Muted demand delays tourist season in Goa

This is an EXCLUSIVE story. Do not reproduce or use in any manner whatsoever without the writer's permission.

Business for hospitality and tourism industry players in Goa is unlikely to reach the heights this peak season. In fact, the overall market scenario that was expected to improve in November and December months is yet to pick up steam. While some industry players are of the view that green shoots of revival are beginning to show up, a few others feel business is already down by 30%, if not more.

Rattan Keswani, deputy managing director, Lemon Tree Hotels and director, Carnation Hotels, said, the situation in Goa is not as robust as it should have been. “Demand is a bit muted than it normally is at this time of the year but we are seeing green shoots of revival,” he said adding that hotels being operated and managed by Lemon Tree in Goa are witnessing inflow of domestic travellers.

Chapora Beach (Picture Courtesy -- https://goa-tourism.org.in/chapora-beach-goa)

A sought after beach destination by international and domestic tourists alike, Goa has had a tough 2019 so far. While off-season months were full of challenges including those arising as a result of Jet Airways shutting down operations, the business season that would have typically compensated for the loss of revenues, isn’t looking any better either.

Santosh Iyer, vice-president - sales and marketing, GlobeTrott Leisure and Events, said, the market scenario in Goa is very subdued. “The economic slowdown, both in India and international markets, has only made it more challenging for the hospitality and tourism sector players. Compared to last year, business has taken a considerable hit and is down between 20% and 30% already. We are hoping situation to improve and business to pick up towards the last week of December,” he said.

A key reason for this scenario in Goa is the fact that tourist inflow via chartered fights from the European markets has stopped completely after the collapse of 178-year-old British tour operator Thomas Cook UK Plc. This significantly impacted business as a large percentage of these holidayers, estimated to be over 35,000, are unlikely to make it to Goa.

The industry was hoping for some respite after Goa chief minister Pramod Sawant’s assurance in September about the possibilities of direct flights by Air India from London to Goa, before the season begins. However, it’s already third week of November and nothing has happened on that front yet. This basically puts an end to the possibility of a large majority of European travellers coming to Goa this season.

Aloo Gomes Pereira, chief operating officer - Charters & Goa, Trail Blazer Tours India Pvt Ltd, chartered flights from Russia and other Commonwealth of Independent States (CIS) countries are still coming but the numbers are nothing to write home about. “Tourists from Ukraine will start coming in from December, so we’ll have to see how that pans out for the tourism industry in Goa,” said Pereira adding that the beach destination will see scanty international traffic this season.

According to a top hotelier, a lot of hotels in their competitive set were dependent on CIS charters and the numbers this time around are far less. “All hotels banking on charter contracts are having a tough time. Those with a right mix and not having too many charter contracts are protected,” said the hotelier adding that room rates continue to be under pressure.

Hotels were also hoping for better room revenues after goods and services tax (GST) rate cuts were announced on room tariffs. For rooms priced at Rs 7,500 and above, the GST rate was reduced to 18% from 28% earlier. Hotels selling rooms priced between Rs 1,000 and Rs 7,500 would have to levy 12% GST and hotels charging less than Rs 1,000 for their guestrooms have no GST.

“Room rates were hiked in October in the hope of a good business season. However, sensing the ground reality, majority of the hotel operators have re-priced their guestrooms and are now focusing on boosting occupancy levels. It’s all about optimising the total room inventory now,” said a top executive from one of the hotel chains operating in Goa.

While foreign arrivals into Goa was and continues to be a challenge, industry players were anticipating that demand and supply gap would be taken care of by domestic tourists. Unfortunately, the shutting down of Jet Airways earlier this year has already impacted domestic tourist arrivals into Goa. While it’s starting to creep back the numbers are not as expected.

“It’s too early as it’s the first month after Dussehra and Diwali. Normally numbers start to translate now and build up in December, and then carry on in January, February and March. Occupancy wise I don’t think there is too much trouble but total revenue wise I think there is a bit of a shortfall,” said another hotel chain operator.

What’s also ailing Goa’s tourism industry is the deteriorating infrastructure in the state. Road conditions have gone from bad to worse making travelling within the state a very painful exercise.

“The current government is all about false promises and irresponsible statements. Nothing really is happening on the ground. It’s such a horrible experience just travelling from the airport to the hotel. Why would tourists come to Goa if the administration isn’t bothered about providing basic infrastructure facilities even,” said a local tour operator.

Caught in a situation, the hospitality and tourism industry players are left with no option but to find ways and deal with the challenging situation at hand on their own. And with increasing stress in the Indian economy getting pronounced every passing day, it will have to be seen if domestic travellers will have a role to play in bailing out Goa this tourist season.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

This 23-year-old electronics engineer’s innovation looks to minimise road accident deaths

Prateek Kumar, Founder and Director, Vida Salvateur International Pvt Ltd

This feature first appeared in www.YourStory.com on Sunday, November 3, 2019.

