Each and every hotel in the country knows one thing: the power of domestic tourism. So we should talk about that, and I think that is the way to go forward. But foreign tourists, inbound tourists, should and can be the icing on the cake. There's no reason we shouldn't get them. We keep worrying about the fact that oh my god, where are the jobs? Well, very few industries create as many jobs and as good from an employment point of view as travel and tourism. So that's the reason why you should be taking this really seriously. You need people who will cook and serve you food. You need people who you will be buying handicrafts from. You want local guides who are there, and those will typically be people who know that place well. And that is where we need our jobs. Otherwise the whole rural-urban shift is playing havoc in our cities. Our cities are now overburdened with so many people. So this is a very good thing where you can give meaningful jobs to people right where they are, including women. If they have a bad experience, forget it — they're not coming back. We all know what a disgruntled customer does. A disgruntled customer tells 10 people. A happy customer tells few people. What has not been solved enough for a foreign tourist, Vikram, is hygiene and safety. I was about to say that — that's the two points. We all have friends overseas. Safety and hygiene. If you can't figure out safety and hygiene, don't sit and keep saying that foreign tourists are they going to come. And the good news, by and large, it's been a positive experience. They've said we've had a great time. The curiosity, there was hospitality. People took us into their homes. They were friendly because we are warm and hospitable people. Atithi Devo Bhava is in our DNA.
This is the India story, and we're going to be taking a look at one of those sectors of the country that you could say we've underperformed a little bit. It's the logical place for India to really shine in. I'm talking about travel and tourism. With India's beauty, India's heritage, India's culture, India's food, you would expect India to be one of the travel and tourism capitals of the world. And perhaps we are going to get there. We will eventually get there. But there are things that we've got to do to fully achieve and give actuality to that particular part of the India story. So how are we going to do it? Well, let's find out from the man who's really been transforming India's travel and tourism. Certainly from a corporate point of view, one of the first people to really figure out how to do it all online — Deep Kalra, chairman and founder of MakeMyTrip, who in 2000, I think, is when you first had the Eureka moment of saying, well, the internet's going to come and that's going to transform travel and tourism.
Right. True. Quite true. And thank you for having me here, Vik. Well, we've known each other a long time, so it's a really great pleasure.
Now, when the question comes about why is India not getting as many tourists, it has to be broken up into two things. There's domestic tourism which is actually going like gangbusters and it probably will keep doing that. 1.4 billion Indians are going to travel once they get disposable income. So the real question is, I guess, around the foreign tourists.
Yeah, I think so. There is a lens which likes to look at inbound tourists, and I think we should. There's nothing wrong with that. But what COVID taught us, at least in travel and tourism, is besides the hard knock we all got in that business because travel and tourism was pretty much decimated right through that period, domestic tourism actually got it back. And each and every hotel in the country knows one thing: the power of domestic tourism. So we should talk about that and I think that is the way to go forward. But foreign tourists, inbound tourists, should and can be the icing on the cake. There's no reason we shouldn't get them.
You already called out what India has. In fact, I would go out on a limb and say what we have, no other single country has. We have the whole package, no matter what kind of tourist you are. So obviously we have history and legacy, and we have phenomenal wealth — whether it's our temples, or it's yoga, or it's alternate therapies, and it's Ayurveda. But then for the youth, I think we've got some of the best adventure you can do in the Himalayas, in the oceans. We have two stunning oceans and seas, and the Andamans has been open for a long, long time. And if one hasn't been there, one hasn't really seen the beauty of the sea. But now Ladakh is opening up. And Lakshadweep is the same waters as the Maldives, and look at the number of people who go there and how much they spend. So I hope we get that right.
So I would love to talk about both segments. We can start with international inbound. I'm just going to take this into some depth, because look, at the end of the day, this was about the India story. It's all very well to say we're going to be Viksit Bharat in 2047, and I'm sure we will be. But you only get to being Viksit Bharat by 2047 if you start doing a lot of the things in five-year bursts. What are we going to achieve by 2030, by 2035, by 2040, and so forth? And I think when it comes to travel and tourism, this is one of those areas where you've got to be really, really ambitious. And I'm going to tell you why. All of those various aspects that we were just talking about — the sheer breadth of the tourism potential of India is massive. That's a natural resource the like of which no other country has. And I don't just mean the natural resources from the point of view of beauty. Obviously it's there. You can see it from these images. Also the culture, also the heritage. Who can have a culture and a heritage and a history? Well, maybe the Greeks can and the Egyptians can, maybe the Chinese, but who else can talk about 3,000 years of history? Who else can talk about giving offerings like these — like yoga, like Ayurveda, like meditating next to the ocean? Nobody can do any of this. And the opportunity of travel and tourism becomes really, really compelling when you consider the economic benefits of it. And those economic benefits are massive, because what do we keep worrying about right now? We keep worrying about the fact that oh my god, where are the jobs? Well, very few industries create as many jobs and as good from an employment point of view as travel and tourism. So that's the reason why you should be taking this really seriously. And there's one more thing I'm going to throw in to convince you that we need to take it seriously. Everyone says AI, right? AI is coming. All the jobs are going to go away. Well, if AI does come, let me tell you one of the things that people will be doing while they are sitting and figuring out what to do with their time — they'll want to travel. They'll want to roam around. So that is something which AI cannot take away.
