TOURISM
STRANDED GUESTS

HOTELS
CHECK-OUT TIME

INFOTECH
DOLLAR NIGHTMARE

Tour operators reported up to 50 per cent cancellations of bookings by overseas travellers to India in the first week after September 11. Tougher and longer airport check-ins and stricter visa requirements will put off many travel plans.

Western countries and MNCs have put out travel warnings. On the flip side, domestic tourism could become cheaper due to aggressive promotion by tour operators.

Hotel occupancies, which are down to 45 per cent, are expected to fall further as cancellations pour in across the country. The usually busy October-March period is unlikely to revive business this year.

Worse hit will be the hotels catering to business travels as companies across the globe cut travel. Management guru Alvin Toffler and Microsoft's Rick Belluzzo are two high-flying business travellers to cancel India visit.

With 62 per cent of the Rs 28,000 crore Indian it exports going to the US, even a temporary setback to America will hit business. Small it firms may struggle to survive. Business plans and meetings are on hold across the industry.

The industry's growth, already lower in the first quarter of 2001-2, will be further hit. Some hope the $40-billion US bailout package will benefit Indian it firms.

Impact: Tourist inflow and earnings to fall drastically; agencies to post losses.

Impact: Room occupancy to fall despite the onset of busy season, tariffs may be cut

AUTOMOBILES
BUMPY RIDE

AVIATION
CLIPPED WINGS

GEMS & JEWELS
LOSING LUSTRE

Barring some old models, most cars in India have 20-40 per cent imported components. They will become costlier with every fall in the rupee value against the US dollar. Maruti and Hyundai have hinted at a price hike.

That won't be good for an industry that has been trapped in falling sales for the past 18 months and was hoping for a demand pick up during the coming festival season between October and December.

United Airlines has suspended its operations in India. Northwest Airlines has cancelled flights to Delhi. More than 40,000 lay-offs announced in a week. Some jobs on the line in India too.

International flights are facing up to 50 per cent cancellations. For domestic airlines, the slack season will continue well beyond October. With most international airlines struggling to keep afloat, the disinvestment of Air-India will remain in deep freeze.

Already down by 12 per cent between April and August exports will crash further because the US accounts for 50 per cent of India's gems and jewellery exports. A rough estimate of export loss due only to the attack on America is $300 million.

Domestic demand too is expected to be lacklustre, though demand for gold may rise if people look for safe investment options. Global demand for low-priced gems may rise.

Impact: Higher security, insurance and fuel costs could lead to higher fares.

INSURANCE
RUN FOR COVER

ADVERTISING
COMMERCIAL BREAK

Most US-based insurance firms having just entered India will face huge payment obligations back home. That will make insurance costlier, particularly for aviation and big businesses. Of the Rs 11,000-crore annual premium, 60 per cent is re-insured abroad.

Ensuring risks abroad will be more expensive. On the positive side, business may grow in value and volume as premiums rise and awareness of insuring risks grows among businesses.

Companies are expected to defer new investments, product launches and promotions for some time. That will result in fewer business opportunities for advertising agencies and lower advertisement revenues for media companies.

Hit by a global slowdown and domestic shake-out, the Rs 7,300-crore ad industry was already being squeezed. Things will get worse just before the onset of the busy season.