Search the Internet          Tips  Sites: Finance, Investment

Tourism reels under terror attacks

Terrorism is proving to be the nemesis of tourism and in tandem with global recession could cause a shortfall of Rs 40-50 billion in India's foreign exchange earnings during the current fiscal.

Even by the government's own admission there could be a decline of about 20 per cent in foreign tourist arrivals and 16 per cent in foreign exchange earnings in the two months following the September 11 terrorist strikes in the US.

Industry, however, is more pessimistic.

FICCI (Federation of Indian Chambers of Commerce and Industry) has forecast over 30 per cent dip in the industry's target of forex earnings of about Rs 160 billion for the current fiscal, saying it was based on 70 per cent cancellations by inbound tourists just ahead of peak session.

Concerned over the severity of September 11 events' impact on tourism, the government constituted a special task force with the objective of sending right signals across the world that situation in India is absolutely normal and there should be no fears about the safety and security of tourists.

Alas, within a month, the highest seat of democracy, Parliament, was attacked by terrorists, which, among other things, led to escalation of tensions on borders with Pakistan, and even the most optimists are dreading to predict a reversal of fortune at this juncture.

Addressing the Chief Ministers's Conference in October on drafting of a National Tourism Policy, Prime Minister Atal Bihari Vajpayee acknowledged the need for rationalisation of taxes both at Centre and states to boost tourism, which apart from a major forex earner has tremendous potential as employment generator.

While Ananth Kumar, who had promised to come out with a new policy to develop tourism as an industry, made way for Jagmohan in the tourism ministry, Vajpayee announced setting up of an advisory panel for tourism policy.

Industry, on the whole, opposed multiple taxes on the tourism sector, saying these were acting as a big disincentive.

The economic slump in the country also affected the domestic tourism. The situation was not helped by certain government measures such as freezing leave travel allowance facilities for its employees.

A downcast business environment, negative foreign trade growth and a pathetic, about 2 per cent, industrial growth virtually paralysed the movement of middle-class domestic tourists in the country, making the industry wonder if its survival was at stake.

The government-owned ITDC, which operates a chain of 26 hotels, alone is likely to suffer a loss of about Rs 400 million due to abysmally low occupancy while the private-sector hotels are going on overdrive to promote and capture the limited business this season.

YOU MAY ALSO WANT TO READ:

2001: The Year That Was...
India draws up a seven-point programme to boost tourism
25-40% discount in 'busy' season
Tour operators plan heavy sops to lure visitors
Tourism to India from Europe nosedives
Attacks crisis is latest plague on Indian tourism
Tourism sector foresees harsher times
Money joins tourists homeward bound
Money
Business News

Tell us what you think of this report