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Indian tourism wary after attacks on US

India's hotel and travel sectors face a grim outlook over the near term as last week's attacks in the United States scare away tourists and business travellers.

"There are some cancellations, mostly for the last week of September and the first week of October," R K Krishna Kumar, managing director of Indian Hotels Co, one of the country's largest private hotels group said.

Hans E Koch, vice-president at Bombay's ITC Grand Maratha, part of ITC Hotels, told Reuters it has already had 500 cancellations for September-October. "People are also generally now a little wary to travel to this part of the world," he said.

The United States has threatened a military assault on Afghanistan, if it does not hand over Saudi-born dissident Osama bin Laden, identified by America as the prime suspect in the devastating attacks on New York and Washington.

Last year, 309,000 US tourists visited India, making them the second-largest tourist group after 354,000 visitors from the United Kingdom, according to India's tourism ministry.

Western Europeans are the biggest group to visit India, followed by South Asians and North Americans, it said.

Industry officials say the fear is things could worsen if the action shifts to this part of the world.

Ashwini Kakkar, chief executive officer of leisure and travel firm Thomas Cook, said it was difficult to say how things would shape up. "The events of the next few days will dictate that."

At Tuesday's close, shares of firms like Thomas Cook (India) Ltd, Indian Hotels Company, ITC Hotels and Hotel Leelaventure have lost 11-19 per cent since the attacks -- while the 30-issue Bombay Stock Exchange index has lost 11.7 per cent.

BACKLOG

Kakkar said there was a backlog of about 50,000 business travellers from the past seven days, waiting to head to the United States, and was likely to take about two weeks to clear.

Many will be software engineers who have no choice but to get to work. A spokesman for Tata Consultancy Services, India's largest software enterprise, said about 200-300 software engineers were waiting to fly to the United States.

Some multinationals like Pfizer Ltd, an affiliate of Pfizer Inc, and Novartis India, a unit of Novartis AG, have received instructions from their head offices telling staff to travel only if absolutely necessary.

"The theatre as it were has changed and moved to South Asia. No one knows which air corridor will be blocked. People will also have generally become wary of travelling by air," Kakkar said.

PEAK SEASON

"We are a little away from the peak tourist arrivals season of November-December-January. There have been no major changes in that yet," Indian Hotels' Kumar said.

But cancellations could reach a peak if there was an outbreak of hostilities, he said.

If hostilities do break out, it will be truly unfortunate for India's struggling tourism industry, which has been affected by natural and man-made calamities in and around its peak season in recent years.

These include an outbreak of plague in the western Indian city of Surat in September 1994, the10-week Kargil conflict with Pakistan from May 1999, the earthquake in Gujarat in January 2001.

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