Wednesday, 19 October 2011

Mumbai Rocks… but the world does not know it

I am just back from one of my favourite cities, Mumbai. I spent last week running our information packed (and ever so slightly stressful) Indian conference and expo. The show examines how the huge Indian travel market is adopting to web, mobile and social media. As ever in Mumbai, last minute surprises abounded but the debates were incredibly informative. The potential facing the company that can tap this market is huge.

Several comments from Azran Osman Rani the CEO of AirAsia X did grab my attention.

First, alliances are doomed due to inherent costs and the proliferation of on-line tools that by pass the goods. In addition Building brand equity for your airline customers is vital. As alliances cut out brands, alliances will die. He also mentioned that what LCCS save on distribution costs they spend on brand.

Second, and in relation to the Indian market he can sell flights to Indians going back and forth but has a huge problem creating India as a destination. An “Overwhelming percentage of passenger mix are people from India. Normally when we fly to Japan, Australia or Europe we start with 60 -70% passenger mix from Malaysia and Asia.” Day 1 for Air Asia our customers were from Delhi and Mumbai. To demonstrate the problem Mr Osman recalled how they had “5000 free seats from Delhi and Mumbai for Malaysians and only sold 3800.” Normally for any other destination such an offer would sell out in 2 hours.

As yet there seems little demand for visitors from Mr Osman’s Asian hub. Now KL is hardly the top of most travellers wish lists but as Mr Osman pointed out it’s the exciting islands and pulsating cities all around it that make it special.

Having spent just one week in Mumbai I know the rest of Asia is missing out but how the Indian travel companies and tourist board can counter this will be a major challenge. One thing I know for sure is that the battle for the Asian traveller will be won and lost on-line and I am sure we will hear more at our next Indian summit in July again in Mumbai. Please note we have brought it forward by a few months!

By Tim Gunstone