Indian travel industry won’t be able to flourish much this holiday season, thanks to demonetisation

The cash crunch, thanks to demonetization, has affected the travel and tour operators in India and that too right at the beginning of the holiday season.

"December is an important month for travel as this is the holiday season, especially in the north, but November has taken a 20% hit even as we slip into December,” Rajji Rai, ex-president, Travel Agents Association of India (TAAI), told ET.

Travel operators are frustrated. Though, the airlines have reduced their prices, people aren’t still ready to spend on a vacation.

"Even though airlines have reduced their fares, people aren't interested. There's also a sense of panic while travelling abroad. Usually, it's busy this time of the year, but we are hardly getting calls. "If the situation doesn't improve, we might have to resort to costcutting and layoffs,” Reji Philip, proprietor, Cosmos Agencies, a prime travelling agency in Mumbai,told ET.

Manoj Samuel, executive director at Riya Travels, one of India's largest brick-and-mortar travel agents, echoed similar worries. "Cash component of our business has definitely declined to a large extent,, he said, adding that short-term sentiment will dent overall bookings.

"Foreigners are restricted to exchanging currency up to only Rs 5000 per week. They want to spend, but Rs 5000 is way too little for them. So, they are either postponing their trips or are cancelling them. There has been at least a 25-35% decline in both outbound and inbound travel,” Subhash Goyal, former-president, Indian Association of Tour Operators (IATO), told ET.

Demonetisation has also thrown up a whole bunch of obstacles for tourists travelling in India. For instance, lack of point-of-sale machines at monuments, long queues for forex at airports due to fewer counters are some of the problems they have to face. Online tickets for monuments have to be scanned, but there are no scanning machines installed in monuments.

However, the situation is expected to get better by February-March.