A Ferrari of a holiday

More players move into the outbound luxury travel market "" but who's buying?

It isn't surprising that Romi Datta, 39 years, should be excited about Ferraris. As CEO of a travel company, he is probably one among nine million "Getting There" rich executives, according to the Indian Luxury Report which places the old traditional rich ("Luxuriented") at one million, the "New Rich" at six-seven million, and the dogged "Mid Affluents" at 15 million. With a collective luxury spend of Rs 65,000 crore, according to a Sahara report, and growing at 14 per cent per annum, and an outbound market of eight million travellers in 2006, expected to grow over 500 per cent to 50 million by 2020, it's a given that the outbound luxury travel market from India will grow exponentially as well.

So Datta will want you to fly down to Rome, from there to zip off in a group of four couples in four Ferraris "" a 599 GTB Fiorano F1, a 430 Spider F1, a 430 Coupe F1 and a 612 Scaglietti F1 "" from north to south Italy, a four-day trip setting you back by ¤5,000 per person, and an eight-day version priced at ¤13,300 per person. "The rich," he says, almost restless to test the product in the market, "want to splash money so they can talk about it."

Datta is CEO of Paradiso, newly hatched from the Sahara group and aimed at selling outbound luxury travel to Indians "with the urge to spend". This isn't one-programme-fits-all travel, it's all about "customisation", about having "personalised travel planners who are like the wealth managers that banks have" who will "build relationships" with India's who's who to ship them off to exotic destinations ranging from chateaux and castles and spas to the Blue Train in South Africa or even Necker's Island "" Sir Richard Branson's private island in the British Virgin Islands which, at $46,000 a night for its 14 villas, is probably the most expensive accommodation on earth.

Luxury travel as a concept is new in India and no, it hasn't taken off as yet. Kuoni might have programmes, but its Indian operations probably do limited business. About two years ago, Abercrombie & Kent launched its A&K Private Label Travel at prices averaging $400 per person, per night and 90 per cent customisation. "No programme," says its CEO, Vikram Madhok, "is off the shelf. You can incorporate visits to private museums and art galleries, build in whatever you like", but guess what "" "in a good year we do business worth Rs 5 crore".

That should make Paradiso's target of Rs 100 crore in three years a big deal if it gets anywhere close to it. "It's a very difficult market to sell to," insists Madhok, "even the most affluent Indians ask for discounts." Datta waves aside any such apprehensions. "Already we have queries for booking yachts at ¤5,000-25,000 a night (without fuel)," he says. Besides, he's hoping to leverage advertising in lifestyle magazines, participation in polo and golf events, and associations with luxury brands as marketing practices. That's besides the key relationship managers who will make presentations to company heads, using a coffee table book on luxury as the key driver for the market.

Madhok doesn't think it's possible. After all, A&K runs its programmes only where it has its own offices, and owns lodges in Kenya and cruise ships in Egypt, while Paradiso will be handing over its programmes to its partners. "It's a very discerning business, a very demanding business," he says, "with most travellers looking for adventure by day and luxury by night."

An analyst who has been observing the market for four decades agrees that it's a slow-moving segment because Indians are not used to the concept of luxury yet. "An Indian travel executive on a salary of Rs 50,000 doesn't understand the requirements of a Gucci/Ferragamo wearing individual demanding a $15,000 luxury holiday," Madhok stresses. Then there's the issue of impulse holidays rather than planning ahead, the reluctance to issue deposits in advance and the tendency to bargain for better value that doesn't quite work when a Kenyan reserve has been blocked off for a visit, or the Red Ferrari tour has been booked long before a trip.

"Money or not," says the Mumbai-based analyst, "it will be a long time before Indians will invest in a luxury holiday They might," he adds with a laugh, "prefer to buy the real estate or product instead." Now that's an opportunity Datta's Paradiso might want to think about.