India’s holiday plans take a hike, as all roads lead to banks

With long lines seen outside banks and ATMs, fewer people have queued up to board trains, buses and aircraft to commence their vacations. According to industry experts, various segments of the travel and tourism industry like airlines, tour operators, hotels and even local guides have felt the slowdown unleashed by the demonetisation move, which came into effect on November 8 midnight. “There has been a slowdown in the industry,” Madhavan Menon, CMD, Thomas Cook (India) Group, said. 

“As a result of the cash crunch, people are prioritising their expenses and discretionary spends are being delayed,” he added. The timing of the move has also hit the sector hard – the current peak travel season of October-December is expected to be the worst in terms of revenue generation in many years. “Demonetisation has had quite an initial impact on both domestic as well as international tourism,” Aloke Bajpai, Chief Executive and Co-founder, ixigo.com, said. 

The saving grace, at least for the airline and rail-road sectors, has been government’s decision to allow old notes to be used for purchase of tickets. The exemption gave a sudden spurt to counter bookings at airports and railway stations, as travellers were seen booking tickets for the next season as well. “At the onset, the sale of tickets at airport counters was seeing a 20 per cent rise owing to the acceptance of old Rs 500 and Rs 1,000 currency notes till November 24,” Bajpai said. “Those willing to buy flight and train tickets over the counter at airports and railway stations with old currency notes are actually making travel plans, for even several months in advance.” 

Segment-wise, the airline sector started giving out discounts to cope with reduction in airline bookings after the government’s recent decision. “The airlines have reported a short-term drop in ticket sales after the demonetisation announcement by the government, and in an attempt to catalyse demand and bring travellers back to the market, we are seeing airlines and hotels offering discounts,” Sharat Dhall, Chief Operating Officer (B2C), Yatra.com, said.