India's Travel Sector Braces For Coronavirus Impact

With international travel hit and fear among those planning domestic travel, affected airlines, hotels and booking portals take note of how much the pandemic is affecting the industry.
India's Travel Sector Braces For Coronavirus Impact
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As the coronavirus disease (COVID-19) outbreak and fears of its widespread transmission looms large across India, one of the major and potentially among the first industries to be hit has been travel and hospitality. The ones who have been exceptionally hit are airlines with international travel facing major challenges across the world.

Several nations have been trying to battle and contain the pandemic through a travel ban and India, too, has suspended all visas with the exception of a few until April 15. The advisory issued earlier this week said that only diplomatic, official, employment and project visas were exempt at the moment. Separately, the country’s aviation watchdog had earlier issued instructions to check aviation personnel before their mandated breathalyzer tests.

At the time of publication, the number of confirmed cases of the coronavirus disease in India was 84.

Cancellations, Fare Drops

“The latest update on suspension of visas from all countries to India is expected to have a substantial impact on the foreign tourist arrival in the country which was already witnessing a drop due to the prevailing situation,” said Sabina Chopra, co-founder and chief operating officer, corporate travel & head industry relations at travel bookings firm Yatra.com.

According to Chopra, the NASDAQ-listed company has received close to 35 per cent cancellation queries from travelers planning trips to foreign destinations while airfares have dropped by 40 per cent to affected destinations.

The parent company of India’s largest airline IndiGo has reportedly seen a 15-20 per cent fall in daily bookings over the last few weeks and warned that it expected quarterly earnings to be hit. These comments came a week after the airline waived off charges to reschedule bookings between March 12 and March 31. It said the same would also apply for fresh bookings made in the same period.

“Whilst the coronavirus is a very serious challenge for us all, we believe that measures such as this will help alleviate its effect on India’s travel,” William Boulter, the company’s chief commercial officer had said in the earlier statement.

MakeMyTrip did not reveal any details about the cancellations but a company spokesperson said it was working closely with flights and hotel partners to extend support to customers for both domestic and international bookings.

Apart from air travel, hotels have also been hit. “There has been about 18 per cent drop in hotel rates and we are receiving cancellation requests from various travelers who are wary of taking up trips domestically as well,” said Chopra.

According to Anuj Puri, chairman of ANAROCK Property Consultants, luxury hotels will be hit especially hard by cancellations and significantly reduced bookings by rich but inherently skittish foreign tourists and businesspeople. “Domestically, things don’t look much better. Hotels cannot count on the annual uptick in bookings on the back of vacation time and the wedding season,” said Puri.

Vista Rooms, a luxury holiday homes provider, said it had seen cancellations only recently. “Since we manage private holiday homes that are primarily in drivable distance from metros, we initially didn't face many cancellations. Instead till Holi, we saw strong demand pan India. Only in the past couple of days, with rising cases in metros have we seen a spurt in cancellation, for roughly 5 per cent of our bookings for March,” said co-founder Amit Damani.

The situation is slightly more dire for some others. The Den, a luxury hotel in Bengaluru, has received cancellations from international booking sources for the next six weeks. While Vista’s Damani said new bookings hadn’t been affected much, Vinesh Gupta, who is general manager at the hotel, said on average, 80 per cent of bookings have been impacted.

Puri, however, added that budget hotels may suffer less in the short-term due to attractive discounts. “Nevertheless, mass cancellations are definitely on the charts as both international and domestic tourists turn risk-averse. Only time will tell when the tide will turn, but a lot depends on factors which the hospitality industry cannot control,” he said.

Helping Customers

The MakeMyTrip spokesperson said the company was currently extending full refund to customers with bookings to severely impacted regions including China, Hong Kong, Italy and South Korea. For regions where airlines have cancelled flights, it is offering a 100 per cent refund and was working with airlines to offer no-fee rescheduling.

“With respect to holiday package bookings – slated for near future, we are proactively suggesting our customers to reschedule their bookings to a later date without any date change-fee,” the spokesperson said.

Yatra’s chopra said the company had introduced a trip protection plan that customers can opt into to avail a refund if they want to cancel their plans.

For March bookings, Vista Rooms is now allowing guests to reschedule upto two days prior to their check-in dates, down from the normal 14-day policy while The Den is allowing all guests to reschedule without any fee.

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