The impact of the ongoing conflict in West Asia has been moderate so far, as industry demand is largely driven by domestic travellers. Despite the seasonal moderation typically witnessed after the peak summer period, the YoY performance has remained healthy, aided by the low base resulting from the cross-border escalations and related travel disruptions during the corresponding period last year. The advisory from the GoI to curb discretionary travel to conserve fuel, along with inflationary concerns, could dampen demand to some extent. However, a potential shift away from international travel could spur spending on domestic travel in the near term.

Exhibit: Trend in Current Sentiment Index (CSI) and Future Expectation Index (FSI)

Source: Urban consumer sentiments RBI; ICRA Research; Note - CSI and FEI are compiled on the basis of net responses on the economic situation, income, spending, employment and the price level for the current period (compared with one year ago) and a year ahead, respectively. CSI and FEI = 100 + Average of Net Responses of the above parameters.