Travel industry could lose 50% of annual business

The summer season could be a washout for the travel and hospitality sectors. Considering both inbound and outbound travel is affected, India could lose up to 50 per cent of the annual business, which is much higher than the losses during the global financial crisis, estimates the industry.

Several countries are closing their borders to keep further spread of Covid-19 away. India too has suspended tourist visas till April 15, restricted entry of passengers from the UK, Europe as well as Afghanistan, the Philippines and Malaysia. These restrictions have brought the tourism industry, which was already limping due to the infection, to a standstill.

The summer season, which starts from February and goes on till June, accounts for 60 to 70 per cent of the outbound travel and over 20 per cent of the inbound travel. Altogether the season accounts for about 50 per cent of inbound and outbound travel and the season might almost get washed out, said Kapil Goswamy, MD, Big Breaks.com.

"Even during the Mumbai terror attacks or global financial crisis, the impact was not this large. We would probably lose 50 per cent of our annual revenues this time,' he said.

"Bookings have been cancelled till April-May, which are our peak season. Nonresident Indians used to come over during this period and they also have to put their travel plans on hold. It is 'zero tourism' now," said Iqbal Mulla, chief council, Global Tourism Council.

According to Goswamy, the industry has come to a standstill. "South Asia has been closed since February. Travel to shorthaul destinations like Thailand, Singapore and Malaysia has not been happening from February. Usually, by March we start seeing groups and families booking for long-haul destinations like Europe and the US. This booking has either not happened or whatever had happened has been cancelled," he said. Even the business travel has got affected as most of the companies are cancelling their meetings and conferences.

Domestic travel by rail and air is also not spared. Trains bookings to Delhi, Kolkata, Bangalore, Hyderabad and Chennai are down 25 per cent compared to the previous month.

"Since the past week we have seen a rise in the number of train ticket cancellations due to the sudden outbreak of coronavirus.New bookings have also gone down by more than 20 per cent. In fact, we have recently launched a free cancellation policy, which allows users to get a free cancellation on their train bookings," said Dinesh Kotha, co-founder, Confirmtkt.

Hotels too are bearing the brunt of the contagion. "Cancellations are happening and bookings by tourists have come to a standstill. Companies also are advising their executives to avoid travel. Summer season usually sees a lot of domestic traffic, especially to hilly destinations. This time, it is unlikely for things to improve before June end,' said T. Natarajan, CEO, GRT Hotels and Resorts.