Travel industry hit by terror not recession

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New Delhi: Tourism in India dropped steeply during the last week of November due to the terrorist strikes in Mumbai but remains unaffected by the global financial crisis, say tourism management gurus.

International traffic dropped by about 10 per cent and domestic traffic by about 24 per cent compared to the same period last year, predominantly as a result of the terror attack in the country's financial hub Mumbai, says Himanshu Singh, managing director, travelocity.co.in, an online portal.

Foreign destinations, however, are being preferred by domestic tourists, ahead of the holiday season, Singh says.

"Interestingly, we are seeing some good pick up in international holiday bookings over the last 10 days. A reason could be the perception of international destinations being safer than domestic ones for Christmas and New Year getaways, as an aftermath of the terror attacks on Mumbai," he says.

At a time when industries across the world have been affected by financial crisis and companies are laying off employees, the travel industry has been flourishing. A key player that has been showing maximum enthusiasm is the middle-income group, he says.

The travel market in India has witnessed growth worth USD 1.75 billion in 2007-08 and is expected to grow to USD 6 billion by 2010, says Scott Blume, chief executive officer, Zuji, a travel portal.

"The travel market has great growth opportunity. Even during the time of 9/11 or SARS outbreak in Asia, travellers worked closely with online travel agents (OTAs) as there was more speed and value in this market and cost effective distribution" says Blume.

Over 30 per cent of all domestic air tickets in 2007-08 were booked online, he says.

Travel portals have the advantage of updating and informing consumers about availability, updated prices, new offers etc within a very short span of time. This facility can be really beneficial to hotels and airlines during a financial downturn, he says.

On the recent crunch situation in air travel, Singh says there are opportunities in India beyond domestic air travel.

"I feel opportunities in India are huge. There exist good opportunities for business beyond domestic air, and we have had good success with international flights, hotels and dynamic packaging as customers look for greater choice and control on their travel," he says.

India as a nation is aware of the benefits of online booking of air tickets, hotels, even though internet penetration is fairly low.