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Attacks crisis is latest plague on Indian tourism

A plane roars suddenly across the sky.

"Must be an attack from Pakistan!" chuckles a shopkeeper from his doorway in New Delhi's Janpath market, which usually teems with foreign tourists and persistent knick-knack hawkers.

"Business is very down, no tourists," says Ajay Sood, whose poky store of fragrant leather bags stands empty behind him. "It's because of the war."

There is, of course, no war. But India's proximity to a theatre of conflict in Afghanistan following the strikes on the United States has already taken a vicious swipe at the country's tourism industry.

Despite its Himalayan peaks, wildlife-packed jungles, opulent palaces, temples and sun-soaked beaches, India is hardly the world's favourite tourist destination.

A little over 2.6 million foreigners, many of them hardy budget travellers and backpackers, visited the country last year, giving it a microscopic 0.4-per cent share of the world market.

As the Lonely Planet guide explains, India is "not an easy country to handle, and more than a few visitors are only too happy to get onto their flight and leave the place".

The latest blow to airlines, hotels and the countless millions who earn a living from the tourism industry has come at the worst time -- just as the high season, with its more clement weather, gets under way.

It was a similar story back in the autumn of 1994, when an outbreak of plague in a western corner of the country -- which killed more than 50 people -- prompted a raft of governments and airlines to impose controls on travel and trade with India.

AMERICANS BACK OUT

It is still too early to be sure how far the foreign tourism trade, which earns India more than $3.5 billion a year, will be hit. And although visitors now returning from favourite destinations like Rajasthan say hotels are half empty, that is probably because the busy season hasn't started yet.

Murali Dhar, president of the Indian Association of Tour Operators and a retired army major, drew on his military savvy for comfort.

"New bookings are not coming in, and people abroad are looking at how developments shape up," he said. "But I personally feel there will be no war, and even if a conflict takes place India will not be that much affected."

Indeed, no Western countries are advising their citizens to avoid India right now.

But Subhash Goyal, owner of the Stic Group of Companies and a member of IATO, said that of 200,000 foreigners he had expected between October and March, 100,000 had cancelled their trips.

The majority of these were from the United States, where fears about flight safety and terrorism are riding high.

With more than 300,000 US tourists and business executives visiting India last year, Americans account for the second-largest group after visitors from Britain.

"The scene right now is bad," Goyal told Reuters. "We're getting cancellations from the United States, Germany and even places like Japan and Hong Kong."

Added Ravi Dubey, senior vice-president at Indian Hotels Company, which runs the swanky Taj group: "There is general nervousness among visitors from the United States about flying to a region which they perceive as being dangerous".

"It's hurting...there's no point pretending it isn't."

Cancellations have touched the 30-per cent mark at the Carlson group's 300-room deluxe Regent Hotel in Bombay, which charges up to $375 a day plus taxes.

"We cater mostly to corporate visitors and many are telling us they have to cancel bookings because they have been instructed to restrict travel," said Betty Remedios, its assistant director.

"IN FOR A SHOCK"

So far, though, the impact appears to be on bookings for the weeks ahead rather than the months ahead.

An official at the luxury Raj Vilas hotel -- part of East India Hotels Ltd's Oberoi Group and twice host to former US President Bill Clinton -- on the outskirts of Jaipur said the "bread and butter months of November to February are still looking full on the books".

But the administration in the desert state, whose maharajas' palaces, ancient forts, wildlife sanctuaries and riot of colour and culture draw one out of every three foreigners visiting India, is worried.

"The state tourism industry is in for a shock," State Secretary for Tourism Lalit Panwar told Reuters. "It is too early to quantify the damage, but on a rough estimate foreign tourist arrivals this year should be down by almost 40 per cent."

If fear doesn't put tourists off, there is always cost.

India's domestic airlines have warned that fares may be increased soon to compensate for the surge in insurance costs and plunge in ticket sales since the attacks.

Finance Minister Yashwant Sinha has said the tourism, hotels and aviation industries would take the biggest knock from the attacks crisis, which has raised the spectre of a worldwide recession and looks likely to exacerbate the economic slowdown already under way in India.

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