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Tourism and Hospitality

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Tourism & Hospitality

November, 2010


As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the world's attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country. India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019.

Contribution to the economy

Combining unparalleled growth prospects and unlimited business potential, the industry is certainly on the foyer towards being a key player in the nation's changing face. Furthermore, banking on the government’s initiative of upgrading and expanding the country’s infrastructure like airports, national highways etc, the tourism and hospitality industry is bound to get a bounce in its growth.

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.17 billion from April 2000 to September 2010, according to the Department of Industrial Policy and Promotion (DIPP).

India’s hotel pipeline is the second largest in the Asia-Pacific region according to Jan Smits, Regional Managing Director, InterContinental Hotels Group (IHG) Asia Australasia. He added that the Indian hospitality industry is projected to grow at a rate of 8.8 per cent during 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open-sky policies made by the government are all aimed at propelling growth in the hospitality sector.

Foreign Tourist Arrivals

Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) in India and Foreign Exchange Earnings (FEE) from tourism on the basis of data received from major airports. Following are the important highlights, as regards these two important indicators of tourism sector for October 2010.

  • FTAs in India during October 2010 were 487,000 as compared to FTAs of 446,000 during the month of October 2009 and 450,000 in October 2008.
  • FTAs during the period January-October 2010 were 4.32 million with a growth rate of 9.9 per cent.
  • FEE from tourism during the month of October 2010 were US$ 1.18 billion as compared to US$ 1.09 billion in October 2009.

Government Initiatives/policy

According to the Consolidated FDI Policy, released by DIPP, Ministry of Commerce and Industry, Government of India, the government has allowed 100 per cent foreign investment under the automatic route in the hotel and tourism related industry. The terms hotel includes restaurants, beach resorts and other tourism complexes providing accommodation and /or catering and food facilities to tourists. The term tourism related industry includes:

  • Travel agencies, tour operating agencies and tourist transport operating agencies
  • Units providing facilities for cultural, adventure and wildlife experience to tourists
  • Surface, air and water transport facilities for tourists
  • Convention/seminar units and organisations
  • The Government of India has announced a scheme of granting Tourist Visa on Arrival (T-VoA) for the citizens of Finland, Japan, Luxembourg, New Zealand and Singapore. The scheme is valid for citizens of the above mentioned countries planning to visit India on single entry strictly for the purpose of tourism and for a short period of upto a maximum of 30 days. During the period January - October 2010, a total number of 5016 VoAs were issued under this Scheme.
  • The tourism master plan, the first for Karnataka, envisages initiatives to attract private investment ranging from US$ 2.2 billion to US$ 4.4 billion in the next three to five years. The plan is prepared based on the Vision 2020 document prepared and adopted by the Karnataka State Planning Board. The state government aims to generate 200,000 jobs in the tourism sector in the next five years. The master plan is aimed at making Karnataka the number one destination for tourism in the country by 2020, according to Mr G Janardhan Reddy, Minister for Tourism and Infrastructure Development