 "travel, tourism")
The sluggish recovery in foreign tourist arrivals in India has impacted inbound tour operators, tourist transporters and hotels.
While foreign tourist arrivals are slowly recovering, they are still below the pre-Covid levels.
In June 2024, there was a 9 per cent increase in foreign tourist arrivals compared to June 2023.
However, the numbers remain 2.8 per cent below pre-Covid levels, according to the last available Monthly Tourism Statistics report.
Given the sluggish recovery, the Indian Association of Tour Operators (IATO) reached out to the government on Monday for immediate intervention to attract foreign tourists to India.
“The Ministry of Commerce used to have a budget of about Rs 1,000 crore, giving an incentive to tour operators and hotels to promote India globally,” Rajiv Mehra, president, IATO told Business Standard.
The major markets from where foreign tourists arrive in India are the UK, the US, and Europe.
He said that India has almost all the trade with China except tourism because the tourist visa has not yet restarted.
Aashish Gupta, consulting chief executive officer (CEO) of the Federation of Associations in Indian Tourism and Hospitality (FAITH), said it is largely because of a lack of aggressive international branding of India. It is also because of hardly any offices in key markets.
The budget for overseas promotions and publicity, including market development assistance for 2024-2025, is Rs 33.02 crore, down from Rs 100 crore in 2023-2024.
“China is a big market for us,” he added.
In terms of foreign tourist arrivals crossing the pre-pandemic level in 2024, Mehra doesn’t expect the 2019 level to be reached. “At best, we are expecting 7-9 per cent growth over 2023 levels,” he said.
According to a CRISIL report for September 2024, countries such as Qatar, Dubai, Vietnam and Sri Lanka are drawing tourists with more affordable options and favourable visa policies.
These destinations have already exceeded their pre-Covid levels. Additionally, there are also aggressive campaigns by emerging destinations such as Azerbaijan, Georgia and Kazakhstan.
“The government should consider visa fee waiver. It could be just for six months or one year, to create the initial boost in the market for foreign tourist arrivals,” Mehra added.
“For hotels, domestic travel and business segments are making up for this gap somewhat. But there is still a requirement to see inbound tourists pan Indian in key leisure destinations. This gap of inbound tourists must be met through a series of measures,” Gupta added.
According to the latest CRISIL report, post-pandemic recovery in India’s inbound tourism is lagging the global trend.
In the first half of calendar year 2024, foreign tourist arrivals in India stood at 4.78 million, about 90 per cent of that seen in the first half of 2019.
In comparison, globally, foreign tourist arrivals in the first seven months of 2024 were at 96 per cent of pre-Covid levels (2019).
The reduced demand from Bangladesh — on account of the current political scenario and the suspension of direct flights from China — are impacting tourist footfall.
Both these countries were a major source of tourists for India. They accounted for 27 per cent of the foreign tourists in 2019, the CRISIL report added.
“The drop in foreign tourists has impacted revenue streams, especially for luxury hotels,” said Amit Kumar, analyst at HDFC Securities. He cited declines in room occupancy, spa services, and international corporate travel.
The same concern was voiced by Anand Ramanathan, partner, consumer products and retail sector leader, Deloitte India.
He added, “Luxury travel is expected to grow, with a focus on attracting high-spending tourists.”
Historically, foreign tourists have contributed 30-60 per cent to the luxury hotel chains in India before the pandemic.
“By the end of FY25, foreign tourist arrival figures are expected to touch their previous peak of 10.6 million. Further, in FY26, we expect the figures to grow at a high single digit,” Kumar added.
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> Foreign tourist arrivals remain 2.8% below pre-Covid levels
> According to analysts, this footfall contributed 30 to 60% of the revenue of the luxury hotel chains in India before the pandemic
> Experts attribute slow footfall growth to lack of aggressive international brandmarketing and absence of tourism offices in key markets
> Qatar, Dubai, Vietnam, and Sri Lanka are drawing tourists with more affordable options and favourable visa policies
