Rising from Adversity: Exploring the Job Boom in Hospitality Industry

The hospitality industry consists of travel, tourism, hotels, restaurants, and has been a major contributor to the Indian economy. Due to the heritage architecture, historical sites and development of tourist destinations that the country possesses, India has always been a major hub for tourism. However, the COVID-19 pandemic drastically affected the hospitality industry, which caused unexpected challenges along with uncertainties. The hospitality industry made a come-back after the strict norms set up for COVID-19 were eased. This comeback of the hospitality industry had a positive cascading effect on the job market. This was driven by several factors and more so with a combination of them, such as, rise in domestic travel, government initiatives, and a change in consumer preferences. According to a report by professional networking platform Apna, driven by economic recovery, the demand for the workforce in the hospitality sector registered a growth rate 13% during January-April 2024, indicating a recovery in the overall job market. In this blog, we shall look at the factors that have caused this boom in the job market of the hospitality industry and its impact on the Indian economy.

The impact of COVID-19

The global economy came to a halt due to the COVID-19 pandemic. Lockdowns and travel restrictions were imposed across the country. This affected India’s hospitality industry, which faced multiple challenges in every aspect. The hospitality industry is labour intensive that employs various set of people, right from housekeeping staff, chefs to managers at front desk and event planners. The COVID-19 pandemic caused a closure of hotels and restaurants, leading to reduced operations and job losses. According to the National Council of Applied Economic Research (NCAER), the hospitality industry witnessed a job-loss of ~38 million individuals during the pandemic.

The labour-intensive industry not only had a negative impact on the jobs of the labourers but had a major economic impact as well. Revenue drivers of this industry such as room occupancy, food and beverage sales and events, experienced a sharp decline. According to the Federation of Hotel & Restaurant Associations of India (FHRAI), the hospitality industry witnessed a loss of over Rs. 90,000 crore (US$ 10.77 billion) in the year 2020 alone.

The hotel occupancy rates experienced a downfall as domestic and international travel were halted to curb the spread of virus. Major metro cities in India such as Mumbai, Delhi and Bengaluru, typically have occupancy rates close to 70-80%. However, during the peak phase of the pandemic, the occupancy rates dropped close to 10-15%. The major impact of this hard-hit drop in the occupancy rates was borne by luxury hotels as they largely rely on international and business travellers. Besides the drop in occupancy, hotels in India had to bear the large sum of fixed costs such as maintenance of property, which multiplied the financial trouble for hotels in India.

Key Factors driving growth in India’s hospitality job market

The boom in jobs in the hospitality industry is due to several factors that have been outlined below: 

• Rise in domestic travel

Global travel and tourism were drastically affected by the pandemic, as displayed by the record-low numbers of travellers in FY21. Considered one of the primary drivers of the job boom in the hospitality industry, the rise in domestic travel has been a major contributor. Post-pandemic, the sector has shown strong signs of recovery as the domestic air passenger traffic is anticipated to cross 150 million passengers in 2024, which is higher than the pre-COVID level of 141.2 million in 2020. This surge in travel is visible with India’s rank in the World Economic Forum’s Travel & Tourism Development Index in 2024, improved to 39th in 2024 up from 54th in 2021. The rise in domestic travel has a cascading effect on the job boom, as the increasing number of travellers demands more hospitality staff to cater to their experiences. This presents various job opportunities in the accommodations and food services sector that can be grasped by aspiring individuals. According to TeamLease Services, it estimates that approximately 200,000 jobs will be generated in the hotel, restaurant and tourism sectors by 2025, thereby stimulating the job market in India.

Source: DGCA website

• Government initiatives and support

The government of India has been playing a vital role in the recovery of the hospitality industry. The government launched various initiatives such as the Emergency Credit Line Guarantee Scheme (ECLGS), which aims at providing financial assistance to businesses struggling since the onset of the pandemic. Besides, the government plans to enhance tourism and travel in the country, as rising tourism has a positive ripple effect on the hospitality industry. The Ministry of Tourism launched various initiatives, such as the Dekho Apna Desh, Swadesh Darshan, Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD) and Ude Desh ka Aam Nagrik (UDAN), that highlight and promote the lesser-known destinations. Additionally, more budget allocations and support from the government have enabled to help the industry generate more income and grow at a fast pace. In 2023-2024, Rs. 2,423 crore (US$ 290.4 million) has been allocated to the Ministry of Tourism. These initiatives have not only enhanced the demand but also boosted the employment opportunities within the hospitality industry.

