Tourism and Hospitality

Tourism & Hospitality Industry in India

Latest update: September, 2018

  • In CY2017, foreign tourist arrival in India stood at 10.177 million and reached 2.12 million in CY 2018 (up to February).
  • Foreign tourist arrivals into the country is forecast to increase at a CAGR of 7.1 per cent during 2005–25
  • The number of Foreign Tourist Arrivals (FTAs) in February 2018 were 1.05 million as compared to FTAs of 956,000 in February 2018 and 849,000 lakh in February 2016.
  • The growth rate in FTAs in February 2018 over February 2017 was 10.1 per cent.
  • The Government of India has set a target of 20 million foreign tourist arrivals (FTAs) by 2020 and double the foreign exchange earnings as well.
  • The Government of India is working to achieve 1 per cent share in world's international tourist arrivals by 2020 and 2 per cent share by 2025.
Growth

Notes: CY – Calendar Year, E- Estimated, *up to February 2018
Source: World Travel & Tourism Council’s Economic Impact 2017, Ministry of Tourism 12.

  • The sector’s total contribution to GDP stood at US$ 208.9 billion (9.6 per cent of GDP) in 2016 and is forecast to rise by 6.7 per cent in 2017, and to rise by 6.7 per cent pa to Rs 28,491.8 billion (US$ 424.5 billion), 10 per cent of GDP in 2027.
  • In February 2018, the country earned foreign exchange of around US$ 2.706 billion, from the tourism sector.
Growth

Notes: The definition of direct, indirect and induced contribution is specified in the glossary, E- Estimated, F - Forecast
Source: World Travel & Tourism Council’s Economic Impact 2017, News Article

 

Last Updated: September, 2018

Introduction

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. During January-July 2018 FEEs from tourism increased 12.1 per cent year-on-year to US$ 17.09 billion.

Market Size

India is the most digitally-advanced traveller nation in terms of digital tools being used for planning, booking and experiencing a journey, India’s rising middle class and increasing disposable incomes has continued to support the growth of domestic and outbound tourism.

Foreign Tourist Arrivals (FTAs) increased to 5.97 million in January-July 2018, achieving a growth rate of 7.3 per cent year-on-year.

The travel & tourism sector in India accounted for 8 per cent of the total employment opportunities generated in the country in 2017, providing employment to around 41.6 million people during the same year. The number is expected to rise by 2 per cent annum to 52.3 million jobs by 2028.

International hotel chains are increasing their presence in the country, as it will account for around 47 per cent share in the Tourism & Hospitality sector of India by 2020 & 50 per cent by 2022

Investments

During the period April 2000-June 2018, the hotel and tourism sector attracted around US$ 11.39 billion of FDI, according to the data released by Department of Industrial Policy and Promotion (DIPP).

Government Initiatives

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.

Some of the major initiatives planned by the Government of India to give a boost to the tourism and hospitality sector of India are as follows:

  • The Government of India is working to achieve 1 per cent share in world's international tourist arrivals by 2020 and 2 per cent share by 2025.
  • Under Budget 2018-19, the government has allotted Rs 1,250 crore (US$ 183.89 million) for Integrated development of tourist circuits under Swadesh Darshan and Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD).

Road Ahead

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. India's travel and tourism industry has the potential to expand by 2.5 per cent on the back of higher budgetary allocation and low cost healthcare facility, according to a joint study conducted by Assocham and Yes Bank.

Exchange Rate Used: INR 1 = US$ 0.0149 as of Q1 FY19.

References: Media Reports, Ministry of Tourism, Press Releases, Department of Industrial Policy and Promotion (DIPP), Press Information Bureau (PIB), Union Budget 2018-19

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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