Skift tips

Taking advantage of long-term trends that may boost hotel pricing power, driving more earnings per square meter at a hotel with concepts like “hybrid hospitality,” and exploring the potential of generative artificial intelligence are all potential areas of upheaval for hotel investors, owners, asset managers, and corporate brands.

Air India has become the latest entrant to hop on to the bandwagon of ChatGPT. Doing away with an outdated manual pricing system, the airline announced recently that it would be shifting to an algorithm-based software for setting airfares to extract more revenue from each flight. Its modern revenue management software continuously anticipates where people want to visit and how much each flyer is willing to pay, rather than the old method of having one fare for each block of seats — thereby ensuring higher revenue per flight. The airline will reportedly use GPT4 — the latest version of the revolutionary chatbot — to improve the FAQ section, pilot briefings, and more. Speaking at an event recently Air India CEO Campbell Wilson said that the use of the chatbot will not be “gimmicky”, but will be to actually enhance the airline’s functions. Last month, Air India partnered with cloud-based software company Salesforce to transform its customer experience. In another wheel of change under its new owner Tata, Air India is also testing ChatGPT to replace paper-based practices. “Frankly the system is almost so bad it’s good,” Wilson said, adding that this offered the chance to start from scratch rather than “jury-rig” existing architecture. The Tata Group is also integrating the Tata-related airlines, with the merger of Vistara with Air India and the integration of low-cost carriers Air India Express and AirAsia India. As part of its expansion plans, the Tata-owned airline last month had placed a record deal of 470 aircraft — 250 from European planemaker Airbus and 220 from U.S. aircraft manufacturer Boeing — at a list price of over $70 billion. 

On March 28, Skift Future of Lodging Forum attendees are invited to an opening reception packed full of excitement and networking. Our exclusive party is taking place from 6-8 p.m. at the modern and dynamic Google UK located in Central Saint Giles, and is the perfect way to kick-off your leading hospitality-focused conference experience. We’ll provide the cocktails and hors d’oeuvres, you bring the fun!

Reports suggest that India-based budget hotel operator and aggregator Oyo will be reducing its Initial Public Offering (IPO) size by about two-thirds. The company is likely to file a fresh document for its IPO as soon as this week, according to a Bloomberg report. The company had initially filed to go public in October 2021. In December, India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), had advised Oravel Stays, the parent company of Oyo, to refile the draft prospectus, updating all the relevant sections such as risk factors, key performing indicators, outstanding litigations and basis for offer. Oyo’s last submission to SEBI was the updated financial results of the first half of financial year 2022-23. Updating its draft red herring prospectus with results for the first half of the 2023 financial year in November, Oyo had reported that its adjusted earnings before interest, taxes, depreciation, and amortization for the second quarter grew eight times from $860,000 in the first quarter to $7 million primarily driven by a 23 percent quarter-on-quarter rise in gross booking value per hotel. However, speaking at a town hall on Monday, Oyo Founder and Group CEO Ritesh Agarwal told employees that Oyo expects its revenue in the financial year 2023 to be more than $692.5 million, up 19 percent from 2022’s $581 million. Agarwal attributed the company’s better financials to sustained growth in India, Indonesia, the U.S., and the UK, and relevant optimization and synergies in its European vacation homes business. He outlined that Oyo’s key focus areas this year would be on profit after tax along with consistent momentum in earnings before interest, taxes, depreciation and amortization, achieving cash flow positive in financial year 2024, cost efficiency and improving contribution margins, and making storefront additions. 

A debate over market access was rekindled at an aviation event in India as foreign carriers seeking additional capacity to serve more routes in India feared the Tata Group-owned Air India’s rebirth and record order of 470 jets might capture most of the market. Dubai’s Emirates, Turkish Airlines and Kuwaiti carrier Jazeera Airways have all called for sharp increases in air traffic rights to and from India to meet demand. Vietnam and Indonesia also want more flights, an Indian official said. However, speaking to Reuters India’s civil aviation minister Jyotiraditya Scindia said the country has no plans to increase air traffic rights for the United Arab Emirates. He instead urged domestic carriers to fly long haul and help establish new hubs. “We are going to see an explosion of air traffic in India in the years to come,” he said, adding he wanted domestic carriers to focus on international expansion. “We are not getting enough share from this market,” Turkish Airlines Chief Executive Bilal Eksi said. Dubai has requested an extra 50,000 seats a week on India routes while Kuwait’s Jazeera Airways said the current weekly allowance of 12,000 was inadequate and asked for the cap to be raised to 28,000 seats.  

