The great debate over Indian tourism

The trigger: The Goa brouhaha…

Back in November, Ramanuj Mukherjee declared that Goa tourism is “down in the dumps”—and that foreign tourists have “abandoned the state.” He shared a chart that showed the number falling from 8.5 million in 2019 to 1.5 million in 2023. The source: A Hong Kong-based data company called CEIC. Mukherjee also predicted that Indians will soon wisen up—and opt for more attractive overseas destinations—like Sri Lanka. Cue tsunami of tweets from Indians rushing to concur—raging over everything from overpriced hotels to the ‘taxi mafia’. 

Goa strikes back: Enraged by this public shaming, the state’s tourism minister—Rohan Khaunte—went on the offensive. First came the police complaint filed on November 5—describing Mukherjee’s post “an incident of public mischief.” The tourism department also mistook CEIC for the Chinese Economic Information Center—dismissing its data as Beijing propaganda.

Sarkaari numbers: Khaunte trotted out his own set of numbers. He acknowledged a drop in international visitors to Goa from 2019 to 2023—from 937,114 to 452,702. But Khaunte insists the overall total has slightly increased thanks to domestic tourism—from 8,064,400 to 8,175,460. 

Point to note: This fits the government’s narrative that domestic tourism more than compensates for any loss in overseas visitors: 

Over the last decade, we have begun to take the stand that even if foreign travellers do not want to come, we don’t really care. The Indian middle class is growing. It loves travel. Domestic tourism will fill our destinations… Foreigners may be put off by a bomb blast or a health scare as has happened frequently to us in the past. But Indians will keep travelling.

Hey, Americans don’t need foreigners to keep their tourism biz booming—why should we? FYI: Domestic tourists account for two-thirds of all travelers in the United States.

As for the police complaint: Khaunte says a firm slapdown was more than overdue: 

If we do not attend to this in terms of complaint, then the maligning or misrepresentation of Goa will continue. Our prime minister is talking about ‘Chalo India’ and ‘Dekho Apna Desh’. Every state today is competing, collaborating or cooperating. And here you have somebody just coming and giving figures, which are unknown to anybody.

In other words, dissing Indian tourism is now ‘anti-national’—just FYI. 

Are these the “real” numbers?

Putting aside data out of China or our sarkaar, we have three independent signals about the state of foreign tourism. None are encouraging. 

WEF ranking: India has slipped 10 spots on the World Economic Forum's Travel and Tourism Development Index—from 29 in 2019 to 39 in 2024. No, it can’t all be blamed on the pandemic:

On an overall index score of 7, where 1 is the worst, and 7 the best, India's score of 4.25 was lower than its emerging-market peers such as China and Brazil... Among the world's top 10 economies, India's slide down the rankings was the sharpest, followed by the UK, which fell three places since 2019 to occupy the seventh spot.

While US maintained its #1 spot, China—for all its diplomatic jhagdas with the West—went up a notch to #8. 

Foreign exchange numbers: are surprisingly healthy—but misleadingly so. A CRISIL report on the first six months of 2024 shows we are making way more money from these foreign tourists: 

India's foreign exchange earnings (FEE) from foreign tourists in the first half of 2024 were $15.33 billion, which is a 17.62% increase from the same period in 2023. This is higher than the $14.53 billion earned in the same period in 2019.

But, but, but: There were only 4.78 million foreign tourist arrivals (FTAs) in January-June—about 90% of the first half of 2019. That doesn’t sound too bad—except that other countries are easily beating their pre-pandemic levels—with FTAs in Qatar up 47%, Dubai 11% and Vietnam 4%. OTOH, we are earning more per international traveler—up from Rs 200,000 in 2019 to Rs 270,000 in the first half of 2024. The likely reasons: A declining rupee and an increase in the number of luxury travelers. 

The hospitality industry: The greatest challenge to government data comes from  hospitality industry leaders. The union government claims we received 10.9 million foreign visitors in 2019—an all-time peak—which has now dropped by 10%. The industry claims the “real foreign tourist arrivals are about 3 million.”

The elephant in the room: Yes, the tourist infra is poor, hygiene is bad, blah blah blah. But they have not declined since 2019. The lesser acknowledged cause for the drop in foreign tourist numbers: geopolitical strife. Take Bangladesh, for example. In the first half of 2024, the United States and Bangladesh were the two top sources of tourists to India. In June, Bangladesh was #1—accounting for 28.49%—followed by the US at 22.59%. But those numbers have plummeted after Sheikh Hasina was kicked out. July saw a drop of 20.26% compared to the same month in the previous year. In August, the decline was even steeper—witnessing a 38.08% drop. 

Also this: In 2019, Bangladesh and China together accounted for 27% of the foreign tourist arrivals. The Indian government has since become way more stingy in its visa policy toward both countries. 

Why any of this matters: Despite the government’s bluster, the long-term loss in terms of revenue due to fewer overseas visitors is indisputable: “Though domestic travel is booming, tourism’s contribution to GDP declined from 5.8% in 2002-03 to 5.2% in 2019-20, according to the government’s figures.”

What about those Indian tourists?

The evidence on domestic tourists is conflicting, more regional and somewhat anecdotal. Here are some examples. 

