Foreign travellers seem to have begun cancelling or postponing their leisure trips to India, in the wake of deteriorating economic health of Western countries. The negative travel advisories issued by these countries’ governments haven’t helped, either.
The pace of foreign tourist inflow into India slowed considerably last month. This, coupled with less traffic by domestic travellers, are forcing airlines to offer discounts and hoteliers to check room rates.
Charter flights, whose frequency is normally amongst the highest at this time of the year, has also taken a hit. Many European tourists, for instance, are opting to undertake small leisure trips within Europe instead. In fact, because of the dip in foreign tourists and slow home demand, traveller fares to leisure destinations like Goa or Jaipur are lower than last year.
According to data issued by the ministry of tourism, November, normally the second best month for foreign tourist arrivals in India, has recorded the worst monthly growth rate so far in this year. The month saw only a 4.7 per cent growth in arrivals, at 637,000, compared to 608,000 recorded in the same month last year. In comparison, November 2010 recorded growth of 12.3 per cent over the corresponding month in 2009. Further, the fall in growth in November broke the trend of rising growth recorded since August this year.
"Europe constitutes 20 per cent of our total foreign traffic. There has been a cancellation of at least eight to 10 per cent of this across our India properties,” said K B Kachru, executive vice president, South Asia, Carlson Hotels. “The advisories have made matters worse, as the timing was very wrong. The weak economic scenario of several Western countries hasn't helped.”
In mid-October, travellers from the US, UK, New Zealand, Canada, Italy, the Netherlands and Australia were advised by their respective countries to exercise a high degree of caution when travelling to India, warning them about the heightened possibility of terrorism. No country has softened the tone of these advisories, despite a strong response by the ministry of external affairs.
Dipak Haksar, chief operating officer, ITC Hotels, said, “The countries that have issued advisories, including America and the UK, are large source markets for India and the advisories directed by them may have impacted FTAs into the country.”
American, British and Canadian nationals together account for about 35 per cent of all foreign tourist arrivals in India every year. India saw an inflow of a little over two million tourists last year from these three countries, from a total of 5.58 million.
Morton Johnston, general manager, The Leela, Goa, said, "There is a slight decline in foreign charter tourists this year. It is too early to put a figure, as the season has just begun. It is not a good season for tour operators in the UK and European market, and many people are taking shorter weekend holidays within Europe, rather than taking long-haul tours."
The drop in foreign tourist inflow in November has come despite the sharp depreciation in the value of the Indian currency over the past two months. While this depreciation was expected to deter Indian holidayers going abroad, it was also expected to work in favour of foreign tourists coming to India.
"I would attribute the low growth in FTAs into the country to the overall health of the Western economies. The (only) partially positive mood in the US economy and the concurrent euro zone crisis is definitely bound to impede the travel and tourism sector,” added Haksar.
However, leading tour operator Cox & Kings believes growth will return in the coming months as situation improves. Peter Kerkar, director, said, “It is not appropriate to compare the growth vis-à-vis the same month last year, as this was from a higher base and will definitely give an impression of low growth. We continue to maintain a positive outlook for the Indian inbound business and we believe that it will continue to grow in the months ahead.’’
Aashutosh Akshikar, chief executive officer of Mercury Travels stated "We are witnessing subdued growth in inbound tourism but there is decline in revenue margins by at least five per cent because most tourists are choosing budget holidays.'' He said the company had designed ‘'value for money’ packages, as it was noticed that the number of repeat high-end customers had slowed.
