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Tourism and Hospitality

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Tourism and Hospitality

October, 2012

Introduction

India is believed to be one of the top most tourism spot from 2009-2018, having the highest ten year growth potential, according to the World Travel and Tourism Council (WTTC).

The country's travel and tourism industry is one of the most profitable industries in the country, and is credited with contributing a substantial amount of foreign exchange. Indian tourism offers a potpourri of different cultures, traditions, festivals, and places of interest.

India was ranked fifth in the world for hotels with the best business outlook, according to a report by TripAdvisor. The country showed optimism with the highest proportion of businesses in Asia-Pacific (APAC) region. It displayed unbridled optimism with the highest proportion of businesses in APAC that expect the economy to improve in the second half of 2012. India was also ranked highest globally, among all countries surveyed for staff turnover, based on increased staff levels.

Moreover, India has also emerged as one of the world's most cost-efficient medical tourism destinations. Medical tourism in the country is a sunrise sector valued at more than US$ 310 million. Currently, India receives more than 100,000 foreign patients a year. It is expected that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during 2011-15, according to a RNCOS report titled 'Booming Medical Tourism in India'.

Hotels are an important component of the tourism product. They contribute in the overall tourism experience through the standards of facilities and services offered by them.

Market Size

The foreign tourist arrivals (FTAs) during September 2012 were registered at 415,000 as compared to FTAs of 402,000 during September 2011. A growth of 3.2 per cent was registered in September 2012 over September 2011.

The foreign exchange earnings (FEE) during September 2012 were worth Rs 6,652 crore (US$ 1.26 billion) as compared to Rs 5,748 crore (US$ 1.09 billion) in September 2011. The growth rate of FEE in rupee terms was 15.7 per cent in September 2012 over the corresponding month a year ago.

The FEE through tourism in India was recorded at Rs 77,591 crore (US$ 14.67 billion) during 2011. The amount of FDI inflow into the hotel and tourism sector during April 2000 to July 2012 was worth US$ 3,450.97 million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.

The overall hotel rates in India registered an increase of 12 per cent during the first six months of the year. This was due to a surge in demand from domestic travellers, as per the latest Hotels Price Index (HPI) study conducted by Hotels.com. The index looks at prices that people paid for their hotel rooms around the world.

Investments

  • India and Bulgaria plan to explore the possibilities of cooperation in the tourism sector. The two countries emphasised upon the need to start exchanges of visits of tour operators and opinion makers to promote tourism between the two countries
  • Federation of Hotel & Restaurant Associations of India (FHRAI) has signed four memorandum of understanding (MoUs) with its international counterparts, spanning in USA, Europe, Middle East, UK, China and United Nations World Tourism Organisation (UNWTO) to exchange expertise and fraternity strategy evolution
  • US-based Wyndham Hotel Group is set to expand to 70 properties in India by 2016. "India is a key market for us and we have nearly doubled our presence in the past two years," as per Mr Frank Trampert, Managing Director (APAC), Wyndham
  • The Government of Maharashtra plan to set up an international cruise terminal at Mumbai port to attract international cruise tourists from Europe and the US
  • KEF Company plans to invest Rs 1,600 crore (US$ 302.46 million) in Kerala. The project includes a luxury hotel, integrated manufacturing facilities and a super specialty hospital in Kozhikode
  • Toyota Enterprises has entered into a joint venture (JV) with the Bengaluru-based Hyagreev Hotels, which runs The Chancery Hotel in Bengaluru. The project is Toyota Enterprises' first, outside Japan
  • Daiwik Hotels Pvt Ltd that debuted with a four-star property at Rameswaram in Tamil Nadu, plans to have a chain of properties at various pilgrimage centres in the country
  • ITC has launched the world's largest LEED Platinum green hotel (an eco certificate), Grand Chola, in Chennai, Tamil Nadu, with an investment of over Rs 1,200 crore (US$ 226.84 million)