• Adoption of technology

Ever since the outbreak of the pandemic, there has been a rising adoption of technology in the hospitality industry. Right from contact-free check-ins to digital menu in restaurants, technological advances have played a vital role in betterment of customer experiences. This shift towards digital transformation has opened the doors for many job roles in IT support, digital marketing and data analytics in the hospitality sector. As a result of this move towards digitalisation, skilled professionals are one of the key demand drivers that can handle these digital innovations and ensure seamless customer experience and operational efficiency.

• Growth in budget hotels

There has been a shift in the customer preferences towards a more personalised and affordable travel experience. This in turn has led to the emergence and rise of boutique or budget hotels. Unique stay experiences and affordability have been the primary drivers of this shift in preferences. The rise of this trend has encouraged the growth of small and mid-sized hotels in the country, leading to more employment opportunities in several roles, mainly including front desk management, housekeeping and culinary services.

• Food and Beverage (F&B) sector

The food and beverage sector plays a vital role in the hospitality industry and has witnessed substantial growth post-pandemic. The COVID-19 pandemic influenced the F&B sector to innovate and transform their business model from traditional food service restaurants, and come up with solutions such as cloud kitchens, food delivery services and specialty restaurants. As per a Research and Markets report, India’s online food ordering and delivery market was valued at US$ 28.3 billion in 2022 and it is expected to grow at a CAGR of ~27% to around US$ 117 billion by 2028. This growth in the modern F&B solutions has enabled excess job opportunities for chefs, delivery services, kitchen helping staff and other management roles.

Source: Research and Markets

Trends in India’s hospitality industry and employment opportunities

• Tourism hotspots

Certain regions in India have become a major tourist hub due to their specialties that are highlighted by their geographical location, architecture or culture. States such as Goa, Rajasthan, Himachal Pradesh, Uttarakhand and Kerala are such hotspots that attract tourists on a large scale. This surge in tourist inflow has led to increased hiring in hotels, resorts and tourism-related businesses. The hiring ranges from back-office support, chefs, administrative staff, front-desk managers to event planners. This surge in hiring has a ripple effect on the economy, as these hotspots have been revived post-pandemic.

• Spiritual tourism

Traditionally, Indians have been visiting religious and holy destination due to the cultural values imbibed in its citizens. There has been added efforts that are taken to increase the connectivity and convenience to travel to such locations, leading to increased tourism. A recent example of this is the inauguration of the Ayodhya Ram Mandir earlier this year. To cater the large influx of tourists, there needs to be equally capable hospitality staff in terms of skills and the number of employees in hotels, restaurants and resorts. Therefore, spiritual tourism proves to be an emerging trend in India that has a cascading effect on the growth in employment opportunities in the country.

• Urban centres

Metro cities such as Mumbai, Bengaluru, Delhi and Chennai are known to be the urban centres of India. These cities have been experiencing a surge of business travellers and hosting of corporate events. Post the pandemic, the reopening of offices and the gradual shift to normalisation of business functioning has given rise to the demand for hospitality services, especially in the accommodation and event management space. This has proven to be a positive factor and trend for job creation in hospitality industry as the demand for catering business travellers and corporate clients have experienced a surge.

Challenges that present opportunities for growth

The job boom in the hospitality industry offers several opportunities; however, certain challenges need to be addressed for sustained growth of the industry. Providing job security and fair wages by offering stable environment, competitive salaries and additional benefits, such as health insurance and skill development, can ensure attraction and retention of talented professionals. Carrying out business through sustainable practices, such as reducing waste and conserving energy, attract more environment-focused travellers, along with generating jobs that are focused on environmental management. Another opportunity that can be tapped into is adapting to evolving consumer preferences, such as offering services for the upcoming trend of “workcations”, which can help enhance the revenue streams while enabling job creation for the hospitality industry. Lastly, investment in infrastructure can play a major role, which is enabled through improved transportation, connectivity and modern facilities that enhance the customer experience, leading to a boost in tourism and employment opportunities.

Conclusion

Despite facing adversity, the job boom in India’s hospitality industry is a testament to the industry’s flexibility and adaptability. Domestic travel, government initiatives, evolving consumer preferences and technological advancements are the factors that have been contributing to the sector’s growth. The hospitality and tourism sector is expected to add 5 crore direct and indirect jobs in the coming 5-7 years, according to Hotels' Association of India (HAI). The recovery of hospitality industry not only benefits its workforce, but also has a positive impact on the broader economy. By enabling employment opportunities and driving economic growth, the hospitality industry in India looks promising to play an important role in India’s post-pandemic recovery.