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Tourism and Hospitality

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Tourism and Hospitality

January, 2012

Introduction

"For India, the broad trends for 2012 are strikingly similar to the US. Around 53 per cent of Indian travellers claimed they travelled more in 2012, with 20 per cent more travellers planning to take an international holiday. Also, 44 per cent of Indian travellers are looking at spending more on their holidays in 2012 than last year", Stephen Kaufer co-founded TripAdvisor.

Growth Trends

Ministry of Tourism compiles monthly estimates of Foreign Tourist Arrivals (FTAs) and Foreign Exchange Earnings (FEE) from tourism on the basis of data received from major airports. Following are the important highlights regarding FTAs and FEE from tourism in India for the year 2011.

Foreign Tourist Arrivals (FTAs):

  • FTAs during the Month of December 2011 was 715,000 as compared to FTAs of 680,000 during the month of December 2010 and 616,000 in December 2009
  • There has been a growth of 5.2 per cent in December 2011 over December 2010 as compared to a growth of 10.4 per cent registered in December 2010 over December 2009
  • The growth rate of 5.2 per cent in December 2011 is higher than 4.7 per cent growth rate observed in November, 2011
  • FTAs in India during 2011 were 6.29 million with a growth of 8.9 per cent, as compared to the FTAs of 5.78 million with a growth of 11.8 per cent during the year 2010 over 2009
  • The growth rate of 8.9 per cent in 2011 for India is better than UNWTO’s projected growth rate of 4 per cent to 5 per cent for the world in 2011 and 7 per cent to 9 per cent for Asia and the Pacific

Investment Trends

India's growth story still seems very credible to global corporations looking to grow beyond their borders. The world's largest hotel chain Best Western International Inc, USA, has taken up new strategies to expand its presence in the country in the hospitality sector.

"If you look at the rates charged at the five or six-star luxury hotels, you can say that India is among the most expensive in the world. But if you look at the mid-scale and up-scale hospitality segments, India is quite affordable. I think growth is going to come from tier-2 and tier-3 cities. The 45 cities of India that have more than a million population have the most growth potential in the hospitality sector and we will perform best in these emerging markets”, David T Kong, president and CEO, Best Western International Inc.

Following the success of religious and medical tourism in India, the domestic travel industry is seeing a surge in a new set of tourists: Executives who travel to upgrade their skills while on a holiday in the country.

Mr Iqbal Mulla, President, Travel Agents' Association of India says that there has been a rise in the number of corporate houses sending their executives, especially mid-level and above, to India for management programmes offered by top B-schools, chiefly because it means huge cost savings for them. “The courses and accommodation charges are 50-60 per cent less in India, and the courses offered are on par with those offered by universities in the US and Europe.” The educational tourism sector in India is gaining ground due to the cost-effectiveness of courses and for offering higher level of training standards, agrees Mr Ravi Kaklasaria, Director, SpringPeople Software Pvt Ltd.

Starwood Hotels & Resorts plans to open 20 new Hotels across all its brands by 2015. The company which is the largest operator of four and five star hotels in India currently operates 33 hotels in the country under management contracts. The hotel chain also plans to launch its brands W and St. Regis in the country in the next three to four years. With the debut of the W and St. Regis brands, Starwood will fly eight of its nine brand flags in India including W, St. Regis, The Luxury Collection, Le Meridien, Westin, Sheraton, and Four Points by Sheraton and Aloft.

Taj group of hotels will be opening its doors in Yunnan Province of China. The Indian Hotels Company Ltd on Monday signed a memorandum of co-operation for a joint venture with Yunnan Tourism Co Ltd to engage in the development, construction, operation and management of two hotels in Kunming Expo Garden situated in Yunnan province. Taj already has management contracts in place for the Taj Temple of Heaven, Beijing. Besides, Taj will also manage a 300-room key luxury resort in Hainan Island.