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Tourism & Hospitality Industry in India

April, 2013


India's rich cultural heritage and history, food, friendly people, architectural monuments, hospitality and services are positive strengths for its tourism sector, which make it ahead of many of the emerging markets.

Today, tourism is the most vibrant tertiary sectors and has a strong hold on the economy. The sector contributes 6.23 per cent to the national gross domestic product (GDP) and 8.78 per cent of the total employment in India. Moreover, India stands 42nd in the world rankings in terms of foreign tourist arrivals (FTAs) in the country, according to a report titled 'Competitiveness of Tourism Sector in India with Selected Other Countries of the World' by Ministry of Tourism. The World Travel and Tourism Council (WTTC) named India as one of the fastest growing tourism industries for the next 10 to 15 years.

In addition, India has also developed as one of the world's most cost-efficient medical tourism destinations, and is anticipated that the Indian medical tourism market will register a compound annual growth rate (CAGR) of 27 per cent during 2011-15, as per a RNCOS report titled 'Booming Medical Tourism in India'.

"India is an extremely important market for IHG, one that we are always looking for the right opportunities to invest in. With international tourism increasing year-on-year and the continued strength of domestic tourism, we see incredible opportunities for growth," said Mr Jan Smits, Chief Executive Officer, InterContinental Hotels Group (IHG) in Asia, Middle East and Africa, who took part in a trade mission to India with Mr David Cameron, the British Prime Minister, to boost trade ties between the two countries.

Market Size

The amount of foreign direct investments (FDI) inflow into the hotel and tourism sector during April 2000 to January 2013 was worth US$ 6,561.78 million, as per data provided by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce.

FTAs have shown a growth of 2.8 per cent in March 2013 over March 2012 while the growth rate in Foreign Exchange Earnings (FEEs) from tourism stood at 21 per cent over the same period in rupee terms. FTA during March 2013 was recorded at 640,000 as compared to 623,000 during the month of March 2012.

The Visa on Arrival (VoA) Scheme of the Government of India has registered a growth of 54.6 per cent in February 2013. A total number of 1,947 VoAs were issued last month as compared to 1,259 VoAs issued in February 2012.

Major Developments & Investments

  • India is among the top five tourism source markets for South Africa. The country has received 79,306 Indian tourists during January-September 2012, according to the data released by South African Tourism
  • Mumbai is among the 10 most affordable destinations in the world, according to a cost comparison study done by TripAdvisor on common incidental items and services that travellers purchase while staying at a hotel
  • The International Tourism Mart organised by the Ministry of Tourism was inaugurated at Guwahati by Mr Janaki Ballav Patnaik, Governor of Assam. It is the first international tourism event to be organised in the North Eastern region of India
  • India and Canada plan to strengthen cooperation in tourism sector. Both the countries will identify areas for working together and explore new opportunities in tourism sector
  • India and Japan plan to strengthen cooperation in tourism sector. Both the countries will identify areas for working together and explore new opportunities in tourism sector especially in the field of human resource development and investment in the tourism sector
  • Egypt has initiated talks with the Tata Group to set up a hotel chain in the African country
  • InterContinental Hotels Group (IHG) has signed 13 new hotels in India in 2012, boosting its existing pipeline of hotels in the country to 47
  • Marriott International plans to open 52 more properties in India over a period of four years
  • Tourism Corporation of Gujarat Ltd (TCGL) and Indian Oil Corporation Ltd (IOCL) have signed a memorandum of understanding (MoU) to help promote tourism in the State by offering facilities to tourists at IOCL petrol pumps