Compliance: A double-edged sword?

The tourism industry is a compliance-heavy sector. While some see this as a burden, others view it as a growth driver. Beyond making it a level-playing field, it can protect consumers – particularly in light of increasing AI data breaches and cyberattacks – offer significant business advantages and build trust equity. How do you see it?

Hazel Jain

The travel and tourism industry is notoriously compliance-intensive with many layers of taxes like GST and TCS. Many view this as a burden and unnecessary. But rules are important, and these compliances are “mostly” justified, says Sanjay Ghare, CEO, Vervotech. “The necessity for such stringent compliance could be understood just by looking at the increasing sophistication of cyber threats, particularly AI-driven fraud in travel insurance. A recent industry survey revealed that 65 per cent of insurance claims handlers have noticed a surge in fraudulent claims facilitated by AI, which highlights the escalating challenges in this sector,” he explains.

POV: Technology platform provider

Despite the comprehensive nature of existing compliance frameworks, there are critical gaps, especially in cybersecurity. Given that the travel industry ranks as the third most targeted industry for cyberattacks, the existing measures are evidently not sufficient. Ghare adds, “The pace at which technological threats evolve, we need a more dynamic approach to compliance, far beyond the current standards. In today’s market, where 76 per cent of travellers prioritise sustainable and ethical operations, the ability to demonstrate superior compliance can be a decisive factor in winning customer trust and loyalty.”

Insurance provider

Insurance compliance is complex, with over 2,200 unique compliance obligations and a rapidly evolving regulatory landscape. Dev Karvat, Founder & CEO, Asego, says, “The compliance landscape in this industry is multi-layered and continually evolving. We don’t view compliance as a mere box-ticking exercise, we treat it as a cornerstone of trust.”

For travel agents

For a travel agent, there are multiple compliances to adhere to – IATA compliances in the form of BSP statements on weekly basis, IATA bank guarantee, ADM issues, GST, TDS, TCS, FEMA, DGCA regulations for online portals, visa regulations, airlines compliances, and many more. Rajesh Poddar, Partner, Rightchoice Tours N Travels, says, “These are necessary – we need to be compliant as many regulations are changed on a regular basis which needs to be updated. Data security is another reason why we need this.”