Foreign tourist arrivals in India set to surpass pre-pandemic peak

India is emerging as a favored choice among global travelers, partly due to escalating tensions in the Middle East and the ongoing conflict between Russia and Ukraine, which have driven up oil prices and transportation expenses.

Foreign tourist arrivals (FTAs) is projected to grow 19.59 percent YoY  in 2024 according to a report by Noesis. FTAs are expected to breach the 2019 peak, reaching an estimated 11.05 million by the year-end.

NOESIS is India’s leading Hotel Transaction advisory and consulting company, which provides end to end hospitality solutions across India and South Asia.

In 2019 FTAs reached a record high of 10.93 million. In 2023, FTAs witnessed a remarkable surge of 43.5 percent, reaching a substantial figure of 9.24 million. USA, Bangladesh, UK, Australia, and Canada are leading the influx of foreign tourists to India, the report noted.

India is emerging as a favoured choice among global travelers, partly due to escalating tensions in the Middle East and the ongoing conflict between Russia and Ukraine, which have driven up oil prices and transportation expenses. This has created uncertainty for travel in Eastern Europe, prompting tourists to seek more stable destinations. Additionally, with the decline in tourism to China following the pandemic, travellers are increasingly drawn to India as an alternative destination, attracted by the prospect of a secure and enriching experience.

Rise in foreign exchange earnings (FEEs)

Foreign exchange earnings (FEEs) from tourism in India soared to unprecedented levels in 2023 (January-December), totalling Rs. 2,31,927 crore. This remarkable achievement reflects a substantial year-on-year (YoY) growth of 65.74 percent compared to the Rs. 1,39,935 crore recorded in 2022 (January-December).

Interestingly, this surge in spending outstrips the recovery in foreign tourist arrivals (FTAs), suggesting a notable rise in per-traveller expenditure among international visitors and highlighting their robust inclination towards spending during their stay in India, according to the report.

According to projections by Noesis, FEE per foreign tourist visiting India typically falls within the range of Rs 1.50 lakh to 2.50 lakh, excluding the outlier year of 2021. Considering this range and assuming an average FEE of Rs 2.54 lakh per tourist for 2024, the report estimates that the total FEE from tourism could reach approximately Rs 2.8 lakh crore for the period spanning January to December 2024.

Hospitality and aviation industries to surge

The report noted that the hospitality and aviation industries in India are set to grow from the increasing influx of foreign tourists and their spending within the country's tourism sector. The anticipated surge in tourist demand is expected to manifest fully in the fiscal year 2024-25, with nationwide occupancy rates projected to surpass pre-pandemic levels, reaching 70 percent-72 percent, and Average Room Rates (ARR) estimated to climb to Rs 7,500-7,700 by FY2025.

Notably, three major Indian airlines have collectively placed orders for an impressive total of 1,150 aircraft, which is set to significantly enhance the tourism sector's accessibility and connectivity across the nation for foreign visitors.

These orders, originating from Tata-owned Air India (470 aircraft, comprising 250 Airbus and 220 Boeing), IndiGo (530 Airbus, including 30 widebody A350-900 aircraft), and Akasa Air (150 Boeing), indicate a substantial expansion in airline capacity. This expansion is poised to greatly enhance both domestic and international connectivity, facilitating easier exploration of India's diverse destinations for tourists, the report highlighted.

The Government of India, in collaboration with the Ministry of Tourism, has undertaken several initiatives to stimulate foreign tourist arrivals (FTAs). Among these are the Swadesh Darshan scheme, initiated in 2014-15 and later revamped as to Swadesh Darshan 2.0, which focuses on the integrated development of thematic tourist circuits, with 76 projects sanctioned under its umbrella. Additionally, the PRASHAD scheme aims to rejuvenate pilgrimage sites and enhance heritage infrastructure, with 46 projects sanctioned across 26 States/Union Territories. Complementing these efforts are initiatives such as the Adopt a Heritage Scheme and the E-visa facility for nationals of 169 countries. In support of the "Visit India Year" declaration for 2023, the Ministry actively participated in prominent international travel exhibitions worldwide, such as FITUR (Madrid), Arabian Travel Mart (Dubai), and ITB Berlin, among others.