It is a Dali-esque moment. Do we want a meeting with Patrick Normand? The CEO of Cartier wants to talk about his brand and its viability in India. At work, it might even be just another day as mails with requests for meetings keep blipping on to the monitor. Would we like a tete-a-tete with the marketing head of the company that pioneered botox treatments? Could I confirm a lunch appointment?
But there are other mails too. One confirms that the IHT luxury conference in Delhi has been “postponed”. Across Mumbai and the country word is out that big ticket events are taking a hit. Osian’s auction in Mumbai at, ironically, the Taj has had obviously to be postponed too, but fortunately the art is safe. The Live Earth entertainment extravaganza has been called off. The India vs England series stands cancelled. Spa awards and corporate awards are off. Other corporate events and wedding celebrations won’t happen.
There have been fires at the Taj Mahal Palace and Towers and The Oberoi and Trident hotels in Mumbai. And gunfire. Friends are missing, people are dead, an acquaintance has managed to escape.
A handful of years ago, filmmaker Zafar Hai made a riveting documentary on a hundred years of the Taj. Now, I wonder, will he update it — with a fire under its dome, flames splitting out of its windows, a massacre on the menu?
And memories of another hotel, the Oberoi Intercontinental (as it was known then), the first hotel I stayed in in Bombay. I bought trunks especially so I could swim in its pool overlooking Marine Drive, the incredible glamour of that time in the early eighties when sheikhs still crowded its lobby.
Now, TV reporters say that lobby is charred.
More From This Section
And travel agents say hardly anything matters, their business is gone anyway, that the Taj and the Oberoi are iconic Indian hotel chains and the association with attacks on them will reverberate for a long time to come. Faxes and emails with cancellations are piling up.
But no one will say how bad things are. It’s too early for numbers, some comment. We have friends who are hostages or, worse, dead, let’s postpone business for a bit, others say. Almost everyone knows someone who was in those hotels in India’s most agonising civilian attack ever. Televisions have not been off for 48 hours.
There is a sense of despair.
Tourism is a happy business, say operators, so the negative impact will be huge. Anything from 25-50 per cent down by cautious estimates, but it could be worse. “There is a sense of fear,” confirms one agent. The leisure market, in particular, is extremely sensitive. The global meltdown had already affected it, the acts of terrorism in Mumbai are probably the nails in its coffin.
Just when airlines looked like they could offer some relief on prices (courtesy the drop in the cost of aviation fuel), it looks like less — far less — people are going to be flying. “The industry has already been negative this fiscal,” says Kapil Kaul of the Centre for Asia-Pacific Aviation, “there will be significant immediate impact due to cancellations.” But also, “Everybody gets used to it.” But it isn’t just the leisure market that will be affected, India Inc is going to be flying less too: “High-end corporate travel will be impacted as numerous corporate figures [were] trapped in the Taj.”
The travel advisories too are cautionary, as yet — maybe the globalised world is getting used to, becoming callous even, about terrorism — and suggest deferring travel for the next 48-72 hours, go only if essential, et cetera. Back home, industry specialists are using terms like “immediate impact” and “short-term prognosis”, both of which look gloomy.
But no one is forecasting “ahead” or “mid-term” or “long-term” right now. Or they’re waiting for words of comfort from the government on security. But no one has any answers for the traveller’s query: “What assurance can you give us on security at your airports?” We’d like to know too.
On television, an angry Suhel Seth is holding an “inept” government accountable. In the neighbourhood, a mother has been unable to explain the scale of the calamity to her only child, so the birthday McParty will happen as planned. A wine tasting in the city goes ahead as scheduled. But the lunch with Stella McCartney is off for now.
Still, if people won’t go out, won’t travel and won’t, in all likelihood, dine out as freely as before, what’s to happen when they aren’t at work? Will they shop? Go to the movies? Hang out at the CCDs?
Not for the next two-three months, not maybe even for the next six months. For no matter how short our memory, the fear will stay for a long time to come. The immediate loss in footfalls in multiplexes is understandable, premieres have been cancelled, media conferences are off, the money spent has gone up in smoke, the curtains have come down on new plays.
But everywhere, stories of incredibly good luck are leaking out. Bigg Boss inmates Zulfi Syed, Raja, Rahul Mahajan and Rakhi who escaped an exploding taxi; designer Krsna Mehta headed for dinner at the Taj but who “decided to call it a day” because he was tired; or that, had the terrorists stormed the Taj two days earlier, they’d have walked into the melee and the who’s who that attended the Mittal-Kanoria wedding; or even Samir Chabbria thankful of a quiet night at happening restaurants Tetsuma and Prive so they could lock diners up till they were allowed out the next morning…
But defiance is already rearing its head. “Twenty-six people [wonder how he got that figure?] can’t jeopardise 1.2 billion people,” protests hotelier Aman Nath.
Here’s what some others added:
“When it comes to new hotel projects, those are long-term and won’t be affected,” Sonica Malhotra, MBD group of hotels, says.
“Right now, those who have contacted me are the ones travelling to India in the next few days. They are most likely to postpone their arrival but it won’t stop them from coming permanently,” Ravi Bhootalingam of Manas Advisory, and formerly with the Oberoi, adds.
