Indian Market & Trends

Travel & tourism sector affected by cash crunch

DELHI: Demonetization has shed its gloomy shadow on the booming tourism and hospitality industry in India.

The onset of the winter travel season has been stymied by the unexpected storm of demonetization, reports Firstpost.

People have curtailed overseas travel and instead are exploring various local tourist destinations. Getting money from banks and ATMs continue to be a hassle with no respite in sight.

The travel and hospitality industries are facing a tough time. Many foreign trips sponsored by big brands largely done through cash transactions is negatively affecting tourism industry and revenues due to the ongoing cash crunch. India’s hospitality industry has been severely affected as the hotels have lost a large number of pay-in-cash-only clientele due to demonetization. Around 60 percent drop in hotel bookings have been reported.

At present, the scenario of the Indian citizens are worse, even if they are rich in terms of money. The wealthy and luxury-driven travellers are shifting their plans and in some cases cancelling holidays completely.

When the rich and exclusive clientele from Delhi and Mumbai shift their birthday / anniversary extravaganzas to Goa instead of Prague or London, it is clear that demonetisation has trimmed their budgets simply because of unavailability of money. It has resulted in a drastic transformation that has veered ‘from International tourism to Domestic tourism’.

Not just travel and hospitality industry, but almost all sectors are feeling the impact of demonetization. Not a single sector is immune to it. The industry’s corporate clientele though is hit, the leisure segment is hit the hardest. Amongst the latter, the international leisure segment has been hit severely.

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