As we begin the new year it’s time to reflect on the year gone by. We recovered from the devastating second wave in June 2021 and for six months the Indian hospitality and travel industry witnessed a gradual recovery. One may call it revenge travel or pent-up demand, the result was that many stakeholders of the industry benefited from this surge in demand. Air travel did better than expected though the government had restricted capacity for some time only to loosen it at the end of the year.
A few takeaways. One is the disinvestment of Air India, which was long overdue. It has returned to the Tata empire and the travelling public are waiting in anticipation when Tatas officially takes over and revamps the entire operations both within India and internationally. Air India has its distinct advantages with landing slots across all the major international hubs and one of the best landing slots in India.
The Covid-19 pandemic has also brought about a shift in the way people approach travel. Customers prefer direct flights with one or no stop compared to the pre-covid days and Air India with its network in place could act as a catalyst to fuel this growth. The government is also in no hurry to restore flying rights that foreign airlines enjoyed before 2020 and this is to enable a level playing field for Indian carriers. However, the government should balance the needs of the growing travelling public and protect local carriers. It has been observed that more flights lead to a multiplier effect on the economy.
Second, the launch of Akasa Air is a welcome sign. The collapse of Jet Airways had created a void and the new airline, which has ordered 72 Boeing 737 Max aircraft, will perfectly fill the gap. Other Indian carriers such as Indigo and SpiceJet have also added capacity on the domestic network and all this points to a growing demand for air travel within the country.
On the domestic tourism front, state governments have not lost time in promoting their destinations and many of them have already announced new tourism policies to cater to the growing number of domestic tourists.
Though we have been confronted with the new Omicron variant, the state governments have adopted a proactive approach to promoting domestic tourism. Leading hotel chains such as the Indian Hotels, ITC and others have announced their expansion plans and are set to add many new properties to their existing bouquet of hotels.
Business travel had picked up in the last quarter of 2021 and the growth has been dampened a bit with the emergence of the third wave in India.
Overall, as we say, there is always a silver lining among the dark clouds.