Hotels fear cancellations

At a time when the tourism sector is battling a slowdown, the terrorist attacks in Mumbai have cast a shadow on the industry and hoteliers are expecting large-scale cancellation of bookings, especially from overseas visitors.

"Over the next two-three months, there will be a large number of cancellations. But I do believe the Indian industry will bounce back like many other destinations," said R K Krishna Kumar, Managing Director of Indian Hotels, which manages Taj Hotel in Mumbai. Terrorists, this time, have targeted five-star hotels damaging Mumbai's historic Taj and Oberoi, to create a fear psychosis among travellers.

"I think we can expect tariffs to fall by at least another 5-10 per cent almost immediately," says Harish Sood, General Secretary, Federation of Hotel & Restaurant Associations of India. Nearly 65 per cent of hotel rooms are used by business travellers. Mumbai and Delhi together offer about 30,000 rooms.

"Capacity utilisation during winter months is normally 100 per cent," explains Sood, "Now, due to the slowdown it was about 80 per cent this year. But with the attack on Mumbai, hotel capacity will nosedive. Domestic travel in India was driving occupancy but for the next few months I think we'll see large-scale cancellations of conferences and reduction in business travel." Carlson Group Executive Vice-President K B Kachru said, "Security has always been a major factor in tourism. A reaction is bound to come and a general tourist would be apprehensive."

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