The Indian tours and travel industry could see revenue increase this fiscal to over 70 per cent of the pre-pandemic (fiscal 2019-20) level, riding on high pent-up demand and increasing confidence of people to travel as the pandemic risks wane, CRISIL Ratings said on Tuesday.
While full recovery to the pre-pandemic level is expected only by the financial year 2023-24, continuing recovery with improved operating profitability, supported by cost-control measures, and healthy liquidity will support credit profiles from here, it said.
The industry, which provides services such as air/bus ticketing and hotels/packages for both leisure and corporate travel within India and abroad, has taken the severest beating from the Covid-19 pandemic.
Post the initial shock of the pandemic in the first half of fiscal 2021, which brought the entire industry to a standstill, tours and travel operators witnessed gradual recovery in the second half, with improving air traffic and demand for short domestic holidays.
In the first quarter of 2021-22, however, the severe second wave of the pandemic slammed the brakes on recovery, that too in the peak travel season of summer, tamping revenue down to less than 20 per cent of the pre-pandemic level.
The third quarter of fiscal 2022 saw the industry make healthy recovery as the second wave abated, taking revenue up to 60 per cent of the pre-pandemic level on the back of high pent-up demand. Air traffic reached around 70 per cent of pre-pandemic levels during the third quarter, led by domestic traffic, CRISIL Ratings said in a report.
“High pent-up demand, eased restrictions, and higher consumer confidence are expected to drive recovery in domestic travel to over 80 per cent of the pre-pandemic level. Corporate travel should also rebound to over 70 per cent, as corporates increasingly resume work from office. However, segments such as outbound and inbound travel should see a more gradual recovery as restrictions in other countries ease gradually,” said Naveen Vaidyanathan, Director, CRISIL Ratings.