As airfares soar, tourist inflow nosedives

New Delhi: The increase in price of aviation turbine fuel and economic slowdown has spelt doom for the hospitality and tourism sectors, with hotel room tariff crashing almost 50% in certain cases.
Several city hotels have applied summer rates nearly after two years as this is the first time since 2006 that they are witnessing occupancy as low as 50% in June and July. Since pricing is demand-based, the severe room shortage meant they need not have resorted to lower tariff in past two years.
The crisis sparked by the rising price of crude oil seems to have come a full circle for the travel industry, as it has affected every sector. In the good old days of low air fares, high hotel tariff in Delhi meant companies started sending their executives on a day trip to Delhi as staying overnight was more expensive than flying again to the Capital next morning. Then airfares started shooting and have now reached such levels that companies are cutting travel costs with a heavy hand. This, in turn, has led to a sharp drop in room tariff.
Blaming the hike in ATF, Indian Association of Tour Operators (IATO) president Vijay Thakur said that long haul destinations like India had suffered resulting in a 10-15% dip in arrivals.
18/07/08 Saurabh Sinha & Himanshi Dhawan/Times of India

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Categories: Indian Aviation- In General Jul 2008