India Tourism Report Q3 2008

Tourist Arrivals Strong In Q108 Figures released by India's Ministry of Tourism in April 2008 indicate that visitor arrivals remained strong in Q108. A total of 1.66mn tourists arrived in the country in the first quarter of the year, up from 1.49mn in Q107, representing a 12.1% y-o-y increase. This was also positive for foreign exchange earnings, which rose by an impressive 21.1% y-o-y to total INR160bn.

Despite this strong beginning to the year, we remain cautious regarding the potential for full-year growth.

This caution is based on the impact of the slowing US economy and the consequent expected decline in US visitors to India, with the US and the UK being India's main sources of tourism. In addition, we expect the holding of the Beijing Olympics in China in August to divert some regional tourism from India to China. As such, we retain our forecast for visitor arrivals in 2008 at 5.2mn, and will continue to monitor forecast performance going forward.

Visa Streamlining Planned The Indian government is considering proposals for streamlining visa provisions for foreign tourists. This would provide visas on entry to India for these 18 nationalities, which at present are required to apply for visas in their countries of origin, often resulting in time consuming procedures. The proposals would apply to countries that are already automatically eligible for multiple entry visas. The countries are Argentina, Belgium, Brazil, Chile, Finland, France, Germany, Iceland, Japan, Luxemburg, Mexico, Netherlands, New Zealand, Norway, Spain, South Korea, Switzerland, the US, the UK and Vietnam.

The proposal was launched by the Ministry of Tourism, approved by the Ministry of External Affairs and is now awaiting approval by the Ministry for Home Affairs. The latter is reportedly in favour of the idea, but only if an advanced passenger information system, giving details of passenger nationality and ID, is first implemented. This is not yet standard airline practice. If approved, the visa plan would boost tourism by making it easier for foreign tourists to visit India, as well as enhanciung the country's last-minute appeal as a tourist destination.

Jet Predicts Annual 2007/2008 Loss Company chairman Naresh Goyal stated in April 2008 that he expected the airline to post a loss in 2007/2008, although he did not refer to a specific figure. He added this was largely due to the airline's aggressive expansion programme, which has seen it launch new overseas routes, and introduce fare cuts in order to compete with other regional carriers, at a time of high fuel prices. For example, in January 2008 Jet launched direct flights from Calicut and Mumbai to Doha and Muscat, and in April launched direct flights between Hong Kong and Mumbai. Goyal estimated that each new route would take at least 18 months to become profitable.