High Indian hotel rates bigger tourism deterrent than terrorism

March 16th, 2009 - 2:33 pm ICT by IANS  

By Manik Mehta
Berlin, March 16 (IANS) Prohibitive hotel rates and not the fear of terrorist attacks are keeping recession-hit tourists away from India, say European tour operators who were expecting Indian hotels to reduce their prices after last year’s Mumbai carnage and the global economic meltdown.

“People tend to have short memory and many may have even forgotten the tragic incidents of Nov 26, 2008 in Mumbai. But hotel rates continue to deter people from visiting India, particularly when the mood in Europe is to guard against any unnecessary expense in the economic downturn,” Klaus Rinner, a Vienna-based tour operator, told IANS.

Rinner, who attended the March 11-15 International Tourism Bourse (ITB) here, lamented that the “totally unrealistic and unacceptable” hotel rates will deter leisure tourism to India.

The Indian pavilion with a large contingent at the ITB - the world’s biggest tourism show and a veritable barometer of global tourism trends - proved to be the setting for many worried exchanges regarding high hotel prices between agents and service providers.

Sunil Sikka, head of marketing and business development of the New Delhi-based WelcomHeritage hotels, attributed the high hotel prices to the supply-and-demand situation in the country.

“India badly needs hotel rooms. There is great disparity between the low supply and high demand. The government has been quite supportive of the endeavours made by hotels to add rooms and has been expeditiously giving clearances. I believe that the root cause of the declining numbers of tourists to India is to be found in the economic crisis, which has made travellers very price conscious, and not the Mumbai carnage,” Sikka told IANS.

Abinash Manghani, head of sales and marketing at Fortune Park Hotels in Gurgaon, echoed Sikka’s views and said that leisure travel to India had declined by some 20 percent.

“We have been asked by the government to reduce hotel prices,” he said.

According to Indian tourism secretary Surjit Bannerjee, who made a passionate appeal to tourists to come to his country, tourism flow increased in 2008 with foreign tourist arrivals touching 5.37 million over 5.08 million in 2007.

However, much of the increase took place in the first half of the year before the deepening of the economic crisis and the Mumbai terror attack. The pace of tourism flow to India had considerably slowed down by the year end.

The Indian government, according to Bannerjee, was working closely with Indian hotels to provide incentives aimed at attracting tourism by offering a free night’s stay to tourists staying in a hotel.

Nonetheless, the operators here seemed unimpressed by what they described as “very small incentives with too many complex conditions attached”.

Representatives of Mercury Travels Ltd., a Mumbai based travel company, were in fact prepared for some decline in tourism traffic.

“As the recession gets deeper, travellers will be calculating their pennies before they embark on any expensive foreign tourism. Germans love travelling, but they also have budget limits, one should not forget,” explained S.K. Ravichandran, the Frankfurt-based sales manager of Mercury Travels.

Ravichandran’s colleague in Frankfurt, Hans Koehler, the tours manager of Mercury Travels, called for a change in the mindset of Indian hoteliers.

“Besides charging very high rates, Indian hotels do not give us adequate notice of availability of rooms. They do not understand that European tourists plan their travels well in advance and need notice,” said Koehler.

“When we approach some hotel for a quotation, they quote us an incredibly high rate for our customers, even though they may have rooms available. Then suddenly when they realise their rooms need to be filled, they notify us and ask us if we have any customers available to fill in the rooms. That is not how the industry works here,” he added.

According to Koehler, hotel rates accounted for 65 percent of tour costs in India. Business travellers can afford to pay such costs because they do not pay out of their own pockets but leisure travellers simply get turned off by exhorbitant rates.

When told the government was offering one free night’s stay to tourists staying in Indian hotels, Koehler said that the incentives were “highly impractical”.

“You need a lawyer to interpret the complex fine print,” he remarked.

Other tour operators also echoed similar sentiments about organising trips to India. They pointed out that the Palace-on-Wheels luxury train, for example, was charging $500 per day per person. A new version of the train is even more expensive than its older version. Passengers have to dole out $640 per person per night for a seven-day trip.

Defending the prices, Usha Sharma, commissioner in the Rajasthan government’s tourism department said that new train is “more luxurious in its content and more opulent than the older Palace-on-Wheels”.

“We created the new train because the old train is overbooked and there is always demand,” she argued.

However, Sharma’s argument did not seem to impress many operators who felt that the prices demanded were beyond the reach of even rich people.

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