Who is betting on a short war? It’s not the Bush administration but the Indian travel industry. The fate of the travel industry is once again at stake. The will to win, desire to succeed and urge to survive can well describe the mood of the Indian travel industry that is in the line of fire, discovers Raadia Mukadam

The message that was communicated after a recent closed door meeting held by the MoT with representatives of the travel trade in New Delhi, was that there have not been major cancellations, just a slowdown in fresh bookings. Contradicting this, Subhash Goyal of the Confederation of Tourism Professionals says that, there have been 50 per cent cancellations by leisure tourists heading to the US or Britain, but nowhere else. What both sides agree on is that the damage can be contained if the war is short. Industry veterans believe that a lot depends on how aggressive the war gets or how long it lasts. The timing of the war does not as much hurt the inbound season as it is at its fag end but will certainly impair the oncoming outbound season. “The impact of the war, though adverse cannot be quantified as yet, however, the longer it lasts, the worse the impact,” says Meher Bhandara, general manager, corporate communications, TCI, on an ominous note.

The verdict is unanimous, fear psychosis has got the better of both the business and leisure traveller. Lalit Sheth, chairman and MD, Raj Travels and Tours Ltd says, “Yes, the impact may be not as grave as 9-11, but figures obtained reveal that domestic flights are affected to the tune of 30 percent whereas the international flights are affected to the tune of 40 percent. We cannot overlook the fact that after the 1991 Gulf war, the travel industry suffered for 36 good months after the war.”

While this reflects the blow ticketing agents have already received, cancellations to the West are pouring in. Ashwini Kakkar, CEO and MD, Thomas Cook India revealed, “We do expect cancellations of the incoming traffic and charters though so far there has been no pressing of the panic button. On the outbound side, there has been an expected lull in bookings for the US, Middle-East and to some extent Europe.” Gauging the declining traffic to the West, Nalin Kapadia comments, “Though it is difficult to judge final impact, tourist flow to the Far East and South East Asia are bound to increase.” The Indian traveller is resilent and is opting for safer destinations in the Far East, South Africa, Australia and New Zealand which is reason enough to the outbound tour operator to be optimistic.

The Contingency Plan
The September 11 incident had sent the world reeling, what followed in its aftermath sent the travel industry in a tailspin. A catastrophe that taught the industry to have a contingency plan in place. Not wasting any time crying over spilt milk or letting yesterday use up too much of today, the industry is ready with an alterative solution, ‘vision’ being the key word. So rightly does the old adage go, ‘the future belongs to those, who prepare for it today’.

Goyal’s contingency plan is to turn focus on the Asian countries and Australia on the outbound front, and to aggressively promote domestic tourism which will naturally boom as the direct outcome of such a situation. Within the ministry too officials speak of a shift of strategy to South and South East Asia, China and Australia.

According to Kakkar, the contingency plan that Thomas Cook India took was to aggressively keep a control on expenditure, offering alternate destinations and holiday concepts. Thomas Cook also focussed on domestic tourism, introducing rail based packages in India. ‘Reduce costs and better your technology’ is Kapadia’s survival mantra. “Agents should stop providing free services to customers who need to realise that services cost,” added he. In the face of such catastrophes, Sheth advises his industry colleagues to recognise the problem and accept reality. “There is no point dumping the prices and spoiling profitability all together just to sell a seat or package to a hesitant customer. The name of the game is, not to take your eyes away from a macro target only to cater to a micro one,” says Sheth.

Though there has been much talk of agents and tour operators diversifying into travel related services, not many took the cue until the water had risen above the mark and reality finally dawned. Identifying the travel related fears of travellers and especially after 9/11, Thomas Cook got into the travel insurance business. Kamal Ramchand, managing director, Tulip Travels, says, “Travel agents have been surviving on very low margins, we should start increasing our margins, by parting with lesser commissions to customers. Getting into a parallel business is the need of the hour, as dependency solely on revenue ticketing is getting increasingly risky.” Bhandara on the other hand asks tour operators to explore options in domestic tourism and focus on short haul tourism while constantly innovating. The government can help give a fillip to domestic tourism by developing the infrastructure on a war footing.

Looking To Hit A Home Run With Domestic Tourism
The silver lining of this otherwise very dark cloud is that domestic tourism is expected to boom, diverting a large chunk of the outbound leisure travel segment toward Indian destinations. Says Kapadia, “If the government comes up with proper propaganda, domestic tourism should definitely get the benefit of cancelled tourists to western destinations.”

However some agents like Sheth believe that a global crisis such as the on-going war, has already exhibited a tremendous effect on the domestic tourism. According to him, whether the war continues over a period of time or comes to an early end, it will result in a weakening economy, escalating prices and raising inflation, diminishing the spending power of the traveller. The flip side therefore could be bleak with most businessmen opting to conserve income instead of indulging in a vacation.

Though it may seem as though we are moving from crisis to crisis, but the industry though far from the finish line is not yet ready to succumb. Since, necessity is the mother of invention, new trends and innovation are the developments, the industry will witness in the near future and not shutters drawn down!!

The airline industry seems to move from one crisis into another. Is it braced to face the future or will it succumb to the pressure of war...Asks Charmaine Fernz

The US Economic Downturn, September 11, Terrorism and now the Gulf War... Well these bleak scenarios have turned the world of travel and tourism topsy-turvy yet gearing up the industry for uncertain times ahead. With the industry just moving into normalcy post 9/11 and bracing itself for an upbeat season ahead; we have the Gulf War. Well, does it perturb the travel and tourism industry or will we witness courage under fire?

