Note ban likely spur for record tourist inflow, US biggest contributor

One million foreign tourists landed in the country last month, a record number for any single month. The arrival shows a year-on-year growth of 13.7 per cent. December happens to be a strong month for foreign tourist arrivals but growth in December 2015 was only 3.2 per cent. Some industry watchers, therefore, relate the sharp rise last month to demonetisation, which may have prompted thousands of persons of Indian origin (PIOs) to visit the country. 

The December data of 1.03 million visitors looks high compared to the average of 0.71 million for the first eleven months of 2016. In November, foreign tourist arrival was 0.89 million. Arrivals in December 2014 and 2015 were 0.88 million and 0.91 million, respectively. 

The biggest contributor in December arrival was the US, accounting for 190,000 visitors or 18.33 per cent. Arrival from the US was 170,000 in December 2015. Similarly, arrivals from the UK in December 2016 was 121,400 against 105,900 in the corresponding month of the previous year. Arrivals from Canada rose from 38,600 in December 2015 to 42,800 last month. The arrival data exclude Indian nationals residing outside the country.

Ankur Bhatia, executive director of Bird Group, which has an interest in hospitality and aviation services, is a bit surprised by the December growth. “Many PIOs, now citizens and passport holders of other countries, may have travelled last month to deposit their demonetised currency. Countries like the US, the UK, and Canada have a large Indian diaspora,” said Bhatia.

PIOs are estimated to hold a large amount of demonetised Indian currencies. The Global Organisation of People of Indian Origin (GOPIO) said PIOs and NRIs hold an estimated Rs 15,000 crore in old currency (Rs 500 and 1,000), according to an Indian Express report early this month. The report quoted GOPIO founder president Thomas Abraham seeking an extension of time to exchange notes beyond June 30, 2017. 

Some, however, think the growth has little to do with demonetisation. “December was a strong month for foreign tourist arrivals. A weak Rupee and eased visa procedures is helping growth,” said Raj Rana, chief executive officer (South Asia) at international hotel company Carlson Rezidor, which operates 82 hotels in India under brands like Radisson and Park Plaza.

Rana added that he continues to see strong growth in the first fortnight of January. “As of now, the outlook is strong. But we have to wait to see how the economy and industry shapes during the year. That will decide the growth in corporate travel which is bread and butter for five-star hotels”.