Hotel stocks tumble

Hotel stocks tumble as earnings mood slumps

The terror strikes in two leading hotels of Mumbai found reverberations in the bourses. The share prices of Indian Hotels that runs the Taj chain of hotels fell by 17 per cent on Friday, while East India Hotels' (EIH) fell by 10 per cent during the day before staging a smart recovery to close the day with a gain of 5.2 per cent.

The attack attracted widespread attention from the India Inc and most of the business leaders and experts have suggested that this will have an impact on the tourism industry and the business trips, which will impact the hotel industry and its revenues. "The hotel industry was at the beginning of the tourist season and an event like this will impact the tourist flow and will impact the hotels business for the financial year 2008-09," said gaurav Dua, head of research, Sharekhan.

Analysts said the companies' share prices are likely to remain under pressure.

The meltdown-hit travel trade and hospitality industry will have to weather another storm, thanks to the terrorists's siege of two hotels in Mumbai since Wednesday night. But industry watchers and captains predict that it will only be a short-term assault on business.

The terrorists scoped out iconic hospitality landmarks like the Taj Mahal Palace and Tower Hotel and the Oberoi Trident in the country's financial capital unlike previous attacks - sparking fears that the tourism and hospitality sectors will have to grapple with the crippling blow over a long period.

'The situation is almost like 9/11,' Anil Bhandari, former chairman-cum-managing director of the Indian Tourism Development Corp (ITDC), told IANS.

'Obviously, people will not like to travel. But domestic travellers will be around,' he said.

'Cancellations of overseas bookings have already started. The fate of travel trade and hospitality business now depends on how we send the message across that everything is normal. Several countries have already issued advisories against travelling to India,' Bhandari said.

India, explained Mumbai-based Sunil Gupta, the chief operating officer of travel majors SOTC and Kuoni Group, is a complicated destination because of the size of the country and the multitude tourism circuits.

'Tourists book in advance. I think the attack will affect holiday bookings for February and March. People coming to India will avoid Mumbai. The fact that Delhi has the largest inbound airport will help travellers reschedule their itineraries,' Gupta told IANS from Mumbai.

'It is the last straw on the camel's back.'

Since North America and Europe, the two largest inbound tourists contributors to India, are fighting economic slowdown, bookings have already borne the brunt. 'The attacks have only made it worse,' Gupta said.

However, he said the silver lining was winter - especially Christmas - is always a subdued season for inbound travel and trade. 'People in the West want to celebrate Christmas with their families. That might cushion the impact.'

The SOTC kept its South Mumbai offices closed for the past two days. Bookings will resume Monday.

Sources at Cox & Kings said it was a 'wait-and-watch situation'. 'It is too early to speculate the impact,' a senior Cox & Kings official said.

Owner of restaurant chain Moti Mahal and the author of the Moti Mahal Cookbook Manish Gujral is concerned about the impact of the attack on his business.

Gujral's eatery chain has properties spread across the country, including Mumbai.

'The Moti Mahal restaurant in Mumbai is located next to the Oberoi at the Inox Mall. It has been closed for the past two days. On the night of the attack, the employees were trapped inside the premises. I am worried about the impact on my business,' Gujral told IANS.

'Why are our police not equipped to battle terror?' he said, arguing that if the country was unable to provide security to its people and ensure a safety along the border, it was not possible for hotels to protect individual customers.

There is a very perverse logic to terror, said travel trade and hospitality writer Bhisham Manshukhani, associated with Paprika Media owned by the Essar Group. 'People forget and Mumbai has the ability to recover. It can reduce the damage,' Mansukhani said.

According to him, domestic tourists will remain. 'But it will take time for foreign travelers to return. Add to it the recession. Hotels are going to see a major crash in the short term,' he said.

Tourist Heaven Under Attack

MUMBAI, India (27-Oct-2008) — Coordinated terrorist attacks struck the heart of Mumbai, India’s commercial capital, on Wednesday night, killing dozens in machine-gun and grenade assaults on at least two five-star hotels, the city’s largest train station, a Jewish center, a movie theater and a hospital.

Even by the standards of terrorism in India, which has suffered a rising number of attacks this year, the assaults were particularly brazen in scale and execution. The attackers used boats to reach the urban peninsula where they hit, and their targets were sites popular with tourists.

The Mumbai police said Thursday that the attacks killed at least 101 people and wounded at least 250. Guests who had escaped the hotels told television stations that the attackers were taking hostages, singling out Americans and Britons.

A previously unknown group claimed responsibility, though that claim could not be confirmed. It remained unclear whether there was any link to outside terrorist groups.

Gunfire and explosions rang out into the morning.

Hours after the assaults began, the landmark Taj Mahal Palace & Tower Hotel, next to the famed waterfront monument the Gateway of India, was in flames.

Guests banged on the windows of the upper floors as firefighters worked to rescue them.

Fire also raged inside the luxurious Oberoi Hotel, according to the police. A militant hidden in the Oberoi told India TV on Thursday morning that seven attackers were holding hostages there.

“We want all mujahedeen held in India released, and only after that we will release the people,” he said.Some guests, including two members of the European Parliament who were visiting as part of a trade delegation, remained in hiding in the hotels, making desperate cellphone calls, some of them to television stations, describing their ordeal.

