The Indian government’s latest Economic Survey for 2023-24 reported a significant gain in foreign exchange earnings through tourism, amounting to INR 2.3 trillion ($27.5 billion) – a 66% increase from the previous year. Moreover, the number of foreign tourists visiting India in 2023 rose by 44% to over 9.2 million. However, despite these gains, international travel spending in India remains 14% below pre-Covid levels, signaling that much of India’s tourism recovery is driven by the domestic market. The upcoming Indian Budget may see a higher allocation to the tourism sector to further support its growth.
In 2023, the hospitality industry in India saw significant growth, adding 14,000 rooms to reach a total inventory of 183,000 chain-affiliated rooms. The industry is focusing on providing personalized guest experiences and enhancing operational efficiencies, with hotels adopting innovative strategies to capitalize on established concepts and boost revenue. Additionally, average daily rates in Indian hotels increased by 13.6% in the 2024 financial year. However, the sector has been impacted by global inflationary pressures and capacity delays, necessitating a skilled workforce and infrastructure improvements.
The Economic Survey highlighted the need for improvements in tourist services and infrastructure, as well as the development of a skilled workforce in the tourism sector. In response, the Ministry of Tourism has initiated the Incredible India Tourism Facilitator Certificate Programme to create a skilled cadre of tourist facilitators nationwide through a digital platform. The initiative aims to formalize employment within the sector and address the worker shortage issues in the tourism industry in India.
The Indian aviation industry faced a setback due to a Microsoft glitch that disrupted airline and airport systems, impacting major carriers like Air India, Vistara, and Indigo. Despite the disruption, flight operations were restored over the weekend, enabling smooth functioning across airports. The outage caused delays in processing, prompting advisories for travelers to arrive early for flights. While compensation directives are in place for delays caused by airlines, it remains unclear who will compensate passengers in this instance.
Indian Hotels Company (IHCL) has ventured into the branded residences space with the launch of its first Taj Branded Residences in Chennai, reflecting a lucrative market segment in India valued at over INR 220 billion ($2.6 billion). IHCL aims to diversify its revenue streams and leverage the strong brand equity of Taj through this initiative. Additionally, SAMHI Hotels signed a management agreement with Marriott International to rebrand two properties, further expanding its partnership with Marriott and exploring opportunities in the hospitality sector.
The Indian aviation industry recorded its highest-ever domestic passenger traffic in the first half of 2024, with over 79.35 million passengers transported by Indian airlines. The growth in domestic passenger traffic over the past decade has been significant, with IndiGo playing a key role in serving the Indian market. In a bid to attract Indian tourists, MakeMyTrip has partnered with Legoland Malaysia Resort, aiming to appeal to Indian families and boost tourism from India. Malaysia’s visa waiver for Indians until the end of the year further facilitates travel between the two countries.
