Tourism revenue may fall 40% on terror strikes

The Indian travel and tourism sector may lose as much as 40 per cent of annual revenues following the advisories issued by US, Canada, UK and other European countries to their citizens, asking them to avoid travelling to India.

The Rs 33,350-crore Indian tourism industry earns most of its forex revenues from the US, UK and European visitors.

The industry may lose 15-20 per cent of its revenues in the peak season as foreign travellers are likely to shun Mumbai in the aftermath of terror strikes. This is over and above the 20 per cent expected loss in revenues due to the global economic slow down, said industry experts.

“A year ago, rooms and flight tickets were not available during the peak season but for the last few months, rooms and tickets are in plenty, which show the industry is reeling under slowdown. We were estimating a loss of 20 per cent business due to this. Now, with the terror attacks our image as a safe tourism destination has been destroyed. The impact could further increase to a minimum revenue loss of 30-40 per cent,” said Rajinder Rai, president of Travel Agents Association of India (TAAI).

According to an official with travel firm Cox & Kings, the terror attacks in Mumbai did not result in large scale travel and hotel-room cancellations.

"A good percentage of the bookings for the peak December-January season were already paid by the operators and thus revenues are unlikely to be hit immediately. But future bookings and enquiries are a concern and revenues will dip from March 2009,” said EM Najeeb, president of Kerala Travel Mart (KTM), an industry-government initiative, which attract tourists from all over the world to Kerala for the past five years. The terror attack is a death nail to the travel and tourism industry as foreigners were targeted and the country took more than 60 hours to control the situation. This is a bad advertisement for our travel and tourism industry, said Rajinder Rai.

Kerala, one of the main tourism destinations in India, fear a lean season ahead. Sources said one of the leading hotels in Thiruvananthapuram got about 250 cancellations in a day after the Mumbai attacks.

Before that, slowdown had caused cancellation of many of the 8,000-plus rooms, which were fully blocked for the next five years' peak new-year seasons,” said a tour travel operator from Thiruvananthapuram.

According to G Biju Krishnan, managing editor of industry publication Asian Traveller, industry needs to focus more on domestic tourism to tide over the crisis.

“A state like Kerala had about Rs11,600 crore revenues during the last year, of which forex earnings were just Rs 2,500 crore. Out of the 70 lakh visitors to the state, there were only 5 lakh overseas visitors,” he said.

Goa, one of the main tourism destinations near to Mumbai, has witnessed about 10 per cent room cancellations in the past few days and tourist inflow may fall by about 25 per cent during the current season, said a tour operator in Mumbai.