Elusive refunds pose headache to travel industry

Putting plans on hold: Passengers wearing protective masks arrive at the international airport in Mumbai.

Putting plans on hold: Passengers wearing protective masks arrive at the international airport in Mumbai.   | Photo Credit: Mitesh Bhuvad

With the government suspending all tourist visas till April 15, requests for cancellations have shot up

Securing refunds for high-spending foreign tourists against cancellations is proving to be one of the biggest challenges for people in the travel industry.

With the government suspending visas, requests for cancellations have shot up, but unlike major hotels and airlines, big-ticket holiday packages like tiger safaris and the Palace on Wheels are not entertaining refunds.

Several groups from Germany and France were due to visit India and had adopted a wait-and-watch approach, but Wednesday’s decision of the government to revoke visas has led to forced cancellations. “There are major challenges on the refund part. Most hotels, major airlines and taxi operators are more receptive and cooperating with refunds. It is that some government entities are just not responding,” said Pronab Sarkar, president, Indian Association of Tour Operators (IATO).

IATO on Thursday had appealed to the government to review the travel ban after 14 days and waive the GST for the travel industry for one month. It has also sought the intervention of Ministry of Tourism with regard to issuing refunds.

Mr. Sarkar said besides the Palace on Wheels, where tariffs for the seven nights and eight days trip ranges from ₹2.73 lakh to ₹7.56 lakh per person, national parks are refusing refunds despite taking advance payments.

The luxury train takes tourists to Jaipur, Sawai Madhopur (Ranthambore National Park), Chittaurgarh, Udaipur, Jaisalmer, Jodhpur, Bharatpur, and Agra before returning to Delhi. The Indian Railway Catering and Tourism Corporation, which operates the Maharajas’ Express, is however promptly giving refunds to tourists.

Mr. Sarkar said, “Refunds are due from Ranthambore, Corbett, and Pench national parks. We have told them that this is not the time to make money but to cooperate with the tourists so that they get back their refunds and plan trips in the near future. If we cancel and not refund it means that the chapter is closed and this will only lead to the tourists telling others not to visit India because the money gets stuck. This will have a bad impact.”

Foreign tourists already in India are feeling the effects of the travel restrictions. In Punjab, a group of tourists from Denmark, wanting to attend Hola Mohalla, were asked to undergo a medical check-up. They were later denied permission by the district administration. Hola Mohalla, which is held between March 10 and 12, is a Sikh festival that takes place on the second day of the lunar month of Chett. Similarly, tourists had to leave Hampi in Karnataka and move to Tamil Nadu as local government officials panicked and asked them to leave.

Rajesh Mudgill, secretary IATO, said the ban on all travel for a month will have a cascading economic impact and lead to job losses in the hotel, aviation and travel sectors. “We estimate it will lead to direct loss of not less than ₹8,500 crore,” he said.

Subhash Goyal, chairman of Assocham National Council on Tourism and Hospitality, said he foresees job losses in these sectors as companies are trying to tide over the crisis by removing non-essential work forces and stopping recruitment.

Mr. Goyal said, “The government should review the decision to suspend visas for a month and allow inbound travel through limited gateway cities. If no visas are valid, within the next 10 days the travel and tourism industry will come to a virtual stop. It would mean that everyone will cut down costs and terminate non-essential staff and stop recruiting additional staff.”

Gurbaxish Singh Kohli, vice president of Federation of Hotel and Restaurant Associations of India, said hotel room cancellations had crossed 80%. “New bookings are almost completely on hold, including the non-resident Indian segment, which accounts for 60% of tourism revenues mostly from April to September,” he said.

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Printable version | Jun 4, 2020 7:22:53 PM |

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