Domestic Travel Operators To See Up To 17% Growth In Revenue This Fiscal, Says Crisil
The study was based on an analysis of India's four major travel operators, which account for about 60% of the sector's revenue.
Rising domestic tourism and an increasing propensity to travel overseas will expand the revenue of India's tour and travel operators by 15–17% this fiscal, Crisil Ratings Ltd. said on Thursday.
Revenue growth will further be uplifted by factors such as improving infrastructure, rising disposable income, a behavioural shift in travel patterns, and the government's increasing focus on boosting domestic tourism.
The assessment was based on an analysis of the country's four major travel operators, which account for about 60% of the sector's revenue.
"The credit profiles of travel operators, too, are expected to remain healthy, supported by strong balance sheets and steady operating margins of 6.5–7%, in line with the last fiscal, resulting in sizeable cash flows and continuing low reliance on debt," stated Crisil Ratings.
"Micro holidays" such as quick getaways or staycations over long weekends, growing spiritual tourism, and better infrastructure facilitating travel to newer destinations fuelled growth in the domestic tourism market.
Additionally, an increase in foreign tourist arrivals to pre-pandemic levels and high demand from corporates and meetings, incentives, conferences and exhibitions segments also support domestic travel, the rating agency added.
For overseas leisure travel, growth is being led by higher disposable incomes, visa-free facilities from 37 countries, simplified visa processes, including visa-on-arrival and e-visa facilities, among others, and easing visa-related challenges related to long-haul destinations.
In addition, attractive travel packages and increased focus of Indian airlines on new destinations in southeast Asia and central Asia are spurring international trips, driving outbound travel to a record high this calendar year, said the company.
The trend of "revenge travel" seen after the pandemic has evolved into "regularised travel" in recent years with a significant shift towards shorter and frequent vacations, for both domestic and overseas trips, observed Poonam Upadhyay, director at Crisil Ltd.
"Moreover, growing middle-class aspirations, rising urbanisation, affordable packages, steadily increasing income levels, and the government's focus on boosting Indian tourism will maintain strong momentum in the tour and travel sector. This will, in turn, ensure healthy double-digit revenue growth for travel operators this fiscal as well," she stated.
(With inputs from PTI)
