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Tuesday, 27 December 2016

On plastic and a prayer, travellers sticking to New Year’s plans despite demonetisation

The demonetization move threw a spanner in the works for year-end travelers. But armed with hope and the weapons of the cashless economy, many are going ahead with their New Year plans.

This New Year’s, the festive spirit seems to have been dampened by the demonetization move, with many cash-centric tourist destinations losing a bit of their sheen for travellers.

Those who had been looking forward to trips to their favorite destinations have either had to shelve their plans or stock up on cash and prepare themselves to forgo the small pleasures of exploring the local surroundings and getting those little keepsakes to return home with.

Ashok Kumar, a techie travelling to Goa to celebrate the New Year, says, “After a little indecision, my wife and I decided to go ahead with our trip as planned. High value notes ceasing to be legal tender has thrown things off a bit, though. We’re stocking up on cash, and I fear we will have to give our favourite dhabas en route a miss.”


There is no doubt that demonetization has discouraged and hassled several people looking to travel for the New Year; however, it appears that most are still going ahead, albeit armed with cards, mobile wallets, bundles of cash, and a whole lot of hope.

A highly planned affair

Sandeep Sahadevan says that his group, comprising four couples and six children, has made advance NEFT payments to hotels which include breakfast in their charges. “We checked with many hotels in Thekkady, Kerala, on whether they accept cards and negotiated a cost that includes a set number of mineral water bottles, lunch, and dinner too, as we are not sure about whether we can explore the local outdoors with cash in such short supply. As we are driving down with kids, we also did research on petrol pumps and food joints that accept cards. We are away for three days, and we have scheduled our pit stops at plastic-friendly locations,” he says.

Sandeep and his gang are setting aside Rs 10,000 in cash to take care of unforeseen emergencies like accidents and tire punctures. With a 1,000 km trip usually entailing about Rs 1,400 in toll, he is hopeful that toll plazas will accept cards.

Accepting the new norm

Dilip Chengappa from Kabbe Holidays, a remote homestay in Coorg, says that in the initial weeks after demonetisation, business was hit, with several cancellations. However, between December 23 and 31, the homestay is at full capacity. “People are getting used to the new cashless system. I have also installed a point of sale (PoS) machine with a 2G connection. It’s a bit slow, but serves the purpose.”

The local cash-centric economy of Virajpet, where he is located, was initially hit, but now, Dilip says that people are busy installing PoS machines. According to him, it’s only those who want to remain outside the system that continue to have cash transactions.

Bengaluru-based Rakshita Tours and Travels has had to change the way they accept payments from customers. “The first thing that most people ask now is whether we accept cards. The conversation starts from there. Only then do they ask for the type of vehicle and tell us their destination,” says Srikanth MK, owner of the travel agency. While they did see a drop in business in the immediate aftermath of high denomination notes being taken out of circulation, things are starting to pick up with the approach of the end of the year. What was primarily a cash business now has PoS machines in the office and accepts NEFT transfers and cheques as well.

Still merry times for startups

Ritesh Agarwal, Founder and CEO of OYO Rooms, says that while demand was initially hit post demonetisation, especially at more popular destinations, things have bounced back. “While there was a negative impact in the second week of November, year-end travel demand is not so elastic; people like to go out on a holiday during this period, even if for a weekend. Hence, we expect it to peak closer to the New Year,” says Ritesh.

“Demonetisation has resulted in flat airfares and hotel tariffs in this traditionally peak-travel season – so, this is great news for smart travellers,” he adds.

Hotel and homestay aggregator Stayzilla seems to be ringing in the holiday cheer. A spokesman for the company says, "We have been encouraging online payments since the beginning of this year as it is a secure and more convenient means of transferring money. For a company like ours, which provides homestays for travellers, we are aware that carrying large amounts of cash and finding ATMs could be a huge inconvenience and hamper the travel experience. Hence, the demonetisation initiative has been good for us. Our online prepaid booking for this Christmas season has gone up fivefold compared to last year.”

Meanwhile, Bengaluru-based redBus, an online bus and hotel booking platform, is reaping the rewards of its integration with mobile wallets earlier this year. A source in the company says, "Recent developments have actually benefited us. With several of our competitors relying on transactions in cash, our facilitation of digital payments has seen a boost in bookings over the past month."
The fun is still on

“I had planned a New Year’s outing with friends and saved for it. We are going ahead despite the tough times as we had planned three months in advance,” says Karthika Raju. She and her friends are off to Puducherry by bus and return by train. She is not unduly worried as Puducherry has a relatively high density of PoS terminals. She claims to have got this information on the town from the internet and jokes that she heard from friends in Chennai that even wine stores there accept cards.

N Chandana is looking forward to her trip to the Western Ghats, and says, “The year has been filled with a lot of hard work, and I’ve been looking forward to this break for a while. The cash scene is not encouraging, but my friends and I are not going to let it deter us. Some things will have to be given a pass, like the fruits and vegetables sold by villagers along the way, and ellneer (coconut water), of course. That’s a shame, but we just can’t afford to part with cash cheaply.”

The cash crunch may give the holidays a slightly gloomy look, but the party is far from over!

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