Alex Chamberlain, a British citizen who was dining at the Oberoi, told Sky News television that a gunman had ushered 30 or 40 people from the restaurant into a stairway and, speaking in Hindi or Urdu, ordered them to put up their hands.

“They were talking about British and Americans specifically,” he said. “There was an Italian guy, who, you know, they said, ‘Where are you from?’ and he said he’s from Italy, and they said, ‘Fine,’ and they left him alone.”

Sajjad Karim, 38, a British member of the European Parliament, told Sky News: “A gunman just stood there spraying bullets around, right next to me.”

Before his phone went dead, Mr. Karim added: “I managed to turn away and I ran into the hotel kitchen and then we were shunted into a restaurant in the basement. We are now in the dark in this room, and we have barricaded all the doors. It’s really bad.”

Attackers had also entered Cama and Albless Hospital, according to Indian television reports, and struck Nariman House, which is home to the city’s Chabad-Lubavitch center.

A spokesman for the Lubavitch movement in New York, Rabbi Zalman Shmotkin, told the Associated Press that attackers “stormed the Chabad house” in Mumbai.

Israel’s Foreign Ministry said it was trying to locate an unspecified number of Israelis missing in Mumbai, according to Haaretz.com, the Web site of an Israeli newspaper.

Several high-ranking law enforcement officials, including the chief of the antiterrorism squad and a commissioner of police, were reported killed.

The military was quickly called in to assist the police.

Hospitals in Mumbai, a city of more than 12 million that was formerly called Bombay, have appealed for blood donations. As a sense of crisis gripped much of the city, schools, colleges and the stock exchange were closed Thursday.

Vilasrao Deshmukh, the chief minister for Maharashtra State, where Mumbai is, told the CNN-IBN station that the attacks hit five to seven targets, concentrated in the southern tip of the city, known as Colaba and Nariman Point. But even hours after the attacks began, the full scope of the assaults was unclear.

Unlike previous attacks in India this year, which consisted of anonymously planted bombs, the assailants on Wednesday night were spectacularly well-armed and very confrontational. In some cases, said the state’s highest-ranking police official, A. N. Roy, the attackers opened fire and disappeared.

Indian officials said the police had killed six of the suspected attackers and captured nine.

A group calling itself the Deccan Mujahedeen said it had carried out the attacks. It was not known who the group is or whether the claim was real.

Around midnight, more than two hours after the series of attacks began, television images from near the historic Metro Cinema showed journalists and bystanders ducking for cover as gunshots rang out. The charred shell of a car lay in front of Chhatrapati Shivaji Terminus, formerly Victoria Terminus, the mammoth railway station. A nearby gas station was blown up.

The landmark Leopold Café, a favorite tourist spot, was also hit.

Reached by phone, some guests who had been trapped in the Taj Mahal Palace & Tower Hotel said about 1 a.m. that they had heard an explosion and gunfire in the old wing of the hotel.

A 31-year-old man who was in the Taj Mahal Palace & Tower Hotel attending a friend’s wedding reception said he was getting a drink around 9:45 p.m. when he heard something like firecrackers — “loud bursts” interspersed with what sounded like machine-gun fire.

A window of the banquet hall shattered, and guests scattered under tables and were quickly escorted to another room, he said. No one was allowed to leave.

Just before 1 a.m., another loud explosion rang out, and then another about a half-hour later, the man said.

At 6 a.m., he said that when the guests tried to leave the room early Thursday, gunmen opened fire. One person was shot.

The man’s friend, the groom, was two floors above, in the old wing of the hotel, trapped in a room with his bride. One explosion, he said, took the door off its hinges. He blocked it with a table.

Then came another blast, and gunfire rang out throughout the night. He did not want to be identified, for fear of being tracked down.

Rakesh Patel, a British businessman who escaped the Taj Mahal Palace & Tower Hotel, told a television station that two young men armed with a rifle and a machine gun took 15 hostages, forcing them to the roof.

The gunmen, dressed in jeans and T-shirts, “were saying they wanted anyone with British or American passports,” Mr. Patel said.

He and four others managed to slip away in the confusion and smoke of the upper floors, he said. He said he did not know the fate of the remaining hostages.

Clarence Rich Diffenderffer, of Wilmington, Del., said after dinner at the hotel he headed to the business center on the fifth floor.

“A man in a hood with an AK-47 came running down the hall,” shooting and throwing four grenades, Mr. Diffenderffer said. “I, needless to say, beat it back to my room and locked it, and double-locked it, and put the bureau up against the door.”

Mr. Diffenderffer said he was rescued hours later, at 6:30 a.m., by a cherrypicker.

Among those apparently trapped at the Oberoi were executives and board members of Hindustan Unilever, part of the multinational corporate giant, The Times of India reported.

Indian military forces arrived outside the Oberoi at 2 a.m., and some 100 officers from the central government’s Rapid Action Force, an elite police unit, entered later.

CNN-IBN reported the sounds of gunfire from the hotel just after the police contingent went in.

The Bush administration condemned the attacks, as did President-elect Barack Obama’s transition team. The White House said it was still “assessing the hostage situation.”