skift.com
25.08.2023 / 13:53
Skift India Daily: Tour Operators Return to Profits
Leading operators in the Indian tours and travel sector are set 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, according to Crisil Ratings. Revenue is likely to recover 90 percent of pre-pandemic levels, buoyed by strong recovery in both corporate and leisure travel segments in India and abroad. Crisil Ratings expects operating margins to sustain at these levels next fiscal, due to implementation of cost optimization and automation initiatives undertaken by travel operators commencing from the pandemic period, even as revenues are expected to pass pre-pandemic levels next fiscal. This marks a significant turnaround from operating losses of 25.8 percent and 2.7 percent in fiscals 2021 and 2022, respectively. “Rising business travel, along with increasing return-to-office and preference for face-to face meetings besides increasing consumer preference for short breaks will push revenue past pre-pandemic levels in fiscal 2024. Interestingly, preference for short holidays is seeing momentum, especially within India and Asian destinations,” said Poonam Upadhyay, Director, CRISIL Ratings. The improvement in operating performance, together with healthy liquidity and net debt free balance sheets, will help strengthen credit profiles of the players, the report said.