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.

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Author: seoquadlabs

QuadLAbs Technologies is the world's leading travel technology provider company. QuadLabs offers online booking engine, travel booking software to the travel companies. We specialize in providing most comprehensive travel distribution platform which empowers travel intermediaries, travel management companies, aggregators, distributors, OTAs and tour operators globally which helps boost their travel business revenue. Our Products – • XChange Version 11.6: One of the most comprehensive travel distribution platform for travel intermediaries which helps them to sell across multiple sales channels • B2B Dashboard: Empower travel agents to centrally manage all their B2B agents and subagents. • B2C Online Booking Engine: Provides booking engine functionality for multiple services like Flights, Hotels, Package, Transfer and sightseeing, car, insurance and many more. • Mid Office: Known as “central booking handling interface” where all the bookings and final documents are processed. • Corporate Booking Tool: Offers complete corporate workflow management from enquiry generation booking processing and authorization. • Contract Management & Distribution: Provides independent modules for managing contracts of hotel, sightseeing, transfer and many more. • Flight Inventory Management System: A system to manage and distribute flight inventories through multiple sales channels. • Package Management and Distribution: Helps in managing pre-defined FIT and GIT packages with the combination of different components, services, categories, package type and costing.

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