When Prateek Kumar suffered a road accident while doing his BTech at the Delhi College of Engineering (DCE), it turned out to be a major turning point in his life. That experience in November 2016 not only changed the way he approached life, giving him a larger impetus to observe safety, but also gave him a purpose – to make a device that would ensure timely help in cases of road accidents.

“We all know someone who has lost a family member in a road accident because help did not arrive in time. It’s quite unfortunate and the sad reality that we are living in. This needs to change. I wanted to contribute towards bringing this change through my extensive experience in building solutions based on Internet of Things (IoT) and software, from conceptualising to production,” says Prateek.

Convalescing after the accident, Prateek set his mind on building a device that would be capable of sensing the intensity of an accident, sending out relevant information to the nearest hospital or other healthcare service provider, and also intimating the victim’s family members – all within seconds or minutes of the accident occurring.

The germ of an idea that the 23-year-old entrepreneur alighted on was a smart helmet integrating a chip or device, with the technology being retrofitted into existing headgear.

“I looked up sources online and came across some sporty helmets in the European markets featuring a GoPro camera and other gizmos; those didn’t align with what I had in mind and were quite expensive too. I wanted to make a cost effective smart circuit/ chip / device that can either be embedded or retrofitted in the helmet. More importantly, the technology solution had to be thought of keeping in mind the Indian road/ driving conditions. Then, in 2017, along with some friends, I began working on finding a viable offering for the Indian market. As it called for significant investments, I also wrote a software program and sold it to my college to raise money for this project,” recounts Prateek.

In February 2017, the team also received some funding from the Spark-up Idea Fund hosted by iCreate, the technology business incubation centre of the Gujarat government.

“Students and innovators at various engineering colleges across India can apply for the Spark-up Fund directly via https://icreate.org.in/spark_up. The entries are opened at regular intervals and details regarding participation are posted on the website. Applications submitted by various participants are scrutinised and shortlisted by a group of experts. This is followed by a few interview rounds over Skype or a telephone call. Winning entries are then offered up to Rs 50,000 in funding to enable students/ innovators take their respective projects to the next level of development,” said Prateek.

After graduating in 2018, Kumar registered his venture, Vida Salvateur International Pvt Ltd (VSIPL), under the government’s Startup India scheme.

The company’s name literally translates to life-saving in Spanish and or French -- Vida is Spanish for ‘life’ and Salvateur is French for ‘saving’ / ‘life-saving’). 

The smart helmet and the chip/device will be marketed under the brand Motobuddy. In fact, VSIPL is in the process of registering the trademark/ copyright for the brand and its handcrafted logo design.

So far, approximately Rs 25 lakh has been invested in the business, including a grant of Rs 10 lakh received in July last year under the Nidhi Prayas scheme of the Department of Science & Technology, Government of India via IKP Eden, Bengaluru, which is India’s first hardware product incubator.

“Every year, two batches are rolled out for this scheme. One can directly apply to incubators that are listed under this programme. The funding offered is a huge support for innovators wanting to start their entrepreneurial journey,” he said.

When Prateek and his friends started developing the smart helmet’, the circuit designed to power the device was so large that it covered an entire helmet. Streamlining the device to an optimal size and making it aesthetically appealing was critical to ensure the headgear would be marketable.

After two years of hard work and numerous iterations, Prateek was successful in reducing the bulky circuit to a coin-sized chip.

Over the last two years, the company has worked extensively to fine-tune the innovation to accurately detect and send out alerts on an accident.

“It was quite a challenge to reduce the circuit to its present size. A lot of prototyping with the right set of manufacturers and components went into making this happen,” says Prateek.

The startup currently has 18 members handling various operational functions. The core team comprises Prateek who brings extensive experience in software development, Drones and IoT solutions to the table. Holding the chief technology officer (CTO) position in the company is Dr. Manoj Saxena, a gold medallist from DCE, masters from IISc and, a PhD from IIT Delhi and Stanford University. Armed with an MBA from INSEAD, Venugopal Gupta is associated with the company as a business advisor and mentor. The author of Business Parables, Gupta is currently the director at Toilet Board Corporation in Europe.
Vida Salvateur is now looking to raise a fresh round of funding of about Rs 1 crore to go into production.

How the device works

Motobuddy’s technology can be paired with a mobile handset via bluetooth. A mobile application has been developed already for this purpose and will be made available for downloads on Google Play Store and iOS App Store at the time of commercial launch. The user can then populate emergency contact numbers and personal health-related details such as allergies, specific medical conditions, and any existing ailments after registering on the app.

The basic reason for integrating the device in helmets is to motivate users to remember their headgear on every ride, Prateek explains. The device also emits a red light using LEDs, thereby enhancing the visibility of the rider on the road.

