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India’s travel and hospitality industry has been on a roller-coaster ride since the outbreak of the Covid-19 pandemic early in 2020. Just when things were beginning to look up, the threat posed by a new Covid variant, Omicron, has left the industry on tenterhooks again.
In an effort to contain the spread of the new variant, the Central government has announced a series of curbs, including quarantine for a week, for international tourists arriving from ‘at-risk’ countries. Moneycontrol reached out to multiple travel agents to gauge the impact of these safety measures. In Delhi, most travel agents reported a 20-30 percent rise in cancellations.
Data from Online Travel Agency (OTA) Yatra.com indicates a nearly 50 percent drop in new bookings by international passengers coming to India. In addition, around 15 percent of bookings made earlier have been cancelled.
“Many tourists have reached out to us for clarifications regarding their travel plans and there is a rise in concern from passengers who were earlier planning to travel around Christmas and New Year,” an executive at Yatra.com said.
The World Health Organization says the Omicron variant has the potential to spark infection surges around the globe, leading the Central government to once again heighten screening of arriving international passengers.
To this end, on November 30, the Central government issued new rules for international travellers entering India in order to contain the spread of the new variant.
The Central government has classified all European countries, including the UK and 10 other countries — South Africa, Brazil, Botswana, China, Mauritius, New Zealand, Zimbabwe, Singapore, Hong Kong and Israel — as ‘at-risk’ countries, as they have reported a surge in Covid-19 cases in the past few weeks and have also reported cases of the new Omicron virus.
The Central government is also constantly monitoring the spread of the Omicron variant and is expected to update the list of countries in the ‘at-risk’ category as the severity of cases rises.
Outlook for the tourism industry in India
However, despite the rise in international cancellations, most travel agents and online travel agencies are hopeful that the new developments along with new interstate guidelines, rising Covid-19 cases in some European nations and consequent lockdowns will not upend the promising recovery made so far.
"While the new guidelines might affect travel plans, the industry is not expecting a huge impact as there is still strong pent-up demand to travel,” said Prashant Pitti, Co-Founder, EaseMyTrip.
Pitti added that the industry had seen a huge surge in bookings both domestically and from international passengers for the Christmas and New Year season and that there has been no trend of cancellations by domestic passengers.
"With a large portion of India’s population being vaccinated, we believe that travel sentiment is still strong and will continue to drive leisure travel in the coming months once restrictions are eased further. Meanwhile, we must stay vigilant and careful. There is no need to overreact and create panic in the market. We are hopeful to see normalcy in international travel as soon as the situation is safer,” Pitti added.
Similarly, Prahlad Krishnamurti, Chief Business Officer, Cleartrip, said that while there has been a minor drop in new bookings over the last few days for international flights coming into India, no remarkable trend has been observed in cancellations so far.
“Our customers have also reached out to us to understand the impact of these regulations on their travel plans. We expect this to persist till the severity of the variant is understood in greater detail. If the impact is severe then it may lead to a delay in recovery in international travel,” Krishnamurti added.
“People are not cancelling plans just yet. We are all waiting and watching,” said Jyoti Mayal, president of the Travel Agents Association of India, who believes that after waiting for two years people will be reluctant to cancel trips.
Travel agents in Delhi also said that while enquiries from foreign tourists on travel to India have fallen in the past week, domestic passengers have not yet started cancelling plans.
“We have seen some cancellations by foreign tourists, but demand from the domestic market remains strong. We are still getting enquires from domestic tourists for Christmas and New Year,” said an executive from Delhi-based Welgrow Travels.
Another executive from Skylink Travels said that December and January are considered the peak for the wedding season in India. Since no restrictions have been announced so far by the government, most weddings and travel plans around weddings have not been cancelled.
Outlook for Indians looking to go abroad
Bookings by Indians planning to travel overseas for a holiday have been the most hit due to the outbreak of the new variant of Covid-19, tourism industry insiders said.
“With many European countries going into lockdowns or announcing stringent norms for international passengers, we have seen a significant fall in new bookings to Europe, the United States and Africa,“ the executive from Yatra.com said.
He added that until now, around 10 percent of the customers who had booked tickets for travel to Europe had cancelled their plans while around 6 percent of customers had cancelled plans to travel to the US in the next two months.
Similarly, an official from Delhi-based Swan Travels told Moneycontrol that customers who had earlier booked travel plans to Europe and the US were now looking at options such as Thailand, Japan, Maldives, Sri Lanka and South Korea, where the Omicron variant has not been detected.
“Only around 10 percent of all previously booked tours have been cancelled by customers till now. Most of them are looking at alternative spots to go for their vacations at the moment,“ the official said.
The government’s decision to roll back allowing international scheduled flights to open up has also led to a fall in customer interest in overseas travel, multiple travel agents said.
“People were planning to travel abroad when the government announced last week that all international flights would open up. We received a lot of enquiries for tickets beyond December 20 and for January as well. But now, with the international flights limited again, people are cancelling plans,“ the executive from Skylink Travels said.