Leena Nandan, Joint Secretary, MoT stated, " There has been a reasonably good growth last year keeping in mind the global economic meltdown and terror attacks. The tourism sector has been one of the fastest growing sectors in the country. It offers immense opportunities to entrepreneurs in various segments and industry should work aggressively to get better results."

K B Kachru, country head, Carlson Group said, "The tourist arrival figures clearly indicate that foreign tourist arrivals have not taken a beating. The tourism sector has shown much faster growth as compared to other sectors in the last few years. Now there is a need to push the tourism sector, and the 2010 Commonwealth Games should bring in the required infrastructure to the country."

According to a report prepared by MoT, there has been an increase in traffic to the tune of 75 per cent with employment generation up by more than 43 per cent between 2002 and 2007. It is estimated that more than USD 6.5 billion of investment has already come for the construction of new star hotels.  The United Kingdom contributed the largest number of visitors with more than seven lakh, followed by the US with almost five lakh. While France has shown a growth of 16 per cent, visitors from Germany has seen a 22 per cent growth. From the South Asian countries the visitor growth in 2008 has been significant at 20 per cent. Latin American countries, particularly Brazil, Argentina and Mexico, where some major road shows were conducted by MoT over the last two years, have shown a huge interest leading to 25 per cent increase in arrivals from Brazil alone.

According to senior government officials who are working on the plan with representatives of the tourism industry, these steps are being taken up to attract tourists into India as there has been a significant drop in inbound tourists following the recent terror attacks in Mumbai. Several foreign embassies had sent out travel advisories to their nationals recommending against travel to India on security grounds. The new package would be offered for one year, the official said

According to latest data available, the number of tourists arrival fell by 2.1% to 5.21 lakh during November 2008 as against the corresponding month last year. The fall in tourist inflow into the country impacts forex earning, which has dipped by 12.5% to $1 billion in November alone. Earning foreign exchange is all the more important at this juncture as exports have been dipping following the slowdown in world economy. Any additional forex earning would help India in maintaining its trade balance, a sector analyst said.

Since aviation turbine fuel (ATF) prices have fallen dramatically in the past three months, aviation minister Praful Patel said on Monday that state-owned Air India (domestic) would be lowering fares in the coming days. Being direct competitors, private airlines will have to react and possibly follow suit. ATF prices have fallen substantially and airlines must pass on the benefit to the common man by making flying affordable again, he said.

Reacting to the minister's call for fare cuts, Kingfisher said it would take a decision on the issue on Saturday. Jet said it has just reduced fuel surcharge by Rs 400 and is not considering any further cuts at the moment. Low-cost carriers are reportedly working on both lower fares and attractive advance booking prices to get passengers back on board.

After seven successive falls since September, the ATF price today is lower than the November 2005 level, when domestic airlines introduced a fuel surcharge of Rs 200 per flier. However, till last month, the fuel surcharge was Rs 2,350 for short and Rs 3,100 for medium-haul flights.

"Traditionally, the year-end is considered the second-largest holiday season for Indians after the summer break when they all travel with families. This season, we have seen a marked shift towards domestic destinations," says SOTC chief operating officer Sunil Gupta. He said 10-12% of the holidayers have given up on foreign locales and shifted to domestic destinations.

Added Cox and Kings executive director Arup Ghosh, "We have noticed people are going to domestic destinations for 4-5 days." Even for foreign shores, domestic travellers are choosing to stay within Southeast Asian countries like Malaysia, Singapore and Hong Kong, which are cheaper and easily accessible.

A 4-day/3-night trip to Goa will cost Rs 9,250 per person (inclusive of accommodation, travel insurance and meals but airfare). Similarly, a 5-day/6-night trip to Kerala covering four cities would cost Rs 16,000 per person excluding airfare.

