Domestic travel operators to see 15-17% revenue growth in FY25: CRISIL

CRISIL ratings projected a 15-17% increase in revenue for India's tour and travel operators this fiscal year, driven by rising domestic tourism and growing international travel. This forecast is supported by improving infrastructure, increasing disposable incomes, shifting travel behaviour, and the government's emphasis on enhancing domestic tourism. The projection is based on analysing the country's four major travel operators, who account for about 60% of the sector's revenue.

The credit profiles of travel operators are expected to remain robust, underpinned by strong balance sheets and steady operating margins of 6.5-7%, consistent with the previous fiscal year, leading to substantial cash flows and low debt reliance. Domestic tourism growth is propelled by 'micro-holidays,' increased spiritual tourism, and improved infrastructure such as enhanced last-mile connectivity. Additionally, rising inbound travel to pre-pandemic levels and robust demand from corporate and MICE segments bolstered domestic travel. Factors such as higher disposable incomes, visa-free access from 37 countries, and simplified visa processes are driving growth for international leisure travel. The expansion of travel packages and Indian airlines' focus on new destinations in Southeast and Central Asia also contributed to a record high in outbound travel this calendar year. Director at CRISIL Ratings Ltd, Ms. Poonam Upadhyay, noted that the post-pandemic 'revenge travel' trend has evolved into 'regularised travel,' with more frequent and shorter vacations. She highlighted that growing middle-class aspirations, urbanization, affordable travel packages, increasing incomes, and government initiatives will sustain strong momentum in the tour and travel sector, ensuring continued double-digit revenue growth for operators.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.