Multiple factors create climate for tourism boom; watch the stocks

Home Markets Multiple factors create climate for tourism boom; watch the stocks
Multiple factors create climate for tourism boom; watch the stocks

By DK Aggarwal

Tourism plays an important role in Indias economic development and employment generation. The industry has witnessed good growth with an increase in the foreign tourist arrivals. In order to compete in this competitive business, India is creating niche products such as heliport tourism, medical tourism, wellness tourism, adventure tourism, cruise tourism and caravan tourism.

Recently, the government chose Sassoon Dock and Sewree Fort in Mumbai and nearby areas like Kanhoji Angre Island, Mandwa, Alibaug and Vijaydurg to develop as tourist destinations.

Furthermore, in order to attract more tourism, water sports activities around the Marine Drive area are also planned.

Governments efforts to build world-class tourism infrastructure in the form of airports, sea ports, high-speed rail and roads are likely to support the industry. Also, the government is making serious efforts to boost investment in the industry and is working to achieve 1 per cent share in world's international tourist arrivals by 2020 and 2 per cent by 2025.

The government has offered incentives to more regional airlines this year to cover new and underserved airports to spur growth in the industry. In Under Budget 2018-19, the government allotted Rs 1,250 crore ($183.89 million) for integrated development of tourist circuits under Swadesh Darshan and Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD).

The industry has vast potential for generating employment and earning huge amounts of foreign exchange besides giving a fillip to the country's economic and social development. India's cultural diversity makes it a land of unlimited opportunities. The growth of foreign exchange earnings from tourism has continued to be robust.

Also, in April 2018, the hotel occupancy rate was highest in last 10 years and this indicates that tourism is on rise.

The Indian currency is weakening and a depreciating currency can be a blessing in disguise for the industry as foreign tourists will now find it cheaper to visit India.

Recent data indicates that foreign exchange earnings (FEEs) from tourism surged 10.2 per cent to Rs 15,713 crore in March 2018 compared with Rs 14,260 crore in March 2017. The issuance of e-tourist visa' increased 37 per cent to 1.57 lakh in April 2018 from 1.14 lakh in April 2017.

The industry is also looking forward to the expansion of e-visa scheme, which is expected to double tourist inflow to India. Total employment supported by tourism was 8 per cent in 2017; it is expected to rise to 8.4 per cent by 2028.

The total contribution by travel and tourism industry to Indias GDP is expected to increase from Rs 15.24 trillion ($234.03 billion) in 2017 to Rs 32.05 trillion ($492.21 billion) in 2028.

According to a 2018 economic impact report by World Travel & Tourism Council (WTTC), India is likely to become the third largest tourism economy in next 10 years.

With the upliftment of the industry, stocks such as Mahindra holidays, ITDC, Indian Hotels and EIH should move up. Besides, tour operators such as Cox & Kings and Thomas Cook are poised to gain. One may invest in these stocks for the long term.

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