This holiday season, hotels, tour operators are not banking on foreign tourists

“Our business is doing better than in 2019 purely because of domestic demand and travel for manufacturing and conferences," Kush Kapoor, director of Roseate Hotels & Resorts, said, citing that over 75% of its guests come from within India now, up from 70% in the pre-Covid period. Bird Group-owned Roseate runs luxury hotels and five-star properties in the country.

“However, we know that free independent travellers (FITs) or those who don't necessarily use tour packages and baby boomers and heavy spenders are fewer, and this trend is likely to persist throughout the fiscal year," said Kapoor.

Foreign tourist arrivals still trailing pre-Covid numbers

Foreign tourist arrivals are still trailing pre-pandemic numbers. According to the ministry of tourism data, the first half of 2024 saw 4.78 million international visitors compared with 5.29 million recorded during the pre-pandemic period of 2019. Seven million people from overseas visited India in entire 2023, about 40% below 11 million in 2019. And that's after a boost from international events like the G20 summit and ICC's International Men's Cricket World Cup last year.

Roseate’s Kapoor attributed it to the elections in the US, economic slowdown in the UK and other parts of Europe, along with the wars having dampened the travel sentiment across the world. “The flights have become a few hours longer too."

Subhash Goyal, chairperson of STIC Travel Group, said high airfares, which have surged 150-200% since 2019, are also deterring potential travellers.

According to data from the tourism ministry, Bangladesh accounted for the highest number of foreign arrivals in 2023 and January to June this year. That was followed by the US, UK, Canada and Australia.

Intrepid Travel, an adventure tourism agency, is shifting its focus towards curated small-sized group itineraries rather than depending on high-paying foreign travellers.

Also Read | Travel Now Pay Later: How TNPL may affect your tour budget decisions— explained

"Many groups of travellers aged 50 and above are not returning as before," said Rama Mahendru, country general manager for India for Intrepid Travel. “We need government assistance in easing visa policies and participating in global trade shows to boost tourism. We also need to consider Gen-Z and millennial travellers who plan holidays based on social media content."

The industry executives said the closure of India's international tourism offices has weakened promotion efforts in key markets like the UK, the US, Canada, Germany, and France. The Incredible India campaign, once a successful promotional tool, has yet to be relaunched, leaving India with minimal digital or social media presence globally.

While the international marketing allocation in full-year budget was raised to ₹33 crore from ₹3 crore, it’s much below ₹177 crore earmarked for domestic tourism.

Also Read | Mint Primer: Why Maldives needs Indian tourists

"The lack of participation in international trade fairs and exhibitions has hurt our efforts to attract international tourists," said Goyal of STIC. Previously, the Marketing Development Assistance scheme allowed operators to claim expenses for these events, but that has been discontinued, leaving smaller operators struggling to market abroad, Goyal said. The withdrawal of the Services Export Incentive Scheme removed crucial incentives, impacting operators' foreign exchange earnings and ability to promote services overseas, he said.

Rajiv Mehra, president of the Indian Association of Tour Operators and director of Uday Tours & Travels Pvt Ltd, said ticket sales at major tourist sites shows no significant growth in inbound tourism this year. Foreign arrivals, based on ticket sales, was 9.2 million in 2023 compared with 10.5 million and 10.9 million in 2018 and 2019, respectively, despite India hosting international events last year. "We do not expect to reach 2019 levels this year, and any growth, if at all, would be in single digits."

Online travel agency MakeMyTrip is still optimistic, Mint reported this week that. "From a business perspective, inbound travel has nearly recovered, Rajesh Magow, CEO and cofounder, had said. “I would not be overly worried."