Thursday, November 26, 2009

Travel Industry Hopeful of 10% growth during 2010 Games

Today's one-year anniversary of the terrorist attacks in Mumbai not only proves to be turning point for a city that remains defiant in the face of terror, but also for India's tourism.

The industry is hoping to achieve a 10 per cent growth next year after a $1.3 billion drop in tourism revenues in the second quarter of 2009, compared to the same period a year earlier.

"Travel from the Middle East to India recorded a meager five per cent growth at the end of this year's second quarter, compared to nearly double the growth for the same period in 2008," said Waseem Rahmany, Senior Manager, Sales and Marketing, Al Rais Travel.

"However, the end of Q3 saw summer travel provide a much-needed boost to the tourism industry, which bridged the gap between revenue generated in 2008 and 2009 for the period."

Kuoni Travel Group India CEO and Managing Director, Zubin Karkaria, reiterated the sentiment, saying: "In the first quarter of 2009, travel to India from the Middle East took a nose dive; however, nearly 80 per cent of that lost market share was regained by the end of Q3."

He said: "The outlook for travel from this region to India next year is quite positive, with leisure and corporate travel indicating an upswing of nearly 10 per cent growth."

In order to stimulate inbound traffic for 2010, Indian Tourism Minister Kumari Selja said last week at the World Travel Market that a number of initiatives and events have been put in place to reach this goal, including special packages for the World Commonwealth Games in Delhi, which is expected to attract up to 100,000 people in October next year.

"We are already in the initial stages of planning extended holidays into India for those travelers who are flying down to attend the Games," Shakir Kantawala, General Manager of Jet Airways, Dubai and Northern Emirates, told Emirates Business. "We are positive it will turn out to be a huge draw for tourists."

Karkaria said: "Our team has already started working on creating special packages for the Commonwealth Games, which will be rolled out to international travel agencies by January 2010."

As one of the largest tour operators in India, with a turnover of Rs22.29bn in 2008 alone, the company is also in the business of offering wholesale packages to international travel agencies around the world.

India's tourism woes began in Q3 last year, when the full impact of the global recession reared its ugly head. Adding to that was the terrorist attack on Mumbai's iconic hotels, Taj and Trident, along with Leopold Café - a popular hangout with foreign tourists.

Statistics revealed a sharp fall in foreign tourists in the immediate aftermath of the attacks, which persisted well into this year.

In the December following the tragic events, arrivals fell 12.5 per cent on the previous year - a heavy toll for hoteliers in the middle of the peak season for foreign tourists.

The latest available figures by the country's tourism board indicate that 2.4 million foreigners visited India in the January-September period - down 3.3 per cent on the same period in 2008. However, independent studies reveal a grimmer picture of nearly an eight per cent decline in tourism.

A recent report by global consultancy HVS Hospitality Services described the financial year 2008-09 as "an unforgettable one for the Indian tourism" with an overall decline in occupancy and revenue per available room (RevPAR).

"Mumbai reported the largest RevPAR decline of 20.1 per cent for 2008-09 amongst the major cities in India," stated the October report titled Hotels in India - Trends and Opportunities.

Revenue per room in Mumbai hotels fell to Rs6, 513 from Rs8, 155 a year earlier.

"This was due to the Mumbai terror attacks. The event raised concerns in the minds of international travelers regarding India's worthiness as a safe and secure travel destination," the report said.

Occupancy rates were at 60.9 per cent in 2008-2009, down 18.4 per cent on the previous year.

Nationally, tourism contributed 6.1 per cent to India's GDP - down 0.7 per cent on 2007-08.

"In the aftermath of the attacks in Mumbai, it was predictable that tourism in India took a beating and was in need of an image makeover," said Kantawala. "Our way to deal with the crisis was to partner with India Tourism Board and use the media to our advantage."

Through Jet Airways' Visit India initiative, the airline flew media down on familiarization trips to those very cities and hotels that had suffered from attacks of terrorism.

Kantawala said: "We flew media to Mumbai, put them up in the Taj and Trident hotels, and took others to Delhi and Jaipur to show everyone that India knows how to bounce back."

However, by the second quarter of 2009 the H1N1 pandemic had spread its tentacles into India, providing yet another setback for the tourism industry.

"The Swine flu scare was even more lethal than the attacks on Mumbai," said Al Rais' Rahmany. "Almost 30 to 40 per cent of our business comes through the summer travel. But this year's panic brought that percentage down by nearly 10 points."

Rahmany, however, believes the worst for India's tourism sector is finally behind us. "Christmas and New Year travel to India is regaining momentum, with flights to the metros almost booked out, along with airfares increasing with high demand," he said.

According to figures released by the Indian Tourism Board, tourist arrivals are expected to rise again, around December. However, 2009's Q4 forecast of 4.8 million tourists is still down from the 5.5 million recorded in 2008.

Next year's 10 per cent growth in tourism is inevitable, say industry sources, with the government even developing 150 rural sites to generate more revenue. "I am quite bullish on India next year and its increased presence at global travel and trade fairs are a step in the right direction," said Karkaria.

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