The Indian government has advised telecom service providers to take precautions that minimize the interference of fifth generation (5G) networks — which allows for faster wireless speeds — in aircraft operations, including establishing safety and buffer zones and placing 5G towers near airports, according to a Press Trust of India report. Indian aviation watchdog Directorate General of Civil Aviation (DGCA) has not conducted any research on the potential impact of 5G signals on safe civil aircraft operations, according to VK Singh, minister of state for civil aviation. “However, DGCA has reviewed the studies/action undertaken by various countries during the launch of 5G on the potential interference of 5G C-band signals on radio altimeters installed on the aircraft and risk involved in air travel,” Singh was quoted as saying. He said there is a possibility of interference with radio altimeters, which could jeopardize safe airline operations. Concerns over the 5G network interfering with flights had been raised internationally. U.S. aviation regulator Federal Aviation Administration had warned last year that potential interference could affect sensitive airplane instruments such as altimeters and impact on low-visibility operations. Last month, the International Air Transport Association (IATA) had also expressed concern that many airlines would not be able to retrofit their planes to handle new 5G wireless technology in time for the peak summer travel season. 

Hear from our CEO, Rafat Ali, on why you should attend Skift’ Future of Lodging Forum next week in London on March 29:

Reducing visa delays has been a priority for the U.S. consulates in India as wait times for visitor visas has gone down from more than 600 days to 247 days in New Delhi, 332 days in Mumbai, 357 days in Kolkata, while in Chennai the wait is still around 680 days. Skift had earlier reported about how the U.S. Consulate in India had been taking an all-hands-on-deck approach to reduce visa wait times. India ranks sixth among the top source markets for the U.S, said Jackie Ennis, vice president, global markets for Brand USA. A total of 1.25 million arrivals were registered from India in 2022. The latest figures in February revealed that 203,540 Indians travelled to the U.S. so far between January and February. In 2019, Indian travelers spent $16.5 billion in the U.S. The destination marketeer for the U.S. — Brand USA conducted its 2023 India Sales Mission in Mumbai and Delhi last week. Speaking at the event Ennis spoke about how the air connectivity between the two countries has been strengthened with Air India launching two direct flights to San Francisco from Bengaluru and Mumbai in December last year and from Mumbai to New York (JFK) in February. With this, Air India now has 46 weekly non-stop flights between the two countries, in addition to seven weekly direct flights operated from Newark to Delhi by United Airlines and seven weekly direct flights from New York (JFK) to Delhi by American Airlines. Calling India a fast-growing market with tremendous potential for growth in tourism, Ennis added, “We are thrilled to see a heightened interest in exploring beyond the gateways to lesser-known destinations.”

Travel exchange company EbixCash — the Indian arm of insurance software company Ebix — has been granted regulatory approval for its long-awaited initial public offering (IPO). The IPO is expected to raise between $732 million to $975 million, making it one of the largest IPOs in the financial services sector in India. The company has already filed a draft red herring prospectus, but the IPO is still subject to the necessary approvals, market conditions, and other factors. In the run-up to the anticipated IPO, EbixCash had filed its prospectus with the Indian stock market regulator Securities and Exchange Board of India (SEBI) on March 10, 2022 after CEO Robin Raina declared on the company’s quarterly earnings call that EbixCash would file its prospectus “imminently.” Ebix declared its intent to raise $787 million via the IPO, while retaining a significant majority stake in EbixCash. While EbixCash operates in several segments — payment solutions, travel, financial technologies, business processing outsourcing services and startup initiatives — it receives over 80 percent of its revenue from the payments services business. Under this business, the company offers domestic remittance, forex, international remittance and prepaid cards/gift cards. It largely generates revenue based on commissions and transaction fees from providing these services. 

Reporting by hotel companies on their environmental targets and abatement efforts is improving.

