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Economic Survey 2023: Revival in tourism sector, but foreign arrivals below pre-Covid level

Economic Survey 2023: India's G20 presidency is a chance for the travel and tourism industry to promote the country as a major tourism destination

January 31, 2023 / 02:58 PM IST
A traveller at an airport. (Image: Representative AFP)

A traveller at an airport. (Image: Representative AFP)

The tourism sector is showing signs of revival after two years of Covid-induced challenges, the Economic Survey 2023, which was tabled in Parliament by Finance Minister Nirmala Sitharaman, said.

Foreign tourist arrivals in FY23 grew month-on-month with the resumption of international flights and the easing of Covid-19 regulations.

"The post-pandemic scenario of global tourism is gradually converging to the pre-pandemic one. With travel restrictions and health concerns subsiding, tourism has become a vital driver of a strong upswing in contact-intensive activity," the survey said.

Recovery in the tourism sector

The Economic Survey cited the World Tourism Barometer of the United Nations World Tourism Organisation (November 2022), which said that international tourism showed robust performance in the January-September 2022 period.

International tourist arrivals reached 63 percent of the pre-pandemic level in the first nine months of 2022, boosted by strong pent-up demand, improved confidence levels and the lifting of restrictions. The pace of recovery would have been even stronger but for the lingering global uncertainties and higher inflation in advanced nations.

The tourism sector is showing signs of revival with the waning of the pandemic, the survey said. "Foreign tourist arrivals in India in FY23 have been growing month-on-month with the resumption of scheduled international flights and the easing of Covid-19 regulations," the survey said. However, the arrivals are below the pre-pandemic level.

"Profitability ratios of the tourism industry further point towards a strong rebound in the June 2022 quarter. In addition, with the resumption of corporate travel and flexible work arrangements, the rebound in MICE (Meetings, Incentives, Conference, Exhibitions) tourism and leisure travel is re-gaining popularity in India. With infrastructure amenities constantly improving, India is increasingly the preferred destination for MICE events," the survey said.

Medical tourism

India is ranked 10th out of the top 46 countries in the world in the Medical Tourism Index FY21 released by the Medical Tourism Association.

"The way India has handled the Covid situation and also prepared itself for future shocks, trust in India’s medical infrastructure has improved. This will give a big push to Medical Value Tourism (MVT) which is expected to grow to US$ 13 billion by 2022," the survey said.

Also Read: Economic Survey 2023 key highlights: GDP growth for FY24 at 6-6.8 per cent, higher CAD

Several factors, such as the presence of world-class hospitals and skilled medical professionals, superior quality healthcare, low treatment costs compared with other countries, credibility in alternative systems of medicine, and increased global demand for wellness services like Yoga and meditation, make India a popular medical tourism destination, the survey noted.

Covid impact

The tourism industry was another sector adversely impacted by the pandemic, the Economic Survey noted.

"A significant decline in Foreign Tourist Arrivals in India was witnessed in FY21. As per a study conducted by the Ministry of Tourism in collaboration with the National Council of Applied and Economic Research (NCAER), Tourism Direct Gross Value Added (TDGVA) witnessed a decline
of 42.8 percent in Q1, 15.5 percent in Q2, and 1.1 percent in Q3 of FY21 due to the overall economic slowdown in FY21," the survey said.

Tourism being a contact-intensive sector, employment in the sector was impacted due to the lockdown and it was a global phenomenon. As many as 14.5 million direct jobs in Q1, 5.2 million in Q2, and 1.8 million in Q3 are expected to have been lost compared to an estimated 34.8 million direct jobs in the tourism sector in the pre-pandemic period of FY20, the survey said.

India tries to attract more tourists 

India has also attempted to improve its attractiveness as a destination for specialised tourism, the survey said.

"Recent initiatives like the Ayush visa for tourists who desire to visit India for medical treatment, the launch of the National Strategy for Sustainable Tourism & Responsible Traveller Campaign, the introduction of the Swadesh Darshan 2.0 scheme, and Heal in India can assist in capturing a larger share of the global medical tourism market," the survey said.

It added the country's G20 presidency presents a unique opportunity for the Indian travel and tourism industry to take advantage of this chance to promote India as a "major tourism destination", which is likely to positively impact passenger travel and hotel occupancy rate.

Moneycontrol News
first published: Jan 31, 2023 02:57 pm