Too often, the term “resilience” gets tossed up too. “Mumbai is resilient”, even Delhi, or India, are resilient. Actually, they’re helpless. When you have to go to work, you go. Resilience has nothing to do with it.
A Danish lingerie brand goes ahead with its scheduled preview. The international food exhibition in Delhi stays on track.
But, say those who deal in products that are non-essential, goods that fall in the luxury category, these times, they are not so good, but they are not so bad either:
“Given the constant nature of terrorism, there will be a higher level of cautiousness, but consumer sentiment will not dip drastically in the long-term,” says Sanjay Kapoor of Genesis.
“The Indian economy has become immune to terror attacks — the 1993 blasts and the bombings in the local trains didn’t affect the
India story. There will be a temporary negative impact but then Bombay moves on. The affect of this is going to be minor,” Pradeep Hirani of retail brand Kimaya is optimistic.
But brands from Benetton to designer Tarun Tahiliani point to a more serious impact. “I am going to have to revise all my sales targets,” says Tahiliani, who stayed up nights watching the action on television because he owns “half a building three buildings away from the Taj”. “November had been good for retailers after a bad Diwali,” says Benetton’s Sanjeev Mohanty, “so this has come at a very wrong time.”
As if there could ever be a good time for terrorism!
Or, maybe it really doesn’t matter. Business meetings haven’t been called off, at least in other cities. Official travel across the country continues with only minor hiccups, private parties haven’t been aborted, and for most part, flights are landing and taking off on schedule.
Will we forget Mumbai?
Sooner rather than later, probably. This too shall pass, says Aman Nath. It’ll be “a transient glitch”, real-estate analyst Anuj Puri confirms.
If he cares to come to India after all, maybe we ought to keep that appointment with Patrick Normand.
Business Standard’s Neha Bhatt, Archana Jahagirdar, Priyanka Joshi, Abhilasha Ojha, Rrishi Raote, Anand Sankar, Aabhas Sharma, Kishore Singh and Anoothi Vishal spoke with the following people for their inputs for this story: Jitendra Bhargava (Air India), Ravi Bhootalingam (travel consultant), Sameer Chabbria (restaurateur), Anjali Chatterjee (hotel marketing), Kalyani Chawla (brand ambassador), Pradeep Hirani (fashion retailer), Sandip Kalra (travel agent), Sanjay Kapoor (fashion entrepreneur), Kapil Kaul (aviation expert), Ashish Kishore (online travel), Sanjeev Mohanty (Benetton), Manu Mohindra (food consultant), Krsna Mehta (designer), Gopinath Menon (advertising professional), Lalit Modi (BCCI), Aman Nath (hotelier), Komal Nahata (film trade analyst), Nirav Pandey (play director), Anuj Puri (real estate analyst), Devyani Raman (luxury analyst), Arjun Sharma (travel agent), Shravan Shroff (multiplex owner), Rashmi Uday Singh (food writer), Harish Sud (hotel analyst), Zulfi Syed (model, actor), Tarun Tahiliani (fashion designer), Neville Tuli (auctioneer), R C Venkatiesh (ESPN). Their views are here presented collectively, but should not be credited to any one person.
| HOW MUCH IT HURTS! HOW INDUSTRY ANALYSTS AND INSIDERS ANTICIPATE THE IMPACT OF MUMBAI | |||||
| Eating out | Hotels | Airlines | Shopping | Celebrations | |
| Next week | 50% | 50% | 40% | 60% | 50% |
| Next month | 30% | 40% | 20% | 25% | 20% |
| Next year | 10% | 25% | 10% | 15% | 10% |
| (Estimates show decline in percentages) | |||||
|
HOW MUCH IT HURTS! |
Cricket: The 24x7 India passion stands to be diluted with the Champions League postponed and the India-England series cancelled. Estimated losses on account are Rs 50 crore for Neo Sports, Rs 120 crore for ESPN. Lalit Modi might say “It was in the best interests of all concerned that the Champions League is postponed”, but advertising agencies will be hurt too since “for most brands cricket is an opportunity to showcase new campaigns”, according to a Mumbai-based planner.
Hotels: The immediate loss in occupancies is horrendous enough, but with an anticipated 50 per cent fall in tourist arrivals (business travellers are counted in this category too), the opportunity cost will translate into a slowdown in new hotel projects. Count on the realty slowdown and hotel infrastructure pause, and you’ll have a financial crunch with too many zeroes to be able to count adequately. “Business will take a beating,” predicts FHRAI secretary general Harish Sud.
Big ticket events: Event managers and wedding planners will go under as corporate functions get cancelled, entertainment extravaganzas requiring security get postponed, and weddings shrink in size. By some estimates, losses could be between Rs 500-1,000 crore.
Airlines: Expansions were already on hold, flight plans had been “corrected”, now passenger loads will shrink. Expect some bankruptcies; there will be no M&A bailouts.
Restaurants: The immediate fallout should not impact beyond the first few months of 2009, and since overheads are low in comparison to other industries, they should survive without too many problems.
Luxury shopping: The tail-end of 2008 may have put an end to the India Shopping story. Already, sales were slow, but with fear pointing to fewer people going to malls, and the precautionary urge to save over splurge, luxury brands might have to postpone their launches or expansion plans. Budgets are shrinking, and even given the benefits of retail therapy, brands will have to wait for the return of the Big Spender.
