Border Tensions Impact Arrivals
In 2025, India experienced a notable downturn in foreign tourist footfall, registering an over 9% decrease that brought the total to 90.2 lakh visitors.
A primary driver of this decline was the heightened tension between India and Bangladesh, which led to a mutual tightening of visa policies. This diplomatic strain significantly affected Bangladesh's standing as a key source country for tourists, causing it to drop from the second-largest to the fifth-largest contributor. Official data revealed a stark 73% reduction in tourist arrivals from Bangladesh, with numbers falling to approximately 4.7 lakh for the year. This substantial decrease of 12.8 lakh arrivals from Bangladesh alone surpassed the total decline in overall foreign tourist numbers for India during the same period, highlighting the profound impact of bilateral issues on the tourism sector. Industry insiders have also questioned the inclusion of Bangladeshi arrivals in overall foreign tourist figures, as many visitors from that nation primarily enter for medical treatment or employment rather than traditional tourism activities, thus not contributing significantly to hotel occupancy or local tourist attractions.
Indian Outbound Travel Soars
While foreign tourist numbers dipped, a contrasting trend emerged with a substantial rise in Indians traveling abroad. In 2025, the number of Indian citizens venturing overseas surged by 6.6%, reaching an unprecedented 3.3 crore. This growth was observed despite a slowdown in travel to specific destinations like Saudi Arabia and the United States. Interestingly, travel to Canada also saw a decline, with nearly 16% fewer Indians visiting the country, settling at around 8 lakh. This burgeoning outbound tourism reflects a growing willingness and ability among the Indian middle class to explore international destinations. The expansion of Indian carriers on foreign routes further capitalizes on this boom, aiming to capture a larger share of the outbound travel market by offering competitive international flight options.
Cost Factors Influence Choices
A significant factor influencing travel decisions for both inbound and outbound tourists is the perceived cost-effectiveness of destinations. Many frequent Indian travelers report that accommodation in popular international locales like the UAE, CIS countries, Sri Lanka, Thailand, Vietnam, and Malaysia can be secured for Rs 5,000-8,000 per night. In stark contrast, comparable hotel rooms within India often cost double that amount, even during off-peak seasons, and can escalate considerably during holiday periods. This price disparity makes international trips more financially appealing for the Indian middle class than domestic holidays in places like Goa or Kerala. Consequently, foreign tourists are also finding more affordable alternatives to India, leading them to explore other regions. Travel agents observe that India may be pricing itself out of the market for certain segments due to its star hotel rates, even with reasonable domestic airfares outside peak times.
Industry Reactions and Outlook
The reaction from the Indian hotel industry to the decline in foreign tourist arrivals is nuanced. A prominent hotelier noted that while foreign tourist numbers might be lower, the domestic travel market remains robust, and there's a significant increase in business travel. They expressed no immediate concern for foreign visitors skipping the country, as long as their properties remain well-occupied. The demand for luxury stays in India is reportedly outpacing supply, a market imbalance that ensures strong revenue yields for major hotel players. This situation suggests that the hospitality sector is confident in its ability to maintain profitability through domestic and business travelers, even in the absence of a booming foreign tourist influx. The focus on expanding international routes by Indian airlines further indicates a strategic move to tap into the strong outbound travel trend.
