Despite the global tourism sector showing signs of recovery, India is experiencing a slower rebound in tourist arrivals post-pandemic. According to a recent report by Crisil, the number of foreign tourists visiting India in the first half of 2024 reached 4.78 million. This figure represents approximately 90 percent of the tourist numbers recorded during the same period in 2019, before the pandemic hit.
Factors Influencing Low Tourist Arrivals
Crisil identifies several key reasons for this delay in tourist arrivals. One major factor is the decrease in demand from Bangladesh, largely due to the ongoing political instability in that country. Additionally, the suspension of direct flights from China has further contributed to the decline in visitors. These two nations were significant sources of tourists for India, accounting for 27 percent of all arrivals in 2019.
Moreover, competing destinations such as Qatar, Dubai, Vietnam and Sri Lanka are attracting tourists with more appealing options and favourable visa policies. These countries have not only recovered but surpassed their pre-COVID visitor levels. For instance, Qatar has seen a remarkable increase of 47 percent in foreign tourist arrivals, while Dubai and Vietnam have experienced increases of 11 percent and 4 percent, respectively. Even Sri Lanka has managed a slight growth of 0.2 percent.
The Competitive Landscape
The report highlights that emerging tourist destinations like Azerbaijan, Georgia, and Kazakhstan are actively promoting themselves to attract travellers. These countries are launching aggressive marketing campaigns to capture a share of the global tourism market and encourage spending from tourists.
Recommendations for Improvement
To enhance its appeal as a tourist destination, Crisil recommends that India simplify its visa processes. This could involve expanding e-visa and visa-on-arrival programs similar to those implemented by Thailand and Sri Lanka. Additionally, improving direct flight connectivity with countries that have high outbound tourist rates could significantly ease travel to India. The report also suggests leveraging social media influencers in target markets to promote Indian tourism effectively.
While India's tourism sector is on the path to recovery, it faces stiff competition from other countries that are currently outperforming it. By addressing these challenges and implementing strategic improvements, India can work towards regaining its status as a favoured destination for international travellers.
A Surge in Foreign Exchange Earnings from Tourism
India witnessed a significant increase in foreign exchange earnings during the first half of 2024, with a rise of 23 percent compared to the same period in 2019. This uptick suggests that international tourists are spending more during their visits to India. Several factors have contributed to this increase, including a notable rise in luxury tourism and higher costs for premium services.
Increased Spending by Tourists
The growing preference for high-end experiences among travellers is one key reason behind this surge in spending. Between 2019 and 2024, the rates for five-star hotels in India saw a 20 percent increase indicating a shift towards more luxurious stays. Tourists are opting for premium services, such as fine dining, upscale accommodations and unique cultural experiences, which have become more common as many travellers have higher disposable incomes. This trend highlights a move from quantity to quality in travel with tourists now valuing experiences over budget constraints.
Rise in Foreign Exchange Earnings Per Tourist
This shift towards luxury is further reflected in the rise of foreign exchange earnings per tourist. The amount increased from Rs 1.5 lakh per arrival in 2019 to Rs 2.0 lakh in the first half of 2024, marking a nearly 33 percent growth. Additionally, the depreciation of the rupee against the dollar has played a significant role in boosting earnings. The rupee fell by 19.4 percent, reaching 83 per dollar in 2024 compared to 69.5 per dollar in 2019. This depreciation has made India a more affordable destination for foreign visitors, effectively increasing their purchasing power during their stays.
Emerging Trends in Indian Outbound Tourism
While India is attracting more foreign exchange, its outbound tourism is also experiencing a notable transformation. In the first half of 2024, departures by Indian nationals increased by 12 percent compared to pre-Covid levels. Indian tourists are becoming a driving force for global tourism, fuelled by higher disposable incomes which have made international travel more accessible. Moreover, enhanced airline connectivity and simplified visa processes have made foreign destinations more reachable, encouraging Indian travellers to explore international locations more frequently.
India’s tourism landscape is undergoing a shift with both inbound and outbound travel trends showing positive growth. On the one hand, foreign tourists are spending more in India, thanks to the rising preference for luxury experiences and the depreciated rupee. On the other hand, Indian travellers are contributing to global tourism with increased departures. Both trends highlight the evolving nature of travel and tourism, driven by changes in consumer behaviour and economic conditions.
The Rise of Passion-Focused Niche Travel
In 2024, passion-focused niche travel has become a dominant trend, driven by travellers’ desires to explore their specific interests. Unlike traditional travel, where the destination is the primary focus this new wave prioritizes the experiences and activities that ignite travellers’ passions. One prominent example of this shift is “culinary tourism”, where food enthusiasts travel not just to explore new places, but to immerse themselves in the local food culture and culinary practices.
Customization and Personalization: The Key to Success
A central element of passion-focused travel is the high level of “customization” and “personalization” it demands. Travelers no longer settle for generic experiences; they want tailored itineraries that reflect their unique interests. For businesses, this means that understanding the passions, preferences, and desires of their ideal customers is essential. The more you know about what excites and motivates travellers, the better you can curate a travel experience that resonates deeply with them.
Hyper-Focused & Niche-Specific Travel
Passion-focused travel thrives on “hyper-specific niches”. Whether it's culinary tourism, adventure sports, art-focused journeys, or wildlife exploration, travellers are increasingly drawn to specialized experiences. This requires travel providers to delve deep into these niches by continually developing new itineraries that cater to the evolving tastes and desires of their target audience.
In 2024, as travellers seek more meaningful and passion-driven experiences, this trend is reshaping the way people think about and approach travel. It's not just about where you go—it's about how your passions can shape your journey.
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