There is a strong association between foreign tourist arrivals (FTAs) and their travel search volume index to India as inbound tourism is emerging as one of the key economic growth drivers, according to a report in the Reserve Bank of India’s (RBI’s) monthly bulletin for May.
Visits by foreign tourists, which dropped due to Covid-19 restrictions in March 2020, saw a revival in November 2021. There has been a significant increase in foreign tourists coming to India in 2023 due to the G20 Summit, meetings, incentives, conferences, and exhibitions (MICE) events, leisure trips, and the return of business travellers. The ICC Cricket World Cup also boosted India’s tourism. There was also a surge in tourism in the first half of 2024.
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According to the research paper, travel and tourism created 76.17 million jobs in 2022-23, which is 12.57 per cent of total jobs created during the same period. Also, the foreign exchange earnings from the tourism industry for 2023 reached ₹2.32 trillion, marking an increase of over 66 per cent compared to 2022.
“There is a significant correlation between FTA and GVA-THTCB (GVA - Trade, Hotels, Transport, Communication and Services related to Broadcasting) for Q4FY21 to Q4FY24 (0.71), which supports the earlier argument that FTAs contribute directly and indirectly to GVA (Gross Value Added),” the research paper said. The views in the report are that of the authors and not of the central bank.
“Empirical results show a strong correlation between FTA for the current month and travel search volume index for preceding five months,” the paper added.