‘business Travel Has Seen A Big Bang Return’

In an interview, Menon said both business and leisure travel has recovered to nearly pre-covid levels or have surpassed, with majority of the demand coming from domestic travellers. Edited excerpts: 

What is the state of corporate travel in the country right now? 

Business travel has witnessed a big bang return. We are currently running at 90% of pre-covid levels. Though, admittedly, the mix of international travel to domestic travel has changed with 70% 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 actually returned to profitability, both at SOTC and Thomas Cook. In the course of the year, we’ve acquired a lot of large corporates’ business.

What types of firms are sending their executives to travel?

Most of the corporates that we deal with are all back in travel mode. The bulk of them are travelling domestically and about 30% are travelling internationally. Given the current state of affairs, international travel is a little prohibitive in terms of cost, so I think that will take a little more time to come back. But domestic travel is covering some of the shortfall. 

Are rising airfares not a deterrent?

While domestic airfares have risen consequent to the rise in oil prices, international airfares have risen dramatically and airlines have yet to return to pre-covid schedules. 

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

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

Will international tourists take time to visit India?

Long-haul tourists anywhere in the world were expected to take a little more time to come back. Primarily because the focus of holiday travel across the world is on short-haul destinations. This is reflected in data coming out of the US, Europe, India and Australia.

Visas are proving to be very long drawn for Indians. Your comment? 

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

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

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

Despite holiday costs going up?

The cost of holidays have gone up on higher input costs like airfares, ground transportation and hotel rates and a weaker rupee exchange rate. On an average, the cost of holidays have increased by 25-30%.