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Coronavirus pandemic | Travel industry down to its knees: 'Not done a single booking in three weeks,' says agent

Business has come to halt for travel agents and tour companies as customers cancel flights and trips due to the coronavirus scare

March 19, 2020 / 11:06 PM IST

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The phones are ringing. Mails are coming. It may look like a normal day for a travel agency. But it is not. Customers are calling and mailing to cancel their air tickets and trips. A few are rescheduling.

"I haven't done a single booking in three weeks," said the owner of a travel agency, who did not want to be named, in Mumbai suburbs.

Far away in Kohima, David Kuruvilla 's emotions are mixed. He is a part of India Trail, which specialises in organising trips to the North-East. On March 17, Kuruvilla completed three years in India Trail.

But with most of the states in the region putting a blanket ban on tourists for over a fortnight and the future beyond that too uncertain, Kuruvilla is wondering what to do next.

"Three upcoming trips have been cancelled...We have no clue how long it is going to last. Probably, we need a plan B," he said.


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Unfortunately, for the hundreds of travel agencies and companies organising travel tours, there is no Plan B.

"If this goes on for a month, or a maximum of two, many of the travel agencies will have to close down. While we all are fearing the mortality rate of coronavirus, the financial mortality because of it will be even higher," says Ajay Prakash of Nomad Travels.

Coronavirus, which has killed over 8,000 people and infected 200,000, has brought the travel industry to its knees. As holidaymakers cancel trips and companies opt for video conferences, the passenger traffic has plummeted. While a few airlines have already collapsed, others have grounded their fleet, cut salaries and asked employees to go on unpaid leave.

In India too, the virus is beginning to hit the industry. Three people have already died, and 151 have been reported to be infected. Most of the airlines, including GoAir, Air India and IndiGo, have curtailed or completely suspended international services, with the Indian government putting in travel restrictions to limit the spread of the virus.

While industry organisation IATA said that the aviation industry could be facing a loss of up to $113 billion, advisory CAPA warned many airlines could be facing bankruptcy.

The timing could not be worse. The aviation industry, as well as the travel space, was looking forward to the summer travel season - which is especially the peak for international travel. But not this time.

"People are reluctant to travel abroad as they fear of getting stuck if the governments announce restrictions. If that happens, travelers could get stuck, overstay their visas and this will have an implication when they want to travel in the future," pointed out an industry executive.

"The season, adds another, has gotten over even before it began," added another.

Domestically too, most of the families travel during three months starting March, coinciding with schools closing for the summer.

"The growth in domestic passenger traffic has been high at 16 percent-23 percent during the three month period March-May," said a note from Acuité Ratings & Research Limited.

But, in 2020, a significant negative growth is expected in monthly domestic airline traffic which can go as high as 50 percent at least up to June 2020, depending on the severity of the outbreak in India in the near term, added the note.

Worst ever

This is the worst that Prakash has seen in his career of over three decades.

"There is nothing to compare. Not SARS, 9/11 or the 2008 economic meltdown. This time, everything is hit," he says.

Entrepreneurs like him are trying to cut costs. Switching off air conditioners, limiting travel of employees or reducing use of stationery. India Trail may close its offices for a while. But, these are not enough.

"Unless you are generating revenue, you can't survive," says Prakash. "We need to pay salaries," adds Kuruvilla.

Murmurs have already started layoffs in the industry. An executive said that some of the online travel portals had started sending off contractual staff.

"I can hold on for another month or so. After that I may have to close down," said the owner of the travel agency quoted earlier.

"Everyone is hoping for a miracle," he added.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Mar 19, 2020 09:16 am
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