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Visitor Arrivals Enjoy Steady Growth In H110

Data released by the Indian Ministry of Tourism in August 2010 show that tourist arrivals continued to grow throughout H110, after returning to growth in the early months of the year. Overall tourist arrivals in the first half of the year reached 2.6mn, after impressive growth of 10.7% year-on-year (y-o-y). The tourism industry was even more buoyant in revenue terms, with foreign exchange earnings in H110 totalling US$6.8bn, a rise of 36.6% y-o-y.

This strong rate of growth indicates that India’s tourist industry is recovering well from the downturn in 2008 and 2009. The rate of arrivals slowed in July, growing by only 4.1% y-o-y, and although a slower rate of growth in July is unusual, with the Western holiday season offsetting the monsoon season, we do not believe this represents a setback for the recovering industry. Instead, it may be a pause ahead of the Commonwealth Games in October, with many tourists choosing to delay their holidays to coincide with the event in New Delhi. As such, we expect tourist arrivals to grow rapidly in the last quarter of 2010 as the games encourage greater tourism throughout India.

Preparing For The Commonwealth Games

The Commonwealth Games will be held in New Delhi in October 2010. The event is planned to bring major benefits to the country in terms of tourism and international status. However, just two months before the games started there were concerns that preparations were running behind schedule. In particular, a government report earlier in the year found that work on 13 of the new venues intended for the games was running behind schedule. The greatest benefits from the games are set to be tourism and sponsorship, with actual ticket sales contributing a relatively small amount as many of these have been set at low prices to attract local spectators. As with the Olympics in China in 2008, India will be hoping that tourists will visit New Delhi for the games but then use this as a jumping off point for a longer visit to India, bringing tourism benefits beyond the metropolitan areas.

India Targets 35 Airports For Modernisation

As part of the ongoing strategy to improve India’s transport infrastructure, the government is looking to improve facilities at 35 second-tier airports. The project focuses on airports outside metropolitan areas and includes facilities such as Raipur, Amritsar, Goa and Jaipur. Although the modernisation had been scheduled for completion in March 2010 in time for the Commonwealth Games, the economic slowdown in 2008-2009 slowed the project and it will now be completed in 2012. While the delay means that some areas will not be able to handle as much passenger traffic as hoped during the games, the long-term improvements to infrastructure will benefit the tourism industry from 2012.

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