The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country.
India’s rising middle class and increasing disposable incomes has continued to support the growth of domestic and outbound tourism.
Domestic Tourist Visits (DTVs) to the States/Union Territories (UTs) grew by 15.5 per cent y-o-y to 1.65 billion (provisional) during 2016 with the top 10 States/UTs contributing about 84.2 per cent to the total number of DTVs, as per Ministry of Tourism.
Foreign tourist arrivals (FTAs) in India increased 18 per cent year-on-year to reach 723,000 in September 2017. FTAs on e-Tourist Visa in India increased 71 per cent year-on-year to 118,000 in September 2017.
India's Foreign Exchange Earnings (FEEs) increased 16.1 per cent year-on-year to US$ 2.176 billion in August 2017.
India is expected to move up five spots to be ranked among the top five business travel market globally by 2030, as business travel spending in the country is expected to treble until 2030 from US$ 30 billion in 2015. #
International hotel chains will likely increase their expansion and investment plans in India, and are expected to account for 50 per cent share in the Indian hospitality industry by 2022, from the current 44 per cent.*
The tourism and hospitality sector is among the top 10 sectors in India to attract the highest Foreign Direct Investment (FDI). During the period April 2000-June 2017, the hotel and tourism sector attracted around US$ 10.48 billion of FDI, according to the data released by Department of Industrial Policy and Promotion (DIPP).
With the rise in the number of global tourists and realising India’s potential, many companies have invested in the tourism and hospitality sector. Some of the recent investments in this sector are as follows:
The Indian government has realised the country’s potential in the tourism industry and has taken several steps to make India a global tourism hub.
In the Union Budget 2017-18, the Government of India announced some initiatives to give a boost to the tourism and hospitality sector such as setting up of five special tourism zones, special pilgrimage or tourism trains and worldwide launch of Incredible India campaign among others.
Some of the major initiatives taken by the Government of India to give a boost to the tourism and hospitality sector of India are as follows:
India’s travel and tourism industry has huge growth potential. The tourism industry is also looking forward to the expansion of E-visa scheme which is expected to double the tourist inflow to India. JW Marriott plans to have 175-200 hotels in India over the next four years.
AccorHotels India has adopted a ‘born in France, made in India’ approach to increase its properties in India, which has reached a total of 45 hotels and is expected to increase to 55 hotels by 2017.
Exchange Rate Used: INR 1 = US$ 0.015 as of October 6, 2017.
References: Media Reports, Ministry of Tourism, Press Releases, Department of Industrial Policy and Promotion (DIPP), Press Information Bureau (PIB), Union Budget 2017-18
Note - ! - As per the report of National Skill Development Corporation on “Human Resource and Skill Requirements in the Travel, Tourism & Hospitality Sector (2013 -17, 2017 – 22)”, @ - World Economic Forum (WEF) report, # - According to a report by KPMG and FCM Travel Solutions, # - According to data from Indian Credit Rating Agency (ICRA).