, not just at Pragati Maidan.
There are other challenges. Hotel room rates tend to be high, raising the costs for exhibitors. The winter conditions raise the risk of heavy fog at Delhi airport. Just a few days before the show opened, heavy fog had forced an airport shutdown and cancellation of dozens of flights. If that happens in future years, it could play havoc with the show. As there are no hotels nearby, an efficient shuttle bus operation becomes critical. It isn’t. The SATTE industry conference, attempted for the first time this year, also received a less than expected turnout, although some sessions were better attended, better moderated and featured more interesting speakers than others. For 2014, the conference content and structure is under review.
Internecine turf battles amongst numerous travel industry associations are an unnecessary impediment. At the opening ceremony, Mr. Karl Dantas, President of a group known as the “Enterprising Travel Agents Association,” publicly rued the inability of the many industry stakeholders to work together. He said that while “a great service is being done to bring everyone together on the same platform (at SATTE), the outbound and inbound cannot work until the stakeholders work together to implement what we discuss here.” He appealed to everyone to “please do not go back and do your own things. I am sure both inbound and outbound will really work if we can coordinate our activities and policy positions, especially on common issues that affect us all.”
One very important dream remains unfulfilled. As its name suggests, SATTE was designed to be a South Asian trade show, to combine the strengths of all the South Asian countries (Pakistan, Maldives, Nepal, Bangladesh and Sri Lanka). However, only Nepal and the Maldives had a presence. The prospects of enhanced travel to, from and between India-Pakistan fell victim to yet another geopolitical development before the SATTE curtain went up. A border clash led to two Indian soldiers being killed. All too predictably, the resulting jingoism by opposition politicians and various media outlets forced the Indian government to suspend an agreement to provide easier visa access across the Wagah border to Pakistani senior citizens. According to The Hindu newspaper, many elderly Pakistanis who had queued anxiously since early morning to take advantage of the relaxed visas were turned back because of “technical difficulties”.
Having secured a foothold in the Asia-Pacific’s second largest country, UBM has moved rapidly to secure a foothold in the third-largest, Indonesia. A link-up has been forged with the Indonesian company Raja MICE to organise the first SATTE Indonesia in Bali in June. That, too, will be a B2B show. Already a major inbound market, Indonesia is set to be the Asia-Pacific’s next big outbound market. SATTE Indonesia will be targeted at regional travel trade buyers and sellers who may not have the time or money to attend other regional shows such as ITB Asia and PATA Travel Mart. That will fulfill one of the most promising potential links in the Asia-Pacific travel market – bilateral travel between India and Indonesia.
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