Despite Low Fares, Slowdown Hits Tourism Sector’s Festive Fervour

With just a day to go for Diwali, India’s festival calendar is reaching its crescendo. But the looming economic slowdown, which has begun to affect almost all sectors, has hit the tourism industry too.

The Quint spoke to various stakeholders of the sector, who unanimously said the usual spurt they witnesses during this time of the year is absent this year.

“October is going to be a bad month, and hotels have already accounted for that. The double-digit growth that everyone was expecting is not going to happen. In the case of independent hotels, the growth might even be lower,” Manav Thadani, Co-Founder of hospitality consultancy firm Hotelivate said.

“Only time will tell that whether the growth stays at 6 percent or bounces back in the remaining three months of this year,” he added.

Aviation Wings Clipped

The aviation sector, which is closely linked to tourism, too, is strained.

“Aviation sector typically grows at twice the rate of GDP. It's not even growing half of that rate. People are not buying tickets for personal travel, and companies have tightened their purse strings,” Mark Martin, CEO of Martin Consulting, an aviation consulting firm said.

The low sale of air tickets is in spite of airlines having slashed their fares significantly to attract flyers.

According to a report by The Hindu, fares on key metro routes are down by 30 percent, while this is usually a time airlines hike airfares due to spike in demand.

However, Civil Aviation Minister Hardeep Singh Puri, speaking to The Hindu, refused to attribute the demand shortage to slowdown. “No, low fares are not due to an economic slowdown. Is any plane going empty, not at all. LCCs are competing against each other and dumbing down fares,” he said.

A senior journalist who handles the aviation sector told The Quint that airlines are now in a dilemma over whether to keep fares low and incur losses or risk the demand for tickets plummeting further by selling them at normal prices.

Low-Budget Hauls More in Demand

Even those who are still planning their trips this festive season, are not really looking to splurge and are exploring budget-friendly options.

At least four travel agents The Quint spoke to said tourists are not opting for relatively expensive destinations like the US, Europe and Australia.

Holiday-goers are instead opting for destinations like Croatia, Hungary, Czech Republic, Cambodia and Vietnam, the travel agents suggested.

Moreover, a large number of tourists who are going abroad have planned their trips in advance to take advantage of early-bird offers, thus robbing travel agents of the festive season spike in their businesses.