With the economy seemingly in better shape and liquidity having significantly eased, tour operators have a feeling that 2010 is potentially going to be much bussier compared to 2009. They are moving faster in traffic generating markets to workout deals with overseas counterparts and ability to deals are much higher with Commonwealth Games, availability of hotel rooms, enhancement in the infrastructure and visible increase in tourist arrivals in Jan - Feb, 2010 over the corresponding period of 2009. Things are beginning to look better for the hospitality industry across the country with an increase in occupancy level (about 25 to 30%) and hotel rates are getting closer to the pre - recession time. Hotels also had innovative strategies to tap immense potential of domestic segment by special packages during festival months which were really value for money to incentivise the domestic tourists to travel and enjoy these discounts. Airlines too some extent supported with reduced fare. But the situation appears to have changed suddenly and the tour operators need to be prepared for a rocky ride in the year 2010.
The travel advisories issued by countries like UK, USA, Australia, France, Singapore are already dwindling numbers of tourist arrivals from these countries and damage has already been done. Ripple of the slowdown and threat of terror attacks have affected future bookings for 2010 at least for first quarter and may continue the same scene in second quarter.
Country has taken a heavy beating as being identified as targets of terror. With the slump in inbound travel continues inspite of our best efforts and aggressive promotions overseas. As if this was not enough, the recent revised visa regulations of Government of India have put a severe blow. No clear cut instructions are available with the Indian Missions overseas and Immigration checkpoints about the actual position about visa norms. Each one has his own interpretation and tourists are being harassed unnecessarily, odd questions are being asked when they apply for India visas. On this account foreign tourist arrivals has started falling and tourists who are in India and going back after visit to Nepal or Bhutan have sad experience to tell to their people on return, with a promise never to come back. Even introduction of visa on arrival from Nationals of five countries have not faired well as they too have faced problems and visa fees on arrival is just double as they had mentioned whereas our competitive countries have announced long term visas for tourists and on complimentary basis etc. No doubt, it is mainly for security concern but nothing positive has been initiated to streamline the visa issue. Each tourist has a sad experience to tell which they faced at the Indian Embassy consulate overseas where they visited to get India Visas Tour operators overseas have expressed their unhappiness by with drawing India from their holiday brochure. Our Tour Operators in India are moving from pillar to post to salvage the lost business and spending fortune to visit overseas countries to recreate confidence specially at a time when they should be handling groups in India from overseas.
To make the matter worst, even in the budget announced recently for 2010-2011, tourism sector has nothing special to cheer. There is little to attract investment in tourism. Air travel is likely to become more expensive as domestic carriers deal with double blow of our expanded service tax regime and a levy on crude imports from 1st April, 2010. Also the Budget shows 5% customs duty on petrol up from Zero up till now. This will make Aviation Turbine Fuel which forms for almost 60% of an airlines operations cost higher. Service tax on air travel is also being extended to include domestic travel and international flights in any class. It was earlier applicable only to international first and business class travel. Airlines will pass on this new tax burden to the travelers and the travel will be restricted.
Of late there has been a positive vive in the market for air travel which is going to be dampened, once the government notices are issued. Also hotels have started increasing the price and all these will make India Holiday Packages very uncompetitive. Tourists are very sensitive to price and visit destinations which are hassle free and cost effective.
Even for Commonwealth Games, no specific concessions have been announced related to service tax for which tour operators were pleading. At least withdraw this for two years till GST is put into force. Though some concessions have been provided under MDA scheme of the Ministry of Tourism, but there are some new clauses that one should travel by Air-India. This is a big blow for the tour operators as Air India does not operate covering all European destinations. Also price wise they are costlier. So the tour operators can't take the benefit of the concessions on offer.
These issues are compounded by lack of basic facilities at our entry points, tourist sites, lack of trained and language speaking guides, evening entertainment programmes, terror threats and safety concerns (as lot of negative reports were in the international press about rape, cheating, molestation etc) which do not auger well for a destination. Even some decisions of the Delhi Government for every segment in the tourism business in Delhi to register with them by a cut off date or pay fine and series of regulatory constraints, blockage of roads in the name of development, road accidents, road rage and improved facilities appear to be too inadequate to meet the growing number of tourists (even if they come in a limited number during the Commonwealth Games).
There is also negligible motivation to attract private investment. Even though our Ministry of Tourism has taken many new initiatives for sustainable growth of tourism, direct interaction with the trade, inviting tourism delegations from overseas for B to B discussions with counter parts in India, code of Ethics for tourism business, circuit concept to improve infrastructure, higher allocation for global publicity capacity building programmes but till visa problems are settled, taxes are reduced, seamless travels between each state circuit is made feasible, airlines are motivated with cut in ATF / taxes, security measures improved nothing concrete in tourist volumes can be expected. It is not global economic downturn (that is a temporary phase) major issues are enumerated above to be given priority for redressal. If we don't be pro-active, we can never emerge from the slump in tourist arrivals and stagnate in 5 million plus figure in tourist arrivals for coming years too.
It is essential to change the mind set of policy makers. They should not take tourism as an elitist industry but value its contribution to national economy, generating employment, foreign exchange earnings, national integration, value it for conservation and help to increase GDP. All concerned Ministries should be partners to tourism growth with the sincere efforts of Ministry of Tourism and help our travel industry to grow as they are going to bring the actual tourists to India. Tourism is a package of service where every Concerned Ministry, Ministry of Home, Ministry of External Affairs, Aviation - all to put their contribution & strengthen basic requirements of Tourism. Now or Never, Tourism will need action & not leap sympathy. Let us work together to make India a destination for all tourists in the coming decade.