Deep, I was just putting out a little plug for why travel and tourism is really something for us to focus on. Would you agree with some of those points?
I think I agree with all. You couldn't have put it better. I just go one step further on the AI point, Vikram, which is: the beauty is that a lot of these jobs tomorrow will actually not get replaced by AI, especially in the hospitality sector, in the tour guide sector. Down the line, the tertiary sectors which get impacted — with handicrafts, food, etc. — are still going to need people. And for a country like India, that's really good news, because we definitely don't want a scenario where a large chunk of our labor force gets replaced or displaced, because then we have other serious problems. So I think it's a tremendous industry. We add 7 to 8 percent of GDP is the contribution of travel and tourism. And 7 to 8 percent is right now, and we're all agreeing that we are only scratching the surface. It could be much more. Other countries have 20, 25 percent.
And that's what we're going to talk about, I hope, because I think we'll easily grow — I would reckon we will grow 30 to 40 percent faster than the economy. And I'm not talking about the digital online sector, which is my sector, but overall travel and tourism will grow 30 to 40 percent, maybe faster than the economy.
Because of the — the economy is growing 10, 12 percent. So you're saying 20 percent growth in travel and tourism is possible?
Well, I wish the economy was growing 10, 12 percent. We're still starting to get there — in nominal terms, right? So if you want to take that metric, absolutely. Because of the pent-up demand, young population, more disposable power, we've moved very fast already to get to $2,200 per capita income. We're going to race ahead now to 4,000 and 5,000. And that's when the tipping point starts to come.
On our own platforms, we're seeing so many people travel for the first time. And that means this is the first time they're actually experiencing holiday travel, leisure travel. So that's going to happen in a massive way. The second and the big contributor is over 10 percent of jobs. So this sector actually can be one of the big, big ones for the economy as we move forward.
So just to elaborate on what you've said — up to a certain point, what happens is that as people get the income, they're first spending it on their basic necessities. They need food, they need to make sure there's electricity in the house, build your first house — all of that is the first thing that you spend your money on. In India we say roti, kapda, makaan — you take care of the basic needs. Now, more and more people are going to move from that consuming class. Right now it's still a small number — 100 million, let's say 150 million — it'll start to spread. Those sections and others will start saying, okay, now I have taken care of my bare necessities, what am I going to do?
And this is compounded by the fact that the youth does not want to now save up and own a house. The youth does not want to save up and own a vehicle. The youth of today is saying we are a renting economy — we will enjoy, we will dispose, we don't want to own. I have a brother who's 40 years old, a very successful lawyer in Bombay, married to a successful lawyer also, and they don't want to own a house. They're saying there's no point, and we've had endless discussions.
I'm sure the finance ministry and others are going to say don't blow up all your money in holidays and MakeMyTrip — you should save your money, put it in mutual funds. So they're doing all of that. So the youth is very clear on saving in financial assets. They don't want to get locked into physical assets. So that means we have even more disposable income where people are saying fundamentally I want to spend this on experiences. Actually, that's the umbrella. Now it depends on how much time you have. There are two kinds of people: one is you have all the money but less time, and the second is you have more time but less money. And you start converging.
So as people get into their first job, they're saying okay, we have some money now — we'll go out on the weekends, we'll have a good time, or let's save up, every two or three months let's take off for Goa, let's take off for Manali or Srinagar or wherever. And then they start dreaming about going overseas, which is happening all the time because it's fairly economical to hop across with great air connectivity. Then they start talking about longer holidays, experiential holidays. So we are finding the evolved traveler now saying listen, I want to go and immerse myself in a place, I want to really soak it in.
If Kumbh is happening, I will go even if it means hardship, because this is only happening once in 144 years. So basically no one's going to see this Kumbh again. So I found a lot of younger people wanting to go and see Mahakumbh for themselves and really immerse themselves — go there and enjoy that. And I've seen that now happening for various other things: music concerts, sports events, or just to go and detox. Digital detox is becoming a huge thing.
So I mean, we are of course, to be clear, we're talking right now about the domestic tourist and why it's important, and why travel and tourism itself is important. And we'll come — no, let's come squarely to the foreign — no, but let me just finish with this a little bit more. Are you seeing that trend happening already, that for young people the amount of their wallet that they are spending on travel and tourism is rising and it's increasing and it's a very important part of what they're spending their time and money on?
Absolutely. The most popular gift that youngsters are giving their friends who are getting married now are travel vouchers. That's a norm. We obviously have gift vouchers, but this was not happening. I got married 30 years ago and the most common gift we got was a casserole. Basically, things have changed, budgets have changed, but a lot of people say take a holiday, have a nice time. And people are not giving money. They're pooling together. So a bunch of friends — four, five, six friends — will get together and say, can we get them a nice travel voucher where they can go and spend it wherever they want. And that's being appreciated because that's where people would want to spend it.
