Some Notable Effects of Demonetisation on Travel Industry
Since the demonetization hit the Indian economy on November 8th, 2016, India witnessed a huge let down in the economy. The bold move by PM Modi, to remove Rs 500 and Rs 1000 notes as legal tender while introducing new Rs 2000 notes in the circulation may be the right and most needed decision to be made in order to control the black money in the country, but it surely made the economy came to a temporary halt, for which he was majorly criticized as well. Travel industry is one such industry that suffered greatly from this heroic decision. Let’s point out some areas where the effects of demonetization hit immensely to the industry.
1. Inbound and outbound travel: Most Indian travellers found it extremely cumbersome as cash in hand was not a legal tender currency. Card facilities in small shops and roadside market were not available.
2. Domestic travel: People travelling within the country also tackled issues related to payment Hotels and restaurants along with transportors did not accept old notes.
3. Reduced traffic on online travel portals: Indian travelers neglected the thought of traveling after the ban, hence the online travel websites saw a considerable decrease in the traffic.
4. Travel plans postponed: Many travelers postponed their travel plans due to shortage of money. The main priority was to get cash in hand as the Governement had a deadline to exchange old cash into new ones.
5. Airline bookings: The unexpected ban also hit the airline industry hard as lots of travelers cancelled their air tickets.
6. Restaurant reservations: Restaurants in big cities showed a massive drop in reservations. There were many cancellations and no shows, which affected both small and large scale hoteliers and restaurants.
7. National monuments: The number of visitors to national heritage sites showed a significant decline as well. This was mainly due to the shortage of new currency, which made both the domestic and foreign tourists face many issues.
8. Increased digital payment: Not all the effects of demonetization to travel industry were negative. After the bold decision, travel industry showed a brilliant increase in online payments where the travelers booked their hotels, flight and other travel products using their cards and Internet banking. It also allowed small vendors to use digital wallets as a payment medium, which helped both the travelers and the business owners greatly.
As stated by PM Modi during his demonetization speech that people of India would face difficulties for a couple of months, however, it will only be temporary. His words was true and today, even after so many issues, travel industry in India has shown a rapid growth in the current year.