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The winter tourist season is likely to see subdued growth this year, with soaring air fares and over-capacity in the hotel industry further impacting the travel segment. India has a traditionally robust travel season between October and January.
“Bookings in the first half of September were slow. However, in the last 15 days there has been a slight increase. But it is nowhere close to normal levels,” said Pratik Mazumdar, Head of Marketing and Strategic Alliance of Yatra.com.
Travel industry players expect the overall demand from the domestic travel segment to remain flat this year, owing to a combination of factors that include higher taxes.
Though bookings have been more or less steady in the business segment, the response in the leisure travel category has been lukewarm, according to Mazumdar. For instance, in Goa, which is a traditionally strong leisure market, there has been a dip in demand. A similar case is with Thailand. Tour operators refer to the hike in air fares as the main culprit.
“It is likely to be a dull Diwali for the industry. In fact, air fares are expected to further surge by 10 to 15 per cent by the end of October,” Mazumdar added.
Tour operators add that long-haul travel bookings have come down by about 40 per cent. Most travellers are sticking to their neighbouring regions for winter vacations, they say.
“Rather than planning a Kerala or Goa trip from Delhi, they are heading to Himachal Pradesh or the Rajasthan circuit,” Mazumdar said.
In a bid to offset the air fare hike, a majority of travellers are opting a stay in three and four-star category hotels instead of premium hotels.
“The trend is more pronounced in the October-January period this year, primarily to compensate for the rise in air fares,” said Vikram Malhi, Country Head, Expedia. This has had an effect on the occupancy levels of premium hotels.
In a recent industry report, Crisil Research said that the profitability of premium hotels (5-star and 5-star deluxe) is expected to plunge in 2012-13 and 2013-14.
“Occupancy rates of premium hotels will fall from 64 per cent in 2011-12 to 56 per cent in 2013-14, due to large-scale room additions and global economic slowdown. Operating margins will drop to just over 16 per cent in 2013-14, the lowest in 10 years,” the report added.
In the inbound travel segment, industry players expect the forthcoming winter season to see marginal improvements as compared to last year.
“The negative sentiment in Europe has somewhat curtailed,” said Mazumdar. Also, the rupee has been a favourable factor for inbound travel segment.
> nivedita.ganguly@thehindu.co.in
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