In a post Covid world, where there has been intense competition across the world to woo international travellers, India Tourism has, for some reason, decided that it will get international tourists without having to spend anything on marketing. The budgets for international marketing now stand slashed from the already low INR 33 crores to a paltry INR 3 crores. The writing seems to be on the wall, asking the Indian tourism industry to ‘Go Domestic!’.
Cultivating and creating an ecosystem that brings international travellers into India takes decades, and now with the clear-cut diktat that India wants to be Atma Nirbar even in generating tourism numbers, India’s stakeholders are clearly on the edge.
Prime Minister Narendra Modi’s call sometime back from the parapet of the majestic Red Fort on the anniversary of the country’s Independence Day sure took us all by surprise. The call was nudging his fellow countrymen to see more of India, thus hoping to increase footfall to India’s biggest tourism segment. Why now? With the rise of hotel inventory across sectors and having successfully outpriced ourselves in the international markets, India has handed over our ‘bread and butter’ market to our Asian rivals on a silver platter!
With a ridiculous taxation rate in the form of GST of 18% imposed on rooms over Rs. 7501 (which is less than USD 100) to 12% on anything over Rs. 1000. Considering the spiralling of the value of the US dollar vis-a-vis the humble Indian rupee in an inane attempt to beat some sort of record, the Indian government has taken extreme pains to shoot itself in the foot. In an era when the Indian foreign exchange was minuscule, India Tourism has always had a favourite son with the long-haul foreign tourist bringing in the much-needed dollar. But in the changing scenario, where the reserves are more than US $700 billion and inbound arrivals are at a status quo, the timing to woo the domestic desi traveller has never been this good.
With the Prime Minister happening to remind people to travel within India, it is also a ‘shot in the arm’ to the domestic travel market. The segment is diverse, blessed with a record population of nearly 1.5 billion all year round and ever so aspirational. The statistics on this vary—anything from 175 to 575 million travelling; of course, it is dependent on whom you ask!
If one considers the forex outflow as a result of India being one of the darlings of the global tourism export markets, it is surely not surprising. As per the statistics by US Exports, India is now one of the fastest-growing outbound tourism markets in the world, second only to China.
In their annual report, India Tourism states International Tourist Arrivals (ITAs) have reached 18.89 million, surpassing the previous peak of 17.91 million in 2019 and exceeding pre-pandemic levels, registering a growth of 5.47% over 2019. Foreign Tourist Arrivals (FTAs) in India have grown significantly over the decades, reaching 10.93 million in 2019 before the pandemic caused a decline. With recovery underway, 9.52 million FTAs were recorded in 2023, achieving 87.09% of pre-pandemic levels with a 47.89% increase from 2022 (6.44 million). Non-Resident Indian (NRI) arrivals also surged to 9.38 million in 2023, marking an 18.9% increase from 2022 and exceeding pre-pandemic levels by 34.38%.”
A growing, consumption-driven economy, a large and increasingly affluent middle class, and the ongoing liberalisation of air transportation have contributed significantly to this growth in international outbound travel. Additional interest in niche tourism sectors such as medical, wellness, and adventure tourism has also contributed to this growth. Increased smartphone and internet penetration have also contributed to an increased number of online bookings.
More Indians travelled outside their country than the inbound arrivals. 2023 saw 27.88 million embarking overseas, compared to 21.6 million in the previous years, increasing by a whopping 29%.
Way back in the early nineties, when the properties were limited and the eagle-eyed foreign tourist looked like manna to save India from spiralling imports, it was a prudent exercise to tap foreign exchange. With an economy now growing at a little over 7% and being one of the fastest-growing large economies in the world, India has surely come a long way.
The domestic tourists are back with a vengeance. The era of fancy brochures, which sold packages and room nights, wherein the tariffs were once quoted in euros even for the hapless domestic traveller, has ended. The ongoing recession in Europe and American markets and the current geopolitical synergies with wars in Ukraine, Israel, and now Iran will further dampen the spirits of those seeking international arrivals.
Several countries had their own economic compulsion to create marketing campaigns to encourage people to travel within their geographic borders, adding to the reduction in international arrivals in India. India Tourism describes “domestic tourism” as the “backbone” and shows off a figure of an estimated 575 million domestic tourist visits. With the rapid economic development taking place in the country and the availability of greater disposable income, combined with affordable holiday packages and enhanced connectivity, tourism in India is increasing steadily and acts as a catalyst for furthering the economic growth in view of its wide-ranging linkage effects and multiple impacts.
With countries going overboard with marketing plans to keep their citizens homebound, India will find it difficult to sell its wares abroad, at least for the next couple of years. We seldom have a strategy for the domestic travel market; it is always an afterthought or a kind of backup market! Though India Tourism has recently come out with a scheme wherein partial reimbursement of marketing expenses for hotels, travel agents, and other stakeholders is possible for those working in the domestic market, it needs to do more in terms of creating a long-term agenda and establishing a full-time marketing body for domestic tourism, considering that it has a user base of over 1500 million.
With every destination around the world, when the going gets tough, the tough go domestic! India is probably still one of the few countries that is obsessed with chasing finicky international arrivals. In spite of probably being the world’s second-biggest domestic travel market, it still receives a treatment meted out to second-class citizens.
Mere sloganeering or having the prime minister having to push discerning travellers to travel within is not enough. We have to sensitise state governments to reach out to markets within to have an impact! The attempt to reach out to domestic markets is not a smooth highway, though, but it sure commands enough respect to reach out to a market closest to hearts and proximity alike!