Tourism ministry working on visa-on-arrival to promote India as a global destination: Gajendra Singh Shekhawat

Domestic travel boosting India tourism but foreign tourist arrivals yet to see full recovery.

The government is exploring visa on arrival for countries that send the biggest numbers of tourists to India, union minister for culture and tourism Gajendra Singh Shekhawat has said, a move aimed at bringing in more international tourists whose numbers are yet to come up to pre-Covid levels.

The tourism ministry is also working with the external affairs ministry to explore ways to engage with top markets to promote India as a global destination, the minister said at the 54th annual convention of the Federation of Hotel & Restaurant Associations of India (FHRAI) on October 16.

“We have started work on giving top international destinations visa-on- arrival status. We recently granted one lakh visas free of charge on the World Tourism Day,” he said.

India’s tourism growth has been driven by domestic travel in the post-Covid period, while inbound tourism is yet to see recovery fully.

Recently, the Indian Association of Tour Operators (IATO), the country's apex body of inbound tour operators, sought government’s assistance by way of advertisement and overseas campaigns to drive foreign tourist arrivals (FTAs).

Lower foreign tourist arrivals

Tour operators continue to suffer as foreign tourist arrivals remain below 2019 levels, the association said.

More than 230 million international arrivals were recorded in 2023 in the Asia-Pacific region, of which India accounted for only 7.2 million, hospitality consulting firm Hotelivate said in a recent report.

In 2018 and 2019, 10.56 million and 10.93 million foreign tourists visited India. In 2023, the number was 9.2 million. This year, too, arrivals are not expected to reach the pre-Covid level.

IATO blamed the sluggishness on the lack of budgetary support for publicity abroad, especially in the key markets like the UK, Canada, the US, Germany, Australia, France and Russia.

Out of the total allocation for the tourism sector in FY25, Rs 33 crore has been set for overseas promotion and publicity, down from the revised allocation of Rs 100 crore.

The allocated budget for domestic promotion and publicity, including market development assistance, increased to Rs 176.97 crore, up from Rs 95 crore in the revised allocation of FY24.

Inbound tourism

While inbound tourism needs a push, travel platform Booking.com said in a recent report many foreign travellers are opting for India as a standalone destination.

According to its survey, more than half of inbound travellers seek India as a standalone destination, while a third intend to combine their visit with other Asian countries.

Booking.com surveyed 2,000 adults in 19 countries and territories who plan to travel to India over the next 12-24 months.

Foreign exchange earnings (FEEs) from tourism have increased, reaching $15.3 billion in the first half of 2024, a 17.6 percent jump from 2023 and 5.5 percent from 2019, the travel platform said.

The influx of international visitors is catalysing the local economy, potentially generating 58 million jobs by 2033.

The platform expects tourism to contribute approximately $512 billion to India's GDP by 2028.

Domestic travel

Shekhawat expects a faster growth but due to domestic tourism.

"The hankering for inbound tourists is not there anymore because of Indian tourists' paying capacity. Ujjain and Ayodhya have over 100 million tourists,” the minister said.

The middle class is growing and travelling, which will give demand a big boost. “The estimated CAGR (compound annual growth rate) for the travel industry is 14 percent but the middle-class group will outdo itself in creating demand which will help CAGR to be at 20 percent in the coming times," the minister said. “Hospitality will be the biggest growth driver of the Indian economy.”

The ministry is also focusing on decongesting popular tourist spots and developing new products. "I have been working closely with states to submit proposals for big-ticket projects, so we can start working on them," he said.

The Centre has received proposals for 87 projects worth more than Rs 8,000 crore and almost all states submitted their plans barring West Bengal, the minister said.

"I’m in talks with the World Bank for a long-term finance arrangement to handhold these states,” he said. For Jammu and Kashmir, three new tourist destinations have been planned and the work on the Rs 5,600-crore project has begun, the minister said.

Better Road infrastructure

Addressing the convention through a video link, road transport and highways minister Nitin Gadkari said the development of religious sites is giving a boost to tourism.

"The number of visitors to pilgrimage sites like Badrinath, Kedarnath, Yamunotri, and Gangotri is also rising,” he said. Not just pilgrimage sites, people were also heading to modern cities and exclusive tourist locations, he added.

Talking about the Humsafar policy, which was launched recently, the minster said the government would provide rest areas, gas stations, electric charging stations and quality restaurants at more than 2,000 key locations.

Growth in hospitality

The travel boom is fuelling demand for hotels, with the sector recording occupancy of 67.5 percent in FY24, the highest in a decade, the Hotelivate report said.

Hotels registered the highest ever average daily rate (ADR) of Rs 8,055 and a revenue per available room (RevPAR) of Rs 5,439, just shy of the record high in FY08.

Challenges

Goods and services tax (GST) and infrastructure remain big challenges for the hospitality industry.

The hotel industry believes infrastructure status will be a game changer as it will facilitate long-term loans at affordable interest rates.

Shekhawat said he spoke to finance minister Nirmal Sitharaman about the infrastructure status and its potential impact. “She listened to everything seriously, and I am confident we will see positive outcomes soon," he added.

Hotel owners want GST rates to be lowered. They want the 18 percent slab to go and a uniform rate of 12 percent. The GST rate is 18 percent for room tariffs above Rs 7,500 a day and 12 percent for below Rs 7,500.

"There is up to 16 lakh room inventory which is in the unorganised sector, constituting about 80 percent of the industry. The organised sector, which is 10 to 15 percent of the total hotel industry, is being mapped and discussed over and over again," FHRAI president Pradeep Shetty said.

Around 50 to 60,000 rooms are likely to be added in the next five years, Shetty said.

The overall branded pipeline for the next five years as of March 2024 stands at 88,706 keys, the Hotelivate report said.

The minister also stressed the need to collect and putting together the correct data for India to be rated among the top global destinations.

"Data on government portals which is used to identify a country's tourism potential is lacking and we are speaking with states for a system on aggregation of data. If we do that, India can be among the top 10 international destinations," Shekhawat added.