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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.”

Says Amit Kapoor, AVP, Business Development (Leisure), Travelguru, “We are continuing to get lot of queries and bookings for Kerala, especially to places like Munnar, Kumarakom, Allepey, Thekkady and Kovalam.” Kapoor puts that down to it being the ‘best climate’ to visit the tea plantations, mountains and the backwaters. Other hot favorites among travellers are Rajasthan and the perpetual demand for Goa. “We did witness a minor slowdown in business, but now it is picking up,” says Neelu Singh, COO, Ezeego1.com . “There has been a 10-15% dip in flights due to the ATF hike and consecutive terrorist activities, with a supplementary softness in hotels of about 5-10%.”

Where are tourists looking for while booking a holiday? “I have an annual budget for a holiday,” says Scott Fernandes, an avid traveler. “Any holiday I book should factor in the airfare.” Concurs Arup Sen, Executive Director, Cox and Kings India, “Packages with offers like cash back, super savers are always attractive. The preferred days range from 10-15 days, while destinations are wholly dependent on the budget of the traveller.” The average budget for a domestic holiday is pegged at 35-50,000, say tourism companies.

The most holiday packages that people are opting for are customised FIT tours, wherein customers can enjoy more varied dining experiences, shopping and spa treatments. Says Deep Kalra, CEO & Founder, MakeMyTrip.com, “Wine tours and wildlife are gaining favour among travellers. Mono destination trips instead of multi city / country hops are also becoming quite popular.”

There are some foreign destinations that will continue to remain favourites, says tour companies, such as South East Asia (Malaysia, Singapore, Thailand), Mauritius and Switzerland. There has been increased interest and awareness regarding Bali, Australia, New Zealand, Hong Kong, Scotland, Finland too. Analysts say easy access to information and increased disposable income has transformed travelling drastically. As a result travellers have been taking more frequent and shorter breaks. Easy availability of loans to finance travel needs has also given a shot in the arm to the tourism industry. “The popular ones are Egyptian Explorer, for five nights and six days at a cost of Rs 34,699; Kenya holiday, four nights/five days Rs 57,758. The cost for a holiday in France and Switzerland for seven nights/eight days Rs 65,419,” says Singh.

A holiday is becoming one of the options to beat the stress of a rapidly globalising economy, says Gupta. In addition to leisure holidays; DINKS, visiting friends and relatives (VFR) travelers are also opting for niche products like adventure tours, luxury travel, exotic honeymoon packages etc. Meetings Incentives Conventions and Exhibitions (MICE) segment is also coming up as a potential market for Indian tourists.