Inbound tourism has shown signs of recovery, but challenges remain. The 2019 Foreign Tourist Arrivals (FTA) of nearly 11 million climbed down to 2.74 million in 2020 on account of the outbreak of Covid-19 pandemic. It fell to just over 1.4 million in 2021. However, as the pandemic is widely believed to have entered the endemic stage and travel worldwide steadily opening, international tourism has shown strong signs of recovery reaching 60 per cent of pre-pandemic levels in the first seven months of 2022.
India’s inbound tourism has however shown a much slower recovery so far. FTA during the first seven months of 2022 have been 27,64,975 as against pre-Covid 2019 number of 61,14,150 for the same duration. Compared to pre-pandemic 2019 numbers, Indian inbound market recovery is at around 45 per cent, much slower than the international tourism recovery that reached 60 per cent for the same period. And most of the industry stakeholders believe that even this number is mostly on account of business travel and not leisure travellers and tourists.
Uncertainty remains. Commenting on the inbound tourism revival for the current season, Manav Thadani, Founder Chairman, Hotelivate, said, “I can’t say with great certainty that it will increase. It will come and most of it will be led by business travel. I think our source markets in Europe are still going through a lot of upheaval. People from the US are not going to travel for so long. I think one good thing is that if inbound had to be weaker then this is a good year because the domestic market is so strong that we won’t really feel the impact of a lower inbound traffic coming into India.”
Challenges
There are several headwinds that India’s inbound tourism sector faces today. International travel is still emerging out of the shadows of a devastating pandemic. International air travel is still not what it used to be. Overseas marketing is not happening. New Tourism Policy is being awaited for the inbound tourism promotion to begin. Digital focus in overseas promotion that is being talked about is still a work in progress.
Founder and former Vice Chairman, FAITH and Managing Director of KTC India, Sarabjit Singh, says, “We were very keen to hear what Union Minister of Tourism or Union Tourism Secretary had to say on inbound at the National Tourism Awards organised on World Tourism Day on September 27. None of them, from the Vice President to the Minister or Secretary spoke about inbound tourism. They spoke about domestic tourism and other things that tourism economy can help deliver for the country, but nothing on inbound or overseas promotion that we as an inbound tourism stakeholders wanted to hear. After all, we were earning US$ 30 billion in foreign exchange for the country before Covid! Look at the Rupee’s slide today! Inbound tourism and foreign exchange that we earn for the country is one of the key antidotes to this slide.”
“The Government did not do anything about participating in WTM this year, didn’t go to TOP RESA, such an important event. Worse still, it seems like we are not even being talked about or in consideration. This season, we are not expecting more than a third or at most 40 per cent of our 2019 level of business. It could have been much better for the businesses and the country had there been some overseas marketing and promotion like what other destinations are doing in their respective source markets,” the former FAITH Vice Chairman added.
That’s not all. e-Tourist visa is another issue industry is grappling with. Indian Association of Tour Operators (IATO) has recently written to the Prime Minister requesting his intervention in restoring e-Tourist visa for the UK, Canada, Saudi Arabia, and other such source markets. The association points that the pandemic broke the back of the entire hospitality sector, but the worst hit has been the inbound tourism industry. Now the pandemic seems to be over, with the hospitality sector rebounding but similar rebound seems to be eluding the inbound industry.
According to IATO, there are multiple reasons for it like high airfares, restriction on travel and above all difficulty in procuring the visas. The association has made numerous representations and sent letters to the Tourism, Home Affairs and External Affairs Ministry requesting them for restoration of e-Visa for UK, Canada and other source markets as maximum foreign tourists travel to India from these countries. “Having failed to evoke any response from these ministries, we have written to the PM, hoping for a quick resolution” says a dejected IATO President Rajiv Mehra.
