Even as memes renaming 2022 as the new 2020 are doing the rounds, this year can safely be dubbed as the year of travel recovery after a devastating 2020. As we reflect on the year gone by, ETTravelWorld picks seven events that created a buzz in the Indian travel and tourism sector.
But before anything else, it’s worth mentioning that after almost a decade, India got a Tourism Minister with a cabinet rank in 2021. The last cabinet post held by a Minister for Tourism was Subodh Kant Sahay in 2012. Having appointed G Kishan Reddy as the Tourism Minister, the government also appointed two Ministers of State for Tourism – Sripad Yesso Naik and Ajay Bhatt. The industry interpreted this as a significant move by the Centre to indicate the importance of the tourism sector.
‘Tis the season of IPOs
As Covid-wrecked travel companies looked for alternative routes to raise funds, many of them decided to take the initial public offering (IPO) route. With a number of global travel companies going public this year, Indian companies have also boarded the IPO bus.
While entities like RateGain and EaseMyTrip have taken the plunge, many others are waiting in the wings – OYO, Yatra, Adani Airports, GoFirst, Ixigo, and Ola – and the list only seems to be getting longer. With most of them having filed the draft red herring prospectus (DRHP), it looks like travel companies will make quite a buzz at the BSE in 2022.
The Maharaja’s homecoming
While an attempt had been made to sell the national carrier in 2018, the government at that time had decided to hold on to 24 per cent of the equity in the airline. Cut to January 2020, the government decided to sell off a 100 per cent stake of the airline.
However, the divestment process finally took off on December 14, 2020, and a new owner was announced in October this year. The ownership of the national carrier came full circle as the Tata Sons offer of INR 18000 crore was picked as the winning bid. Talace Pvt Ltd, a wholly-owned subsidiary of Tata Sons, was chosen as the new owner of the carrier, against the INR 15,100-crore bid made by a consortium led by Ajay Singh, CMD, SpiceJet.
Tata Sons will have to retain debt of INR 15,300 crore and the cash component of the bid will be INR 2,700 crore. The net impact on the government with this transaction will be around INR 44,000 crore. The reserve price for the Air India bid set by the government was INR 12,906 crore. The government has also stipulated that Tata Sons will have to retain all the employees of Air India for a period of one year. The Tatas will also have to use the name and logo of Air India for a period of five years. Civil Aviation Minister, Jyotiraditya Scindia, aptly called Air India’s sale to the Tata Group ‘a new dawn for the airline’. However, with this acquisition, one question that is on everyone’s mind is, ‘What will the Tata Group do with three airlines (Air India, Vistara, AirAsia India) in its stable?’
Two new airlines on the Indian runway: Up, up, and away
Following the National Company Law Tribunal (NCLT)’s approval of the resolution plan of Jalan Kalrock Consortium for Jet Airways, all eyes were trained on the revival of the airline that went into insolvency proceedings two years ago. However, aviation enthusiasts were in for a surprise when investor Rakesh Jhunjhunwala decided to invest in an airline, thereby setting the stage for Akasa Air.
With ex-Jet Airways CEO, Vinay Dube, and ex-IndiGo, Aditya Ghosh, at the helm of affairs, Jhunjhunwala’s Akasa Air, which received a no-objection certificate from the Ministry of Civil Aviation in October, is now expected to start operations in early 2022. At this year’s Dubai Show, Akasa announced its order of 72 737 MAX airplanes, and last week, the airline unveiled its tagline ‘It’s Your Sky’ and aircraft livery that features a ‘rising A’ symbol in orange and purple. India’s growing economy and expanding middle class are expected to fuel strong demand for commercial flights and, in addition to the already existing carrier, two new airlines will now be seen catering to this demand.
The Jalan-Kalrock consortium-led Jet 2.0 also aims to restart domestic flights as a full-service carrier by the first quarter of 2022 with six narrow-body aircraft, followed by short-haul international flights in the latter half of the year. Jet 2.0 aims to reach 100+ aircraft fleet as a 5-year plan.
Incredible India welcomes international tourists once again
Having closed its borders to international tourists for almost 20 months, India resumed quarantine-free entry for foreign travellers from 99 countries from November 15, based on mutual recognition of Covid-19 vaccination certificates. India had also announced the resumption of scheduled commercial passenger flights, only to retract the decision less than a week later following concerns over the Omicron variant.
Even as restrictions came back with a bang, inbound tour operators had something to cheer about when the first charter post Covid landed in Goa on December 15, carrying 150 tourists from Kazakhstan. India has now announced that scheduled international passenger flight operations will remain suspended till January 31, 2022. Inbound stakeholders opine that the sector can bounce back only after regular flight operations resume and once tourists are allowed to enter quarantine free.
Government checks out of select ITDC properties
As part of the government’s National Monetisation Pipeline (NMP), the Centre announced its decision to monetise real estate assets worth an estimated INR 15,000 crore, including eight India Tourism Development Corporation (ITDC) hotels. The government had laid down that NMP will provide the potential to leverage the brand value of the Ashok Group.
The hotel assets under ITDC that have been considered under the monetisation pipeline include Hotel Pondicherry Ashok; Hotel Kalinga, Bhubaneshwar; Hotel Ranchi; Hotel Nilachal, Puri; Hotel Anandpur Sahib, Rupnagar; Hotel Samrat, New Delhi; Hotel Ashok, New Delhi, and Hotel Jammu Ashok. The hotels have been considered for monetisation from FY 2022 to 2025.
The government is adopting different routes for monetisation. While there are talks of joint leasing for Pondicherry Ashok, an O&M contract is being discussed for Hotel Kallinga Ashok, Hotel Samrat, and Hotel Jammu Ashok. A divestment opportunity is in the pipeline for Hotel Ranchi Ashok and Puri’s Hotel Nilachal, while Delhi’s Hotel Ashok may go in for subleasing and Anandpur Sahib may look at a transfer of ownership. Long-term leasing, divestment, long term OMT contract may be explored as potential models for monetisation to be ascertained on a case-to-case basis as per detailed asset-level due diligence. This news was followed by the appointment of BJP spokesperson Sambit Patra as the Chairman of ITDC.
Cordelia makes a splash
Having checked into the hospitality business, US-based hotelier Sant Chatwal decided to make a splash in another travel-related business with the launch of Cordelia Cruises. An acquisition from the erstwhile Jalesh Cruises, Cordelia became the latest entrant in India’s cruise industry as it announced that it would start sailing from May 2022.
However, the surge in Covid cases led to the cancellation of the cruise liner’s initial sailing plans and it finally set sail from Mumbai on a two-night round voyage to nowhere, in September. All set to make an estimated investment of USD 300 million over the next three to five years, Chatwal said this would help develop the cruise sector in India.
In an earlier interview with ETTravelWorld, Jurgen Bailom, the President and CEO of Cordelia Cruises, had said, “The company aims at bringing in multiple ships in a phased manner and intends to cater to all segments of the market. The focus will not just be on creating domestic itineraries but also a mix of international sailings.”
Cleartrip in Flipkart’s cart
Going ahead with its diversification plan, Flipkart, the Walmart-owned e-commerce firm, officially announced its decision to acquire a 100 per cent stake in Cleartrip for USD 40 million. Flipkart also maintained that all Cleartrip employees would be retained.
Soon after, Gautam Adani’s ports-to-airports conglomerate also announced the investment of an undisclosed amount in Cleartrip. As part of the investment, Cleartrip, one of the oldest travel booking portals in India, would serve as the group’s online travel agency partner.