It must be realised that 9/11 shook the industry off its wits and prepared them for any unforeseen circumstance in future. Being a very volatile industry, it is affected by the slightest crisis. Industry veterans like Hans Peter-Doser, general manager, India, Sri Lanka, Maldives, Nepal, Bangladesh and Bhutan, SWISS International Air Lines gives a run down on the status of the aviation industry.

Flight Operations: Most airlines have not over-flown Iraqi airspace since 1991, therefore flying around Iraq is not an issue. However, with the war, ’the theatre of operation’ will determine the route commercial aircraft will have to take. The extent of rerouting to avoid the ’closed airspace’ will determine the operational consequences - longer flying times with additional fuel costs and crew time limitations could make non-stop flights from India to Europe difficult.

Costs: Aviation fuel (ATF) has already seen price increase in excess of 33 percent since last June. The Iraq conflict could lead to further increases which airlines will not be able to sustain and will have to be passed on to the consumer. Moving on what’s surprising is the casual confidence of most Gulf carriers. For Qatar Airways, it will be business as usual. The airline will continue to operate its normal flight schedule. We have access to safe contingency air routes that will allow us to fly around any possible theatre of war. These routes have been approved by the International Civil Aviation Organisation (ICAO) as safe air corridors. These routes may add some additional time to travelling times, but nothing significant. Qatar Airways will only use ICAO-approved air corridors.

After having understood the after-effects, from a business point of view, most airlines are tentative to disclose what would be the expected loss. The general consensus is to ’wait, watch and then calculate’ since it would be too soon to comment.

Surviving The Storm
Having time on hand to prepare themselves most airlines had set requisite contingency plans. Going through a few, one could list the obvious one… suspending flights, rerouting, tighten up safety and security concerns etc. However, most airlines already have operational plans addressing all possible scenarios depending on the size and scope of the conflict. Airlines know on which routes the impact would be most severe and will either reduce or cancel operations to such destinations on a temporary basis. Disclosed Doser, “As far as SWISS goes, no immediate reduction of frequency is foreseen on the India route on account of the Iraq crisis.” On the Gulf front, Emirates is continuing to operate normally except for services to Kuwait that have been temporarily suspended. Said Maurice Flanagan, Emirates Group managing director, “Safety remains a top priority. The airline is monitoring the situation in the region continuously to ensure the well-being of our flight, cabin crews and passengers in every way we can We are using alternative routes where necessary. Emirates has never flown over Iraq, even under normal conditions, and none of our routes takes our aircraft near to that country.” Explaining an An airline’s stance on the use of alternative routes, Flanagan explains that rerouting is not restricted to only times of conflict. Sometimes a routing is varied to avoid poor weather conditions. During the past few months, Emirates has prepared meticulous plans to route aircraft heading east and west along corridors which are safe and secure even in the event of military activity in Iraq. The re-routing for flights to Europe, for example, can be routed north over Iran, Georgia and then west over the Black Sea or they can be routed over southern Saudi Arabia.

Contrary to this Gulf carrier, Gulf Air has announced immediate changes in flying times following the extension of certain routes in compliance with new flight paths approved by the International Civil Aviation Organisation (ICAO). With immediate effect, flying times on flights from Bahrain to Europe, and flights between Bahrain and Tehran have been increased by 45 minutes. Flying times from London, Frankfurt and Paris to Bahrain remain unaffected. Citing reasons Captain Hameed Ali, vice-president operations at Gulf Air clarifies saying: “The extended routes have been implemented to ensure the safety and security of all passengers. This is also our absolute priority, and will not be compromised under any circumstances.” Gulf Air has launched ’Gulf Travel Update’, a dedicated website at www.gulftravelupdate.com to provide passengers up-to-date information on its operations as a result of the onset of military conflict in the region.

All said and done, airlines having witnessed a series of set backs are looking at ways and means to keep this variable industry going. However, just survival strategies works in favour of the airlines, what about the people’s perception of travel?

The Change In Focus
Being a very competitive world, with well-informed travellers, the industry must look at taking precise measures to garner the interest and promote destinations again. For that we have to understand passenger behaviour. The reaction of passengers are markedly different in various parts of the world. The Indian passenger tends to react to such crisis situations in a much calmer and rational manner, as they know from their own experience how things are blown out of proportion by extensive media coverage.

However, the current crisis seems to have caused the passenger to postpone the decision making process as to when and where to spend his summer vacation. Passengers from developed countries on the other hand are not used to conflicts, have little idea of distances from the area of disturbances and might perhaps prefer to stay home and play it safe. Possible ’travel advisories’ warning citizens to avoid certain countries again would have an adverse impact on leisure travel. Westerners normally plan their vacations well in advance, if this uncertainty continues, it could have an adverse impact on tourism to India. There could be a possible drop in the number of foreign visitors coming to India. Should the Indian passengers decide against travelling abroad for their summer vacations, they would then travel within the country. Whether this shift would compensate for the missing foreigners is debatable. Moreover, the infrastructure and service requirements of foreign visitors are different from the needs of the domestic customer. The dollar-based tariff structures would have to be adjusted to accommodate the domestic travellers.

Inbound tour-operators concentrate on providing service and land arrangements for foreign tourists and rarely focus on domestic tourists. Though on a positive note, sources from Qatar mention that people are still coming to Qatar to visit, to work, and for leisure. Most people have become more resilent to world events.

Past set backs have more than enabled the industry to combat critical situations and emerge the winner.