The Telegraph
Since 1st March, 1999
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Double-whammy to hotel revival hopes

New Delhi, April 27: The hotel industry has been Bush-whacked by the Gulf war and laid low by the SARS epidemic, but it still hopes to receive more foreign tourists and rake in more dollars by the year-end.

The optimism looks a little dodgy at the moment. Since October 2002, there has been a surge in tourist arrivals. But the double whammy this year — in the form of the Gulf war and the SARS epidemic that has been raging through China and South East Asia — has punctured hopes of the long-awaited revival.

The upshot: there have been fewer tourist arrivals from the West because of travel advisories in the West and, as ill-luck would have it, none of the compensating tourist arrivals from the East.

The hotel industry admits the Gulf war and the SARS epidemic have seen a sharp drop in tourist arrivals. Shyam Suri, secretary general of the Federation of Hotel and Restaurant Association of India, says the double trouble will impact foreign tourist arrivals by at least 5-7 per cent. “Both Europeans and Americans are reluctant travel to Asia,” says Suri.

Still, the hotel industry reckons that the downbeat won’t last for too long. “The first quarter of calendar year 2003 has seen a significant jump of 12.5 per cent in tourist arrivals over the corresponding period last year. The last two months of 2002 have also witnessed some revival. We hope to make up and do good business this year,” he added.

But the statistics don’t look too promising. Foreign tourist arrivals have been showing negative growth over the past two years. According to the latest figures released by the government for 2002-03, foreign tourist arrivals have been estimated at 23,70,121, down 6.6 per cent over the corresponding period last year.

What’s worse, the slump in tourist arrivals in calendar 2002 was sharper than the 4.2 per cent fall in year 2001.

If the tourists don’t come, the moolah doesn’t come in either. India earned $ 2,964.70 million last year as against $ 3,042 million in 2001, a fall of 2.5 per cent.

“We are very confident that this year we will definitely do better in terms of tourist arrivals and higher forex earnings. The last two months of 2002 have shown a growth rate of more than 25 per cent. The Gulf war and SARS have not substantially affected the industry,” says Lalit Suri, chairman cum managing director of Bharat Hotels.

An analyst said that inbound traffic has not recovered post-September 11 attack with tourist arrivals dropping by 20.3 per cent from September to December 2001. However, this has resulted in negative growth rates in foreign tourist arrivals during each month from September 2001 to September 2002.

Since October 2002, there has been a revival in inbound traffic, says the Economic Survey for 2002-03.

Hoteliers feel the Gulf war and SARS will have some impact on the industry, but reckon that later in the year it will be largely compensated with huge bookings of business delegations.

Tarun Thukral, general manager of Le Meridien, said, “Our business has been down by more than 15 per cent due to the Gulf war and SARS. But growth in the first quarter has been 20 per cent more than last year.” The impact of the SARS epidemic will take longer to subside because travellers across the globe are spooked by the prospects of catching a bug. However, bookings in hotels show that business travellers will continue to come to India, he added.

Maharaj I. S. Wahi, president, Indian Association of Tour Operators, said, “The second quarter of the calendar year is a lean period so the impact should not last long. However, the government should offer some incentives to travellers and improve India’s destination image.”

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