New Delhi — India’s tourism and hospitality sectors are holding steady, thanks largely to strong domestic demand, even as global disruptions—particularly the ongoing West Asia conflict—impact international travel.
According to a report by the PHD Chamber of Commerce and Industry, the hospitality sector continues to show resilience, supported by a sharp “V-shaped” recovery and sustained demand within the country.
The restaurant and food services segment, however, is witnessing mixed trends. While domestic consumption and food delivery—accounting for up to 30 per cent of revenues for organised players—are providing stability, rising input costs of 10–15 per cent and a dip in international footfall are putting pressure on profit margins.
Domestic tourism remains the key growth driver, fueled by evolving travel trends such as “revenge travel,” staycations, bizcations, and experiential dining. In contrast, inbound tourism has declined by 15–20 per cent, especially in the leisure segment, as foreign travellers adopt a cautious stance amid geopolitical tensions.
The report notes that tourism, aviation, and hospitality together contribute nearly 8 per cent to India’s GDP and support over 40 million jobs, making them highly sensitive to global developments.
Outbound travel patterns are also shifting, with Indian travellers increasingly opting for short-haul destinations like Thailand, Singapore, and Vietnam, while demand for long-haul routes has softened.
A strong recovery in 2025 has helped cushion the impact, with branded hotel inventory nearing 2 lakh rooms and domestic air traffic crossing 5 lakh passengers daily. However, disruptions in Middle East air corridors have increased flight durations by 2–4 hours on key routes and pushed up airfares.
To strengthen resilience, the industry body has suggested diversifying international flight routes, improving bilateral connectivity, and rationalising taxes on aviation turbine fuel (ATF), hospitality, and food services.
It also emphasised the need for better digital travel systems, faster visa processing, and targeted promotion in new global markets. While current geopolitical tensions pose short-term challenges, the report sees an opportunity for India to build a more robust and self-reliant tourism ecosystem.
With inputs from IANS