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Tourism and Hospitality

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Tourism and Hospitality

April, 2011


Hospitality in India is based on the Sanskrit adage ‘Atithi Devo Bhava’ or ‘guest is god’. The concept was adapted by the Ministry of Tourism, Government of India which aims at creating awareness about rich variety of tourism in India.

India is currently ranked 12th in the Asia Pacific region and 68th overall in the list of the world's attractive destinations, according to the Travel and Tourism Competitiveness Report 2011 by the World Economic Forum (WEF).

India is well known for its natural resources (ranked 8th) and cultural resources (24th) with many World Heritage sites, both natural and cultural; rich fauna, many fairs and exhibitions and strong creative industries. India also has quite good air transport (ranked 39th), particularly given the country’s stage of development, and reasonable ground transport infrastructure (ranked 43rd), reports The Travel and Tourism Competitiveness Report 2011 by World Economic Forum 2011.

Investment in travel and tourism in India is expected to reach US$ 34.7 billion in 2010 and US$ 109.3 billion by 2020.

Contribution to the economy

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.35 billion from April 2000 to February 2011, 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 projected the Indian hospitality industry to grow at a rate of 8.8 per cent during 2007-16, making the country as the second-fastest growing tourism market in the world.

The domestic hospitality sector is expected to see investments of over US$ 11 billion by 2012, with 40 international brands making their presence in the country in the next few years.

According to the Tourism Satellite Accounting (TSA) research, released by World Travel and Tourism Council (WTTC) and its research partner Oxford Economics in March 2011:

  • The direct contribution of travel and tourism to GDP is expected to grow by 8.1per cent per annum (pa) to US$ 76.65 billion (2 per cent of GDP) for 2011-2021 period, while the total contribution is expected to be US$ 82.61 billion in 2011 (4.5 per cent of GDP). It is forecasted to rise by 8.8 per cent pa for 2011-21, accounting for 4.9 per cent of GDP.
  • Travel and tourism is expected to generate 24.93 million jobs directly in 2011 (5 per cent of total employment). This includes employment by hotels, travel agents, airlines and other passenger transportation services. By 2021 industry will account for 30.44 million jobs directly, an increase of 5.51 million (22.1 per cent) over the next ten years.
  • The industry is expected to attract capital investment of US$ 27.67 billion rising by 8.7 per cent pa to US$ 63.47 billion.
  • Visitor exports are expected to total US$ 15.23 billion in 2011, rising to US$ 30.18 billion in 2021.