And if that’s not all, suddenly there are cancellation in hordes by the UK tourist visitors because of sudden change in visa rule last week that requires British citizens to be physically present at India’s London embassy if they want an Indian visa. Non-availability of appointment slots is only aggravating the situation. Recent travel advisory by the US, a key tourism source market for India, asking American citizens to exercise ‘increased caution’ due to ‘crime and terrorism’ while travelling to India are some of the other thorns in inbound revival.
According to Mehra “IATO is in receipt of a number of requests from our members/foreign counterparts expressing their concern on the delay the intending tourists in UK are facing in getting normal visa for India as there is NO e-Tourist visa at present. Appointments are not available to intending foreign tourists at the VFS Global offices in the UK. It is taking 6 to 8 weeks’ time in the UK to get a normal Indian visa and even for that also appointments by the VFS Global offices are not being given. Handling of normal paper visa for India by the embassy in the UK/VFS Global is very discouraging and harassing for the tourists planning to come to India as it is taking 2 to 3 months to get a normal tourist visa and that too after a lot of efforts”.
An ominous situation, Mehra says that IATO is getting feedback that if the situation does not improve, foreign tour operators will stop selling India tour packages. Due to non-availability of e-Tourist visa for UK, Canada and other source markets, we as a country are losing huge business as tourists from these countries are opting for alternative destinations. If this situation continues, it will be a big loss for the inbound tourism business and the entire season may be lost, causing further loss of foreign exchange earnings and loss of employment as one foreign tourist coming to India creates 9 jobs directly or indirectly.
According to Arvind Singh, Secretary – Tourism, Ministry of Tourism, Government of India, “The bookings are good, but some dampeners remain, like high airfares from key source markets like the US. There are some concerns about the e-Visa. It’s not being allowed from Canada and the UK. So, we are in touch with the External Affairs Ministry to further allow e-Visa. About airfare, you know you can’t do much. It depends on the market situation.”
New Policy, New Road Map
Overseas marketing that was stopped in the wake of the pandemic is yet to start. There is no noticeable in-person physical meetings or roadshows happening anywhere, something that Indian tourism stakeholders and IATO is asking the Ministry of Tourism to resume at the earliest. India Tourism is missing from TOP RESA or WTM this year. However, these seem deliberate decisions and a lot has to do with the New Tourism Policy that is expected soon. In the midst of a policy rejig that will redefine the future of India tourism, the new policy, once finalized, will determine the new course of action for inbound too.
“It is a fact that we suspended all our overseas promotion in the wake of Covid-19. We are in the process of restarting that (Overseas promotion) in a new way. There has been discussion at many senior levels within Government and we have been advised to go in a particular manner and we have restructured our strategy in that way with strong focus on digital promotion and new set-up of offices, and hopefully we will be coming up with that soon,” says Secretary Singh.
Furthermore, while shedding light on the New Tourism Policy, Singh said, “The key strategic objectives of the policy are to enhance the contribution of tourism in the Indian economy by increasing visitation, stay and spending, and making India a year-round destination.”
The Tourism Secretary also points that there is surging demand for travel to India by international tourists since India removed the restrictions in March. “The good thing is that every day I keep getting requests for restoration of e-Tourist visa from countries like Kazakhstan because of strong demand or there is strong demand from the UK from where e-Visa has been stopped. So, it’s building up,” he said.
IATO President Mehra points that so far barely one-third of the business has revived. However, on an optimistic note, Mehra says, “Ministry of Tourism is upbeat on inbound tourism. Strategizing and plan of action are being worked and here digitization is in focus. 20 Missions abroad have been given an officer who would look after tourism. IATO is pursuing for physical roadshows, FAM trips for bloggers, media and foreign tour operators. The National Tourism Policy 2022 will usher in the framework of tourism development, supporting tourism industry, strengthening tourism infrastructure and develop tourism subsectors & subsets.”
G 20
Probably the next 12 months will be unlike any before. As far as international tourism promotion goes, a lot of marketing and promotional action will be directed through the 12 months of India’s Presidency of the G 20 from December 2022 until September 2023. G20 comprises some of the most important and developed countries of the world, together these countries also account for more than 80 percent of the world’s GDP, 75 percent of international trade and 60 percent of the world’s population.
