Why the Maldives row could boost India's domestic tourism sector

Recent controversy gives hospitality operators new sense of hope amid post-pandemic slump

India was the largest source of tourists to the Maldives last year. AP

The continuing row between India and the Maldives, sparked by comments made by politicians from the archipelago nation, has left many wondering if it is an opportunity for the world's most populous country to revive its own domestic tourism industry.

Industry insiders believe the recent diplomatic row between the two countries may provide Indians with an opportunity to travel more locally, as some people are boycotting trips to the islands while rising incomes and improved infrastructure are helping to fuel their travel ambitions.

“The recent issues in the Maldives have indeed stirred conversations and redirected attention towards domestic tourism in India,” says Varun Arora, chief executive and co-founder of Ekostay, a hospitality company based in Mumbai offering luxury homestays.

“We've observed a noticeable surge in interest among travellers to explore the diverse and culturally rich destinations within the country. This shift in focus has opened up new opportunities for the domestic tourism sector, allowing us to showcase the incredible beauty and experiences our own country has to offer.”

The dispute started when three junior ministers from the Maldives made what many perceived were negative comments in response to Prime Minister Narendra Modi's social media posts promoting tourism to India's Lakshadweep islands.

Lakshadweep is only accessible to tourists who obtain a permit, with tourism being restricted because of factors including its relatively underdeveloped infrastructure, fragile marine ecosystem and measures in place to protect local indigenous communities. Mr Modi's posts included photos of the islands' picturesque beaches and one of him snorkelling.

The ministers were suspended and the Maldivian Foreign Ministry said the comments did not reflect the views of the government.

Even so, the issue has sparked anger in India, resulting in many reportedly rethinking their travel plans and calling for a travel boycott to the island nation, which could cost it millions of dollars in tourism revenue.

Last year, India was the largest source market of tourists for the Maldives, at 206,000 tourists, according to the Ministry of Tourism, Maldives.

“Following the recent Maldives crisis, there has been a notable surge in inquiries about destinations like Lakshadweep and the Andaman and Nicobar Islands,” says Rohan Verma, co-founder and chief executive of JustWravel, a social travel community that plans road trips, treks and group tours in India. “Both these places offer alternatives to the Maldives.”

One Indian travel company, EaseMyTrip, even went so far as to suspend all bookings to the Maldives in response to the dispute.

“We are immensely proud of India's stunning beaches,” EaseMyTrip said in a statement when it announced the move. “Our country boasts a vast 7,500-kilometre coastline, featuring the wonders of Lakshadweep, the Andamans, Goa, Kerala, etc.”

The dispute with the Maldives comes amid an increase in domestic tourism in India over the past decade. With historical monuments, lush rainforests, beautiful beaches, snow-capped mountains, and diverse cultures in a country of more than 1.4 billion, it has a lot to offer on its own doorstep.

Figures from India's Ministry of Tourism show that domestic tourists made 1.73 billion trips to different states in the country in 2022, up 11 per cent from the previous year.

The Covid-19 pandemic derailed travel both domestically and internationally. Although there has been a strong rebound since then, those numbers are still down on pre-Covid levels, with local trips in India totalling a record 2.3 billion in 2019, according to official statistics.

But industry experts say that travel is bouncing back strongly and they expect the sector to expand rapidly over the coming years.

“More people are exploring destinations within India and a big part of this is the changing dynamics of our society,” says Varun Nagpal, founder and chief executive of Vianaar Homes, a holiday home company in Goa.

“The middle class, which forms a significant part of our population, is finding more room in their budgets for leisure activities, including travel.”

One of the main factors helping to make domestic tourism more appealing is improving infrastructure and connectivity, he says.

“Travelling has become much easier with well-connected flights and other means of transportation,” says Mr Nagpal.

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“We’re expecting domestic tourism to really grow exponentially in the coming years, especially with all the promotions around hidden gems like Lakshadweep and the government taking steps to make these locations more accessible.”

Hotels and resorts in India are reaping the benefits from domestic travel demand, and more properties are opening to cater to Indian travellers.

“Domestic tourism in India is experiencing a significant upswing,” says Alok Kaul, head of operations at Shilp Wellness, a Turkish-themed resort that opened in 2022 in Panvel, about 40km from Mumbai.

“The country's impressive gross domestic product growth sets it apart globally,” says Mr Kaul.

“This economic expansion has led to higher disposable incomes, prompting people to explore travel opportunities.”

Although the pandemic had a negative impact on travel overall, it also prompted Indians to look at trips closer to home and this is having some lasting benefits, according to industry experts.

“Post-pandemic, there was a resurgence in travel in India. Due to the restrictions for travel, a lot of people started to find India a viable and exciting destination as well,” says Abhilash Ramesh, executive director at the Kairali Ayurvedic Group.

But with international travel rebounding strongly following the pandemic, some hospitality operators have noticed bookings for their properties wane this season.

“Since the outbound travel opened up, we saw a huge drop this winter,” says Manish Goyal, the founder of Stotrak Hospitality, which manages hotels, resorts and homestays in the states of Uttarakhand, Rajasthan and Himachal Pradesh.

Still, with the government “doing their part by developing the infrastructure” and international hospitality chains expanding in the country, he expects his business to pick up soon.

“Now we have started getting a lot of inbound queries, we are sure the Indian hospitality sector shall revive again,” Mr Goyal says.

“Certainly, domestic tourism will continue to boom,” says Sanjay Sharma, chief executive, Organic Hideaways.

His Eco Glamp property business in the northern state of Uttarakhand grew by almost 50 per cent last year compared with 2022 and he expects to see that number rise by another 40 to 50 per cent this year.

Another driver of demand for trips within the country is social media, says Mr Sharma.

“Major credit also goes to digital marketing,” he says. “Bloggers and influencers are pushing everyone to be a traveller or explorer.”

But India is still a long way from realising the full potential of its domestic tourism industry, as there are challenges that need to be addressed, according to Ekostay’s Mr Arora.

There is still a lot of work to do and “infrastructure development in some regions may be lacking, affecting the overall travel experience, he adds.

“The industry also needs to ensure that safety measures and hygiene standards are maintained,” he says.

“Promoting lesser-known destinations and ensuring responsible tourism practices are adopted are crucial to avoiding overtourism in popular areas. Overall, a collaborative effort between the government, private sector and local communities is essential to overcome these challenges and foster the growth of domestic tourism in India.”

However, others believe there are some issues that may be harder to address.

“The alarming shift in climate patterns has brought about drastic changes in the seasons, impacting snowfall, rainfall and overall seasonal transitions,” says Mr Verma of JustWravel.

“This, undoubtedly, has implications for domestic tourism.”

Still, with its diverse landscapes and historic, cultural and wildlife attractions, India has an opportunity to not only boost domestic tourism amid the continuing Maldives row, but also international tourism, he believes.