Acknowledging that a well travelled person is more knowledgeable than a well read person and with the growing need for travel related services a lot of players have emerged. Foreseeing success, majority of travel players have opted for the franchise route
There is a huge difference between travelers of the past and present. Till a few years back people had to stand in long queues and had to plan their trips in advance to get reservations done for trains, buses or air planes. Now booking tickets and planning vacations is done with just a phone call or click of the mouse. Credit for this wonderful development goes to the emerging organised travel players and advanced technologies used by them. The entire travel process has become quite convenient ultimately leading tremendous increase in travelers in India. To make their presence felt across the country most of the organised players have opted for franchise route.
Indian Tourism can be considered as the largest service industry with its contribution of 6.23 per cent to the national GDP and 8.78 per cent of employment in the country. By 2018 Indian Tourism industry is expected to generate US$275.5 billion at a 9.4 per cent annual growth rate. This up-swing in the travel industry can be due to emergence of middle class, augmentation in foreign tourists in India, busy schedules and hectic life styles of people. Owing to this a lot of people plan their holidays to take a break from daily schedules. Moreover the discounts in airfares and other travel sources and easy access to internet have also lead to the development in travel industry. This growth in Indian travel industry has piloted the way for the success of the organised travel players. Another aspect that has given impetus to the organised travel players is the travel policies of the government.
Indian government has taken initiatives for attracting foreign tourists in the country to increase foreign exchange. The slogan ‘Athiti Devo Bhava’ and ‘Incredible India’ campaign has brought about awareness and excitement in people to visit the country. The Indian Ministry of Tourism and the Indian travel industry have joined hands for offering many incentives to foreign tourists. The incentives are being offered in collaboration with airlines, hotels and tour operators.
Is franchising the best route?
In the last few years it is seen that many travel players have opted for franchising for expansion. Expressing his views on this Karan Anand, Head, Relationships and Supplier Management, Cox & Kings India Ltd said: “The Indian travel industry has grown by leaps and bounds. But the industry as a whole is still largely unorganised. In this scenario, customers want a travel operator, who can offer a range of travel options and services under one roof. In line with this, we wanted to bring the world of travel at the customer’s doorsteps by setting up a network of franchisees all over the country.” Debmalya Banerjee, Vice President, I-Nova Group shared: “We adopted the franchise route to boost retail institutional participation. Franchising is the best platform to cover the length and breadth of the country and make the brand popular by tying up with local partners.”
Further franchising is paving the way for the wheeling of the travel industry to every part of the country. Franchisors are spreading their wings and growing their franchise networks.
Offline or online travel players?
Indian travelers are getting more net savvy and informative. As compared to earlier times travelers today are more aware and conscious to select places that they would like to visit and thereby prefer online information to travel guide books. This is leading to the popularity of online travel portals. As informed by Anshul Srivastava, Head of Sales, Arzoo.com, “There is little difference between online and offline travel franchising. In online franchising, the franchisee does not possess any real outlet or virtual office to work from.” Moreover Srivastava believes that online travel portals will take time in achieving success in the Indian markets as till date only 20–30 per cent of the people make online travel bookings while 70-80 per cent still prefer to go to offline centres. He further informs, “Online travel portals are getting popular because they are the best medium for entrepreneurs to run a travel agency from homes. Nevertheless, it will take time for Indian travel companies to adopt online portals and come in the league with the European nations, which have developed online travel sites.” Therefore it can be said that it is not the case that only one of the two will prevail, both, offline and online travel portals will complement one another. Online has complemented offline and this is healthy for the travel industry as a whole.
Low cost business with high benefits
One more benefit for aspirants of travel business can be the low cost investment needed for reaping high and long time results. Banerjee informed: “To own a Travo franchise, one needs to invest Rs six lakh. A space of 300 sq. ft at ground floor in any prime location is the fundamental criteria for taking the franchise.” As per Srivastava: “Our investment differs according to our three models. We have Arzoo Travel Point, which need investment of only Rs Three thousand, our second model is Arzoo Elite, needing investment of Rs Two lakh and the last is Arzoo Travel Trade, which does not need any investment to start.” However besides appropriate investment, good and hardworking franchisees are important requisites. Aspirants need to have previous experience in travel agencies and a good location to open a centre.
Hurdles in way of success
No business is free from risks and challenges. Similarly the travel business has certain risks that need to be calculated before jumping in the arena. Ajay Upadhyay, Chief Operating Officer, Travel E-Point informs, “To maintain high volume growth and profitability, franchise need to offer wide range of services to general public. Identifying and managing multiple services is a challenge for franchisees.” Another challenge can be the lack of knowledge among franchisees. Srivastava feels that travelers today are more aware, when they walk-in to an outlet. Generally, they have more information than the franchisee. This can pose a challenge for franchisees.
To finish it can be said that investing in a travel franchise is quite profitable but to establish oneself definitely takes some time. Patience will definitely pay at the end whether it is offline franchise travel agency or an online one.