Travel business could melt a quarter

ATTACK ON MUMBAI

Already reeling under the impact of the economic meltdown, domestic as well as international travel is all set to take a big hit after the terrorist attacks on Mumbai.

Travel companies expect business to fall at least 25-30 per cent in December, the peak of the busy travel season. November to January constitutes 50 per cent of inbound tourist flow into the country.

Company executives are also unanimous that while domestic travel to Mumbai, which constitutes a major chunk of inbound and outbound domestic corporate travel, will take a direct hit. The impact is also expected to cascade to the rest of the country.

“We expect business in December to be completely wiped out. December is a very important month because of Christmas and we see a lot of families travelling to India during this time. Overall, we expect 30 per cent of our business to be affected,” said Shonali Datta, managing director of travel company Peirce and Leslie which specialises in inbound leisure travel.

Added Subash Goyal, the chairman of Stic Travels, which concentrates on domestic tourists: “We expect our business to fall by at least 25 per cent in December.”

An executive of a Delhi-based travel company said that since today is Thanksgiving Day in the US, the full impact will only be felt from tomorrow. The executive added that his company lost business worth $300,000 today itself.

Several governments including the UK, Australia and New Zealand have issued advisories to their citizens against travelling to Mumbai. Some multinational corporations too joined the bandwagon and requested their employees to avoid travelling to Mumbai. These include UBS, Shell, Siemens, Merrill Lynch and Deutsche Bank. Merrill Lynch, according to sources, has also advised its staff not to travel to Delhi unless essential.

“We are connected to the travel desks of our clients. Companies like Shell and UBS are the first ones to have issued advisories to their employees against travelling to Mumbai. But this is just the first day and the count will be much more at least for the next week,” said a travel company executive.

The incidents will also impact the corporate travel industry. “We expect significant amount of cancellations based on the current events,” said Ankur Bhatia, executive director, Bird group of companies.

Praveen Gandhi, the CEO of corporate travel company Carlson Waggonly, said: “Around 20 per cent of our business comes from Mumbai and that will be hit. The major impact will however only be seen in the next few days.”

Other travel companies have given firm advice to their clients, especially international ones, against travelling to Mumbai, while sensitizing them that the rest of the country is safe.

"A lot of uncertainly in these international clients is very basic as they look at India as a whole and think the entire country is unsafe for travel which is not necessarily true. While we are telling them to cancel immediate trips to Mumbai, we are also telling them that the rest of the country is safe to travel," said Aseem Sadana, the co-founder and COO of travel company Isango.