Travel & tourism sector rebounds with domestic biz leading the way

India’s vibrant tourism sector is a key driver of economic growth, while providing a kaleidoscope of landscapes, cultures and memorable experiences to the global travellers. While positioned at 22nd in the world’s most visited countries, the nation’s potential for moving up the ladder in the tourism industry is humungous. But the avowed success depends on removal of structural and operational bottlenecks. Towards this end, it is critical to address the issues of infrastructure development, streamlined regulations, robust safety measures, and sustainable practices. Moreover, fostering regional development, community involvement and investing in skill development can help to bring about a more inclusive and equitable growth path. India has recorded the highest surge in airfares among other countries in Asia Pacific and Middle East, which is seen as a ‘threat’ to the civil aviation industry’s long-term recovery. According to the Airports Council International (ACI Asia-Pacific), there has been a 41 per cent hike in the airfare in India, followed by United Arab Emirates (34%), Singapore (30%) and Australia (23%). The central government said that the rise in airfares have been seen on select routes.

The World Travel & Tourism Council’s (WTTC) 2024 Economic Impact Research (EIR) reveals a significant recovery of India’s Travel & Tourism sector, with domestic tourism playing a pivotal role. The data shows that whilst domestic tourism is driving the recovery of the sector in India, international travel spend remains below pre-pandemic levels.

According to the global tourism body’s latest research, the sector’s contribution to India’s GDP reached just over INR 19.13TN in 2023 – almost 10% ahead of 2019 levels. Employment in travel &tourism grew by 10% to reach just under 43MN, 8% more than in 2019. Domestic visitor spending was 15% ahead of 2019, reaching INR 14.64TN however international visitor spending remained more than 14% behind 2019 last year – INR 0.4TN less being spent by international visitors last year than in 2019.

Such strong growth in domestic visitor spending is evidence that domestic visitors have led the sector’s path toward post-pandemic recovery. Julia Simpson, WTTC President & CEO, said; “India’s Travel & Tourism sector is bouncing back with remarkable vigour, driven by a surge in domestic tourism.While international visitor spending is still catching up, the unwavering support from local travellers showcases the resilience and potential of this dynamic sector. With continued strategic efforts, India is set to shine as a global tourism powerhouse. “The Indian Government’s ambition to facilitate 100MN inbound tourists at the anniversary of India’s independence in 2047, as part of the @2047 ambition, will supercharge the Indian economy and make India one of the world’s most popular travel destinations.”

Across all four metrics, the sector is forecast to be ahead of 2019 by the end of this year.WTTC has projected that travel &tourism will contribute almost INR 21.15 TN to the Indian economy this year, which is a 21% increase from 2019. Jobs are predicted to increase by 2.45MN this year, equivalent to one in 11 jobs in India. International visitor spending is expected to grow more than 17%, to reach INR 2.85TN, while domestic visitor spending is projected to continue growing this year, with a 9.6% increase to reach more than INR 16TN. With the right government support, WTTC is forecasting that the sector could grow its annual GDP contribution to INR 43.25TN by 2034, representing 7.6% of the Indian economy, and could potentially employ almost 63MN people across the country. The Union Government’s ambition to facilitate 100MN inbound tourists at the 100th anniversary of the country’s independence in 2047, as part of the @2047 vision, will supercharge the Indian economy and make India one of the world’s most popular travel destinations. WTTC forecasts that across South Asia, travel &tourism will contribute INR 25.1TN this year, with jobs supported by the sector reaching 54.77MN by the end of 2024. Domestic visitor spending is expected to reach INR 18.3TN this year whilst international visitor spending is anticipated to reach INR 3.8TN.

Streamlining regulations and incentivising investment in the tourism sector can significantly boost India’s attractiveness as a destination, since it currently lags on tourism policies, air transport, and tourist service infrastructure, the report highlighted. In contrast, India scored high on price competitiveness, availability of cultural and natural resources, which have boosted its allure for tourism. The WEF’s annual report flagged poorly-skilled human resources as well as poor hygiene hurting the growth of travel and tourism in the country that received about 10.93 million international tourists in FY20, before the pandemic shut down travel.