Indian Travel Sector Could See 12-14% Growth: India Report

The Indian tour and travel sector anticipates 12-14% growth in the current and upcoming fiscal years, according to a report by Crisil. 

The driving factors include sustained high airfares and nearly pre-Covid levels of volumes across various segments. This growth encompasses long-haul travel, where visa challenges are gradually easing. 

Operational Resilience: Despite increased promotional spending, the operating profit margin is expected to exceed 6.5% in both this fiscal year and the next. This resilience is supported by operating leverage benefits and various cost optimization and automation initiatives implemented since the pandemic. Healthy cash flows and strong balance sheets are expected to bolster credit profiles.

Overseas Travel Dynamics: Growing outbound travel, especially post-pandemic, and rising demand for short getaways propel the growth of Indian tour and travel operators. The recent Tax Collected at Source (TCS) rate hike is predicted to have a limited impact, as individual trip expenditures typically fall below the INR 700,000 threshold for over 80% of tour packages.

Challenges and Considerations: While the sector is poised for growth, tour operators may face difficulties monitoring per-traveler limits during the transitional period due to a lack of sufficient tracking mechanisms for travel spending. Key monitorables include the growth in commercial air fleet, airfare fluctuations, changes in tax structures, and inflation trends.

Leisure Segment Insights: In the overseas leisure segment, short-haul destinations, primarily in the Middle East, parts of Europe, and Southeast Asia, will drive growth. Long-haul travel to the US is expected to recover, especially for students, although full pre-pandemic recovery will take time..

Promotional Strategies: Travel operators are likely to increase promotional spending by 100-150 basis points to capitalize on the surge in demand. Debt protection metrics, such as interest coverage, are projected to be over 4 times, compared to approximately 3 times in the last fiscal year. 

In March of this year, Crisil had predicted that leading operators in the Indian tours and travel sector were to report 6-7 percent growth in operating profits in fiscal 2023, after having reported losses for the past two fiscals due to pandemic-induced travel restrictions. 

India’s Air Passenger Traffic to be 400 Million by 2030

By 2030, the Indian aviation sector is projected to have over 200 airports, with a notable emphasis on Tier 2 and Tier 3 cities, anticipating the movement of more than 400 million. passengers. 

This information was provided by aviation minister Jyotiraditya M Scindia while laying the foundation stone for a new terminal building at Rajahmundry Airport in Andhra Prad

Domestic air passenger traffic in the first half of the fiscal year (between April and September) was 75.4 million, year-on-year growth of 20% and 7% higher than pre-Covid levels.

Net losses: Credit rating agency ICRA had predicted in October a reduction in the industry’s net losses, estimating them to be in the range of INR 30-50 billion for the fiscal year 2024. This marks a substantial improvement compared to the INR 170-175 billion net losses in the preceding fiscal year.

Rajahmundry Airport Expansion: Rajahmundry, currently connected to Hyderabad, Chennai, and Bengaluru, handles 126 flight movements weekly. The expansion, costing INR 3.5 million covers an additional 17,029 sqm to meet the growing passenger traffic, serving 2100 passengers during peak hours and accommodating 30 lakh passengers annually.

Oyo Elevates Rakesh Kumar to Chief Financial Officer

Global travel technology company Oyo has promoted Rakesh Kumar to the position of chief financial officer (CFO). Formerly, he was the deputy CFO.

Professional Background: Before joining Oyo, Rakesh worked with EY, where his contributions spanned statutory audits, tax audits, IFRS compliance, and IPO-related work. 

Oyo also announced that Ankit Tandon, global chief business officer and CEO of Southeast Asia and Middle East, will now head Investor Relations, including M&A activities, as well as the financial planning and analysis function.

Sunburn Music Festival Approval Revised

The coastal state of Goa, which according to Oyo’s Summer Vacation Index 2023 is a favorite destination of 92% Indians, has considered the concerns of locals by not allowing the music festival Sunburn till December 31. 

However, it has issued a provisional approval to organise a three-day festival up to December 30.

The Empower Committee of the tourism department, headed by Goa tourism minister Rohan Khaunte has also refused to grant permission for the music to be played beyond 10 p.m.

It remains to be seen if the new regulations will impact the arrival of tourists in the state in a month heavy with vacationers

The festival in 2022 saw the arrival of over 0.35 million visitors from across 50 countries. 

IndiGo Announces Additional Flights to Phuket

IndiGo airline announced the inclusion of flights connecting Mumbai and Phuket, along with the resumption of services between Bengaluru and Phuket. This expansion aims to strengthen the air connectivity between India and Thailand.

Flight Schedule: Starting from January 5, 2024, additional flights between Mumbai and Phuket will operate, followed by flights between Bengaluru and Phuket from February 28, 2024. Both routes will have flights six days a week.

Visa-free entry: Capitalizing on visa-free entry to Thailand, IndiGo aims to improve connectivity, aligning with its mission of ‘giving wings to the nation.’ With these additions, IndiGo now operates 56 weekly flights from five airports in India to Thailand. 

Uttarakhand to Launch Gyrocopter Safari

Uttarakhand is set to introduce India’s inaugural gyrocopter safari by the end of the year in a bid to ease the spotting of tigers amongst other wildlife. The announcement came during a tourism session at the Uttarakhand Investors’ Summit.

India is home to 75% of wild tiger population. The state of Uttarakhand has reported the third-highest tiger population in the country with 560 tigers, according to the Uttarakhand forest department. Given the population, tiger safaris in this region are extremely popular. Now with gyrocopter safari, the entire process becomes much safer, avoiding man-animal conflict. 

What is it gyrocopter safari? A gyrocopter, distinct for its engine-less rotor system, bears a resemblance to a small helicopter. The safari promises a distinctive and thrilling experience for tourists. According to officials, gyrocopter safaris have been conducted in Rishikesh since 2014 with the support of the state government. The gyrocopter safaris will take off from Rishikesh, providing tourists with a bird’s-eye view of the region’s natural beauty, including spotting of tigers. 

Tiger facts: India is home to half the world’s tiger population. According to the latest census released in March 2011 by the National Tiger Conservation Authority, the current population is estimated at 1,706 – up from 1,411 in 2008, but a long way off the 45,000 which reportedly roamed India 100 years ago.

In India, the tiger is found in 18 states, from the Himalayas in the north to Tamil Nadu in the south and across the northeast into Burma.

They occupy a variety of habitats including tropical evergreen forests, deciduous forests, mangrove swamps, thorn forests and grass jungles.

A total of 923 tigers were killed by poachers between 1994 and 2010, according to the Wildlife Protection Society of India (WPSI).

An undercover investigation by the WPSI and the Environmental Investigation Agency (EIA) in 2005 revealed that the trade in tiger and leopard body parts in China continues to thrive.