The Indian hotel industry, which was limping back to normalcy after the November 26 terror attacks in Mumbai last year, is facing a new crisis with the outbreak of swine flu.
Tourist inflow could decline by 10 to 20 per cent in the coming weeks, industry watchers say. India was expected to get 5.5 million international tourists this year.
After the terror attacks in Mumbai hotel tariffs across the country had plunged by about 50 per cent, compounded by an economic slowdown that caused cut-backs in business travel.
“Reports indicate that hotel stocks around the world are dropping in response to the swine flu scare and this would have some potential impact on travel and tourism business in India as well,” said Parul Soni, associate director at consulting firm KPMG India.
The Mumbai attacks saw occupancy rates come down to 50 to 55 per cent levels, and industry officials believe the flu could cause the figure to stay put.
A standard room in a premium five-star metropolitan property costs about Rs 10,000 per day at present as compared with about Rs 18,000 last year.
“For hotels to keep the rooms vacant is a big waste and that is the reason we saw hotels offering rooms at nearly 50 per cent of the rack rates with freebies thrown in of late. Hotels with large inventories (with over 400 rooms) will be affected if the disease spreads further,” said Rajendra Kumar, vice-president of the Federation of Hotels and Restaurant Association of India.
“The spread of the disease could see huge cancellations in bookings,” said Raji Rai, president of the Travel and Tourism Association of India.