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 amid concerns over the impact of the West Asia war on India's foreign exchange outflows. According to reports from The Hindu BusinessLine, IndiGo shares declined more than 5% 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. Mahindra Holidays & Resorts India fell over 3% to ₹232.10, while ITC Hotels declined to ₹159.54. The broader hospitality sector faced significant selling pressure, with Indian Hotels Company slipping 2.5% to ₹755.90 and Chalet Hotels down 2.7% at ₹767.85. Leela Palaces declined more than 3% to ₹410.30, reflecting widespread investor concerns about potential impact on international travel demand.
The market decline followed Prime Minister Modi's call for citizens to reconsider their travel patterns during the ongoing global crisis. As reported by The Hindu BusinessLine, 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. The Prime Minister's appeal included specific measures asking 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. The government's focus on reducing overseas travel reflects broader concerns about India's foreign exchange position and the potential impact of geopolitical tensions on economic stability.
The hospitality sector faced immediate pressure from the government's travel appeal, with multiple companies experiencing coordinated declines. According to The Hindu BusinessLine reports, the fall followed Modi's urging citizens to reduce overseas weddings, vacations and leisure travel, creating uncertainty about future international travel demand that could impact hotel occupancy rates and revenue streams for companies with significant overseas operations. The latest data shows FII outflows from the consumer services segment, comprising hospitality and travel, spiked to ₹7,770 crore in April compared to ₹2,141 crore in March, reflecting continued investor concerns about the sector's international exposure. Online ticket booking platforms also came under pressure, with Le Travenues Technology falling 3% to ₹163.76 and Yatra Online dropping 6.5% to ₹101.05.
