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: The holiday season will begin soon. But the downtrend in the economy has made its chilling fingers felt in almost all sectors. With 500 plus million domestic travellers every year, what will be the effect on the travel industry? With three major holidays during the midweek of October, most hotels bookings have taken a beating. As a result of this business traffic has slowed down considerably.

As recently as 6 months ago, the Indian hospitality sector was expecting another good year and a correction was not foreseen till at least another 12-15 months in many of the markets. However, due to the global economic slowdown, the opening of new hotels, high inflation, including staggering increases in fuel prices that has forced the cost of air travel to increase, there has been a severe tightening of travel budgets which has resulted in a fast drop in occupancy, says Manav Thadani, Managing Director, HVS International, a global consulting and services organisation focused on hospitality, gaming and leisure sectors.

“The immediate threat to the hotel sector demand is the growing concern of a slowing economy which is facing us globally. Fortunately India is less dependent on foreign travelers who actually constitute a minuscule portion of the overall travel compared to domestic travelers.”

According to estimates of the World Travel and Tourism Council, Indian tourism will grow at 7.9% from 2008 to 2017 in real terms. Foreign tourist arrivals to India have been showing an increasing trend estimated at 4.98 m in 2007 compared to 4.43 m in 2006. Owing to the spiraling fuel prices, the aviation sector is anticipated to record heavy losses in 2008-09. Some amount of consolidation and restructuring is anticipated in the civil aviation sector for the Indian carriers to reduce losses and stay afloat.

Where are the holiday goers headed to this season? Some travellers like Prakash Sampat who has already covered the entire country with his family on his annual Diwali sojourns has again opted for Punjab and Shimla this year. “We had planned to go to Dubai but the budget was a problem. Since my daughter is learning about the area in school, we decided to make our trip an enlightening journey.”