MotoBuddy Smart Helmet

In case of an accident, the IoT-enabled device detects it but doesn’t send out an alert for 30 seconds. During this brief period, if the accident isn’t serious, the rider can cancel the automated activation process. If the alerts aren’t cancelled, the device sends out a message to the nearest hospital with details of the accident, its intensity, and location. Based on this intelligence, the hospital will be able to send emergency services, either an advanced one or a basic ambulance, to the accident spot.

Motobuddy is working on developing a network of hospitals in Noida, in other parts of Delhi- NCR, and eventually across the country. The company is also in the process of onboarding emergency ambulance service providers into its system, says Prateek, adding, “In case the nearest hospital is not in our system, our executives monitoring the system will call and inform a hospital about the incident. If the hospital doesn’t act within a set period of time, the system will send another message to alert the next-nearest hospital.”

The device simultaneously sends out a message to the rider’s family and friends entered as emergency contacts, with all relevant information about the accident.

The way ahead

The team has conducted on-road trials over the past month, with 25 of the chips tested on the road already. The data from these rides and simulated accidents has been fed into the system and analysed, and the devices have been tweaked according to the findings.

”For instance, the motorcycle / scooter rider could experience a big jolt by running into a pothole or on irregularly shaped speed breakers. Such incidences could be misread by an ordinary sensor as an accident. To tackle this situation, special sensors have been designed to accurately identify accidents from incidences of jolts and bumps. Similarly, there are a few other things that are very unique to the smart chip/ device. I can’t share more details at this stage though,” he said.

The startup has applied for patents for the chip and the smart helmet about 18 months ago, and is likely to get them by the end of this year. These patents are India-specific as getting global patents would be a cost-intensive exercise, Prateek points out, adding, “However, once the additional funding comes in and the smart chip gets good traction in the market, we plan to apply for global patents and secure the intellectual property too.”

The company initially plans to roll out the smart chip priced at Rs 1,200, while the retrofitted helmet priced at Rs 2,500 will be introduced at a later stage. The company also plans to offer an AI-driven engine that will provide advanced driving analytics (ADAs), including driving speed and behavior, and location tracking.

An annual subscription-based service, ADA will be offered to Motobuddy users at a very nominal cost, which will be disclosed at the time of launching the product in the market. Future plans of VSIPL include tying up with general insurance companies and bundling a health and or a personal accident insurance policy to be sold along with the device/ smart helmet. This is being done mainly to facilitate cashless claims at various hospitals in the network. Taking the Motobuddy product and service offerings international also forms a part of the company’s business expansion plans.  

“We have streamlined everything that’s required to commercially produce the chip and the smart helmet. We should be able to hit the market within three months from receiving the funding,” he said.
(The writer is a Mumbai-based independent business journalist and has extensively covered diversified consumer businesses over the last two decades. He can be reached at hello@ashishktiwari.com)

Godrej Consumer sees gradual recovery in FMCG sector over coming quarters

This story first appeared in The Free Press Journal on Thursday, November 7, 2019.

The fast moving consumer goods (FMCG) industry in India, according to Godrej Consumer Products, is hopeful of a gradual recovery over the coming quarters.

The Godrej group company has reported 7% volume growth in India business for the July to September quarter of fiscal 2019-20.

Vivek Gambhir, managing director and chief executive officer, Godrej Consumer Products Ltd (GCPL), said, the 7% volume growth was its highest in the last five quarters and was broad based across categories. “We have seen a sequential pick up in volume every quarter, for the last few quarters.

Picture Courtesy: www.godrejcp.com

The growth was led by new product launches, strong marketing campaigns and consumer offers. Our expectation is to ride on the gradual recovery that we see in India and improve our volume growth momentum,” he said during an earnings call on Wednesday.

To achieve this, the company will be intensifying its thrust on innovation and new product launches. In the pipeline are a slew of disruptive offerings including the Good Night Gold Flash, which it claims to be its biggest innovation in the category over the last decade. Another offering is HIT rat glue pad that’s available only in a select few markets at present.

GCPL has also entered the anti-mosquito racquet space under its HIT brand. This product category has been largely dominated by Chinese products and private labels thus far. The company is looking to disrupt this segment with a branded offering via the e-commerce distribution channel.

At Rs 399 a piece, the pricing of this product however is significantly higher compared to what’s already available in the market at present. Abneesh Roy, executive vice president - institutional equities (research), Edelweiss Securities noted that since the product is only available through e-commerce the company may need to look at physical retail stores going forward.

In fact, GCPL is planning to launch the anti mosquito racquet in modern trade and based on the market response will extend it to premium general trade and other outlets in the next phase of its distribution strategy.

“We are quite happy with the initial success and the plan is to scale up across other channels as well. As for pricing is concerned, this is a product with a much longer warranty and is much superior versus some of the unbranded and private labels that you’d see (in the market).