Reliance Industries Limited (RIL) — the company belonging to Asia’s richest man Mukesh Ambani — is set to foray into the hospitality industry under its new arm Reliance SOU, engaging in hotels, resorts, and service apartments that will provide short-term lodging facilities. According to the details available with the registrar of companies, the company is planning to develop hotels and resorts near the Statue of Unity in the west Indian state of Gujarat’s Kevadia. In a stock exchange filing, Reliance said that it had incorporated a wholly-owned subsidiary called Reliance SOU (RSOUL) with the intention of developing commercial properties. However, it did not elaborate on whether it would manage those properties directly, an Indian daily said. Reliance Industrial Investments and Holdings Limited (RIIHL) — a wholly owned subsidiary of the listed parent RIL — had earlier bought a 73.4 percent stake in the luxurious Mandarin Oriental Hotel in New York for $98 million. It also acquired Stoke Park Country Club, another UK-based hotel, for $69 million. 

Leading operators in the Indian tours and travel sector are set to report 6-7 percent growth in operating profits in fiscal 2023, after having reported losses for the past two fiscals due to pandemic-induced travel restrictions, according to Crisil Ratings. Revenue is likely to recover 90 percent of pre-pandemic levels, buoyed by strong recovery in both corporate and leisure travel segments in India and abroad. Crisil Ratings expects operating margins to sustain at these levels next fiscal, due to implementation of cost optimization and automation initiatives undertaken by travel operators commencing from the pandemic period, even as revenues are expected to pass pre-pandemic levels next fiscal. This marks a significant turnaround from operating losses of 25.8 percent and 2.7 percent in fiscals 2021 and 2022, respectively. “Rising business travel, along with increasing return-to-office and preference for face-to face meetings besides increasing consumer preference for short breaks will push revenue past pre-pandemic levels in fiscal 2024. Interestingly, preference for short holidays is seeing momentum, especially within India and Asian destinations,” said Poonam Upadhyay, Director, CRISIL Ratings. The improvement in operating performance, together with healthy liquidity and net debt free balance sheets, will help strengthen credit profiles of the players, the report said.

Representatives of private airlines in India — including IndiGo, Vistara, GoFirst, Air India, and SpiceJet — were summoned by the parliamentary standing committee for transport, tourism, and culture to depose on the subject of exorbitant airfares. “The secretariat has sent an invitation to several private airlines and the Association of Private Airport Operators (APAO) to discuss this issue of urgent public importance,” Indian news agency Asian News International reported, citing sources. Last month, a parliamentary panel had asked the Indian civil aviation ministry to cap the upper and lower levels of airfares and ensure that predatory pricing mechanism is not adopted by airlines in the guise of “free market economy.” The reports mentioned that a perfect balance must be maintained between the commercial interests and passengers’ interests. The committee also pointed out the inaccurate information provided by the private airlines on their websites regarding the number of seats left on the flight and the cost of the tickets. There has been a huge surge in air fliers domestically in India since November last year. As per Indian aviation watchdog Directorate General of Civil Aviation’s domestic air traffic figures, over 12.5 million passengers were ferried in January and 12 million in February.

Artificial intelligence is one of the dominant topics about the future in travel, and we’re all over it at Skift.

Recent breakthroughs in Generative AI have had an electrifying effect on the tech world in recent weeks. Many have compared these first artificial intelligence tools, which create new content, such as images or text from simple prompts, to the early days of smartphones or the internet. With the potential for such wholesale disruption, what does generative AI mean for the travel industry? And how do we separate the hype around this new tech from the reality of what it will look like in use by travel companies.Skift Research’s latest report will attempt to tackle those questions by diving into Generative AI’s impact on the travel industry. This report will focus specifically on large language models and their use cases within the travel business.We examine seven different cases for how AI will be used across travel, including its implications for chatbots, operational efficiency, and search. Across most of these scenarios, we see multi-billion dollar markets being created. Skift Research estimates that altogether generative AI poses a $28 billion-plus opportunity for the travel industry.

In a new Skift Research report, entitled Business Travelers: A Multi-Country Survey Report, we explore business travelers’ attitudes toward new ways of working and traveling for business in the evolving environment influenced by the pandemic.

