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NEW DELHI : The Indian tours and travel industry could see its revenue this fiscal touch 70% of the pre-pandemic (FY19-20) levels, riding on high pent-up demand and increasing confidence of people to travel. While full recovery to pre-pandemic levels is expected only by fiscal 2024, continuing recovery with improved operating profitability, supported by cost-control measures, and healthy liquidity will support credit profiles of travel companies, said the study. The credit ratings agency CRISIL Ratings’ analysed three major players (both online and offline) in the ticket and hotel booking space that account for over half of the domestic tours and travel bookings in the industry. These three players had a combined reported revenue of ₹11,300 crore in fiscal 2020. The recovery for these major players is expected to reach about ₹7910 crore by the end of the current fiscal as per the ratings agency. This revenue calculation of ₹11,300 crore was made on gross bookings / gross revenue estimation of ₹78,000 crore.
All of this could though, be impacted by any extension in the pandemic as well as geo-political risks such as prolonged Russia-Ukraine conflict.
But Naveen Vaidyanathan, director, CRISIL Ratings said high pent-up demand, eased restrictions, and higher consumer confidence are expected to drive recovery in domestic travel to close to the pre-pandemic level in the country. “Corporate travel should rebound to 70%, 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," he said.
The ratings agency added that continued demand recovery, along with sustained focus on prudent cost measures could result in operating profit of over ₹150 crore this fiscal for these travel operators.
This would be a turnaround after two consecutive fiscals of operating losses. Services such as air/bus ticketing and hotels/packages for both leisure and corporate travel within India and abroad took the severest beating from covid-19.
In the first quarter of FY21-22, 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% of the pre-pandemic level.
The third quarter of FY21-22 saw the industry make a healthy recovery as the second wave abated, taking revenue up to 60% of the pre-pandemic level on the back of high pent-up demand. To be sure, air traffic reached around 70% of pre-pandemic levels during the third quarter, led by domestic traffic.
The industry had reported an operating profit for the third quarter of fiscal 2022, but losses in the first half of the fiscal and the third wave of the pandemic in the fourth quarter are expected to result in losses of about ₹200 crore for the full fiscal 2022. This is against operating losses of around ₹600 crore during fiscal 2021.