According to Secretary Singh, the Prime Minister’s message is that each visitor who comes to the G20 Conference should go back as an ambassador for India and that is the theme with which we all have to work and put our best foot forward and ensure that we use these conferences to not only provide good services and facilities to the visiting dignitaries but also create lasting impact on him (The G20 visitors) that he remembers that India is the place that he will go back to and also talk to his friends about.
Starting December 2022 there will be a series of large number of meetings at 55 locations in the country which the G20 Secretariat has identified. “All these locations will come on the global focus, and this is very important for India tourism, Singh said at various forums in New Delhi.
“We, in the past, have seen that several countries who took the G20 Summit as an opportunity to project the nation to the global community” Singh said. Citing example of Saudi Arabia, he added that Saudi was predominantly seen as a religious destination, people were visiting it mainly for Mecca and Medina. Post G20 Presidency, it is open to travelers from Europe and other countries, and we see that happening. “Hence, it is an opportunity that all of us should take care of and truly utilize G20 in 2023. This is an event that we look forward to, the Government of India looks forward to, for positioning and projecting India as an important destination for the rest of the world,” Singh emphasized.
“Almost 215 meetings are slotted to be held from January 2023 to September 23 at 55 locations. This will culminate in the Summit which will be held at New Delhi. Each of these meetings will have a large number of audiences. The meetings will have Working Groups in different subjects: Finance, Environment Trade, Labour, Tourism amongst others,” Singh informed.
Elaborating more from tourism perspective, Singh said that tourism itself will have three Working Group meetings and will culminate in the Ministers Conference. “As a part of these large number of side events, G20 will also have advocacy groups. We are also planning side events on behalf of the tourism industry. A global MICE conference is proposed to be held in the month of April in Bengaluru as a side event of the G20 Summit.”
Inbound Demands
As the apex body on inbound tourism stakeholders, IATO’s ears are closest to the ground. The association, based on the inputs from its members and industry best practices, lists out a slew of action and initiatives required to regain India’s pre-Covid market share and rebuild India’s inbound tourism better and bigger.
Mehra says that the need of the hour is physical road shows in target countries to start physical marketing and promotions; participation in major international travel marts/fairs and roadshows. “Overseas marketing and promotions through electronic and print media can be an add on; reduction in airfares by reducing taxes on ATF by the center and the state govts; restoration of e-Tourist visa for the international travelers from the countries such as the UK, Canada, Malaysia, Saudi Arabia, Kuwait, Oman, Bahrain etc. and validity of 5 lakh free tourist visa to be extended till March 2024,” he said.
He also said that the states need to consider giving space to tour operators outside the state as a part of their team going for the overseas roadshows as these tour operators also promote the states of India.
Since the current Foreign Trade Policy 2015-20 is likely to be replaced by new Foreign Trade Policy, IATO says that the benefit of SEIS scheme should be continued for the tour operators and travel agencies for the next 5 years and in case if SEIS is not going to be continued, an alternative incentive scheme should be introduced. “Special status for the inbound tour operators to be given under which an incentive between 7 to 10 % on the net foreign exchange earnings during a financial year might be given,” Mehra added.
Reinstating financial support under MoT’s MDA Scheme, extending the validity of free Tourist Visa till 31st March 2024 without capping of 5 lakh free tourist visas, allowing entry of foreign tourists through land borders of Nepal and Bhutan, removal of submission of information on Air Suvidha App/Portal, Not increasing ASI Monuments’ entrance fee for foreigners for the next 5 years, tour operators to be allowed to import high-end electrical vehicles under EPCG (Export Promotion Capital Goods) scheme, Refund of IGST to tourist under Tax Refund for Tourists (TRT) Scheme, uniform transport tax for all state, reduction of taxes by the Centre and the State Governments on ATF to help reduce airfares, are some of immediate measures Mehra suggest will help boost inbound tourism.
