From heavy taxes to a limited infrastructure status, the tiger tourism ban to an oversupply of rooms, the travel industry seems to have hit a roadblock at every turn of 2012, albeit inviting a new era with proposed solutions. While the aviation industry is still waist-deep in cold water, the promise of FDI is a silver lining. States have taken measures to make tourism development less cumbersome and capital intensive, such as Gujarat’s invitation for PPP’s and Maharashtra’s tax deductions for its upcoming destination Tarkarli, among others. Even the tiger tourism ban fracas was eventually put to rest.
Ankur Bhatia, Executive Director, Bird Group stated that the year 2012 saw the Indian aviation industry go through some prominent challenges, which hindered its projected growth. “The downfall of Kingfisher Airlines has left a negative impact on the Indian aviation industry. With the FDI coming, however, the sector is capable of growing 120-130 per cent as more international carriers will look to invest in domestic airlines,” he stated.
Anil Madhok, Managing Director, Sarovar Hotels and Resorts, feels the same. “Kingfisher Airlines stopping its operation and pushing the air fares up, and companies restricting their travels due to the economic slowdown, has had an impact on business. Mostly room rates have stagnated,” opined Madhok. To curb the issues being faced by hoteliers, the government awarded three star hotels outside the cities with the population of one million the much-awaited infrastructure status. While the move was welcomed by all, the cap on it limited the good it would do for the sector, Madhok said.
“Travellers are still flying despite high airfares. Room rates, however, have been under pressure as the hotel room capacity is growing in India every quarter,” said Jean Michel Casse, Senior Vice President – Operations India, Accor.
According to Rajeev Kohli, Vice President, Indian Association of Tour Operators (IATO), “2012 was a year of mixed emotions. Professionally as a company, we have had a good year and are happy with the way our business has progressed.”
“There has been a steady 12-13 per cent growth in domestic tourism in 2012. But one major problem the sector faced in 2012 was the higher airfare that resulted in a 12 per cent decline in domestic passenger numbers,” Subhash Verma, President, Association of Domestic Tour Operators of India (ADTOI, said.
The industry does, however, hope for a better year to come. “I think the Indian domestic market is a very resilient market segment, and if the sentiment recovers in Europe and North America, we can be firing on all cylinders in 2013,” opined Casse.
