Shares of hotel stocks rallied in Wednesday's trade after Union Finance Minister Nirmala Sitharaman in her Budget speech said that the government is on a "mission mode" to promote tourism in the country with the active participation of states, convergence of government programmes, and public-private partnerships.
"India offers immense attractions for domestic as well as foreign tourists. There is a large potential to be tapped in tourism. "The sector holds huge opportunities for jobs and entrepreneurship for youth in particular," she said.
In response to the government's significant emphasis on the tourism sector, shares of 37 companies in the areas of hotels, restaurants, and tourism ended in the green, with EIH Ltd., Indian Hotels Company gaining more than 7% in trade.
|Last Traded Price
|Indian Hotels Company
|Lemon Tree Hotels
|Taj GVK Hotels & Resorts
EIH Associated Hotels
This comes as a big boost for the hospitality sector as it has been the worst-hit industry during COVID-19 and has incurred heavy losses due to the pandemic.
However, the industry bounced back strongly to pre-pandemic levels as a result of easing COVID-related restrictions, and the encouragement from the government bodes well for the sector going forward.
As a part of its efforts to promote tourism, FM announced the "Dekho Apna Desh" initiative to promote domestic tourism. Under this scheme, a total of 50 destinations in the country will be selected through challenging mode.
The main objective of this scheme is to promote tourism and encourage people to discover India's diverse and rich cultural heritage. The middle-class citizens of the nation are the target audience of this scheme, which encourages them to travel within India rather than outside. This scheme also creates more employment opportunities in the country.
The scheme benefits travellers in a number of ways, including lower accommodation charges, lower travel expenses, and waived entrance fees to tourist destinations. Those who desire to visit remote and less-traveled parts of the country will also be given financial assistance.
Meanwhile, Prime Minister Narendra Modi launched the world's longest luxury river cruise, the MV Ganga Vilas, in Varanasi, Uttar Pradesh, two weeks ago, indicating the government's focus on tourism.
According to the 2023 Economic Survey, India's tourism sector is showing signs of revival as the COVID-19 pandemic fades and restrictions are lifted, and the country is ranked 10th out of the top 64 countries in the world in the Medical Tourism Index for FY21.
The survey noted that foreign tourist arrivals in India in FY23 have been growing month-on-month with the resumption of scheduled international flights. However, the arrivals are still below the pre-pandemic level,
The survey also indicates that the profitability ratios of tourism industry is heading towards a strong rebound in the June 2022 quarter. Travel returned to normal levels in March 2022, given the higher vaccination rate and overall effective management of the COVID-19 pandemic.
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