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Economic Survey 2023: Tourism sector showing signs of revival, foreign tourist arrivals growing 

Economy Survey FY23: India’s tourism sector is showing signs of revival with the waning of the COVID-19 pandemic and the removal of the restrictions and is ranked 10th out of the top 64 countries in the world in the Medical Tourism Index FY21, according to the Economic Survey.  The survey said that medical tourism is on the rise due to government initiatives like the Ayush visa for medical tourists, the launch of the National Strategy for Sustainable Tourism and Responsible Traveller Campaign, the introduction of the Swadeshi Darshan 2.0 scheme and Heal in India.

The survey further stated that aircraft movement increased by 52.9 per cent on-year in the country between April and November 2022 on account of relaxations in COVID-19 norms and the resumption of scheduled international flights. The survey stated: “The tourism sector is also showing signs of revival, with foreign tourist arrivals in India in FY23 growing month-on-month with the resumption of scheduled international flights and the easing of COVID-19 regulations.” 

The coronavirus pandemic not only impacted the tourism sector but also the hotel industry as the average hotel occupancy stood at 33 per cent to 36 per cent in 2020. 

“The COVID-19 pandemic affected the fortunes of the hospitality and tourism industries in recent years. The hotel industry closed the year 2020 with an average hotel occupancy rate of 33-36 per cent, reflecting a decline of 32 per cent. In the wake of failing demand and occupancies, hotels reduced tariffs significantly to attract business, thus, pulling down Revenue per Available Room (RevPAR) to [a] dismal low of Rs 1,500- Rs 1,800, a decline of around 57-59 percent,” the survey noted. 

The hotel industry, however, recovered in the Q3 of 2021 due to growth in domestic leisure travel, partial resumption of business travel in India and wedding and social events. During the year 2021, small to medium-sized meetings also made a comeback, leading to a rise in demand for hotels. The sector recorded an average occupancy of 42 per cent to 45 per cent in 2021, 10-13 percentage points higher over 2020. 

After a revival in 2021, the hotel industry was hit by renewed travel restrictions across states in the beginning of 2022 due to the emergence of the Omicron variant of COVID-19 as people put their holidays and business travel plans on hold. Travel returned to normal levels in March 2022 given lower severity, lower hospitalisation rates, higher vaccination rate, and overall effective management of the COVID-19 pandemic. The hotel occupancy rate in November 2022 was around 68 per cent to 70 per cent, reaching the average pre-pandemic level of 2019-20. 

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