NEW DELHI (NNN-Bernama) -- The tourism sector is taking a direct brunt from the dip in the Indian Rupee and the troubled aviation sector in India is not helping the situation either, says Travel Agents Association of India (TAAI) President Iqbal Mulla.
The death of India's leading leisure travel service provider Raj Travels' owner, Lalit Sheth, recently, just goes to show the current state of the industry.
"His death was shocking, Sheth was known for creating the all-inclusive overseas tour packages. It is sad to lose an industry partner in such tragic circumstances," he told Bernama in an e-mail interview.
Sheth, a well-known travel guru, allegedly committed suicide by jumping off the Bandra Worli Sea-Link Bridge in Central Mumbai due to financial problems.
Mulla said the declining Rupee, which fell to an all-time low of 57.32 against the US dollar in late June, was definitely impacting the travel and tourism industry.
"Fares are increasing for both domestic and international routes. So, both outbound and inbound tours are affected," he said.
Asked if Sheth's case could have been an isolated one, Mulla said:"No. The industry as a whole is feeling it, as foreign exchange plays a major role."
The International Air Transport Association (IATA) reported on Aug 2, that all markets, except India, showed an expansion in demand in June compared with the previous year.
India's domestic travel fell 0.7 per cent in June even as capacity expanded by 4.5 per cent.
The load factor was 74.2 per cent. This is the second month of weak year-on-year growth for India, and the growth trend continues to be flat since the beginning of 2012, said IATA.
India's aviation industry has been in massive turbulence with heavy losses and debts, resulting in pilot strikes due to unpaid salaries.
There seems to be no end to this with the government sitting idle on plans to liberalise the industry, such as allowing foreign airlines to take up 49 per cent stake in domestic airline companies.
"Inconsistent airfares and web parity, weekly payment being thrust upon the travel agencies, reduction of commission every now and then is the other major issues dogging our trade," he said.
Reduction in commissions is hurting the business a major way, Mulla said.
TAAI, he said, has been highlighting the issues, which included flight delays, cancellation and low-quality hotels in the country, to the relevant authorities.
However, the issues remain and continue to haunt the industry.
He said among the solutions that were put forward to the authorities were to accorded tourism a 'National Priority'.
Proposals also included the establishment of a National Commission on Tourism headed by the Prime Minister and tourism infrastructure status for Hotels, Convention Centers and Airlines.
There is also a proposal to accord exporter status and benefits given to other exporters to the travel & tourism industry and related sectors, recognized by the Ministry of Tourism, which rakes in foreign exchange/Indian Rupees to the country.
Adequate infrastructure, which is another challenge for the industry, has to be met with a mutually acceptable Public Private Partnership model approved by the cabinet and the state governments.
"Connectivity to most frequented tourist destinations need immediate attention," Mulla said, adding that the government should re-look at fiscal measures and taxation, such as faster implementation of Goods and Services Tax at source.
He said, GST should cover all interstate taxes on vehicle, road tax and toll tax to encourage seamless interstate travel for tourism and lastly creation of National Tourism Board with private sector involvement, he added. --NNN- BERNAMA
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