Slowdown may not check travel boom this season

Over six million foreign tourists are expected to descend onto various holiday destinations in India this year, enthusing hotel chains and travel companies to gear up to cash in on the bandwagon.

As the last three months of an year form the peak season for travel and leisure holidays, the country will also witness room rates rising by 10 per cent and airlines doubling fares on popular routes.

This increase will come on the back of striking recessionary trends in several western countries and peaking inflation in India. Although corporate travel was widely expected to get impacted, the depreciating rupee will aid this section of travellers, say experts and players.

Rajeev Menon of Marriott International says this will be “fairly solid” with no major challenges. “This is going to be a strong fourth quarter with occupancy levels maintained at the higher end,” he notes.

Large hotel chains such as Taj, Oberoi, Marriott and ITC are keen on hiking room tariffs, which is expected to be in the region of 5-10 per cent, to beat the sluggish first half and to make up for the previous years’ lacklustre peak season. “Typically, we start negotiating room tariff hikes around this period. We are surely taking a hike this year. Although there is no final decision on it but one can expect a 5-10 per cent hike", adds Menon, who is area vice president (India, Malaysia, Maldives and Pakistan) of Marriott.

The rise in tariffs will come on the back of better occupancy than last year which are expected to be in the region of 80 per cent and going as high as 95-100 per cent levels in case of a few most sought after properties. Tour operators say there has been no impact of economic downturn on travel. “The cost of packages have increased 5-10 percent over the summer, but that has not impacted travel,” notes a tour operator. “Within the country Kerala and Andaman Island are the favourite destinations.”

As a weaker rupee discourages outbound travellers, factors such as terrorism and political turmoil will have an impact on the domestic industry feel experts.

P R Srinivas, Leader, Travel, Hospitality & Tourism, Deloitte India, says the current exchange rate is favourable for inbound traffic. “Fortunately, we don’t currently have foreign advisories against travelling to India. On an average there are many cities that haven’t reached the 2008 rates. Places like Chennai and Pune has excess capacity while Mumbai and Goa has hardly added inventories.”

During this year, from January to August, India clocked a 3.81 million foreign tourist arrivals, marking a growth of 10 per cent over 3.46 million registered in the same period the previous year, according to the tourism department.

But not all are too optimistic. Anil Madhok, managing director, Sarovar Hotels, says the current political and economic turmoil may take a toll on the industry. “Advance booking trend, though, suggests that tourist hotels are doing fairly good for the season. Occupancy levels should be about 80 per cent if not more.”

Airlines such as Jet Airways are charging Rs 12,300 as a one-way fare from Mumbai to Goa in economy class, more than twice the regular fare. Seats on some of its scheduled flights on that route are completely sold out for December.