Tourist arrivals in India trail global trend, but forex earnings from tourism are up: Crisil

New Delhi [India], September 25 : The post-pandemic recovery in tourist arrivals in India is lagging the global trend. In the first half of 2024, foreign tourist arrivals into India stood at 4.78 million, about 90 per cent of that in the first half of pre-pandemic 2019, as per a Crisil report.
Research firm Crisil cited a couple of factors that are at play behind these weak tourist arrivals.
It asserted that reduced demand from Bangladesh on account of the current political scenario there and the suspension of direct flights from China are impacting tourist footfalls in India. Both these countries were a major source of tourists for India and accounted for 27 per cent of the arrivals in 2019.
Besides, countries such as Qatar, Dubai, Vietnam and Sri Lanka are drawing tourists with more affordable options and favourable visa policies, Crisil said in its report. These destinations have exceeded their pre-Covid levels, with foreign tourist arrivals 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.
"Additionally, aggressive campaigns by emerging destinations such as Azerbaijan, Georgia and Kazakhstan are competing for tourist spends," the report said.
Crisil suggested that India must simplify the visa process by expanding the e-visa and visa-on-arrival programmes, as seen in countries such as Thailand and Sri Lanka.
It also called for enhanced direct flight connectivity with markets, especially those with high tourist outflows, to further ease travel. These efforts can be amplified by leveraging social media influencers in target regions, it suggested.
On the positive side, when it comes to foreign exchange earnings, it rose 23 per cent for India in the first half of 2024 over the same period in 2019.
"This suggests tourists are spending more during their visits, which can be linked to 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," said the report.
This shift in priority from quantity to quality in travel expenditures is also reflected in foreign exchange earnings per arrival, which increased steadily from Rs 1.5 lakh in 2019 to Rs 2.0 lakh in the first half of 2024, a nearly one-third jump.
The rupee's depreciation against the dollar -- down 19.4 per cent at 83 per dollar in the first half of 2024 from 69.5 in 2019 -- is also a major factor for the rise in foreign exchange earnings per tourist as it has made travel to India more affordable for foreign tourists, thereby enhancing their spending power.
India's outbound tourism is, meanwhile, seeing a divergent trend.
With a notable 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.
"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," Crisil said.