West Asia conflict; 15–20% dip in inbound tourist traffic; Rs.18,000 crore net loss for industry: PHDCCI report

PHDCCI released its report, ‘Impact of the West Asia Conflict on India’s Tourism, Aviation & Hospitality Sectors’, highlighting significant disruptions across aviation, inbound tourism, hospitality and restaurant segments, even as strong domestic demand continues to support overall sector stability.

Aviation Sector
- Most impacted: flight cancellations, rerouting, and airspace restrictions.
- Flying times increased by 2–4 hours on key routes → higher fuel consumption.
- Fuel costs (35–40% of airline operating expenses) have surged, straining profitability.
- Disruption of Middle East air corridors (major global transit routes) has reduced connectivity and raised airfares.
- Net industry loss estimated at ₹18,000 crore.

Tourism
- Inbound tourist traffic down 15–20%, especially leisure travel.
- Outbound travel shifting toward short-haul destinations (Thailand, Singapore, Vietnam).
- Long-haul and transit-heavy routes see moderation due to geopolitical risks.

Hospitality
- Sector remains resilient thanks to strong domestic demand.
- Branded hotel inventory near 200,000 rooms; domestic aviation traffic > 5 lakh passengers/day.
- Margin pressures from rising energy costs and input prices.
- Premium/business hotels reliant on foreign travelers face profitability challenges despite stable occupancy.

Restaurants & Food Services
- 10% of restaurants closed; business down by ₹79,000 crore per month.
- Input cost inflation of 10–15% (imported ingredients, logistics, energy).
- Premium dining in tourist hubs hit by reduced international footfall.
- Domestic demand and food delivery (20–30% of revenues) provide stability, but margins remain tight.

Policy Recommendations
- Diversify international air routes; reduce reliance on conflict-prone regions.
- Enhance bilateral air service agreements.
- Rationalize taxation on ATF, hospitality, and F&B.
- Provide financial support and easier credit access for MSMEs.
- Accelerate infrastructure development and multimodal connectivity.
- Promote domestic tourism circuits and strengthen destination marketing in alternative markets.
- Support local sourcing ecosystems to stabilize restaurant supply chains.

Conclusion: While the conflict has caused short-term disruptions, India’s strong domestic tourism demand is cushioning the blow. The report frames this as an opportunity to build a resilient, diversified, and self-reliant tourism ecosystem.