Stocks of travel companies such as Thomas Cook and Cox & Kings soared on Monday, following Prime Minister Narendra Modi announcing a visa-on-arrival facility for US tourists. Modi had made the announcement during his address at Madison Square Garden, New York on Sunday. While the Cox & Kings stock closed 11 per cent higher at Rs 324 on BSE, Thomas Cook closed at Rs 143.95, up 5.7 per cent. Mahindra Holidays and Resorts rose 7.4 per cent to Rs 295.85, while Sterling Holiday Resorts, a Thomas Cook subsidiary, closed at Rs 155.30, up 1.7 per cent.
“Modi’s speech at Madison Square Garden was positive for the tourism sector. Though it will not happen immediately, the number of tourists from the US could see a steady increase because the government is looking to remove the hurdles they face,” said Alex Mathew, head of research, Geojit BNP Paribas Financial Services.
In his speech, Modi announced lifetime visas to Person of Indian Origin (PIO) card holders. The prime minister also said PIO cards would be merged with Overseas Citizen of India cards, doing away with the complications arising out of issuing visas to different categories of citizens.
Modi also promised to provide a visa-on-arrival facility for tourists from the US. Many say this will be a huge boost for the sector and companies catering to such tourists. According to an Indian Bureau of Immigration survey, in 2013, the US accounted for 15.6 per cent of all foreign tourists visiting India that year. But not all market participants and analysts are convinced. Experts argue ease of travel to a country is the third-most important factor when it comes to deciding which country to visit. “The first aspect visitors look at is the destination’s attractiveness, which is in India’s favour. This is followed by safety. The past year has not been good for Indian tourism because of political, social and economic concerns, which reduced India’s attractiveness as a tourist destination,” said Daljeet Singh Kohli, head of research, IndiaNivesh Securities.
He said the visa-on-arrival facility wouldn’t be of much help in drawing tourists, aging better governance and a stable and growing economy would. “Markets are connecting the development expected in the country to the growth of tourism. While the sector is expected to grow, markets have factored in a little too much,” he said.