David Scowsill, president and CEO, World Travel & Tourism Council (WTTC)

As per the 2021 global travel and tourism forecast, the growth per annum from 2011-2021 for India will be placed around nine per cent. David Scowsill, president and CEO, World Travel & Tourism Council (WTTC), talks about the outlook of the industry and indicators for growth to watch out for. By Kahini Chakraborty

Last year you had downgraded the growth of travel and tourism industry from 4.5 per cent to 3.2 per cent, do you still perceive the same growth considering the euro zone debt crisis?

David Scowsill

We see a similar amount of growth of about 3.3 per cent in 2012 because when we look around the world, Japan is still coming out of its problems with the earthquake and tsunami, there is still some unrest in the Middle East. But mostly it is the market turbulence in the European countries which is holding back growth at the moment.

Your outlook for the travel and tourism sector in 2012-13?

The travel and tourism industry for 2012 will grow to about 3.2 per cent globally. Presently, there is still a slowdown due to the market turbulence in Europe and uncertainty in the US because of its elections. But in Asia Pacific the market is going to grow very fast and India and China in particular will grow by seven-eight per cent this year. So the outlook for the travel and tourism industry is looking good.

What would be the right indicators to watch out for revenue growth in the industry in the coming years?

We will first always look at the aviation growth and then freight/cargo traffic business because when that starts to slowdown, which is slowing down a bit at the moment, it is an indicator that business travel might be slowing down as well. But what the market place needs is the euro zone to settle, the markets to settle and the US goes through its elections. After which we will continue with our normal growth rate which is around 4.5 per cent every year. But to put it in context we are still growing at 3.5 per cent this year which is still good growth.

How do you see the growth in GDP contribution from the industry this year in India and globally?

Globally the travel and tourism industry contribution accounts for nine per cent to GDP so it is US$ six trillion contribution to the economy. In India it is only 4 - 4.5 per cent contribution to GDP which demonstrates the opportunity that we have here to grow the industry, hotel and aviation industry for it to accelerate to the level of nine per cent.

What trends do you see in the coming years in the industry globally and India?

Globally the trends in the airline business indicate more number of low cost carriers emerging in the market place and this holds true for India as well. There are a lot of changes taking place in the aviation industry but it is growing. Although not profitably due to high oil prices and particularly in the Indian market place because of competition driven around fare cutting process, but it is going to grow in terms of volumes. In the hotel industry there is certain slowness in the number of investors coming back to invest in hotels. But worldwide hotels are forecasting growth rates in average room rate occupancies.

With the slowdown in the market place at the moment the amount of investments are bound to increase, do you still see potential investors for the sector?

The investment slowed down dramatically in 2008-09 and it is starting to revive. At the moment because of the turmoil around the world people are adopting the 'wait and watch' policy particularly with the Euro zone.

So to some degree they are reluctant to invest and particularly in Europe. However that is not true in Asia, I think people are continuing to invest in the growth in Asia.

Do you think the emerging markets will continue to lead?

The growth rates in the emerging markets are standing at seven-eight per cent every year and India will double its GDP in seven-eight years’ time. But what India needs currently is investment in infrastructure, airports, rail network system, offering attractive interest rates for hotel investments in India. Because at the moment even for domestic tourism we are not moving as fast as we need to.

How do you see the online segment further emerging?

The online segment is growing rapidly. Everybody is moving online for travel transactions and India is catching up quickly. There are a number of good online travel agents (OTA) in India who are educating Indian consumers to transact online. The OTA's are focussed on mobiles and particularly in India where mobile is spreading faster than internet having the ability to transact using apps on mobiles it’s extremely important and that is where a lot of the growth is going to be.