Aiming to be a top adventure tourism destination, the Indian tourism minister recently spoke about focusing on infrastructure development to boost this segment. However, India would need more than just infrastructure development. Quality standards, regulation and oversight would be needed for India to become a leading adventure tourism destination. Most guides, operators and instructors in the country fail to meet basic safety requirements as there are over 5,000 unregistered adventure tour operators in the country, said Vaibhav Kala, founder of New Delhi-based Aquaterra Adventures, told Skift. Highly specialized activities are operated by non-specialized operators due to lack of guidelines and limited skilling facilities. “We need a uniform nationwide regulatory system with ease of registration, training institutes and licensed guides to offer quality and safe experiences to tourists from around the world,” said Kala. Tourism in India lacks legislative backing and is therefore, a state subject. The Centre doesn’t have a mandate to enforce approved regulations and guidelines on the states. States like Uttarakhand, Himachal Pradesh and West Bengal have all been working on adventure tourism standards and guidelines — but in total isolation. Pradeep Murthy, director of Kerala-based MuddyBoots Vacations, highlighted to Skift how several unregulated adventure bucket shops which provide low-quality equipment severely impact safety. “Many operators use plastic helmets for bungee jumping and white water rafting which are otherwise used for scaffolding work in construction,” he said. It’s important that consumers understand and find out if the right adventure equipment is being used — which should ideally be tested in proper laboratories and certified to international standards. “Operators would be forced to adopt regulatory practices only if customers start demanding for licensed operators. The government should therefore, look at educating consumers on a mass level,” added Murthy. India also needs to have a proper mechanism for evacuation and rescue so that tourists are airlifted to safety. 

Jean-Jacques Morin, a top executive at Accor, said the company is committed to growing its “augmented hospitality’ offerings and incorporating sustainability into its business strategy.

Take it easy, seems to be the mantra for Indian travelers as they plan their summer getaway for the upcoming holiday season. Shedding light on summer travel trends, online travel company MakeMyTrip observed that the average number of room nights per booking for the ongoing April-June quarter has increased for both domestic and outbound holiday packages, hinting at the fact that travelers prefer relaxed itineraries. “The average nights booked for outbound packages for the summer quarter is 27 percent higher than last year’s corresponding period, and almost 85 percent higher than the pre-pandemic average,” said Rajesh Magow, co-founder and Group CEO of MakeMyTrip. In domestic packages, too, MakeMyTrip observed a 54 percent increase in average room nights booked this year over the corresponding period in 2019. “The preference for relaxed itineraries has positively impacted average per-passenger spend. Travellers are seeking experience-led travel, resulting in more bookings with pre-booked activities,” Magow said. And even asinternational airfares from India have shot up, with some sectors witnessing an increase of over 50 percent compared to last year, Indian travelers are still considering summer travel. And then of course, there are the visa delays. MakeMyTrip notes that although Indians are interested in traveling to Europe, the top five destinations preferred by them are short-haul international locations — Thailand, Singapore, Malaysia, Maldives, and the United Arab Emirates. On the domestic travel front, Goa, Kochi, Srinagar, Dehradun and Leh are the most sought-after destinations for MakeMyTrip users. “India’s rainbow offering of diverse cultures and landscapes, offering varied destinations to travellers, is coming to the fore in our booking mix,” said Magow. MakeMyTrip has also been witnessing strong traction for pilgrimage destinations such as Puri, Varanasi, Rishikesh, and Vrindavan. A trend that Oyo had also noted last year based on its booking data

Tyler Morse, Chairman and CEO of MCR Hotels, revealed that his company had acquired about 70 hotels and two software companies during the pandemic when he spoke at the Skift Future of Lodging Forum.

In a much-needed impetus for adventure tourism, India would be looking to focus on developing infrastructure for this segment, Tourism Minister G Kishan Reddy said recently. Reddy said India aims to be the a top adventure tourism destination. The second tourism working group meeting under G20 hosted by India’s tourism ministry began with a side event, a panel discussion on “Adventure tourism as a vehicle for achieving sustainable development goals.” Delivering the keynote, Reddy highlighted how India’s topography is conducive for a variety of adventure activities like camping, paragliding, hot air ballooning, river cruising, sailing, snorkeling and wildlife safari. “We have a 4,349-mile coastline, 70 percent of the Himalayas, about 435 miles of rivers, sand desert and cold desert in Ladakh…all of which provide opportunities for a variety of adventure activities for both domestic and foreign tourists,” Reddy said. Talking about the national adventure tourism strategy framed last year, Reddy said it would focus on initiatives like state ranking criteria for adventure tourism sites, a model adventure tourism law, development of mega trails, development of adventure activity guidelines, adventure tourism rescue centers, and development of website and social media pages for adventure tourism.