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Tourism and Hospitality

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Tourism and Hospitality

November, 2011

The Indian tourism sector has been experiencing a resilient phase of growth, driven by the flourishing middle class, increased spending by the foreign tourists, and synchronized administration and promotions by the Government of India to encourage ‘Incredible India’. The tourism industry in India is extensive and lively, and the nation is fast becoming a major international destination. India’s travel and tourism industry is one of them most lucrative businesses in the country, and also accredited with contributing a considerable volume of foreign exchange to the country reserves.

A number of reasons are cited as being the cause of the progress and success of India’s travel and tourism sector. Economic growth has added millions annually to the ranks of India’s middle class, a group that is driving domestic tourism growth. Thanks in part to its booming IT and outsourcing industry a growing number of business trips are made by foreigners to India, who will often add a weekend break or longer holiday to their trip. Foreign tourists spend more in India than almost any other country worldwide.

Growth Trends

The tourism and hospitality industry being the largest service sector in the country, adds around 6.23 per cent to the national GDP and 8.78 per cent of the total employment in the country.

Recently, the Ministry of Tourism also compiled a monthly estimate on the foreign tourist arrivals (FTAs) and foreign exchange earnings (FEE) based on the total number of foreign visitors in the country.

  • During the month of September 2011, the total number of Foreign Tourist Arrivals (FTAs) was 401,000 as compared to FTAs of 369,000 during the month of September, 2010 and 331,000 in August, 2009. There has been a growth of 8.7 per cent in September, 2011 over September, 2010 as compared to a growth of 11.6 per cent registered in September 2010 over September, 2009. The growth of 8.7 per cent in September 2011 is higher than 5.3 per cent in August, 2011.
  • During January-September, 2011, the total FTAs stood at 4,220,000 with a growth of 10.0 per cent, as compared to the FTAs of 3,835,000 with a growth of 8.0 per cent during January-September 2010 over the corresponding period of 2009.

In a report by the Ministry of External Affairs, the Indian hospitality sector is expecting a projected investment of US$ 12 billion within the next two years along with a number of industry initiatives already in progress. As per the report by the Ministry of Tourism, the Foreign Exchange Earnings (FEE) is as follows -

  • Foreign Exchange Earnings (FEE) during the month of September 2011 were US$ 1.1 billion as compared to US$ 892.15 million in September 2010. The growth rate in FEE in September 2011 was 22.9 per cent as compared to 23.2 per cent in September 2010 over September 2009.
  • FEE from tourism in rupee terms during January-September 2011 were US$ 10.25 billion with a growth of 16.6 per cent, as compared to the FEE of US$ 8.79 billion with a growth of 22.7 per cent during January- September 2010 over the corresponding period of 2009.
  • FEE in US$ terms during the month of September 2011 were US$ 1208 million as compared to FEE of US$ 1015 million during the month of September 2010 and US$ 785 million in September 2009.
  • The growth rate in FEE in US$ terms in September 2011 over September 2010 was 19 per cent as compared to the growth of 29.3 per cent in September 2010 over September 2009. FEE from tourism in terms of US$ during January-September 2011 were US$ 11.9 billion with a growth of 18.7 per cent, as compared to US$ 10.01 billion with a growth of 30.5 per cent during January-August 2010 over the corresponding Period of 2009.