Thursday, August 19, 2010

Alternative Business Opportunities For India Entrepreneurs

As concoctions go, there's no simulating the high that comes from blending business with pleasure. For some entrepreneurs in the travel industry, these two components come together in an enviable mix. Driven either by wanderlust, dormant passion or plain opportunity, these people have found ingenious ways to tap the market and create job opportunities.

It helps that the growing breed of travel junkies has spawned a hundred billion dollar industry across the world. In fact, the tourism sector accounted for 9.2% of the world GDP and provided 235 million jobs, or 8% of the total employment worldwide, according to the World Economic Forum's report on Travel and Tourism Competitiveness, released in 2009. Though the hospitality sector suffered a jolt due to the global downturn, it has picked up pace once again. According to the World Tourism Organisation, international arrivals across the globe are expected to grow annually at 4.1% and increase from the current 1 billion to 1.6 billion by 2020.

In tandem with the growing fervor for travel, Indian entrepreneurs are devising unique ways to lure tourists. Be it Suchna and Yogesh Shah, who started the Backpacker Company, Atul Khekh-ade, who charters planes, or Inir Pinheiro and Abhijeet Kavthekar, who are making the most of rural tourism, this enterprising class of professionals is set to redefine the contours of tourism in the country.

Travelling Light For Mumbai-based Suchna and Yogesh, setting up the Backpacker Company seemed a natural offshoot of their intense love for travelling to off-beat destinations. "We preferred to travel independently rather than take rigid group tours, and soon found ourselves bombarded with queries from friends regarding these trips. When we realised that people were willing to pay for good advice, we set up the company in 2006," says Yogesh. "The uniqueness of our venture is that people can enjoy a 'pay-as-you-go plan', where the food and accommodation are not restricted and they can change their itineraries midway, if they want to," he adds.

As most adventurous travellers are young and budgetconscious, the Shahs focus on hostels, bed-and-breakfasts, camping grounds and homestays. Also, the flexible backpacking plans allow clients to take off alone without having to pay extra, a boon in an industry that charges solo travellers a supplement fee. "It also helps that Suchna can vouch for the hygiene and safety of every place we propose.

So women travellers trust our recommendations," says Yogesh. The proof of their success is the 40% annual growth registered by the company since its launch. But it wasn't always easy for the Shahs. In the first year, it was tough to get the business going, especially as finance was a constraint. There wasn't enough money for marketing and advertising, so the couple relied on word-of-mouth publicity and free social networking sites, such as Facebook and Twitter. However, in the past four years, the company has acquired more than 1,000 members. "We are considering venture capital but such an arrangement is like a marriage. You need the right partner, who understands your vision and supports your decisions," adds Yogesh.

The Shahs not only plan to expand their operations to Bengaluru, Pune and Delhi soon, but have also decided to branch out. Recently, the couple has launched Away and Beyond, a new venture to cater to those who like to rough it out in luxury. Flying High While the prospect of organising tours has pulled in a fair share of entrepreneurs, other areas in the sector have drawn an equally feisty bunch of players. Take Atul Khekhade. For someone who had nursed an entrepreneurial temper ever since he started his first company at 19, flying high was a given. Only, Khekhade was forced into a circuitous route before launching Airnetz Aviation in 2007.

While studying for his engineering degree, he started a software company, Pyxoft Infotech, in 2000, with a couple of friends. "We did everything from making softwares to hardware servicing and designing Websites," says Khekhade. However, the business didn't take off and the founders decided to split. In 2003, Khekhade joined Oracle, but after an year, decided to change course again. He plunged into executive education, working with companies in the US. It was during his travels in the US that Khekhade was taken in by the infrastructure, especially in the aviation sector. It made him wonder if there was need for better aviation and airport facilities in India. He identified a location within 80 km of Mumbai, which could be developed as a general aviation/cargo airport and could also be used for medical emergencies. "I was wary after my first start-up, so decided to ensure that the business would pay and then set it up," says Khekhade. He negotiated with companies, such as the Jain group and Religare, which owned airplanes, and worked out a schedule to lease them.

