Context

World Economic Forum’s 2024 Travel and Tourism Development Index (TTDI) rankings have been released recently.

Key Highlights from the 2024 Travel and Tourism Development Index

• Global Ranking: The top 10 economies in the 2024 Travel and Tourism Development Index include the United States, Spain, Japan, France, Australia, Germany, the United Kingdom, China, Italy, and Switzerland. 
  • These countries benefit from favorable business environments, robust transport and tourism infrastructure, and high concentration of natural and cultural resources. 
  • West Asia outpaced other regions, with tourist arrivals 20% above 2019 levels, while Europe, Africa, and the Americas have recovered to around 90% of their pre-pandemic levels.
• Recovery to Pre-Pandemic Levels: Globally, the travel and tourism industry, which historically accounted for 10% of global GDP, is on a path to recovery post-pandemic. 
• International Tourist Arrivals: It is projected to reach 88% of 2019 levels in 2023 and are likely to return to pre-pandemic levels by 2024. 
• Uneven Recovery: The recovery is uneven, especially in areas affected by conflicts and natural disasters like forest fires. 
• Environmental Challenges Threaten Global Travel and Tourism Sector:Issues such as biodiversity loss, climate-related extreme weather events, and pollution pose significant risks to tourism resources and infrastructure. 
  • The sector, which accounted for 5.8% of global water use and 5-8% of global material extraction in 2019, is under increasing pressure to adopt more sustainable practices.

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India-Specific Findings

•  India dropped ten places to 39th in the World Economic Forum’s 2024 Travel and Tourism Development Index (TTDI) rankings compared to 2019.
• India’s Score Falls Below Emerging-Market Peers: India’s score of 4.25 on an overall index scale of 1 to 7 where 1 is the worst and 7 is the best—was lower than that of its emerging-market peers, including China and Brazil.
• India Records Steepest Ranking Decline: Among the world’s top 10 economies, India experienced the steepest decline in the rankings, followed by the UK, which dropped three places since 2019 to seventh position. 
  • In contrast, India received high marks for price competitiveness and the availability of cultural and natural resources, enhancing its appeal to tourists. 
• Reasons for Decline in Ranking: This decline is primarily due to insufficient healthcare access, inadequate tourism infrastructure, and a lack of skilled workers in the sector.

Challenges Highlighted by 2024 Travel and Tourism Development Index

•  Human Resource and Hygiene Issues: Poorly skilled human resources and inadequate hygiene are hindering the growth of travel and tourism. 
  • Before the pandemic halted travel, India welcomed approximately 10.93 million international tourists in FY20.
• Decrease in Government Funding: There has been a consistent reduction in government funding for overseas tourism promotions, decreasing from ₹524 crore in 2021-22 to ₹341 crore in FY23, and further down to ₹167 crore for FY24. 
  • In contrast, there has been a substantial increase in funds allocated for the development of pilgrimage destinations, rising by 66% from ₹150 crore in FY23 to ₹250 crore in FY24.
• Decline in Overseas Promotion Spending: Over the years, spending has been reduced on promoting India as a destination overseas, which is how most countries get high-spending in-bound tourists. 
  • There is no advertising for the country abroad, including roadshows or familiarization trips for tour operators and print and electronic media. 
  • India has allocated just ₹3 crore for overseas tourism promotion this fiscal year. In 2022, India closed all 20 of its tourism offices abroad, assigning the responsibility to local Indian embassies in these countries.

Suggestions for India

• Overhaul of Tourism Policies: The report calls for revamping tourism policies to create a more conducive environment for both domestic and international travelers.
• Enhancing India’s Travel and Tourism Potential: India needs to improve its infrastructure, policy conditions, and sustainability to enhance its future rankings and fully leverage its travel and tourism potential.
  • The embassies overseas need to be mobilized to make tourism a key focus area and the Ministry of tourism should focus on marketing India.

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• Streamlining regulations and incentivising investment in the tourism sector can significantly boost India’s attractiveness as a destination, since it currently lags on tourism policies, air transport, and tourist service infrastructure.
  • Changes should also be made to the Services Exports from India Scheme (SEIS), which will help small and medium companies operating in the travel space to expand their businesses through financial rewards to these service providers by way of duty credit scrips based on a percentage of their net foreign exchange earnings. 
  • These scripts can be used to pay various duties, such as customs and excise, which can lower operational costs. 
• Leveraging Private Sector: The government should encourage the private sector to spend on promoting India with schemes such as SEIS.