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SARS: Fallout spreads to
India
By Indrajit Basu
KOLKATA - War is fine, not pneumonia. Business
and leisure travelers from India don't mind flying near
a war zone if they can avoid regions infected by the
mysterious severe acute respiratory syndrome (SARS).
According to Indian tourism officials, an increasing
number of travelers now prefer to fly over Europe and
West Asia from India rather than Southeast Asia.
"Outbound passengers to the US and Europe from
India are opting for this longer route despite the fact
that it takes them closer to the war zone," said Seema
Luthra, of the travel agency Galileo India. "India's
outbound travelers do not even want to transit through
these countries," added Vijay Chadha, another travel
agent.
The SARS scare has also prompted Indian
companies to cancel scheduled meetings and corporate
bashes in long-time favorite cities Singapore, Hong
Kong, Bangkok and Pattaya, but not much of their travel
schedules to countries in the West. In fact, according
to travel agents, the interest of outbound leisure
travelers from India has increased with the hope of
bagging bargains.
Consequently, outbound traffic
from India to Southeast Asia has already dropped by 15
percent to 20 percent and travel agents say that
cancellations have shot up to as much as 50 percent in
the Hong Kong/China sector.
Despite earlier
reports of India having one case of SARS, this has not
been confirmed and the country has not been included on
any World Health Organization warnings.
Obviously, the airlines are bearing the brunt.
Some of the region's international airlines, such as
Emirates, Kuwait Airways, Singapore Airlines, Thai
Airways International and Cathay Pacific, have reported
that following the SARS breakout, their passenger load
factors have dwindled by 35 percent to 50 percent, which
has forced them to cancel several outbound flights from
India. "Until about two weeks back, bookings on Cathay
Pacific or Singapore Airlines were on a waiting list,
but now, one look at the computer reservation system
reveals that seats can be gotten over the counter," said
an official from the travel agent Amadeus India, adding,
"This gap will take time to be filled. Only European
carriers like Lufthansa, British Airways and Air France
are doing better than most other airlines in the
troubled sectors."
However, even if the outbreak
SARS in Asia may lead to a drastic reduction in economic
activities in almost the whole of the Asian region,
interestingly, according to some experts, India may
witness economic benefits in the short term.
Hong Kong-based T J Bond, an analyst at Merrill
Lynch, says that India could move to the top spot with
the strongest positive view for investment. And, says
Tan Choon Hoe, a portfolio manager with AIB Govett
(Asia) Ltd, "We believe India will be among the few
stable economies in Asia, less immune to a global
slowdown."
Domestic tourism is another expected
gainer from SARS. The Iraq war and the killer virus, say
tourism sources, are forcing many Indian vacationers to
cancel or postpone their international travel plans. And
local destinations are hardselling themselves to become
the most-preferred tourist spots this season. For
instance, one of India's premium hotel chains, the
Oberoi Group's Vilas range of properties, has cut room
rates by 50 percent. Others, like the Taj Group, Kuoni
Travels and SOTC, have also started offering special
packages to woo domestic tourists.
There is
another obvious gainer: the telecom sector. "Travel to
places like China, Vietnam and Singapore has definitely
been curtailed," said Pradipta Sen, a company executive
in a multinational company. "We are basically relying on
video-conferencing and tele-conferencing to keep in
touch with our business interests there." So, for many
multinationals in India, it's time to get those overseas
calls moving to Southeast Asian locations, shoot e-mails
and video-conference. The result: Data Access, a major
telecom player, has seen its India-Singapore /Malaysia
traffic rise by 15 percent, and Dishnet DSL, one of the
two largest video-conference service providers, has just
made its services the cheapest in the country.
Nevertheless, Indian hasn't entirely escaped the
negative impacts of the dreaded flu. For starters, the
outbound tourism sector, aviation and hospitality
industries have taken a blow. And although the deadly
virus hasn't started harming Indians just yet, it has
certainly bitten the country's technology sectors,
particularly information technology. Analysts and
industry bodies are convinced that IT business sentiment
will be deeply hurt and many fear that SARS could even
dwarf the damage caused by the Iraq war, if not
contained soon.
"Business sentiment is getting
impacted, with most multinationals controlling their
Asian operations from Southeast Asia. Even though there
is no evidence of it spreading in India, one does hear
about cancelled or postponed India trips," says Kapil
Dev Singh, head (research), IDC India.
Software
lobby organization the National Association of Software
and Services Companies (NASSCOM) is also worried that
the killer virus could impact Indian software exports if
it drags on. "It could pose serious problems if it
continues for the next three to four weeks. This is a
lean period for visits as most companies are busy making
annual reports, but prolonged uncertainty would be a
problem," says Sunil Mehta, vice president, NASSCOM.
Other analysts warn that the country could be
sitting on a time bomb if SARS touches shores. "Mystery
flu could be a more serious problem than the Iraq war
for the Indian tech industry if it reaches India. And
what would make things worse is India's disaster
management system, which is ill-equipped to handle a
problem of this magnitude," says Sameer Kochar, CEO,
Skoch Consultancy Services.
No doubt then, at
least one sector of the country's industry, is sitting
on tenterhooks.
(©2003 Asia Times Online Co,
Ltd. All rights reserved. Please contact content@atimes.com
for information on our sales and syndication
policies.)
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