Click it and Unblock the Notifications
With the festive season right around the corner, domestic travellers in India are faced with an upsurge in the cost of travel. The increased demand and absence of COVID-19 restrictions are causing prices for hotels, flights, and holiday packages to escalate.
The bankruptcy of the budget airline Go First has further inflated airfares by causing a shortage of aircraft. Additionally, hoteliers have been prompted to raise room tariffs to take advantage of the high demand.
Flights and Hotels Capitalizing on High Demand
Due to a curbs free year following the pandemic, there is a heightened demand for travel during the upcoming festive season. According to airline executives, this elevated demand and shortage of aircraft from the bankruptcy of Go First will lead to an increase in air fares.
Similarly, hoteliers also reported an increase in room tariffs to capitalize on the bumper demand. At least 100 aircraft are currently not operational due to the bankruptcy of Go First and technical issues with Pratt & Whitney engines, leading to a shortfall in capacity.
Increased Rates and Occupancies in Hotels and Flights
Market Managing Director at Wyndham Hotels & Resorts, Nikhil Sharma stated that hotel rates have risen by an average of 20% compared to previous year, with more people opting to travel during the festivals. Similarly, airlines have indicated that bookings are likely to peak closer to Diwali with firms having to adjust their network to increase capacity on high demand routes. Despite the high demand, it is suggested that airlines may not be able to rake in high profits due to heightened costs in jet fuel and interest rates, covering only the cost of operation and not making substantial profits.
In conclusion, it is clear that this festive season will witness a significant increase in travel demand, following a year without restrictive measures due to COVID-19. Consequently, this has resulted in an escalation of costs for hotels, flights, and holiday packages, due to increased demand and limited capacity. However, while hoteliers and airlines may see a surge in bookings and demand, the increased operational costs may limit their profitability, leading to just covering their operational costs rather than generating ample profits.
How travel increased in the last one year
The post-COVID travel scenario in India has witnessed a remarkable resurgence in tourism, as indicated by the latest statistics. In 2022, the number of foreign tourist arrivals in India surged to an impressive 6.19 million, reflecting an astounding annual growth rate of 305.4%. This dramatic recovery can be attributed to the easing of travel restrictions and the renewed interest of global travelers in exploring the diverse cultural and natural treasures of India.
Additionally, the departure of Indian nationals from the country also saw a significant uptick, with 21.09 million Indian travelers embarking on international journeys in 2022, marking an annual growth rate of 146.7%. This surge in outbound tourism indicates a growing confidence among Indian travelers to explore international destinations once again.
Moreover, domestic tourism has thrived during this period, with a staggering 1731.01 million domestic tourist visits recorded across all states and union territories, signifying an annual growth rate of 155.5%. This robust domestic tourism sector not only supports local economies but also showcases the enduring appeal of India's rich tapestry of attractions.
In terms of foreign exchange earnings, the tourism industry has contributed significantly to India's economic recovery. In 2022, the estimated foreign exchange earnings from tourism reached Rs. 134,543 crore, denoting an annual growth rate of 106.8%, while in US dollar terms, it amounted to US$ 16.928 billion, reflecting an impressive annual growth rate of 92.4%.
These figures highlight the sector's resilience and its pivotal role in boosting India's economy after the challenges posed by the pandemic. As the world continues to adapt to the new normal, India's tourism industry is poised for continued growth and is set to welcome even more travelers in the years to come.
