The Telegraph
Since 1st March, 1999
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Hoteliers look east to bridge the Gulf

New Delhi, March 16: Spooked by fears of a war in the Gulf and the anticipated dip in inbound travellers from the West, hoteliers in India are cobbling plans to attract more tourists from south-east Asia and draw in more domestic holiday-makers.

“Bookings over the next two to three months are already very low,” says Shyam Suri, secretary general of the Federation Of Hotels and Restaurant Association of India (FHRAI). “A prolonged war in the Gulf region may lead to large-scale cancellations of bookings from travellers in the West. The overall scenario is very disturbing.”

“The outbreak of war will certainly impact inbound traffic from the Gulf region as well as Europe and the US,” says Anil Bhandari, chairman of ITC Travel House, echoing a fear that has sent a frisson through the hotel industry.

The industry has dark memories of the Gulf war in 1991-92 which sparked a rash of travel advisories in the western nations cautioning their citizens not to travel anywhere near the hotspot, which led to a slump in tourist arrivals to India. It took over a year for the situation to normalise, industry mavens say.

Much the same could happen this time round — hurting the fortunes of the hotel industry that has been badly roiled since terrorist attacks in the US in September 2001.

The industry is taking action to limit the anticipated damage that such a conflagration in the Gulf could cause.

“We now need to concentrate on improving domestic passenger traffic. It’s time for all hotels and travel agents to design attractive domestic packages,” says Bhandari.

But the crisis has spawned a gleam of hope as well. “Every crisis comes as a huge opportunity because this is the time we should think of penetrating other regions and travel groups,” says Amitabh Kant, chairman-cum-managing director of ITDC.

The other hope is that the business traveller in the west will still come to India in pursuit of commercial opportunities undeterred by the turmoil in the Gulf. “The business traveller will keep coming because of professional compulsions,” says Suri.

“In an effort to increase tourist inflow, the ministry of tourism (MoT) is taking adequate steps to stimulate growth within the south-east Asian region. There are almost 3.5 lakh Indian passengers travelling abroad. If they have so much money, why shouldn’t they be incentivised to discover their own country'” added Kant.

The tourism ministry has already started hard-selling India as an ideal tourist destination by beaming advertisements on CNN and Discovery channel, cottoning on to a strategy that has been used effectively by countries like Singapore, Malaysia and the Emirates.

India received just 2.4 million tourists in year 2001-02 and earned foreign exchange worth $ 2,910 million. Inbound traffic has not recovered post September 11 attack; tourist arrivals dropped by 20.3 per cent from September to December 2001 as compared with the year-ago period.

However, this resulted in negative growth rates in foreign tourist arrivals during each month from September 2001 till September 2002. Some amount of revival has been noticed from October 2002, says the Economic Survey for 2002-03. Domestic traffic in the last year has grown by 27 per cent.

India receives approximately 5-6 lakh passengers from Gulf on an average each year. This traffic is, further, expected to get affected.

An ITC official said, the current rate of room occupancy for ITC hotels is 70-80 per cent while for other hotels it is 65-70 per cent which, by industry standards, is quite good.

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