India's tour and travel revenue set to soar 15-17 per cent this fiscal: CRISIL

New Delhi [India], August 4 : India's tour and travel operators are set to expand their revenue by a robust 15-17 per cent this fiscal year, driven by rising domestic tourism and an increasing propensity for overseas travel, Crisil said in its latest report.
The growth will be supported by improving infrastructure, rising disposable incomes, a shift in travel patterns, and the government's focus on boosting domestic tourism.
This growth follows a strong fiscal year where revenue surged by approximately 40 per cent to around Rs 14,500 crore, surpassing pre-pandemic levels by about 20 per cent.
The credit profiles of travel operators are expected to remain healthy, supported by strong balance sheets and steady operating margins of 6.5-7 per cent, resulting in substantial cash flows and low reliance on debt, the Crisil report noted.
An analysis of four major travel operators, accounting for around 60 per cent of the sector's revenue, supports this optimistic outlook.
Poonam Upadhyay, Director, CRISIL Ratings Ltd said, "The trend of 'revenge travel' seen after the pandemic has evolved into 'regularised travel' in recent years with a significant shift towards shorter and frequent vacations, for both domestic and overseas trips."
"Moreover, growing middle-class aspirations, rising urbanisation, affordable packages, steadily increasing income levels, and the government's focus on boosting Indian tourism will maintain the strong momentum in the tour and travel sector. This will, in turn, ensure healthy double-digit revenue growth for travel operators this fiscal as well, " she added.
According to the report, the growth in overseas travel is driven by higher disposable incomes, visa-free access from 37 countries, simplified visa processes, and easing visa-related challenges for long-haul destinations. Attractive travel packages and the increased focus of Indian airlines on new destinations in Southeast Asia and Central Asia are also contributing to record-high outbound travel this year, despite the recent hike in the tax collected at source (TCS) on overseas travel packages.
The report also noted that domestic tourism growth is fueled by micro-holidays (e.g., quick getaways or staycations over long weekends), growing spiritual tourism, and better infrastructure (improved last-mile connectivity) facilitating travel to newer destinations.
Observing the current trend, Anil More, Associate Director, CRISIL Ratings Ltd, said, "Strong customer retention, diverse revenue streams, various cost-optimisation measures, and investments in technology/automation undertaken since the pandemic will keep operating profitability of travel operators healthy at 6.5-7 per cent, in line with last fiscal, despite higher marketing spend. Interest coverage ratio will also continue to be strong at over 5 times, in line with last fiscal."