“Business travel has experienced a strong comeback”

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NEW DELHI : The strong rebound in domestic travel and tourism after the lifting of covid-related restrictions is here to stay, said Madhavan Menon, chairman and managing director of Thomas Cook India, a travel services company.

In an interview, Menon said business and leisure travel had returned to near pre-covid levels or exceeded them, with the majority of demand coming from domestic travellers. Edited excerpts:

What is the current state of business travel in the country?

Business travel has seen a strong comeback. We are currently operating at 90% of pre-covid levels. Although, admittedly, the mix of international and domestic travel has changed, with 70% of travel being domestic and 30% international. Sales volumes are higher because air fares are higher. In fact, in the month of April, the business travel unit effectively returned to profitability, at both SOTC and Thomas Cook. During the year, we acquired many cases from large companies.

What types of companies send their executives on trips?

Most of the companies we deal with are all back in travel mode. The majority of them travel within the country and about 30% travel abroad. As it is, international travel is a bit cost prohibitive, so I think it will take a bit longer to get back. But domestic travel covers some of the shortfall.

Isn’t the rise in airfares a deterrent?

While domestic airfares have increased due to rising oil prices, international airfares have increased dramatically and airlines have yet to return to pre-covid schedules.

What about hotel reservations? Reports suggest a drop in demand in the first two months of FY23.

We have seen an increase in hotel rates due to demand. Sterling Holiday Resorts, a group company, is a reflection of this phenomenon. Average room rates are up nearly 30% from pre-pandemic levels. Occupancy rates are 70%. While the December quarter occupancy was obviously higher than the March quarter, the reality is that in the March quarter the resorts were open for approximately 45 days due to the Omicron wave. Despite this, occupancy rates and turnover are relatively close to the previous quarter. Sterling Holiday Resorts has been profitable since March 2021.

Will international tourists make time to visit India?

Long-haul tourists everywhere were expected to take a little longer to return. Mainly because vacation travel around the world is focused on short-haul destinations. This is reflected in data from the United States, Europe, India and Australia.

Visas are very long for Indians. Your comment?

As for Indian tourists, we have witnessed a demand for vacations in Europe and America. However, the delay in obtaining visas for these destinations is a constraint. We expect visa issuance to ease in the second half of 2022. As an alternative, we offer destinations in Southeast Asia such as Thailand, Singapore, Malaysia, Cambodia and Vietnam which have fully opened up and visas are easy to obtain.

So, for now, are companies relying on domestic travel?

Domestic travel is the fastest growing segment and in the current environment, whether we call it revenge or whatever, we’re about 110% of pre-covid levels. Destinations are fully booked – Kashmir, Goa, Kerala and Andamans. We are seeing more interest in destinations like Himachal Pradesh, Uttarakhand, the North East and religious tourism like Char Dham.

Despite the increase in holiday fees?

The cost of vacations has increased due to rising input costs like airfare, ground transportation and hotel rates and a weaker rupee exchange rate. On average, the cost of vacations has increased by 25-30%.

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