Agra: Tour operators say there is almost a 30% reduction in the customers they bring into Taj Mahal—especially during the peak season of winters. In fact, most hotels in the golden triangle (Delhi, Agra and Jaipur) now bank on destination weddings and conferences—rather than individual tourists. 

Rajasthan: The numbers for both domestic and foreign tourists are sparkling. The total for foreign travelers has jumped from 2019 and 2024—1.7 million to 1.9 million. But Indian tourists have soared from 52 million to more than 100 million. One unexpected reason for a recent surge: A huge boost in Delhi visitors looking to escape the smog.

Kerala: had a fantastic 2019—witnessing the steepest growth in tourist numbers in 24 years—with 1.95 crore (19.5 million) visitors, including 11.89 lakh (1.1 million) international tourists. Last year, it surpassed the pre-pandemic numbers in domestic tourists—setting a new record. 

Bad weather matters: For all the griping about expenses, bad weather is the leading cause for a dent in domestic footfalls. In Kerala, the numbers dropped by 40% in just two months after the landslide in Wayanad. Tourism has slumped in the Kumaon hills for the same reason. 

Irony alert: Of course, most of these disasters are anything but ‘natural—instead caused by over-tourism. 

Then what’s the problem? Indian, foreign… who cares?

The angst is over the number of Indians going overseas for their holidays—which is presumably taking away valuable tourism paisa from local destinations. 

The numbers: In the first half of 2024, India received 4.78 million foreign visitors. OTOH, 15 million Indians traveled abroad—a 13.7% increase from the same period in 2023. In all, 28.2 million travelled abroad in 2024—compared to almost 27 million in 2019. But these are the numbers that count: Indians spent $28 billion—or around $1.42 billion a month—while they were out and about. In fact, foreign travel accounts for 53% of all foreign exchange outflows. In comparison, money sent abroad for higher studies was only $3.47 billion. 

The chart: The problem lies in the comparison of the trend lines. The assumption is that if these patterns hold, the exodus of Indians will begin to eat away at Indian tourism:

The reasons: for the exodus are numerous (more in the reading list). But the biggest are lower price points (Colombo is cheaper than Goa)---and the rising number of visa-free programs (see: Thailand). 

Indians will stop traveling within India? Nah! 

No one is saying that. It’s about who is traveling—and to where. If these trends hold, places like Goa will lose tourists who matter most to the biz: Indians and foreigners who like to spend money. Khaunte’s domestic tourism numbers may indeed be accurate—but they offer little reassurance to the hospitality biz in Goa: 

[He] suggested that the only kind of tourist that Goa seems to be attracting, is the kind that wishes to cut corners everywhere. “I see only young people who buy their alcohol from wine shops, sit and drink in their shared rooms, and eat Maggi for four straight days,” he said. In Goa, this sentiment is echoed in several unkind private conversations berating the “minibus tourist”—code for the lower-middle-class—who come to Goa for a dip on the beach and cook their “food by the roadside”, but don’t “contribute to the economy” of the state.

The Indians who can “contribute to the economy” were likely in Vietnam, Sri Lanka or Thailand this winter—not Kerala or Goa. 

Rise of the pilgrim: Indians are indeed travelling more than ever within India—and will do so in greater numbers. But they’re headed for the mandirs, not the beaches. And that’s exactly the government’s plan: 

[A] big dampener for India has been the steady reduction in government funding for overseas tourism promotions over the years, from ₹524 crore in 2021-22 to Rs 341 crore [3.41 billion] in FY23, and further down to ₹167 crore for FY24. In contrast, substantial funds have been directed towards the development of pilgrimage destinations, with an increase of 66%, from ₹150 crore in FY23 to ₹250 crore in FY24.

Even Goa plans to be part of this religious program: 

The state government’s “Goa beyond beaches” push intends to highlight its cultural, spiritual and environmental assets, focusing on “regenerative tourism”, he explained. Regenerative tourism, according to Khaunte, is about leaving places better than they were found by promoting local artisans, preserving ecosystems and fostering community well-being. “Initiatives like the Ekadasha Tirtha, a circuit of 11 sacred sites, will offer travellers an immersive experience, connecting them with Goa’s rich heritage through worship, architecture and traditional cuisine,” he said.

A tourism rebrand: Goa isn’t the only destination counting on pilgrims—to make up for any shortfall of traditional tourists. Take, for example, Kangra—the so-called tourism capital of Himachal Pradesh. The district has not just lost foreign tourists—but also domestic visitors—who are flocking instead to nearby Uttarakhand for the Char Dham yatra. The solution: to develop temples such as Jawalaji, Brajeshwari Devi and Chamunda Devi ”to create dedicated tourism circuits similar to Uttarakhand’s Char Dham.”

The bottomline: Tourism in India may be soon reserved only for the rich or the religious. The rest of us can head out for Colombo. 

Reading List

The Core and Economist offer good overviews of the state of Indian tourism. The Print has Khaunte’s pushback on Goa—and Vir Sanghvi’s scathing takedown of Indian tourism. Mint reports on India’s free-fall in WEF rankings. For more on why Indians are traveling abroad, read Indian Express (paywalled). You can check out the data on the trend in the CRISIL report—or the summary in the Hindustan Times. The real elephant in the room is sustainability—which we didn’t get time or space to address. For more on that issue, read Deccan Herald (on sidelining locals) and The Print on sea houses in Goa.