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Tourism & Hospitality Industry in India

January, 2014


The travel and tourism industry has emerged as one of the fastest growing sectors contributing significantly to economic growth and development. Provision of employment, income and foreign exchange, expansion of other industries such as agriculture, construction, handicrafts, etc. are some of the important economic benefits provided by the tourism sector.

India has significant potential to become a preferred tourist destination globally. Its rich and diverse cultural heritage, abundant natural resources and biodiversity provides numerous tourist attractions. The total tourist visits in India have been growing at a steady rate of about 16 per cent over the past five years. According to the World Economic Forum’s Travel and Tourism Competitiveness Report 2013, India ranks 11th in the Asia pacific region and 65th globally out of 140 economies ranked on travel and tourism Competitiveness Index.

Hotels are extremely important component of tourism industry and they contribute to the sector by offering services and facilities of extremely high standard. The Indian hospitality sector has been growing at a cumulative annual growth rate of 14 per cent every year adding significant amount of foreign exchange to the economy.

Travel & tourism’s contribution to capital investment is estimated 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 tourism and hospitality industry in India stood at US$ 117.7 billion and is anticipated to touch US$ 418.9 billion by 2022.

Foreign tourist arrivals (FTA) during the period January–December 2013 stood at 68.48 lakh as compared to FTAs of 65.78 lakh during 2012, registering a growth of 4.1 per cent. FTAs during December 2013 were 8.00 lakh as compared to 7.53 lakh during December 2012, growth of 6.3 per cent.

Foreign exchange earnings (FEE) during January–December 2013 stood at US$ 18.133 billion as compared to FEEs of US$ 17.737 billion during 2012, registering a growth of 2.2 per cent. FEEs during December 2013 were US$ 1.886 billion.

The number of tourists availing of the tourist Visa on Arrival (VOA) Scheme during January–December 2013 have recorded a growth of 26.2 percent. During the period, a total number of 20,294 VOAs have been issued as compared to 16,084 VOAs during the corresponding period of 2012.

The foreign direct investment (FDI) inflows in hotel and tourism sector during April 2000 to November 2013 stood at US$ 6,825.56 million, as per the data released by Department of Industrial Policy and Promotion (DIPP).


India is perceived as one of the fastest growing medical tourism destination. According to a recent RNCOs report “Booming Medical Tourism in India”, Indian medical tourism industry is anticipated to register a compound annual growth rate (CAGR) of more than 20 per cent during 2013-2015, therefore, creating huge scope for investments.

Hilton Worldwide has opened its affordable yet upscale brand of hotel, Hilton Garden Inn at Thiruvananthapuram. Hilton also plans to launch its operations in prime city centre locations across India.

Marriott International plans to open a dozen hotels in India by 2015, adding to its existing count of 23 properties. "Currently we have about six to eight definite openings in 2014 and 2015 is going to be a very strong year for us," as per Mr Rajeev Menon, Area Vice President-South Asia and Australia, Marriott Hotels.

French hotel chain operator Accor has expanded its Novotel hotel network across India, with the opening of its eighth hotel under this brand in the country at Pune, Maharashtra.

US-based hospitality and entertainment firm Hard Rock Hotels and Casinos plans to open its first five-star property in India. Gurgaon-based Spectra Hospitality Services (SHS), which is the development representative for Hard Rock in India, is hoping to sign the first Hard Rock Hotel by the end of March 2014.