India’s tourism sector is showing resilience, bolstered primarily by robust domestic travel, even as international arrivals continue to decline due to ongoing geopolitical tensions in the Middle East. A report by the PHD Chamber of Commerce and Industry notes that while demand for local food and restaurant services remains stable—with food delivery comprising approximately 30% of revenues—the sector is still grappling with a 10-15% rise in input costs and a drop of 15-20% in foreign tourist numbers.
The shift towards domestic tourism is largely attributed to new travel trends such as "revenge travel," staycations, and business-related trips. The report emphasizes the significant role that India’s tourism, aviation, and hospitality sectors play in the economy, contributing approximately 8% to the GDP and supporting over 40 million jobs.
Moreover, the disruption in international travel has been exacerbated by increased flying times and higher airfares, resulting from the closure of major air corridors through the Middle East, which are critical for global transit. Even amid these challenges, the hospitality industry is adapting; the number of branded hotel rooms has increased to nearly 200,000, and domestic air travel has picked up, seeing traffic surpass 500,000 passengers per day.
To enhance recovery prospects, the report calls for improved digital travel facilitation, streamlined visa procedures, and expanded marketing efforts to promote alternative global destinations.