Deepesh Mehta, a financial advisor in Bengaluru, had planned a year-end family holiday to Lonavala, near Pune. But he has now cancelled it, fearing cash crunch.
“There is a shortage of Rs. 100 notes and cards are not accepted everywhere,” he said, adding that he has only postponed the vacation to summer, when he hopes the situation will be more stable.
Mr. Mehta is not alone. The top holiday destinations in the State, Hampi and Mysuru among others, have reported a decline of nearly 50 per cent footfalls since November 8, when the demonetisation was announced.
B.S. Prashanth, president, Mysore Tourism Forum, said that tourist footfalls in the heritage city had fallen by over 40 per cent. Sources in Hampi said that the weekend trips by locals had almost been washed out.
It is not just the influx of tourists, but even locals have also been cancelling even pre-booked trips. Joy M.P., Voyargo Vacations, said that in the last two weeks over seven of his clients have cancelled their trips, most of them over concerns over demonetisation.
“People cancelling trips are assuring us that they will do it with us in the coming summer, but no confirmation. It may not be for cash crunch alone. For most businessmen, the priorities have suddenly changed and none are ready to spend on a holiday,” he said.
More than cancelled trips, what has left the tourism sector more worried is the steep drop in the number of inquiries and bookings for year-end holidays.
“This is the season for year-end holidays, as most of those employed in the formal sector want to claim their Leave Travel Allowance, exhaust their leaves. But compared to the usual business we do during November – December months, the inquiries and booking are down by more than 40 per cent,” said Diwakar, who runs a travel agency in north Bengaluru.
Mr. Joy hoped that the cash situation would improve by mid-December, otherwise the the entire year-end holiday business would be wiped out this year, he feared.
As tourism has been hit, the allied industries, like hospitality and tourist taxis, have also been hit hard. Nagaraj, who runs Mango Tree restaurant in Hampi, said that the business had dropped by over 50 per cent especially during weekends when locals come on holidays.
Prashanth of Mysore Tourism Forum said that the occupancy rate in most hotels had been dull and bookings for rooms for the next couple of weeks had also been discouraging.
Radhakrishna Holla, president, Bangalore Tourist Taxi Owners’ Association, said that while they have seen cancellation of trips by over 30 per cent, their bookings during weekends which were mostly by families for pilgrimages and holidays, had come down by more than half.
Backpackers are the hardest hit
Juan Martin and Paula, from Spain have been on a backpack trip in India, from October last week and were in Bengaluru over the weekend. “When the currency ban was announced we were in Hampi and for two days we couldn’t get sufficient exchange. But locals were helpful. Situation is a bit better in cities like Bengaluru. But we have to stand in long queues,” Mr. Martin said.
Stories of locals helping out foreign tourists are also abound. Sources in Hampi said that hotels had given services to backpackers on credit and have been repaid through online payments later. Joy M.P., Voyargo Vacations, said that his driver had paid for much of the expenses of a visiting Qatar family to be repaid later.
The backpackers are the most hit among foreign tourists, say travel firms. “For those who have come on package tours, most of their expenses have been factored in the package and are mostly unaffected. We have been advising them to use hotel taxis, buy water at hotels so that they can pay through international credit/debit cards at the hotels. In fact, demonetisation has brought a shift from the informal sector to the organised in travel industry, which we welcome,” said Anik Khadelwal, CFO, Cox and Kings, travel firm.
