India’s Inbound Tourism Surpasses 2023 Milestones

India's inbound tourism sector has shown recovery and growth, surpassing the 2023 figures and reaffirming its position as a global travel destination. As foreign tourist arrivals (FTAs) surged to over 9 million in 2023, the nation's cultural heritage, landscapes, and pricing have solidified its appeal to international travellers.

Inbound Tourism

Inbound tourism plays a pivotal role in India’s economic development by creating jobs, especially in rural areas, boosting foreign exchange earnings, and fostering infrastructure development. In 2023, foreign exchange earnings from tourism reached USD 15.3 billion, marking a 17.6% increase from 2022 and a 5.5% rise from pre-pandemic levels in 2019.

The sector also recorded an uptick in tourist spending, with per capita expenditure increasing by 23%, reflecting a shift towards high-value experiences. Despite this, the FTAs for the first half of 2024 were at 90% of 2019 levels, trailing behind the global trend of 96%.

Key Source Markets

Between January and June 2024, the top five source countries for inbound tourism to India were:

• Bangladesh: 21.55%
• United States: 17.56%
• United Kingdom: 9.82%
• Canada: 4.5%
• Australia: 4.32%

While religious and medical tourism remains dominant, individual travellers are increasingly seeking immersive and experiential tourism, contributing to the evolution of the Indian travel landscape.

Government Initiatives

The Ministry of Tourism has introduced several strategic initiatives to bolster inbound tourism and promote India as a global travel hub:

• Participation in International Travel Events: India’s presence at major events like the World Travel Market (WTM) in London and ITB Berlin has showcased its cultural diversity and tourism potential
• Visa-on-Arrival Facilities: Expanded visa-on-arrival provisions aim to simplify travel for citizens from key source countries
• ‘Chalo India’ Campaign: This initiative encourages Indians abroad to invite their friends to explore India, offering incentives such as free e-tourist visas
• Focus on Employment and Infrastructure: The tourism sector is projected to generate 58 million jobs by 2033, with contributions to GDP expected to reach USD 512 billion by 2028. The government has also received proposals worth Rs 8,000 crore for new projects to develop underexplored tourist destinations
• Decongesting Tourist Spots: Efforts are underway to diversify offerings and ease the pressure on popular destinations like Goa and Jaipur. For example, Jammu and Kashmir will soon feature three new tourist hubs under a Rs 5,600-crore initiative

Challenges and Opportunities

While the sector has made strides, challenges persist. Industry experts highlight limited budgetary allocation for overseas promotion and publicity, especially in key markets such as the UK, US, and Australia. The allocated budget for international promotion in FY25 stands at Rs 33 crore, significantly reduced from Rs 100 crore in FY24. Nevertheless, domestic tourism is emerging as a force, driven by an expanding middle class with growing disposable income. Occupancy rates in hotels reached a decade-high of 67.5% in FY24, and the average daily rate (ADR) surged to Rs 8,055.

Future Outlook

PATA states that the Ministry of Tourism remains optimistic about inbound tourism surpassing pre-pandemic levels by 2025. The collaborative efforts between the tourism and external affairs ministries aim to position India among the top global travel destinations. A key focus will be on aggregating accurate data to elevate India’s global ranking and creating robust marketing campaigns to draw high-value international tourists. As India builds momentum, the travel boom is expected to catalyse economic growth, boost employment, and position the nation as a dynamic player in the global tourism landscape.