Here's What's Behind a Strong Outlook for Indian Tour Operators

08.08.2024 - 15:16 / skift.com / Bulbul Dhawan

The revenue of Indian tour and travel operators is expected to increase by 15-17% during the 2025 fiscal year, according to projections by credit ratings agency CRISIL. The growth is driven by rising domestic tourism and increasing propensity to travel overseas, the agency said. 

“Improving infrastructure, rising disposable incomes, a behavioral shift in travel patterns, and the government’s increasing focus on boosting domestic tourism will further support the sector’s revenue growth,” it said. 

Factors Affecting the Tourism Growth: According to CRISIL, the domestic tourism market in India is being driven by quick getaways and weekend staycations, growing spiritual tourism, and improved last-mile connectivity. Gradual increase in inbound travel towards pre-pandemic levels and demand for corporate travel is also leading this market. 

On the other hand, higher disposable income along with visa-free facilities, simplified visa processes, more affordable travel packages and focus of Indian airlines on routes to new destinations in Southeast and Central Asia is spurring overseas travel from India. 

The agency has projected 30 million Indians to travel overseas this year, higher than India has ever previously witnessed. In 2023, 27.3 million Indian travelers traveled internationally, marginally surpassing the pre-pandemic figure of 26.9 million. 

Revenge Travel to ‘Regularized’ Travel: CRISIL Ratings director Poonam Upadhyay said that the trend of revenge travel that was observed post-Covid has now changed into “regularized” travel “with a significant shift towards shorter and frequent vacations, for both domestic and overseas trips.” 

A Skift Megatrend earlier this year highlighted how the growing Indian middle class and its increasing spending power is signifying an expanding market for travel services. 

A report released by the Organisation for Economic Co-operation and Development (OECD) last month had said that outbound travel from India is emerging as the future growth engine for global tourism. Consulting firm McKinsey and Company said the same in its report, stating that India has a fast-growing pool of first-time tourists.

Budget airline Akasa Air’s carrying capacity in terms of available seat kilometers increased by 300% in the 2024 fiscal year, it has said. The airline now expects this metric to increase 50% year-on-year for the 2025 fiscal. 

Akasa has completed its second year of operations this week. Over this time, it has rapidly expanded its network to 22 domestic and five international destinations. The operations to the fifth international destination – Kuwait City – is set to commence later this month. 

Currently operating more than 900 weekly flights, the airline has surpassed IndiGo as