Domestic tourism in India has seen a remarkable surge in recent years. This trend has continued as travel restrictions have eased, with many Indians choosing to explore their backyard. The Indian travel industry is poised for significant growth, with revenue expected to rise by 15-17% this fiscal year.
Travel Growth In Domestic Tourism Soars
The revenue rise will be based on a high foundation with sales increased by over 40% year over year to beat the pre-pandemic peak by approximately 20%. Travel agencies’ credit profiles are also anticipated to stay strong by 6.5–7%. An analysis of four major travel operators which account for 60% of the sector’s revenue, indicates as much.
Microtourism (i.e., short weekend trips or staycations), spiritual tourism, and enhanced connections are driving growth in the domestic tourism business. Better infrastructure also makes it easier to go to more recent places. Domestic travel is also being supported by a rise in inbound travel. Even, the number of foreign tourists arriving, as well as strong demand from the corporate and MICE (meetings, incentives, conferences, and exhibits) segments are good factors.
However, the tour and travel industry has a negative working capital cycle. This is due to large client advances and less reliance on debt, its liquidity is projected to remain high. Nevertheless, it will be important to keep an eye on changes to visa regulations, the expansion of the commercial aviation fleet, volatile airfares, shifting tax laws, and inflation.
For tour and travel operators, this presents a golden opportunity to expand their revenue, innovate their offerings, and contribute to the sustainable development of the tourism sector.
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Growth In Outbound Tourism
Higher discretionary incomes and the availability of 37 nations’ visa-free travel options are driving the growth of international leisure travel. Reduced obstacles associated with obtaining a visa for long-haul locations and streamlined visa procedures (such as visa-on-arrival and e-visa services). Additionally, appealing travel packages and a heightened emphasis on new routes by Indian airlines help. Travel to other countries is increasing, reaching a record high for this calendar year.
In a press release, Revenge travel which gained traction after the pandemic, has transformed into travel in recent years, with a notable move towards shorter and more frequent visits, both domestic and international, according to Poonam Upadhyay, Director of CRISIL Ratings Ltd. “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.”
The Indian travel industry is on the cusp of significant growth, driven by increasing domestic tourism and a rising propensity for international travel.
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