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Tourism & Hospitality Industry in India

October, 2013


The Indian tourism and hospitality industry has emerged as one of the key industries driving growth of the services sector in India. Tourism in India has registered significant growth in the recent years and the country has tremendous potential to become a major global tourist destination.

Indian tourism industry is thriving due to an increase in foreign tourist arrivals and greater number of Indians travelling to domestic destinations than before. In the past few years the real growth has come from within the domestic sector as around 30 million Indians travel within the country in a year. Strong growth in per capita income, rising young population coupled with changing lifestyles are leading to greater expenditure on leisure services.

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. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry and tourism is the foremost demand driver of the industry.

Travel & tourism’s contribution to capital investment is projected to grow at 6.5 per cent per annum during 2013-2023, above the global average of five per cent. The tourism policy of Government of India aims at speedy implementation of tourism projects, development of integrated tourism circuits, special capacity building in the hospitality sector and new marketing strategies

Market Size

The total market size of Indian tourism and hospitality sector stood at US$ 117.7 billion and is expected to touch US$ 418.9 billion by 2022.

The foreign direct investment (FDI) inflows in hotel and tourism sector during April 2000 to July 2013 stood at US$ 6,754.49 million, as per the data released by Department of Industrial Policy and Promotion (DIPP).

Foreign tourist arrivals (FTA) during the Month of August 2013 stood at 4.74 lakh as compared to FTAs of 4.46 lakh during August 2012, registering a growth of 6.4 per cent.

Foreign exchange earnings (FEE) during the month of August 2013 were US$1.294 billion as compared to FEEs of US$1.306 billion during August 2012 and US$ 1.264 billion in August 2011.

The number of tourists availing of the tourist Visa on Arrival (VOA) Scheme during January to August, 2013 have recorded a growth of 29.4 percent. During the period, a total number of 12,176 VOAs have been issued as compared to 9,412 VOAs during the corresponding period of 2012.

Major developments and Investments

India is expected to receive nearly half a million medical tourists by 2015, implying an annual growth of 30 per cent. The country has received 43.06 lakh foreign tourists during the period January-August 2013. India is perceived as one of the fastest growing medical tourism destination. The number of medical tourists coming to India has registered a growth of 40 per cent in the past six months. The inflow of medical tourists is expected to cross 45 lakh by 2015 from the current level of 25 lakh.

The Taj Group has launched The Gateway Hotel IT Expressway Chennai, its first hotel in the city under the Gateway Hotels & Resorts brand.

Marriott International has launched its business hotel brand Courtyard by Marriott at the industrial and auto hub of Chakan near Pune in Maharashtra.

ITC Hotels has tied up with Bahrain-based India-born billionaire Mr Ravi Pillai to manage five of its hotels under the Welcom Hotel and Fortune brands in India and Dubai.

Ecole hoteliere de Lausanne has opened a 67,000 square feet campus in India to tap into the growing demand for skilled hospitality professionals in the country. Located in the newly developed Lavasa Township near Pune, Ecole Hoteliere Lavasa will offer a four-year programme.