Our hope is that with the kind of trust and equity HIT commands in the market, we should be able to sustain the premium pricing (Rs 399) of the product,” said Gambhir.

Among other new products to be launched will be in the hair colour space including the relaunch of Expert Creme hair colour and Godrej Anoop Ayurvedic anti hairfall oil through the e-commerce channel. This apart, a bunch of new offerings are in experimental stage and will either be launched on e-commerce or sold through modern trade channels.

(The writer is an independent business journalist and can be reached at ashishktiwari.1976@gmail.com)

Titan cuts H2 FY’20 growth guidance to 11-13% from over 20% earlier

A version of this story first appeared in The Free Press Journal on Wednesday, November 6, 2019.

Stressed consumer sentiments coupled with growing tendency for conserving cash in hand is likely to impact growth targets for consumer companies in the remaining quarters of the current fiscal. And as demand environment continues to be sluggish, consumer companies could be looking to revise their growth guidance for the second half (H2) of fiscal 2019-20 (FY’20).

Taking a lead in this direction is Tata Group’s jewellery, watches, eyewear and fashion accessories business vertical, Titan Company Ltd (TCL). The company management said in an earnings call on Tuesday evening that it has revised jewellery business growth guidance for the period between October 2019 to March 2020. Taking a cautious approach Titan Co. management had in August 2019, said that it was targeting over 20% revenue growth keeping the wedding and festive season in mind.

C K Venkataraman, managing director, Titan, said, “The guidance has been revised to between 11% and 13% now from the earlier over 20% growth levels.” The downward revision has been done after taking into account that overall market situation and consumer buying behaviour, said the top company executive.

Analysts tracking Titan are of the view that the premise of over 20% growth talked about earlier was based on company’s execution of business and not necessarily relying on overall macro market conditions. However, the change in the guidance now is an indication of concerns in this industry as a result of which Titan management has made a significant correction in its growth numbers going forward.

Abneesh Roy, executive vice president - institutional equities (research), Edelweiss Securities, said that the brokerage has been pointing that achieving 20% guidance in H2FY20 is very difficult in jewellery business given weak sentiments, high base of 36% in Q3FY20 and 21% in Q4FY20. “For FY21, the company is yet to change guidance from current 20%. By next quarter, Titan said they will have more clarity,” said Roy.

 
While Edelweiss expects Titan to correct 5-6% in near term, from longer term perspective, the brokerage maintains a BUY on dips given huge retail expansion, struggling competitors and increasing formalisation of jewellery sector.

Elucidating the reasons that led to revising the guidance, Venkataraman said, the company had set out a growth table for five years based on positive sentiments in the business environment. Growth may have been sluggish, in single-digits or flat during the fiscals 2018 and 2019 owing to certain migration that started happening as a result of a lot of structural changes, demonetisation, Nirav Modi scam and so on.

”The trust factor started kicking in, in favour of Tanishq and we were able to deliver a 20% plus growth rate with a certain set of initiatives and certain level of excellence in our execution. Our internal research with consumers done earlier in January and February 2019, indicated positive sentiments. However, what’s appearing now after six - seven months, is that the sentiment is actually worse than what we had measured then.

“As a result, the overall industry has witnessed 70% decline in imports, every single jeweller that we are aware of, is talking about a decline, vendors are talking about big drop in supplies. Regional jewellers are talking about a 12% and 22% decline in business during the festive period as opposed to 10% positive growth that has been achieved by Tanishq. So, obviously the strategies and standards of excellence in our execution are happening in a circumstance that’s less in our favour than a year ago,” he said.

Taking into account the market conditions, the company had to go back to the drawing board, expand the number of weapons that required (to deal the market conditions) or create fresh ones. That, as per Venkataraman, will take a little more than a few months and hence the change in guidance for October 2019 to March 2020 period.

“It is our intent to keep gunning for the over 20% growth number for fiscal 2021. For the moment though, it can only be about tweaking of the arsenal that we already have. And we are going by the more recent growth performance over the last three to four months,” he said.

While companies like Hindustan Unilever Ltd (HUL) operating in the fast moving consumer goods (FMCG) sector are optimistic about overall business, the company management had earlier said that near-term demand outlook, especially in the rural markets, remains challenging.

Among India's leading Ayurvedic and natural health care companies, Dabur said that it is working on achieving its annual growth target of mid to high single digits for the full year.

On the possibilities of revising the guidance for the second half of current fiscal, Mohit Malhotra, chief executive officer, Dabur Ltd, said, there was no need to do it. “We will work to achieve the targeted growth rates for the fiscal 2020,” he said in the earnings call on Tuesday.

(The writer is an independent business journalist and can be reached at ashishktiwari.1976@gmail.com)