In September 2007, he set up Airnetz Aviation with Rs 5 lakh. The cost of an air taxi service or chartering a helicopter starts at Rs 50,000 an hour. Khekhade's instinct about the lacuna paid off as the company registered a turnover of Rs 3 crore in 2009-10. Tapping the Roots Much like Khekhade, toeing the line doesn't come easily to Inir Pinheiro. So, after earning his post-graduate degree in rural management from XIM Bhubhaneswar, he decided to work for Greenpeace.

Even as he was tinkering with the idea of rural tourism, he met Abhijeet Kavthekar, who worked at the Watershed Organisation Trust. "Lack of opportunities in rural India has made it a hotbed for illegal activities. I wanted to leverage the potential in villages and tourism seemed an ideal way to do it," he says. So, in 2006, he and Kavthekar laid the foundation for Grassroutes. "For this venture, the trust supplied me with support and funding of Rs 20 lakh," says Pinheiro. A big advantage of the hospitality sector is that it does not necessarily require highly skilled workers. It's a benefit that Pinheiro and Kavthekar have manipulated to better the lot of villagers in Maharashtra. The first village they set foot in was Purushwadi, a five-hour drive from Mumbai. "The villagers were apprehensive about what people would do if they stayed there and were flabbergasted at the idea of asking the guests to pay for food. We also needed to shore up the facilities in the village," says Kavthekar.

They first experimented with dummy tourists to find if the villagers could cope with their needs. "I then began to tap my network of alumni and called up people in corporates randomly. Of the 30 calls I would make, barely four would respond," says Pinheiro. However, the idea had its appeal and began to take quick root. In 2009-10, Grassroutes hosted 350 tourists and the founders plan to rope in six more villages this year. Hearth Benefits Extreme entrepreneurship, however, is not for everybody.

If you're wary of losing money in a business, you can go the franchise way, as did the Nayars. The much publicised Incredible India campaign prompted R.K. Nayar, a retired army officer, to turn his house at Kailash Colony, Delhi, into a bed-and-breakfast. "I got government approval in January 2008, but at my age I wasn't keen to do any running around for marketing."

When he heard that the Mahindra group was planning to branch out into homestays, he approached the company in October 2008, and it agreed to take on marketing and booking. "It's the best of both worlds, as we have the support and can still take independent decisions on day-to-day running of the business. Till date, our rooms have been occupied for about 600 days," says Nayar. Obstacles and Opportunities Not everybody has the Nayars' luck. There are several challenges that entrepreneurs have to tackle, the biggest being tourist satisfaction. "A big impediment is language, especially for foreign tourists," says Pinheiro.

There's also the problem of meeting international standards. Says Vimla Dorairaju, business head, Mahindra Homestays: "It's not easy to convert your house into a homestay. There are stringent requirements. We visit 10-15 homes before finally zooming in on one." Overcoming such obstacles can often lead to the discovery of new opportunities. "There are nearly 400 air strips in India, but facilities at most are below par. Some of these, such as the one in Pune, aren't even commercially owned and fall under the jurisdiction of the Indian Air Force.

So there's a lot of potential in this area," says Khekhade, who plans to focus on airport development. He has begun work on a blueprint to start operations in Surat, Ahmedabad, Kolkata and Assam. There are many more Khekhades and Pinheiros waiting to devise new tourist lures and tap travel opportunities. In the process, they are creating more employment avenues, business for themselves, and pleasure for tourists. It's a blend that serves to please all.

Tags:Suchna Shah, Yogesh Shah, Backpacker Company, Atul Khekhade, Inir Pinheiro, Abhijeet Kavthekar,Away and Beyond,, airnetz aviation, grass routes,mahindra homestays,Alternative Business, new business

Source:Money Today, Namrata Dadwal, Aug 16, 2010
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