ESCALATING petrol prices in India – which saw hikes of some 11 per cent recently – and a higher service tax are making some Indian DMCs jittery over an expected dip in demand from corporate clients.
Om Prakash, director of Inorbit Tours, said: “Corporates will be compelled to think of alternative destinations. While businessmen who have dealings in India will continue to travel to India, other corporate groups will certainly look at comparable destinations with lower costs. India will lose business to our neighbours, which have better facilities and competitive prices.”
To stay competitive, Prakash said Inorbit Tours had no choice but to “cut into (its) own profits”.
Amaresh Tiwari, managing director of A T Seasons & Vacations Travel, said his company had to bear the price difference in fuel costs and taxes for clients who signed contracts earlier on.
Tiwari also noted that some clients were looking for ways to reduce travel costs in India, such as taking taxis and having most meals outside the hotel.
Article by Divya Kaul.