Introduction to Tourism and Hospitality Sector in India:
The tourism and hospitality sector in India has exploded in recent years. It has proven to be a significant contribution to India’s national GDP in terms of foreign exchange profits, job creation, and infrastructure development, all while showcasing India’s cultural richness and variety on a worldwide scale.
The tourism and hospitality sector in India has emerged as one of the most important sectors of the Indian economy because it provides a major source of direct and indirect employment opportunities for millions of Indians who are unemployed or underemployed by providing relatively better job opportunities than other sectors such as agriculture, manufacturing, or others.
With each passing year, it continues to expand tremendously. There are a variety of accommodations available, ranging from luxurious hotels to budget-friendly guest houses. In reality, India’s tourism industry has expanded by 7%, with more than 8 million visitors flocking to destinations such as Mumbai, Goa, Rishikesh, Agra, and Delhi. Rajasthan forts are popular among tourists visiting India, along with other tourist attractions such as heritage sites, animal sanctuaries, and picnic places.
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Overview of Indian Hotel Industry:
The Indian hotel business has been expanding at a rapid pace in recent years, and it has emerged as one of the country’s most promising sectors. India’s tourism industry is also a thriving and developing industry that contributes significantly to the country’s economy and employment market. It is a vital economic engine that allows India to maintain its status as one of the world’s top tourist destinations and encourages foreign investment into the Indian hospitality industry.
It is estimated that it currently accounts for 7% of India’s GDP, making it one of the country’s most important contributors. The key reasons for this quick rise include the country’s expanding importance in terms of global tourism, international investments, and government modernization programmes during the last few years.
Due to its rich cultural legacy, historical landmarks, and magnificent natural beauty, India is one of Asia’s and the world’s most popular tourist destinations. With rising demand from foreign travellers and an improving economy, the hospitality sector offers tremendous business opportunities.
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India is Wonderful:
Tourism and Hospitality Sector in India is One of India’s most important service businesses.
The tourist industry in India is an important part of the Make in India initiative. The tourist business in India is a big economic multiplier, and it is becoming increasingly important as India strives for rapid growth and employment creation.
Geographic diversity, world heritage sites, and specialist tourist goods such as cruises, adventure, medical, and eco-tourism are all available in India. Incredible India has boosted tourist arrivals and job opportunities.
Tourism encourages the development of multi-use infrastructure, such as hotels, resorts, and restaurants, as well as transportation infrastructure (airports, highways, shipping, and trains) and healthcare facilities.
- India is predicted to be one of the top five business travel markets by 2030.
- Under the automatic approach, 100 percent FDI in the tourism business is permitted.
- Tourism construction projects, including the development of hotels, resorts, and recreational facilities, are eligible for 100 percent FDI.
For further details, please refer FDI Policy
Economic Factors Driving the Growth of Tourism and Hospitality Sector in India:
Tourism in many places of India has increased in recent years. Furthermore, foreign tourists from nations with no direct border with India, such as the United States, the United Kingdom, and France, have increased. A number of political upheavals in Europe have also resulted in an increase in tourism in India. The hospitality business has seen remarkable expansion as a result of these advances.
Many factors are propelling Tourism and Hospitality Sector in India forward. High domestic income levels, a huge population base, a developing middle class population, and rising urbanisation rates all contribute to higher disposable incomes. Furthermore, favourable government policies supporting domestic and international travel, as well as low-cost airfares, have aided the rapid growth of the Indian hotel business in recent years.
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Situation in Industry:
By 2028, India will have contributed $512 billion to its GDP and created 53 million employment.
The travel and tourism industry contributed US$ 121.9 billion to GDP in 2020, and it is predicted to grow to US$ 512 billion by 2028. Between 2019 and 2028, the industry’s direct contribution to GDP in India is predicted to expand at a pace of 10.35 percent per year.
Tourism and Hospitality Sector in India is predicted to earn $50.9 billion in tourist exports by 2028, up from $28.9 billion in 2018. By 2028, international visitor arrivals are predicted to exceed 30.5 million.
From an estimated US$ 75 billion in FY20, India’s travel market is expected to grow to US$ 125 billion by FY27. In FY20, India’s tourism sector employed 39 million people, accounting for 8.0 percent of the country’s overall workforce. It is estimated to employ almost 53 million people by 2029. Between April 2000 and June 2021, the hotel and tourism sector received a total of US$ 15.89 billion in FDI.
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Growth Prospects for This Industry:
In today’s India, tourism is one of the most developed businesses. It employs over ten million people, many of whom work in resorts, hotels, restaurants, transportation, and travel agencies.
International interest has increased as a result of improved security in tourist locations such as Goa, Rajasthan, and Kerala, as well as continuous economic growth, which has boosted domestic tourism. The expanding middle class in India, along with increased demand from foreign tourists, implies that the Indian hospitality business has lots of room for expansion.
Furthermore, rather than using traditional brick-and-mortar travel agents, contemporary technology has made it easier for passengers to book their own rooms online. Self-booking gives an opportunity for hospitality entrepreneurs wishing to create new businesses or grow existing ones by making them available online.
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Market Outlook for the Tourism and Hospitality Sector in India:
Many hotels have sprung up around the country in recent years, with hoteliers taking advantage of the large number of domestic tourists travelling to picturesque regions like Kerala and Goa. International travellers are also interested in visiting cities like as Mumbai and Delhi, as well as domestic tourism destinations.
Since 2012, the number of international visitors has climbed by 10%, with tourism contributing for roughly 9% of India’s GDP. Given that only 4% of Indians travel overseas each year, the sector is anticipated to continue rising quickly.
Furthermore, nearly 1 billion people live within 3 hours of India’s coastline, making it extremely accessible for locals looking for quick weekend getaways. Furthermore, there are numerous chances within India; domestic travel is significantly less expensive than foreign travel.
Low-cost airlines such as Indigo, for example, offer tickets starting at Rs1000 ($16), with even cheaper pricing available on state-run trains and buses.
Growth Drivers:
Incredible India Campaign: Expanding India’s worldwide tourism business.
E-Tourist VISA: E-visas are now available in 171 countries and are divided into five categories: ‘e-Tourist visa,’ ‘eBusiness visa,’ ‘e-medical visa,’ ‘e-Medical Attendant Visa,’ and ‘e-Conference Visa.’
Infrastructure Development: The Ministry of Tourist spends more than half of its budget on developing destinations, circuits, megaprojects, and rural tourism infrastructure projects.
Medical Tourism offers cost-effective therapy, high-quality healthcare infrastructure, and highly qualified doctors.
Coastal Tourism: Promote intra-regional trade among Indian Ocean Rim (IOR) countries through coastal tourism.
Industry Developments:
- Infrastructure Development: Circuits, resorts, and hotels, among other things.
- Rural, adventure, medical, pilgrimage, film, and sustainable tourism are emerging segments.
- Meeting Incentives Conferences & Exhibitions is a business segment (MICE).
- Packaged tour operators, transportation services, and recreational facilities are examples of support functions.
Some Useful Links:
Government Ministry/Department
- Indian Institute of Tourism and Travel Management
- India Tourism Development Corporation
- Institute of Hotel Management
- Ministry of Tourism, Government of India
- National Medical and Wellness Tourism Board
- National Council for Hotel Management and Catering Technology
Industry Associations
- Association of Tourism Trade Organizations, India
- Adventure Tour Operators Association of India
- Federation of Hotel & Restaurants Associations of India
- Hotel Association of India
- Indian Association of Tour Operators
- Indian Exhibition Industry Association
- Indian Heritage Hotels Association
- National Restaurant Association of India
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