The West Asia crisis has triggered a 10-15% drop in India's inbound tourism, disproportionately affecting MICE events and metro hotels. Southern India is more impacted, while robust domestic tourism is cushioning the overall sector, says PHDCCI.
Inbound tourism to India has declined by around 10-15 per cent amid the ongoing West Asia crisis, with the impact most visible in meetings, incentives, conferences and exhibitions (MICE) travel and metro hotel segments, Anil Parashar, Chair, Tourism & Hospitality Committee, PHDCCI, told ANI.
"Overall, the decline is around 10 to 15 per cent, but that is a bit skewed in the sense that the inbound tourism season is pretty much over in India. However, MICE events have taken a hit," Parashar told ANI while discussing a resilience report on the tourism and hospitality sector.
He said this on the sidelines of the PHD Chamber of Commerce and Industry (PHDCCI) media briefing and official release of its latest report titled Impact of the West Asia Conflict on India's Tourism, Aviation & Hospitality Sectors.
Geographical and Segment-Specific Impact
He added that the impact is geographically uneven, with Southern India witnessing a sharper decline due to its higher dependence on Gulf-linked air routes. "The impact is more in Southern India than Northern India because Southern India has more Gulf-related flights which have been impacted, whereas traffic to Northern India is largely through direct flights," he said.
Domestic Tourism Provides a Cushion
Despite the fall in inbound travel, domestic tourism has emerged as a strong support for the sector, helping cushion the overall impact. "Domestic tourism has actually helped the country big time. Domestic tourist numbers are about 270 to 280 million as compared to less than 10 million inbound tourists," he noted, adding that spiritual destinations such as Varanasi, Ayodhya and Amritsar have seen a surge in footfall.
He further said that leisure destinations like Goa have also recorded growth, with tourist traffic rising by around 5 per cent. However, metro cities and premium hotel segments have borne the brunt of the slowdown.
"The metropolis has taken an impact of around 10 to 15 per cent in hotels, and in the super luxury segment, the impact is higher at about 20 per cent because they depend more on inbound foreign travellers and events," he said, adding that tier-II and tier-III cities have remained relatively resilient.
Effect on Employment and Restaurants
The crisis has also had an impact on employment, particularly in aviation and the restaurant industry. "One airline has reduced about 500 people from a workforce of 6,800, which is about an 8 per cent drop, though others are holding on as a rebound is expected," he said.
He flagged that the restaurant sector has been the worst hit, mainly due to disruptions in LPG supply. "About 10 per cent of restaurants in India have shut down, and business has declined. The hospitality and tourism sector employs around 40 to 45 million people, of which about 8.5 million are in the restaurant segment," he said.
Shift in Outbound Travel Preferences
The crisis has also led to a shift in outbound travel preferences, with Indian tourists opting for East Asian destinations. "Travellers are now moving towards the eastern side. For instance, Japan is issuing about 600 visas daily from Delhi and Mumbai, while destinations like Thailand and Vietnam are seeing increased traffic. The western side has been impacted due to disruptions," he said.
Macroeconomic Concerns and Recovery Outlook
On the macroeconomic front, he said the sector could see a measurable impact due to multiple factors, including higher oil prices and a stronger dollar. "Tourism contributes significantly to the economy, and within the sector, we are seeing an impact of about 2 per cent due to aviation, inbound and outbound travel, hotels and restaurants. Oil prices and dollar appreciation are key factors," he said.
On recovery, Parashar expressed cautious optimism, noting that easing geopolitical tensions could improve sentiment, though infrastructure disruptions in the Gulf may take longer to resolve. "We are seeing some green shoots with ceasefire extensions, but recovery in infrastructure like refineries and oil wells in parts of the Gulf could take up to six months. Once the war ends, sentiment will return, and travellers will bounce back," he added.
Key Report Findings
According to the report released today, the West Asia conflict disrupts aviation around 15 per cent dip in inbound tourist traffic, incurring Rs. 18,000 crore net loss for the industry. Also, 10 per cent of restaurants closed down, and the business went down by Rs 79,000 crore per month, the report added. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)