People queuing outside banks in Hyderabad last month to deposit banned notes

The inbound trade in India is beginning to observe fallout from the government’s demonetisation drive and fear that business will be considerably affected if the cash crunch is not resolved soon.

On November 8, the government declared all currency in denominations of Rs500 (US$7.40) and Rs1,000 illegal tender in hopes of curbing the flow of black money in the Indian economy.

“Though a welcome decision, this is a matter of concern for the inbound sector. Foreign tour operators and tourists are raising doubts before booking their holidays to India because they’ve been seeing visuals of long queues outside banks and ATMs in the media,” Ravi Gosain, managing director of Erco Travels said.

“Most of the foreign tourists who book through tour operators pay in advance for their tours but still they need cash for buying souvenirs and paying tips.”

Gosain is not seeing any decline in enquires or arrivals, but said the situation could change if the cash crunch persists.

Louis Dsouza, executive director of Tamarind Global, is already witnessing effects of the currency crisis. “Some foreign tour operators have dissuaded guests from travelling (to India) till we tide over the issue,” said Dsouza, who is concerned about the availability of Indian currency at ATMs and across hotel counters.

The impact on tourism is especially palpable as a number of historical monuments managed by Archaeological Survey of India (ASI) accept cash as the only mode of payment, posing a challenge for tour operators when they book for groups.

“Entrance fee for a few monuments managed by ASI can be made online, but the website is unable to handle the (volume). This is a serious problem that is giving bad name to India,” lamented Gosain.

A 6.5-magnitude earthquake struck Banda Aceh yesterday, jolting Sumatra’s northernmost province in the early hours of Wednesday morning.

The Indonesia media reported that the deadly earthquake has killed at least 97 people and injured hundreds more. Many homes, mosques and buildings were also damaged in the predawn quake.

The search operation for survivors is still ongoing.

Aceh was devastated by Indian Ocean Tsunami in 2004, which killed some 150,000 people in the province alone.

Garuda Indonesia will launch the first direct connection between Indonesia and India when it begins Jakarta-Mumbai flights, via Bangkok, from December 12.

Utilising a Boeing 738 aircraft in a two-class configuration, the thrice-weekly service will operate on Mondays, Wednesdays and Fridays.

With the Mumbai service, Garuda Indonesia now adds the Indian subcontinent to its network.

Apart from boosting trade between the two countries, the new route is expected to drive inbound tourism to Indonesia from India. Indonesia is currently one of the largest markets to India with 350,000 people currently travelling to the region on both business and leisure.

A new European leisure airline group is set to emerge from a joint venture between Etihad Aviation Group (EAG) and Europe’s largest tour operator TUI.

The new airline group, headquartered in Vienna, will have a fleet of around 60 aircraft offering 15 million seats capacity per year. It will start operations in April 2017, serving destinations in the Balearics, Canaries, mainland Spain and Greece from Germany, Austria and Switzerland.

The planned transaction, which is subject to regulatory approvals, will be preceded by Air Berlin divesting its 49.8 per cent share in its subsidiary carrier Niki to EAG’s subsidiary Etihad Investment Holding Company (Etihad).

At closing of the transaction, Etihad will immediately contribute the Niki share to the new airline group, and will neither control nor become a majority owner of Niki.

TUI will contribute its subsidiary TUIfly to the joint venture, including the 14 aircraft currently operated by TUIfly for Air Berlin under a wet-lease agreement.

TUI will hold 24.8 per cent of shares in the new company and Etihad 25 per cent, while the remaining 50.2 per cent will be controlled by the existing private foundation Niki Privatstiftung.

Meanwhile, Etihad’s acquisition of Air Berlin’s shares in Niki represents yet another cash injection into the debt-ridden airline, reportedly to the tune of US$321 million. Etihad had in 2012 bought a 29 per cent stake in Air Berlin in hopes of boosting its European network, but this was followed by years of loss-making performance by the German budget carrier.

The Parisian Macao

Industry members are confident that Macau, flush with a new crop of hotels and attractions, will be strong drawcards for outbound travellers from Singapore in the coming year.

The 13, MGM Cotai, City of Dreams Fifth Hotel Tower and Lisboa Palace will soon join the recently-opened Wynn Palace and The Parisian Macao, injecting 4,580 rooms into the city’s inventory over the next two years, said Grace Tong, Macao Government Tourism Office’s (MGTO) representative in Singapore.

Singapore is Macau’s top per capita spend source market in Asia, growing 17.1 per cent year-on-year to 1,912 patacas (US$230) in 3Q2016. The average length of stay has also increased from 1.8 nights to two nights, Tong noted.

Although numbers for the first 10 months were down two per cent to 113,429 compared with the same period last year, MGTO’s B2B2C roadshow in May boosted 3Q2016 visitor arrivals and Singapore is expected to end the year in positive territory this year.

Tong added: “Apart from gaming, new attractions like Anim’Arte Nam Van which transformed Nam Van Lakeside Plaza into a waterfront leisure and culture hub offering creative activities, dining and performances, and the year-end Light Festival are giving Singaporeans more reasons to visit or revisit Macau.”

Nancy Tan, managing director, Ik Chin Travel Service, concurred: “We will definitely push Macau as a gourmet, shopping and spa destination with four-day/three-night programmes or a six-day/five-night programme that will include Zhuhai and Zhongshan in Guangzhou.”

Cynthia Kho, assistant general manager, tour, WTS Travel & Tours, said the agency is looking at “less extravagant” programmes to suit customers who are watchful of their travel spending amid a subdued economic outlook.

“There is increasing demand for twin-city programmes and our Macau packages will also include Hong Kong, Zhuhai or the Pearl River Delta on top of the one- to two-night stays in Macau,” she said.

As well, a Scoot sales representative told TTG Asia that the airline is looking into increasing its capacity. Currently, Scoot flies daily to Macau, with an additional flight on Saturdays.