Choosing an international locale means shelling Rs 32,000-35,000 per person for a 5-6 day trip to Malaysia and Rs 43,000-Rs 45,000 for a 3-4 day trip to Singapore. But the overall sentiment for holiday travel is low. As per market estimates, holiday business is down 20-25% this December compared to last year. ITC Fortune Hotels president Suresh Kumar said, "The overall sentiment is low due to obvious reasons."

The worst financial crisis in 80 years, high oil prices and a slew of militant attacks has hit an industry that has basked in double-digit growth numbers of both domestic and foreign tourists in recent years, according to data from the Ministry of Tourism.

October saw an increase of just 1.8 percent in the number of foreign tourist arrivals compared to the same time in 2007, prompting the Indian government to ask hotels to slash their prices by 10 to 15 percent in the hope of keeping demand high.

"We are seeing the early stages of a slackening of the market," Madhavan Menon, the managing director of Thomas Cook India Ltd, told Reuters, adding that: "2009 is going to be a difficult year."

A slump risks undermining India's enormous growth potential in the tourism sector, which the U.N.'s World Tourism Organisation (UNWTO) said has also been let down in the past by a lack of adequate accommodation and poor infrastructure.

Despite its vast size, diversity, and array of historical monuments, India still ranks at no. 42 in the world's holiday destinations of choice -- below much smaller countries like Belgium (33rd) and Hungary (26nd), a UNWTO report said.

Representatives from the hotel, tour agents and hospitality industries met tourism secretary Sujit Banerjee on Thursday and expressed apprehensions regarding the slowdown. Confirming the meeting, Banerjee said, "We are concerned over the impact of the global recession on tourism. I plan to take up issues related to visa fee waiver and service tax abolition on bookings made by tour operators with the relevant ministries.''

He added that reduction in entrance charges for monuments would also be looked at.

Visa fee waiver at $35 could mean a substantial hit to the coffers. According to sources, there have been complaints about lengthy visa procedures and the high fees from various quarters. At a time when India is a relatively expensive destination, such issues could spell trouble for the country.

India received 5 million visitors in 2007 and is estimated to get 10 million by 2010. Industry forecasts for the tourist season are gloomy with experts saying that foreign tourist arrivals (FTA) could be down by half to 7.8% if India's economic growth rate falls to 7% and global growth rate comes down to 3.2%. Tourist arrivals grew at a whopping 13%-14% in 2007.

Besides providing the much-needed foreign exchange -- India earned Rs 40,712 crore between January to October 2008 -- tourism is one of the country's largest employers.

Amongst other issues that were taken up at the meeting were focus on established markets like US and UK instead of spending time and resources on new and emerging markets.

Hospitality representatives also demanded a cut in luxury tax and road tax. Both issues require state government nod and are nettled with problems as most states disagree on a uniform rate. Sources said that a temporary tax holiday till the Commonwealth Games in 2010 could be considered.

The traditional Pushkar Fair in early November did bring some cheers to Rajasthan's tourism sector, tourist arrivals thereafter have continued to dip. High-end heritage hotels, mainly dependent on foreign tourists, are facing 10-15% dip in occupancies. Since hotels are major source of employment for locals, employment in Rajasthan have gone down drastically. Besides, the state is home to more than 200 handicraft-making units who have been left stranded. "The entire economy of Rajasthan is dependent on tourism. In Jaipur alone, around 45% of the population depends on tourism directly or indirectly for employment," said Rajasthan Association of Tour Operators president Khalid Khan. He added that though foreign tourists have come down to the state, they have curtailed their spend on shopping.

The situation in God's own country--Kerala--is nothing different. The slowdown has impacted the state's central part, known for its paddy fields and houseboats that ply on backwaters. According to AV George, who runs a homestay named Granary and co-promoter of a houseboat `Lakes and Lagoons', business was bad in October and it has adversely affected both the homestay and houseboat businesses. The best-selling package offered by Granary comprises one night on the houseboat and another at the village homestay. However, this offering has been hit by the falling number of tourists.