Mumbai, Dec. 17: Leisure tourists are skipping India this year preferring to head to cheaper destinations such as China, Thailand, Egypt and Malaysia.
Blame it on the strong rupee and the move by the top hotels to shift to rupee pricing.
The strong rupee appreciation has seen holiday costs rise by at least 10 per cent, said Himmat Anand, COO of Sita Inbound division (India and South Asia), Kuoni Travels.
The rupee has appreciated around 15 per cent this year. Since October, hotel tariffs have risen between 12 and 25 per cent in non-metro destinations and 25 to 30 per cent in the metros.
Rooms in the Indian metros are tagged at around $250 and $300, while rooms at leisure destinations are priced at $175-$200. This is way above what countries such as Thailand or Malaysia are charging. In Thailand, one can get a room of the same quality for $100 a night, said Anand.
Industry watchers say while the business travel segment, which comprises around 75 to 80 per cent of arrivals, has grown, the leisure segment has seen a sharp dip.
The inbound arrivals in the organised leisure segment have seen a slump of around 5 to 7 per cent this year. Hoteliers are asking us for more business, which hasnt happened in the last three years. October was quite bad this year and, from December, there has been a dip again, said Sumit Suri, chief operating officer (inbound division) at Travel Corporation (India).
This is the first time that hotels in Udaipur, Agra and Jaipur have rooms to spare. The trade is not very bullish this year. We estimate that the slump will impact our toplines by around 7 to 8 per cent, said Anand.
Figures put out by the tourism ministry show that the growth rate of foreign tourists has dipped this year to 12.7 per cent from 13.6 per cent in 2006.
Madhavan Menon, managing director of Thomas Cook India, said 2007 had been a very peculiar year.
Though our billings have gone up by around 40 per cent primarily due to the rising hotel tariff, there hasn't been a corresponding increase in passenger growth. The 15 per cent appreciation in the rupee as well as the sharp hike in hotel tariffs has really hampered inbound leisure traffic, said Menon.
It is not the appreciating rupee thats affecting Indias inbound market as much as the rise in hotel room rates across the country, said Arup Sen, executive director, Cox and Kings.
Indian Hotels Company Ltd, for instance, has shifted 80 to 85 per cent of its bookings to rupee tariff by end-October. It will shift entirely to rupee tariffs by January, said India Infoline in a recent analysis of the countrys leading hotel chain.
Dinesh Khanna, president of the Federation of Hotel and Restaurant Associations of India, conceded that there had been a fall in occupancy rates in the leisure segment. However, he said hotels had been able to hedge against the weakening dollar by quoting their tariff in rupees.