Travel and tourism-related stocks traded in the red on Monday after Prime Minister Narendra Modi urged citizens to reduce discretionary spending on foreign travel and fuel consumption amid concerns over the impact of the West Asia war on India’s foreign exchange outflows.
Among the measures suggested, Modi asked people to reduce petrol and diesel usage by relying more on metros and public transport, avoid unnecessary foreign travel, overseas vacations and destination weddings, and defer non-essential gold purchases for one year.
InterGlobe Aviation, the parent company of IndiGo, declined more than 5 per cent to ₹4,287.10 from the previous close of ₹4,522.70 amid concerns that any moderation in leisure and international travel demand could impact passenger traffic growth.
Hotel and hospitality stocks also witnessed selling pressure. Mahindra Holidays & Resorts India fell over 3 per cent to ₹232.10, while ITC Hotels declined to ₹159.54.
Indian Hotels Company slipped 2.5 per cent to ₹755.90, while Chalet Hotels was down 2.7 per cent at ₹767.85.
Leela Palaces, which operates Leela Palaces hotels, declined more than 3 per cent to ₹410.30.
Online ticket booking platforms stocks also came under pressure, with Le Travenues Technology falling 3 per cent to ₹163.76 and Yatra Online dropping 6.5 per cent to ₹101.05.
Khushi Mistry, Research Analyst at Bonanza, said the outbound tourism and aviation sector appears more vulnerable as overseas vacations and destination weddings are discretionary expenses that consumers can easily postpone. According to Mistry, this could weigh on international airlines, online travel platforms and travel-related services linked to foreign exchange spending.
The analyst further said that domestic tourism, hospitality and resort operators may benefit if travellers increasingly opt for local vacations instead of international trips.