Anti-CAA stir, economic slowdown drag down tourism sector

Domestic travel and tourism sector has taken a hit from ongoing nation-wide protests against the Citizenship Amendment Act (CAA) and the downturn in economy. Bookings have gone down during peak tourist season whereas cancellations have increased, industry sources revealed.

Demand has been impacted in both business and leisure segments. While the macro-economic factors have taken a toll on business destinations, the leisure destinations show a greater sensitivity to non-economic factors such as terror attacks, civil unrest, and health-related travel warning.

Reports suggest that travel-related bookings have gone down as much as 5 to 40 per cent across the country. Metros like Delhi and Bengaluru, which recently saw violent protests against the amended citizenship law, have been affected the most. The bookings in December for travel to Delhi have fallen by 38 per cent over the previous year, said travel aggregator ixigo.

"We are in constant touch with all our customers to assist with requests to defer their travel to the affected destinations, as also to offer optional destinations while working with our partners and suppliers, including airlines, to assist travellers with cancellations and refunds," Rajeev Kale, president and country head (holiday, MICE, Visa) at Thomas Cook (India) told Business Today.

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Cancellations for immediate travel have increased substantially due to difficult travel situation, especially in the North East. Travel bookings to the North East have declined 20-23 per cent on a monthly basis. The region, which picked up amongst the domestic tourists in the recent years due to offbeat destinations like Tawang (in Arunchal Pradesh) and Mawlynnong Village (in Meghalaya) seem to have taken a severe beating. Travellers are reportedly re-scheduling or shelving their travel plans to avoid being caught in unrest caused by CAA.

"With the ongoing situation, we have noticed customers rescheduling their trips to North Eastern states. They are opting for domestic destinations like Kerala and Andaman instead. With customer safety being a top priority, we are providing alternative measures and further rescheduling their vacations," said Daniel D'souza, president and country head (leisure) at SOTC Travel.

Meanwhile, economic slowdown has put a dampener on corporate bookings. For the past couple of months, corporate customers have cut back on work-related travel spends, and deferred travel schedules. According to some estimates, an average corporate traveller takes over 150 flights in a year. Due to slowdown, this number has come down drastically as the focus is to consolidate travel and plan in advance. Consolidation means clubbing two destinations in a single trip which would have otherwise been covered in two separate trips.

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Notably, several countries have issued travel advisories for India, in light of the ongoing unrest against CAA. The United States, the United Kingdom, Canada, Saudi Arabia, Russia, Australia and Israel have asked their citizens planning to visit India to exercise caution and avoid areas witnessing violent protests.

"The foreign tourist arrivals (FTAs) are quite slow in 2019. Though domestic tourist visits are slow but comparatively better than the FTAs. This is on account of overall weak domestic economy as well as slow down in the major global markets like the US, the UK and the Europe," says Darshini Kansara, deputy manager (industry research) at CARE Ratings.

Between January and November 2019, the tourism ministry data shows that FTAs have registered growth of 3.2 per cent, which is marginally higher than 2 per cent in 2018. Domestic travellers, and as a subset leisure travellers, are the biggest spenders for the travel and tourism market accounting for 87 per cent of the overall sector economy.