The global economic crisis and the aftermath of the Mumbai attacks put the brakes on India’s tourist boom. India has seen its tourist arrivals drop in recent months for the first time since 2002 when it launched its hugely successful “Incredible India” campaign that enticed millions of tourists from around the world to explore the country. Winter is peak season, but this year business has been slow and hotels are struggling to fill rooms due to mass cancellations by foreign tourists. All sectors have been hit, from pricey tours of Rajasthan to budget beach holidays in Goa. When Palace Tours launched the Royal Rajasthan on Wheels in January, it had hopes the $8 million train would be inundated with bookings by wealthy tourists seeking to explore India in the comfort of a five-star train compartment, with wireless Internet, a spa and silver-service dining on demand. Instead, the Royal Rajasthan on Wheels has either been relegated to the railyards due to lack of passengers or plied the journey through Rajasthan to the Taj Mahal in Agra with only a handful of the possible 82 visitors it can carry. “I think there are more staff than us,” said Amrit Dhaliwal, a tourist who travelled on the near empty train this month with her husband. The American couple were among 10 passengers who embarked on the trip from New Delhi, welcomed by traditional musicians sitting on cushions and playing flutes and drums. “We didn’t realize it would have so few people on it. It would have been nice to have had more people,” said Amrit’s husband Kulwant. Several of the visitors on the train were upgraded from the less lavish Palace on Wheels, a sister train that is operating at about 60% capacity instead of its usual 100%.
Tourism contributes at least 6% to India’s gross domestic product of $1 trillion, and employs 53 million people directly or indirectly. Foreign tourist arrivals dropped 12% to 522,000 in December, compared with 596,560 in the same month in 2007. The plunge in arrivals has hurt the entire sector from New Delhi, to Agra, to the beaches of Goa and Kerala, which in recent years have become favourite haunts for European tourists soaking up the sun during the winter at home. Boats and fishing gear are more visible than sunbathers on some of the most popular beaches of Kerala, and business is so slow that restaurant waiters and shopkeepers vie for the odd tourist seen wandering about the streets. “The spectre of cancellations we have been witnessing following the global meltdown has increased in the wake of the terror strikes,” said Peter Kurien, general manager of the Jasmine Palace hotel. “All the hotels and restaurants used to be filled to capacity at this time of the year. They are half empty now.” Aside from the global economic woes, which have prompted many potential tourists to tighten their belts and stay at home, India is still reeling from the Mumbai attacks in which Islamist gunmen killed at least 183 people. Foreigners seem to have been targeted as the gunmen attacked two luxury hotels, a popular night spot and a Jewish centre in Mumbai. Since then, countries have issued advisories against travelling to India and popular tourist areas such as Goa have been on alert for more attacks.
“There was a slowdown anyway,” said Dhruv Shringi, chief executive officer and co founder of Yatra.com travel website. “Post the Mumbai attacks, we had almost a 22% cancellation in December and it’s about 15% in January. So, my worry is this trend seems to be continuing into February.” Hotel occupancy rates in the town of Kovalam in Kerala were at 60% over the peak season, compared with nearly 100% same time last year. Ratings agency Crisil Ltd said in a report in January that “hotel occupancy rates (in India) are expected to show their steepest decline in a decade”. A slump risks undermining India’s enormous growth potential in the tourism sector, which the United Nations World Tourism Organization says has been let down in the past by a lack of adequate accommodation and poor infrastructure. Despite its size and array of historical monuments, India ranks at No. 42 in the world’s holiday destinations of choice.
Slashing hotel rates, offering buy-one-get-one-free air tickets and free spa treatments are some measures being introduced to entice visitors. Security has been beefed up at many plush hotels, especially in New Delhi and Mumbai.
But some tour operators are frustrated by what they see as the government’s failure to address the sector’s relatively slow progress compared with other destinations. It rankles that smaller Asian rivals such as Thailand, which ranks at No. 18 in the foreign tourist arrival rankings, and Malaysia, at 11, are far ahead of the South Asian giant. “Only 5% of India has been shown to the world.” Tour operators say India is seen as a “hardship destination” even as hotels in major cities charge up to $400 a night. “If you land at the airport and if it takes you an hour-and-a-half to get your bags and then you have to fight in a taxi queue, that’s not really the kind of experience you want as a customer,” Shringi of Yatra.com said. An advertising campaign featuring one of India’s biggest Bollywood stars has been launched to send a message to touts hassling tourists that “guest is god”.
“India is not giving value for money,” said Himmat Anand, managing director of Diethelm Travel India. “There is an ostrich mentality amongst us when we say everything is alright.”