The Hindu Business Line : Financial crisis to affect inbound tourism

Mumbai, Sept. 18 The New Year and Christmas fervour in Goa and other foreign tourist destinations in India are likely to dampen this year, as a result of the financial crisis that has hit the US.

Travel industry experts told Business Line, the inbound tourism in India will slump by 20-30 per cent in 2008 compared to last year. As the fears of recession in the US and European economies mount, travel and holidays would be the last priority on foreign tourists’ list, according to industry experts. Peak season in the country begins from October and lasts till March.

“Forward bookings for the upcoming season will see an impact of what is happening in US. There would be people deferring plans too. Till last week, the bookings were in line with our expectation but the bookings will be affected from this week,” said Mr Sunit Suri, COO, Leisure, Inbound, Thomas Cook India.

Mr Keyur Joshi, COO and co-founder, Makemytrip, said there will be a softening in inbound leisure travel market from not just US and Europe but other places as well. “Mood will be sombre in the coming season. It is not just about what happened with Lehman and Merrill Lynch, people have lost money in stock markets across the world and travel is the last thing one could think about at the moment.”

This downturn might negatively impact the hotel bookings and occupancies as well, especially when Indian hospitality majors recently increased their room tariffs by 8 to 15 per cent as part of their annual review. According to Mr Joshi, 70 per cent of hotel occupancies come from foreign nationals and remaining 30 per cent is from non-resident Indians. The impact of slowdown will be similar on business travel as well, he added.

Commenting on the hospitality business in the upcoming season, Equity analyst with ICICI Securities, Mr Rashes Shah said, if the US stays under this financial crises for long, it is going have a negative impact on hotel Industry in India. “Since peak season has just started, currently there has not been a surge in bookings. But we may see its impact from October onwards.”

Meanwhile, the Indian travel industry is already looking at an alternative plan. “While inbound tourists from the US and Europe would get affected with the downturn, Asian economies like China, Korea, Japan etc are not impacted. Similar with continental Europe, countries like France and Germany have a lot of tourism potential for India,” said Mr Dhruv Shringi, CEO and co-founder of Yatra.com.

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