The foreign tourist arrival registered a sluggish growth of 5 per cent in 2012 as against 13 per cent in the previous year. This has impacted the tourism and hotel companies alike with both sectors bearing the brunt of fall in demand.

Hospitality sector is also witnessing an oversupply situation in some of the market, which has not been absorbed yet. A study indicates that by 2015-16, 93,335 rooms will be added to the total inventory. The supply pipeline is expected to further drag recovery for hotel businesses.

“Several projects that had their plans for development formalised and were in the supply pipeline till last year, have now been delayed or called-off on account of high borrowing costs, tight liquidity and perhaps a lowered confidence in the Indian economy and political leadership,” the study said.

In travel, important source markets for inbound tourism such as Europe, USA and UK have been reeling under slowdown pressures, thereby bringing down activity.

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