Despite significant growth in the travel sector and a robust rebound in economic growth from the COVID-19 downturn, India has dropped ten spots to 39th in the World Economic Forum's 2024 Travel and Tourism Development Index (TTDI). This decline is attributed to weak healthcare access, insufficient tourism infrastructure, and a shortage of skilled labor in the sector.

India’s Comparative Performance

On a scale from 1 (worst) to 7 (best), India scored 4.25, falling behind emerging-market peers like China and Brazil, as per the WEF's latest Insight Report. Among the top 10 global economies, India's decline was the most pronounced, followed by the UK, which dropped three places to seventh. The US maintained its top position, while China, the world's second-largest economy, rose to eighth place.

TTDI Evaluation Criteria

The TTDI evaluates 119 economies based on factors and policies that support the sustainable and resilient development of travel and tourism. The rankings measure each country's capacity to develop and sustain its tourism industry.

Regional Highlights and Recommendations

The UAE experienced the most significant growth in the index, while India's score was 7.1% above the average. The report suggests that India needs to overhaul its tourism policies to create a more favourable environment for both domestic and international travelers. Streamlining regulations and encouraging investment in tourism infrastructure could enhance India's appeal as a destination. Currently, India lags in tourism policies, air transport, and tourist service infrastructure but excels in price competitiveness and the availability of cultural and natural resources.

Impact of Budget Allocations

A significant issue for India has been the steady decrease in government funding for international tourism promotion, from ₹524 crore in 2021-22 to ₹341 crore in FY23, and further down to ₹167 crore for FY24. Conversely, funds allocated to pilgrimage destination development have increased by 66%, from ₹150 crore in FY23 to ₹250 crore in FY24. Despite an unchanged overall tourism budget of ₹2,400 crore from FY23, only ₹1,343 crore was spent on promoting tourism in FY23, with just ₹60 crore of the ₹341 crore budgeted for overseas promotions utilised.

Industry Insights

Dipak Deva, managing director of Travel Corporation India Ltd, emphasized the need for policy changes to significantly impact the tourism landscape. He suggested incentives like a 48-hour free transit visa facility to attract transiting travelers. Deva also recommended modifying the Services Exports from India Scheme (SEIS) to support small and medium travel businesses through financial rewards and duty credit scrips.

Rajiv Mehra, president of the Indian Association of Tour Operators, highlighted the lack of international marketing for India. "India has no problem with infrastructure at the moment, flights or road, they are all very good. The problem is that there is no advertisement of the country outside, including roadshows or fam trips for tour operators and print and electronic media etc.," Mehra noted. He pointed out that shutting down India's 20 tourism offices abroad and assigning their tasks to local embassies has disadvantaged the country in attracting inbound tourists.

Global and Regional Trends

The global travel and tourism industry, historically accounting for 10% of global GDP, is on a recovery path post-pandemic. International tourist arrivals are expected to reach 88% of 2019 levels in 2023 and return to pre-pandemic levels by 2024. West Asia has surpassed other regions, with tourist arrivals 20% above 2019 levels, while Europe, Africa, and the Americas have recovered to about 90% of pre-pandemic levels.

Environmental and Geopolitical Challenges

The sector continues to face uneven recovery, particularly in areas affected by conflict and natural disasters. Environmental challenges, such as biodiversity loss, climate-related extreme weather events, and pollution, also pose significant risks. The travel and tourism sector, which accounted for 5.8% of global water use and 5-8% of global material extraction in 2019, is under pressure to adopt more sustainable practices.

Future Outlook

The TTDI report underscores the need for sustainable and inclusive development to maximize the travel and tourism sector's potential in addressing global challenges. As the sector recovers, it must balance immediate supply and demand issues with long-term environmental and geopolitical considerations.