The much promised good days are here – for the tourism sector, at least. The country has registered 9 per cent growth in foreign tourist arrivals during June, compared to the same period last year. The growth seen in June 2013 over the corresponding month in 2012 was a meagre 2.5 per cent. Still far from the peak travel season for inbound tourism, which starts in September-October, the latest growth numbers signal a strong revival in the sector.
Much of the growth is attributable to a spurt in business activity and increased interest among foreign investors in opportunities in India. Corporate travel to Mumbai, Delhi, Pune and even tier-two cities such as Vizag and Guwahati has risen considerably, according to travel firms.
The pent-up travel demand in the pre-election months is now coming to the fore. “The wait-and-watch period is over. The sentiment is very positive. The dialogue for investments has started in the business community, which has boosted travel,” says Arjun Sharma, managing director, Le Passage to India, one of the leading travel agencies in the inbound sector.
Besides business travel, non-resident Indian travellers are also fuelling travel demand in the summer months. The hotel industry, however, is still waiting for the winter months to drive up average room rates. “The demand has increased but so has the supply. We have seen only slight improvement over last year,” says S M Shervani, president of Federation of Hotels and Restaurants Association of India.
In Delhi alone, there has been an addition of over 1,000 rooms, with a part of Aerocity – near the Delhi airport – becoming operational.
While foreign tourists may not be spending enough to please the hotel industry, the big-ticket corporate traveller has led to an increase of 17 per cent in foreign exchange earnings, cementing India’s standing as a destination for “the quality tourist”.
While in terms of total tourist arrivals, India lags behind many countries, it ranks much higher globally in terms of tourism receipts. According to 2012 data by the United Nations World Tourism Organisation, India was ranked 41st in terms of inbound tourist arrivals, with less than 7 million foreign tourist arrivals, but 16th in total tourism receipts.
Tourism has been highlighted as a big thrust area for the new government, starting with the Bharatiya Janata Party’s election manifesto. Prime Minister Narendra Modi mentioned tourism as a vehicle of growth and international cooperation during his visit to Bhutan.
In his meeting with Facebook COO Sheryl Sandberg last week, Modi talked about using the social networking site to bring more tourists to India. Tourism is a part of the Clean Ganga mission as well. The tourism ministry has chalked out plans to develop 50 tourist circuits in the country.
Senior officials are positive that the government will be generous in allocating funds to the ministry in the upcoming Budget to carry on with such plans.