India's Tourism Industry Faces Slump in Wake of Terror Attacks

By Anjana Pasricha

New Delhi
19 December 2008

India's tourist industry is facing a slump, both due to last month's terror attacks in Mumbai and the global economic slowdown. Two luxury hotels popular with foreigners were among the targets of the terror attacks in the deadly attacks.     

In the three weeks since gunmen mounted assaults on the Taj Mahal and Oberoi Trident Hotels in Mumbai late last month, hotels across the country have been flooded with cancellations from foreign tourists planning to visit India. At least 26 foreigners, many of them staying or dining at the hotels, were among the fatalities of the attacks, and many others were injured.

The attacks occurred during the peak tourist season for India, where overseas visitors usually arrive in the winter months.  

Vijay Thakur, president of the Indian Association of Tour Operators, says there has been a 15 to 20 per cent drop in the number of visitors to the country since the Mumbai attacks.

"Any percentage like this, 15 to 20 per cent cancellations, really is a cause of worrying, it would definitely impact the growth of international arrivals," said Thakur. "More cancellations were because of the fact, you see there were lot of travel advisories from USA, UK and some other countries also like Singapore, Australia."

The financial hub of Mumbai and tourist destinations which lie close by such as Goa, are the worst hit.

But many in the tourism and travel sector are hoping that confidence will slowly recover as the memory of the attacks gradually ebbs.  

Sanjoy Pasricha, vice president, marketing, at the Hotel Leela Venture Ltd., says tourists and other visitors will gradually return in the weeks to come. Leela runs luxury resorts in Mumbai and Goa.  

"We have got a spate of people who have canceled bookings till 31st of December," said Pasricha. "Beyond that I think the fear element is going down and people are planning at this particular point of time to return to their travel plan post 10th 12th of January."

The falling number of visitors has been a double blow for the tourism industry, which was already finding it hard to attract tourists from Western countries, due to the slowing economies in United States and Europe.  

Last year the number of visitors to India grew by 12 per cent, but the global slowdown had prompted the industry to revise growth estimates to just five per cent this year. However, the tourist industry fears that the terror attacks may make even this difficult to achieve. Five million foreign tourists visited India last year.