Spending by Foreign Tourists Soars, India’s Latest Economic Survey States – India Report

Skift Take

Despite the gains, international travel continues to remain a pain point for India’s tourism sector. The Economic Survey, which precedes presentation of the Indian Budget, has emphasized on the recovery of this segment for India. It could indicate a higher allocation to the tourism sector in the Budget set to be presented on Tuesday.

Bulbul Dhawan

India’s foreign exchange earnings through tourism in 2023 was INR 2.3 trillion ($27.5 billion), according to the government’s latest Economic Survey for 2023-24 – a 66% gain over 2022.

In 2023, more than 9.2 million foreign tourists visited India, up 44% from 2022. 

Those are strong gains, however we’ve previously reported that much of India’s recovery post-pandemic is being driven by the domestic tourism market. According to a report by World Travel and Tourism Council (WTTC), international travel spending in India in 2023 was some 14% less than pre-Covid levels.

Hospitality Industry in India: The Economic Survey said that in 2023, the hospitality industry in India added 14,000 rooms, the most it has ever added. The total inventory of “chain-affiliated rooms” in India stood at 183,000. 

The survey added that the industry is also working to personalize guest experiences and improve operational efficiencies. “Hotels are also adopting innovative operational strategies, such as leasing or managing external restaurant, spa, and lounge brands, to capitalize on established concepts that attract hotel residents, thereby boosting revenue,” the Survey added.

Data compiled from the monthly reports of hospitality consulting firm HVS Anarock showed that in the 2024 financial year, the average daily rates in Indian hotels increased to INR 7,616 ($91) from INR 6,704 ($80), an increase of 13.6%. 

Employment Issues: The survey said that global inflationary pressures and delays in the recovery of capacity have impacted the Indian travel and tourism sector, just as other economies have been hit. “However, the decline in price competitiveness since 2021 has been minimal compared to its peers, with only a 0.7% drop. India’s decline is particularly slight at just 0.1% from 2021 levels,” the Economic Survey stated.

Citing the World Economic Forum’s TTDI 2024 report, the survey said that there is a need for improvements in tourist services and infrastructure, and the development of a skilled workforce. Skift has also previously reported on the worker shortage in the tourism industry in India. 

“To formalize employment within this sector, the Ministry of Tourism has initiated the Incredible India Tourism Facilitator Certificate Programme. This program aims to create a skilled cadre of tourist facilitators nationwide through a digital platform,” the survey shared. 

Flight Operations Restored After Microsoft Glitch

The operations across aviation industry in India were restored over the weekend to function smoothly after a Microsoft glitch impacted airline and airport systems. All major airlines, including Air India, Vistara, Indigo, Akasa Air, Air India Express and SpiceJet were impacted by the issue on Friday.

A statement from the Ministry of Civil Aviation on Saturday said that the flight operations were running smoothly and airline systems had returned to normal across all airports a day after the outage. The ministry had added that all issues related to travel adjustments and refund processes were being taken care of.

The outage had caused a disruption of the biometric check-in DigiYatra services at airports, including at Delhi. The airports had to return to manual processes, leading to a slower processing time. Airports and airlines across the country issued advisories to travelers to reach significantly ahead of time for their flights, keeping in mind the processing delays.

While the Indian aviation watchdog Directorate General of Civil Aviation (DGCA) has mandated airlines to compensate passengers for flight delays or refunds if they choose to not travel, the directive is applicable in cases of delays caused by the airlines.

In this case, it is unclear as to who will compensate passengers for their delays. Former national airline Air India refused to respond to Skift’s query.

IHCL Enters Into Branded Residences with Chennai Launch

Indian Hotels Company (IHCL) is venturing into the branded residences space with the launch of its first Taj Branded Residences in Chennai, Skitf’s Asia Editor Peden Doma Bhutia has reported. 

“This is a very lucrative market segment in India, with over INR 220 billion ($2.6 billion) in market value today and showing double-digit growth year-on-year. This helps IHCL diversify its revenue streams and leverage the strong brand equity of Taj,” said Puneet Chhatwal, managing director, CEO, and executive director of IHCL, during an earnings call on Friday.

Chhatwal indicated that IHCL is exploring more opportunities in this space, noting a growing trend for branded residences in India. The company is considering projects in at least eight cities across the country.

SAMHI Hotels Signs Management Agreement with Marriott

Hotel ownership company SAMHI Hotels is set to rebrand two of its hotels as it has entered into a management agreement with global hospitality chain Marriott International. 

As part of the agreement, it will rebrand a 217-key property in Pune into a Courtyard by Marriott hotel. A 114-room hotel in Jaipur will also be rebranded to be included in Marriott’s Tribute Portfolio. Both the properties will be converted and rebranded after renovation in 2026. 

The company has strong relations with Marriott as several of its hotels are under Marriott’s management, including Sheraton Hyderabad, Courtyard by Marriott Bengaluru, Four Points by Sheraton Visakhapatnam, and more. 

SAMHI has also signed deals with Marriott for conversion of four more hotels from franchise to management agreements. 

India Records Highest-Ever Air Passenger Traffic in First Half

The Indian aviation industry has recorded its highest-ever domestic passenger traffic for a half year. Between January and June 2024, Indian airlines carried 79.35 million passengers. This was an increase of over 4% from the previous year, as per data from Indian aviation watchdog Directorate General of Civil Aviation. 

In the January-June period over the past 10 years, the domestic passenger traffic has more than doubled. In 2015, 38.83 million passengers traveled domestically.

During the decade, IndiGo played a key role in serving the Indian market, with its passenger share increasing from 37.5% in 2015 to 60.7% now. 

MakeMyTrip Partners with Legoland Malaysia Resort 

Indian online travel agency MakeMyTrip has partnered with Legoland Malaysia Resort. Through this partnership, the resort aims to attract Indian tourists, especially families. 

India is Malaysia’s fifth-largest source market in terms of tourists. In 2023, between January and September, over 472,000 Indian tourists visited Malaysia. 

To boost tourism from India, Malaysia last year granted visa-free entry to Indians for stays up to 30 days. The visa waiver is in place till December 31 this year.