It couldn't have been worse for the Indian tourism industry. First, the Iraq war impacted travel to West Asia and, then, sars forced Indians not to travel eastwards. For India, it was a classic case of being stuck between the devil and the deep sea. With the outbound travel season just a few weeks away, the question everyone's asking is: where will/ can Indians go this summer? The four million Indians who travel abroad every year are running out of options. Especially since East Asia, besides Europe and the US, had become their most-favoured leisure destination in the past couple of years. (Over 35 per cent of all outbound Indian traffic go to Singapore, Thailand, Malaysia and Hong Kong).
Says Ankur Bhatia, MD, Amadeus India, "There will, in fact, be a drop of over 45 per cent in all outbound travel for the month of April, which is quite alarming." (If one looks at just East Asia, the drop is a higher 60 per cent.) Adds Arjun Sharma, MD, Select Holiday Resorts, "March 15 to April 15 is what we call the decision-making period for summer holidays. But this year the phones weren't ringing till last week." And while enquiries for the West are picking up—after an initial drop of 15-20 per cent, and on the hope that Gulf War II will soon be over—the East is still a no-no. Admits Chitra Bhatia of Aashman Travels, "China (the sars origin country) was another destination being promoted in India but now it's been completely ruled out."
But one nation's loss is often another's gain. Thus, there are a few destinations that are likely to benefit from this crisis. These include Mauritius, Maldives, Sri Lanka and Nepal, which have already introduced aggressively priced packages and upped advertising to woo the Indian traveller. At the same time, domestic destinations within India are also fast realising the new opportunities. Says Amitabh Kant, joint secretary, tourism, "Now is the time to focus on domestic tourism. This is going to be the survival mantra for the travel trade over the next six months." The truth is that with the decline of outbound travel and little scope of inbound traffic—which grew 12 per cent between October 2002 and March 2003—due to the lean season, it's time to unleash the power of the domestic market. After all, 234 million Indians travelled across the country last year and their numbers have been growing at over 25 per cent annually.
After the 'Incredible India' campaign, the tourism ministry has come up with another one directed exclusively at the domestic traveller. Under the banner 'Rediscover India', it will attempt to promote specific destinations in India. For example, the Northeast is a focus area. A Net and print media campaign highlighting destinations there has already resulted in hundreds of enquiries, says Kant, who also plans to launch ads that will specifically target the "LTC traveller". Fortunately, this year's budget restored the LTC (leave travel allowance) for government employees, done with the precise objective of giving an impetus to domestic tourism. The recent removal of luxury tax on hotels and restaurants will also, it is hoped, help bring down prices. The ministry is also partnering with private tour operators to structure packages specially for the domestic traveller.
Naturally, all this has prompted strategy changes among major Indian travel companies. Kuoni India, which only dealt with inbound travel till now, started a separate division for domestic travel a week back called Sita Holidays of India. Says Ranjit Malkani, chairman and ceo, Kuoni Asia, the travel company that owns the Sita and sotc brands in India, "During this entire period, the domestic segment has remained fairly well-insulated against the adverse external impact of the war. We are confident that at least 15,000 customers will travel with Sita Holidays India this year." Kuoni also plans to spend Rs 5 crore on ad campaigns to promote domestic tourism in India.
Meanwhile, the various state tourism departments have also unleashed ads targeting the local traveller. Maharashtra has hiked its tourism budget as it expects competition between states to hot up. And last week, Balbir Mayal, V-P of the Travel Agents Association of India, took 20 travel agents to Srinagar on an invitation from J&K chief minister Mufti Mohammed Sayeed who wanted to show them how safe the state has now become. "I'm going to try my best to promote tourism in Kashmir. Look at Israel; there is so much strife there but it still has tourism," says Mayal who also runs New Airways Travels that specialises in European and US tours.
States that have already reaped the benefits of the fall in outbound travel are, of course, old faithfuls Goa and Kerala. "Those who had planned conventions and dealer meets, say in Singapore or Bangkok, have rescheduled them in Goa. The Easter weekend is already full in Goa and hotels have an occupancy of over 85 per cent," says Select Holiday Resorts' Sharma. Although it's not exactly the best time to travel to Kerala, according to the state's director (tourism) Alkesh Sharma, April is fully booked. "Last year, in June too I had 85 per cent occupancy when the North had only 15 per cent occupancy. This June, we will touch 100 per cent out of which 75 per cent will come from the domestic market."
Kerala, in the last year, has seen more people visit it from states like Rajasthan and even Delhi because of better rail connectivity and the advance purchase schemes offered by airlines. Travel agents predict that spa and ayurvedic holidays as well as smaller breaks to off-season destinations will also be the choice of domestic travellers. Says Ragini Chopra, marketing head for the Oberoi group, "We have already announced our summer packages and one does expect heavier traffic this year because outbound is bound to suffer."
However, there may be a few glitches. While everybody is banking on domestic tourism to see the season through, the high airfares are not going to further their cause. Domestic airlines recently increased fares by 15 per cent. The tourism ministry, on its part, is lobbying with the government to rationalise the sales tax on ATF (aviation turbine fuel) from the current 30-32 per cent to 4 per cent by bringing it under central sales tax. But till that happens, foreign destinations like Sri Lanka which are giving you a complete holiday for as little as Rs 15,000 for five days could seem more attractive than domestic ones.
Travel agents also say that flights to Mauritius, till recently a not-so-affordable destination, are going packed thanks to packages being sold 20 per cent cheaper than last year. But Kant is optimistic about domestic tourism's prospects this year since "nobody is going to move out in the next couple of months". So should we say East or West, India is the best?