Inbound tourists trail pandemic levels, but forex earnings up: Report

Inbound tourism in the country is trailing the pandemic levels as foreign tourist arrivals (FTAs) in January-June this year stood at 4.78 million, which is about 90 per cent of the first half of 2019, a report said on Wednesday.

However, forex earnings are up indicating that per person arrival spending is more, according to a report by Crisil Market Intelligence and Analytics.

The report said that the post-pandemic recovery in India's inbound tourism is lagging the global trend as in the first half of calendar 2024, FTAs in the country stood at 4.78 million, about 90 per cent of that in the first half of calendar 2019.

In comparison, globally, FTAs in the first seven months of 2024 were at 96 per cent of the pre-Covid levels of 2019, implying India is behind the curve, it added.

The report stated that reduced demand from Bangladesh on account of the current political scenario there and suspension of direct flights from China impacting tourist footfalls.

Both these countries were a major source of tourists for India and accounted for 27 per cent of the FTAs in 2019, it added.

Meanwhile, the report said that countries such as Qatar, Dubai, Vietnam and Sri Lanka are drawing tourists with more affordable options and favourable visa policies.

These destinations have exceeded their pre-Covid levels, with FTAs in Qatar up 47 per cent, Dubai 11 per cent, Vietnam 4 per cent and Sri Lanka 0.2 per cent in the first half of the current calendar, the report said.

Moreover, aggressive campaigns by emerging destinations such as Azerbaijan, Georgia and Kazakhstan are competing for tourist spends, it added.

Further, the report revealed that when it comes to foreign exchange earnings (FEE) the picture is rosier, which went up 23 per cent in the first half of 2024 over the same period in 2019.

This suggests tourists are spending more during their visits on several factors, including a 20 per cent rise in five-star hotel rates between 2019 and 2024, increasing tourist preference for luxury experiences and higher disposable incomes with travellers indulging in premium services such as fine dining, high-end accommodations and distinctive cultural experiences, it said.

This shift in priority from quantity to quality in travel expenditures is also reflected in FEE per FTA, which increased steadily from Rs 1.5 lakh in 2019 to Rs 2 lakh in the first half of 2024, a nearly one-third jump, Crisil Market Intelligence and Analytics report added.

Meanwhile, the report said that the country's outbound tourism is seeing a divergent trend with a 12 per cent increase in Indian national departures over pre-Covid levels in the first half of 2024.

Indian tourists are rapidly emerging as a significant growth engine for global tourism, accounting for 2.4 per cent of the global outbound market as of 2019, it said.

The surge is largely driven by economic recovery, which is also playing out in tourism, said the report.

Indians making multiple trips abroad, supported by rising disposable income that has made international travel more affordable and enhanced airline connectivity and streamlined visa processes that have made foreign destinations more accessible, it said.

Changing travel preferences are also influencing outbound travel as demand for unique experiences, such as wellness retreats and adventure trips, is rising, it added.