The reason why the government is very excited about this, I suspect, is partly because of the factor that I was just referring to, which is that the job intensity of travel and tourism is very high. As you start investing in travel and tourism, the number of jobs it creates are actually massive. Talk to us about that a little bit, because people will say why should that be the case?
Well, it's there. There are taxi drivers, there are hotels coming up, there are people working in those hotels, there are people serving in restaurants, there are people receiving others at the airport. It's a lot of economic activity that this generates and a lot of jobs that this generates. And to further layer that — so yes, this is classic macroeconomics 101 which both of us have fondly studied. So I think the ramifications — the secondary and tertiary effect — is great. The other beauty of these jobs, Vikram, is that they are being created in the place where the people stay. And that's phenomenal.
Because while you might come in through an airport into the country, or maybe by sea, then when you're traveling through a vast country, you're going to the different parts of the country, you need people on the ground there. So like you said, you need people obviously who will cook and serve you food, you need people who you will be buying handicrafts from, you want local guides who are there, and those will typically be people who know that place well. And that is where we need our jobs. Otherwise the whole rural-urban shift is playing havoc in our cities. Our cities are now overburdened with so many people. So this is a very good thing where you can give meaningful jobs to people right where they are, including women. A lot of the artisans turning out handicrafts are very often women from these places. And we have the best arts and crafts from all parts of the country.
So I think we can have a huge impact in multiple ways — not just numbers, but where. I think that's a really, really important point you made. So for example, even from a government's point of view, oh, we need to drive economic activity, unemployment in Arunachal Pradesh for example — one of the ways in which you can do it, and you don't have too much of an environmental impact there — start setting up homestays out there, open it up to tourism, and bang, as you said, jobs are coming there, economic activity is coming there, people are coming there, and it has massive, massive potential.
Absolutely right. And micro-entrepreneurship. So I'm glad you mentioned homestays, because that has become the fastest growing sector for us within travel and tourism. And again, COVID gave it the big fillip, because during COVID, when things were opening up, people wanted to go to remote places, they wanted to stay a little isolated. So homestay presented that, versus being in a big hotel where you're with a lot of people. Homestay owners very often don't run the place themselves, but they'll have one manager who will be running that place. They need training. Those people need training. The ladies — they know what to do, but to make it more presentable to the guests, you need to just polish the edges. And we actually, as part of our MakeMyTrip Foundation, are doing training. But there is no end to what we can do with homestays in remote parts of the country.
As I know you're one of those people who's as fascinated by technology and what's coming with AI as I am, do you believe that that is something else that is going to be really driving a lot of interest in this area? Because I'm sure you've heard it — there are some theories which are saying that five years, ten years, fifteen years from now, humans may or may not have too much economic activity. They'll be traveling. Who knows? AI might wipe us all out by that time. If it doesn't wipe us out, then they will be traveling a lot more.
Yeah. The era of abundance as we're all calling it. And it's either abundance or apocalypse, and I don't know which one it is. So right now, that's a whole different debate and we can definitely get into that if we have the time. I think yes, I do believe that AI is going to impact a lot of the booking part of it. So our platforms, we are thinking very hard about it. We already have taken some big strides. We put out stuff. So today you can book an air ticket speaking in Hindi or in English and nothing else. And the reason we did it is not to be cool and to say we've done AI. No, it's because the new customer is coming from places where he or she may not be that comfortable typing on our interface but is very comfortable speaking. So that's all you have to do. And this is just baby steps.
Already on the post-sale side, you can solve almost — 95 percent of all queries or issues can be solved entirely with our AI chatbot, which we call Myra. That is already happening. So I think AI is going to impact that part. I think AI is also — but also, is this an industry itself that is somewhat AI-proof? Because either people will be traveling in any case because of abundance, or this is one of the areas where you do need humans. You can't necessarily do everything here with robots. Maybe in Japan they have robots — by the way, that's now quite commonplace, where if you order something to your room, even in a three- to four-star hotel — I have friends who have experienced it, my wife experienced this recently in China, where they ordered something to their room and a robot came and delivered it, and they had to put in a code and take their diet Cokes or whatever else they were having. And you know, it's a labor arbitrage, so I don't think we need to get there because we do have 1.4 billion people.
But I think AI will augment and help a lot of our processes — again, in hotels and in airlines and in OTAs like ourselves. We'll get a lot of that. But at the end, the last mile, where you have the real interaction, where the magic is made — you know, we all remember that trip where we went to some place where we were a little edgy about it, and then we met this person who may not even have been a guide but was so friendly, so nice, told us all about their place, and we come back with memories very often of people. And that will thankfully remain a human experience.
Which brings me to the second part of this. All right, domestic tourism — we've covered it. Population going to grow, they're going to have disposable income, that will keep the industry going. Now let's come to the elephant that's not yet in the room, which is foreign tourists. Why aren't there more foreign tourists in India?
