Indian tourism hit by rising travel costs
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Indian tourism hit by rising travel costs

Tourists pass the passenger validation system at Suvarnabhumi airport.
Tourists pass the passenger validation system at Suvarnabhumi airport.

Inbound tourism operators for the Indian market have voiced concerns over the slow processing of visa applications, high airfares and an increase in the outbound tax rate from India, as these factors could result in fewer visitors from the subcontinent, causing the Thai government to miss its target of 2 million this year.

Rajesh Nair, chief executive of Enchantive Asia, said despite high demand from the Indian market, there are several factors hindering their arrival.

The Indian government recently proposed increasing its Tax Collected at Source (TCS) for overseas tour packages, from 5% up to 20%, starting from July 1.

Mr Nair said the new tax rate would burden tourists and they might hesitate to travel abroad or turn to domestic trips instead, even though they can reclaim TCS on annual income tax returns.

Moreover, tourist visa applications now take up to 15 days to process, compared with less than a week prior to the pandemic, he said.

Many tourists pivoted to visa-on-arrival at the airport, which consequently caused congestion in terminals.

While India's TCS is beyond local control, Mr Nair said the Thai government should help Indian tourists by subsidising visa costs and offering incentives for groups to alleviate the high airfares, as well as work to improve visa procedures.

The Tourism Authority of Thailand (TAT) still maintains its target of 2 million Indian tourists in 2023, but the most likely scenario is 1.5-1.6 million arrivals based on airline capacity at the moment, said Siriges-a-nong Trirattanasongpol, TAT director of the New Delhi office.

Speaking at a webinar hosted by the Thai Hotels Association, she said flight resumption between Thailand and India last month rebounded to 60% of 2019 capacity.

Go First, a big Indian airline that recently went bankrupt, has stopped flying to Thailand.

If an airline wants to increase flights between India and Thailand during the cool season, TAT will coordinate with them to help create marketing promotions, Ms Siriges-a-nong said.

Tanes Petsuwan, TAT deputy governor for Asia and the South Pacific, said the Consular Affairs Department has been improving the visa approval process, especially for large groups.

Mr Tanes said TAT's offices in India have been assigned to monitor the impact of the TCS increase over the next few months.

From January to May this year, Indian tourists tallied more than 580,000, while 1.9 million people arrived from the country for the whole of 2019.

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