Wednesday, December 24, 2008

India rolls red-carpet for holidaymakers

Hotels in IndiaIf you have been planning to visit India - whether to engross Goa's glorious sands or ogle the Taj Mahal - at present a convivial to pack your bags. Hotel tariffs have plumped by a banging 30%, the Indian government has unleashed a batch of tourist-friendly sops and travel brokers and airlines are extending great deals.

With the fateful mix of a global economical slowdown and terror attacks eroding the development of tourist arrivals in India, tourism has taken a beating. The Mumbai terror attacks on November 26, industry experts’ regret, have ruined the tourism season even as it was unrolling. As a result, compared to the 30% growth in the sector in 2007 - and double-digit growth for the past five years - the country is expected to post a tourist arrival increase of zip this year.

This is a counterpoint from 2007, during which India saw a record number of visitors from abroad and a sharp rise in foreign exchange earnings through tourism. The number of foreign tourists in India touched a record 5 million in 2007, an increase of 12% from 2006. The approximated tourism earnings in 2007 were US$11.96 billion, compared to $8.93 billion in 2006.

This year, even till August, things were not actually so bad. Foreign arrivals had increased 10.4% compared with the comparable period last year. The foreign exchange earnings during the equivalent period rose 21.5%. Buoyed up with this growth, the industry had set itself an challenging target to more than double the number of arrivals to 10 million by 2010, when New Delhi will host the 2010 Commonwealth Games.

But all this looks unattainable now due to a compounding factors, including a plunge in the number of arrivals for the first time in six years by 2.1% in November, traditionally regarded as the beginning of the peak season. The number of visitors in November nose-dived from 532,000 in 2007 to 521,000, while the corresponding foreign exchange earnings from visitors dipped by 12.5% to $1 billion.

To make matters worse, in the aftermath of the Mumbai terror attacks, almost 50% of bulk bookings by visitors (largely from Britain, Europe and the US) were cancelled. Travel advisories issued by the US, Britain, Australia, Canada and Singapore advising against travel to India did nothing to help things. According to Himmat Anand, co-chair of the Federation of Indian Chambers of Commerce and Industry's tourism committee, along with corporate reservations which usually plunge at this time, no fresh bookings have been forthcoming. "India has suddenly vanished from overseas tourists' itineraries this year," he said.

What has further worsened the situation is that on account of a record tourist turnout last year, operators had invested heavily in infrastructure upgrades and refurbishments which are now cumulatively adding to their losses. "This has been among the worst times for Indian tourism in recent history," said Anil Kalsi, chairman (northern region) of the Travel Agents Association of India.

With panic buttons buzzing everywhere, the Ministry of Tourism has been forced to take pressing steps to gain footfalls to the country. It is now working on a war footing with trade associations and airlines to thrust visitor numbers through a slew of measures. The Ministry of Tourism has establish state-level committees comprised of representatives from trade associations and ministries to investigate various aspects of tourism management. Tourism Minister Ambika Soni has also urged governments of various countries not to issue travel advisories against India, simultaneously sending a message of reassurance to the world community that India is a "safe" destination.

To prevent the sector from plunging into further gloom, the Tourism Ministry is also working proactively with travel operators to revitalise inbound tourist traffic. As a part of the "promote India campaign", for instance, tour operators have been asked to pair hotel tariffs with airfares and offer attractive bonuses to visitors. Those who visit India this year will be offered sops like discounted packages for rural tourism, adventure tourism and wellness tourism on their next visit. Tour operators are also offering to sponsor at least 1,000 tourism industry reps to take a free trip to India for discussions.

Meanwhile, the ministry is computing the modalities of giving visas to tourists on arrival to further boost unencumbered travel to India. It is also expounding 22 new mega tourism destinations across the nation at an outlay of 250 million rupees (US$5.1 million) to 1 billion rupees for each destination, to infuse novelty into visitors' itineraries. To give rural tourism a push, 130 more villages have been identified as templates to showcase India's heterogeneous culture. Financial support to tour operators promoting India in the international arena has also been ratcheted up.

The government would do well to fire on all cylinders, considering that after the Mumbai massacre group bookings to popular tourist destinations like Goa, Jaipur and Kerala have plummeted remarkably. "The meltdown mayhem coupled with Mumbai's terror attacks have severely impacted Indian tourism," said Subhash Goyal, erstwhile president of Indian Association of Tour Operators. "It has had a cascading effect down the hospitality chain - from travel agents to the airlines to rent-a-car companies to the hotels."

Five-star hotel tariffs in Delhi have hit an all-time low. A room can now be had in the range of 8,000 rupees to 10,000 rupees, even though the same room fetched between 12,000 to 15,000 rupees last year. Ergo, to create demand, many hotels and resorts are offering a "Global Meltdown Tariff" which flings off 30% off the normal fare.

However, despite a raft of measures taken by the government and the hospitality sector to rejuvenate inbound tourism, industry players are still a tad wary about the Christmas-New Year season, which accounts for the bulk of their annual business.

"Ironically, this is the time when trade is [usually] booming," said Prateek Ghai of Globe Travels, a New-Delhi based travel agency. "But this time, due to a combination of factors, things are looking far too bleak!"