India sees slump in foreign tourists during holiday season

Foreign tourist arrivals in India over Christmas-New Yearwitnessed a significant drop, estimated to be in region of 15-25%
India sees slump in foreign tourists during holiday season
By James Mathew
Thu 03 Jan 2019 01:35 PM

Foreign tourist arrivals in India in the current Christmas-New Year season witnessed a significant drop, estimated to be in region of 15 – 25 percent, despite expectations of a major jump in inward tourism in the year-end season.

The combination of a weak rupee and an aggressive ‘Incredible India’ marketing campaign by the central tourism department was supposed to boost tourist numbers during the holiday season.

Popular tourist destinations in India such as Goa and Kerala suffered the most, with Goa estimated to have seen a 20-35 percent fall and Kerala 20-30 percent decline in foreign tourist arrivals in the year-end season, considered to be among the peak tourist seasons in India for international tourists.

An abnormally high tax rate of 28 percent (GST) on hotel tariff and 18 percent on tourism related services, along with an increase in hotel tariffs and frequent strikes and disturbances in states like Kerala seem to have played the spoil sport in attracting foreign tourists to India this year-end season.

Pollution scare in Delhi and many other leading Indian cities has also said to have led many foreign tourists to give a miss to India this year end season.

Russian, UK drop

“Tourists from Russia, who account for a major chunk of foreign tourists to Goa every year, saw a fall of about 35 percent, while those form the UK, the second highest group, witnessed a fall of 15-20 percent during this Christmas-New year eve season,” Ernest Dias, COO of Travel Corporation of India (TCI), told Arabian Business.

As for tourists from the Middle East, Kerala is among their most preferred destinations in India.

Tourism and hospitality industry executives in Kerala said the foreign tourist arrivals in the state this year-end busy season was highly muted, though there was no estimate on the extent of drop of international tourists.

“As against an average occupancy rate of 92 percent in 2017 Christmas-New Year season, the average occupancy rates in leading hotels across Kerala this year end season was only 62 percent,” Jose Pradeep, Secretary, Kerala Travel Marts Society and Managing Partner, Hotel Yuvarani Residency, Kochi, told Arabian Business.

However, he said resorts and hotels in popular hill stations in the stake such as Munnar and Thekkady have seen better occupancy rates this season as well.

Rebuild Kerala

The Kerala government’s campaign of ‘Rebuild Kerala’, in the aftermath of the devastating flood in the state mid last year also seemed to have adversely affected tourist inflow into the state.

“The ‘Rebuild Kerala’ campaign seemed to have boomeranged on the state tourism sector as most of the tourists might have thought that the state’s infrastructure and transport facilities must have been still in shambles,” Pradeep said.

Pradeep Shetty, Secretary, Hotel & Restaurant Association of Western India, said business in the hospitality sector in the western India region was down by about 20 percent in the current season.

The mood was, however, not all that gloomy across all tourist destinations in India. While beach destinations seemed to have been given a miss by foreign tourists in the current season, India’s popular heritage and desert locations such as Udaipur, Jaisalmer, Varanasi, Khajuraho and Agra have seen increased footfalls by foreign tourists.

“Hotel tariffs in heritage destinations such as Udaipur saw a major jump in the current season, reflecting the rising demand for accommodation in these locations. This also showed that while beach locations such as Goa have easy alternatives in neighbouring Sri Lanka and Southeast Asian countries, India’s heritage locations continue to attract foreign tourists in large numbers,” Hitesh Sawhney, Partner, PwC India, told Arabian Business.

While foreign tourist arrivals have seen a major dip, the domestic tourists seemed to have saved the day to a large extent to India’s sprawling tourism industry this year-end season.

“Though bookings by international tourists have seen a major drop this year-end season, the situation was somewhat made up by the domestic tourists, which helped us to get an average occupancy rate of 80 percent this season,” Guitry Velho, AVP & GM, The Heritage Village Resort and Spa, a popular south Goa-based resort, said.

The bookings by foreign tourists are, however, picking up of late and we expect a good pick up on occupancy rate in the months of January and February because of this, Guitry added.

“Overall, there was not much to cheer for the tourism industry this year end season,” Pronab Sarkar, President, Indian Association of Tourist Operators (IATO), told Arabian Business.

A number of Russian charter flights diverted from Goa, mainly on account of high staying costs due to 28 percent GST and tightening of norms for charter flights. Besides, countries like Thailand offered visa free visits to tourists till mid-January, weaning away foreign tourists from the Indian shores, Sarkar said.

Foreign tourist arrivals in India during January-September 2018 were at 7.47 million, as against 7.03 million during the same period of the previous year, posting a 6.7 percent increase.

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