Distressed Gujarat travel firms alter business itinerary

AHMEDABAD: Sanjay Shah, founder of a city-based travel company, was one of the early entrants when it came to diversifying the business, given the bleak opportunities in the tourism sector for the coming year. “Tourism sector will take time to revive and we are not sure how things will pan out. To keep business running, it is important to diversify and ensure revenue sources don’t dry up. We have begun offering IT solutions for several industrial applications,” said Shah.

Around 40% of tour operators and travel agents in Gujarat have diversified their business due to liquidity crisis. While revenue sources have dried up for tour operators, majority of them are falling short of working capital as their funds are stuck up. Anuj Pathak, secretary, Tour operators and Travel agents’ Association of Gujarat (TAG), said, “Majority of the funds are stuck with airlines and we are yet to receive refunds for the bookings made in the past. Despite repetitive follow-ups, we are not getting any concrete response from the airline. This not just affects the tour operators’ working capital but also their good-will.”
According to estimates by Travel Agents’ Federation of India (TAFI), at least Rs 500 crore worth of refunds are stuck with airlines.