Friday, September 26, 2014

Spiralling prices of travel in India

Indians are definitely travelling a lot more these days. The unprecedented mad rush  witnessed during last long weekend (15-18 Aug 2014) of people trying to get way from Delhi was a good example. Many had to eventually come back for lack of hotel accommodation.  I had to skip breakfast because all eateries were overcrowded and was unable to cater to the sudden rush. You cannot afford anymore to travel without prior confirmed hotel booking, especially on such long weekends. People are travelling to even remote unheard of destinations. Hoteliers are reaping huge profits of this sudden charge of tourist ready to travel any season. The ever burgeoning travel cost had sent alarm bells ringing.

Source: TOI
First piece of news came in the last week of August, 2014 from none other than the Union Minister for Tourism. PTI reported quoting him that the Union Tourism Ministry has appealed to the Finance Ministry to lower taxation on tourism products and related services, which will result in increasing footfalls in the country. "We have requested the Finance Ministry that the taxation on the tourism products and related services should be lowered so that we can attract more visitors to the country," Union Tourism Minister Shripad Naik told PTI. He said that the services like tourist taxis, hotel tariff should have lower taxes, which will make destinations cheaper compared to international rivals. "The tax rebate can be offered to hotels so that they will have low tariffs. We have also asked the ministry to consider cutting down the visa fees. We have 100 US dollars as Visa fee while Sri Lanka charges only 25 US dollars. We need to bring visa fee at par with other world destinations," Naik said. He said that the Finance Ministry has in-principle agreed to look into the demand and lower the Visa charges. 

Things like lowering Visa charges can directly impact tourism as more tourists will be inclined to come. On my trips to Singapore, Malaysia and Thailand, I had paid Visa fee of 1250, 850 and 2000 rupees. Thus at $100 or roughly 6100 rupees, India is definitely pricey.  This percolates down to entire tourism industry, specially the hotels. I beg to disagree with the honorable Minister that inflated prices of hotel charges are because of high taxes.  It is because of greed of hotel owners. I had written an article earlier – ‘Is travelling in India cheaper’ where I explained why travelling to Phuket or Langkawi is cheaper than to Andamans. Hotel prices in India are much higher than its competitors Thailand and Malaysia. Even the dirty, filthy hotels in India tend to charge around 1500 these days. If you are looking for decent accommodation, then you need to be ready to shell out 2500-3000 per night. Most of my travel is for wildlife photography. Crores of black money had been invested in building luxury resorts across most wildlife parks in India. The tariffs of some of these resorts during season will make you giddy. The published AP rates for many of these resorts are around 8000-10000 rupees per night for two. Fortunately no frills alternatives are available for people like us. I do not go to wildlife parks for a swimming pool, spa and gym. However, I do go to these places during off-season when parks are closed for monsoon, to enjoy these facilities at half the price.

As travelling to Thailand or Malaysia is cheap, many Indians prefer to spend their holidays in those countries. One of my guides in Bangkok politely queried if income of Indians had gone up significantly because she had observed that number of Indian tourists had gone up significantly in recent times.  Disposable income had certainly increased with economic growth, but mindset had also changed. If your holiday budget is 40K per head, then one would prefer to spend it on a foreign trip. Because of relatively lower hotel rates, tourists tend to stay for longer duration awhile travelling abroad. This is probably one of the reasons for Indians figuring among highest spenders on hotel overseas.

These stats should open the eyes of Indian hotel industry. Rather than looking to profiteer and mislead people in the name of high taxes, they should look to improve occupancy by better services. Indians travel all season. So rather than making quick bucks in so called high season, one should look to make entire year a season with improved occupancy.

Thursday, September 04, 2014