|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
With supportive policies, govt can unlock full potential
|
|
Thursday, 16 January, 2025, 08 : 00 AM [IST]
|
|
Sneha R G
|
Hospitality in India is all about treating guests like family, guided by the belief that ‘Guest is God’. We welcome them with open arms, offering them the best of what we have, be it food, shelter, or companionship. This cultural emphasis on hospitality extends to the hospitality industry, which has experienced significant growth. The industry benefits greatly from both domestic and international tourism, with travellers contributing to the economy by staying in hotels, dining out, and participating in various activities. Tourism plays a vital role in supporting hotels, restaurants, and entertainment services, driving economic development and enriching travel experiences for visitors.
India emerging as one of the top global travel destinations, its tourism and hospitality sector has become a significant contributor to the country’s service industry growth. Several factors are driving the growth of tourism in India. The Ministry of Tourism is heavily investing in infrastructure development for tourist destinations and rural areas. The Indian hospitality industry is experiencing a profound transformation driven by technological innovations and evolving consumer preferences.
Hotels are embracing novel concepts such as boutique hotels, green hotels, and healthy hotels to cater to the diverse needs of guests. Luxury hotel chains are integrating smart technology into their services, offering amenities like fast Wi-Fi and seamless online booking systems. Revenue in the hotel and accommodation sector is projected to reach $7.66 billion in 2023, with an expected annual growth rate of 8.29% by 2027. India’s diverse geography, including the Himalayas, coastline, forests, and deserts, makes it an attractive destination for adventure tourism. Medical tourism is also thriving, with 21% of international travellers visiting for healthcare and wellness retreats. Cruise tourism is set to expand significantly, with passenger traffic expected to grow from 0.4 million to 4 million by 2032.
Additionally, eco-tourism is on the rise, driven by India’s unique wildlife destinations and natural areas. Despite currently holding less than 1% market share, Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism is expected to double in the next five years. Moreover, the tourism sector offers abundant entrepreneurial opportunities, with over 1,300 recognised startups. These factors collectively contribute to the growth and diversification of India’s tourism industry.
The Indian Government is actively pursuing initiatives to position India as a premier global tourism destination. Through strategic allocation of funds, such as the US$290.4 million designated to the Ministry of Tourism in the Union Budget 2023-24, and schemes like Swadesh Darshan and Prashad, which aim to develop and promote tourist destinations, efforts are underway to enhance the country’s tourism infrastructure. Measures like the Saathi initiative, loan guarantee schemes, and skill development loans are facilitating the safe and sustainable operation of the hospitality sector.
Visa reforms, including the introduction of the Golden Visa scheme, are aimed at easing travel for international tourists, while free visa schemes and infrastructure development projects further incentivise tourism growth. Awareness programmes, film tourism promotion, and digitisation initiatives like Nidhi 2.0 are also being implemented to bolster the tourism sector. Additionally, plans to leverage lighthouses for tourism, streamline tourist vehicle permits, and operate Bharat Darshan trains to pilgrimage sites contribute to broadening tourism opportunities across the country. Overall, these multifaceted efforts underscore the government’s commitment to fostering tourism as a key driver of economic growth and cultural promotion in India.
The Covid-19 pandemic severely impacted the Indian hotel sector, causing a significant drop in occupancy rates from 65% in 2019 to single digits in some months of 2020 and 2021. Despite these challenges, the Indian hospitality industry is expected to grow by 10.35% between 2019 and 2028, with the travel market projected to reach $125 billion by 2027.
Although foreign tourist arrivals decreased substantially in 2020, there was a notable recovery in 2021, albeit with temporary setbacks due to new Covid strains. However, travellers and industry players adapted to the situation, and average room rates began to improve post-second wave, reaching almost 90% of pre-Covid levels. The industry witnessed the opening of 110 new properties and the signing of 161 hotels in 2021. Future trends in the hotel industry include a focus on leisure, staycations, local experiences, enhanced digital guest experiences, sustainability, and the adoption of virtual and augmented reality technologies.
According to the WTTC, India ranked 10th out of 185 countries for how much money tourism brings to the economy in 2019. The tourism sector in India was worth Rs 15.9 trillion (US$191.25 billion) in 2022. Over the next 10 years, the tourism industry in India is expected to grow by about 7.8% every year. In 2020, tourism provided jobs for 39 million people, which is 8% of all jobs in India. By 2028, the tourism industry is expected to contribute US$512 billion to the economy and provide jobs for about 53 million people. The travel market in India is expected to be worth US$125 billion by 2027, up from US$75 billion in 2020.
The airline travel market in India is expected to double in size by 2027 due to better airports and more people having passports. The hotel market in India was worth about US$32 billion in 2020 and is expected to reach US$52 billion by 2027 because more people are travelling and travel agents are working hard to attract them. In October 2023, over 8,11,411 foreigners visited India, with the majority arriving at Delhi Airport. The top five countries sending tourists to India are Bangladesh, the USA, the UK, Australia, and Canada.
In the first 10 months of 2023, over 72 million foreign tourists visited India, and they spent about US$22.32 billion. Spending by Indian tourists went up by 20.4% in 2022 compared to 2019, while spending by foreign tourists increased by 81.9%. Since April 2000, the hotel and tourism industry in India has received US$17.29 billion in foreign investments. International tourists are expected to bring in US$59 billion by 2028, but most of the growth will come from people travelling within India.
As the eagerly awaited Union Budget approaches, stakeholders in the hospitality industry are closely watching for potential policy shifts and financial measures that could further shape its trajectory. Recent reports have highlighted the sector’s promising resurgence, with double-digit revenue growth observed in the first half of FY24. This exceptional performance can be attributed to a confluence of factors, including the revitalisation of domestic tourism, a steady influx of foreign tourists, and successful global events like the G20 presidency and Cricket World Cup.
The Indian hospitality sector’s growth potential is underscored by projections estimating its substantial contribution to India’s GDP, with estimates reaching US$1,504 billion by 2047. This projection highlights the sector’s economic significance and its role in India’s long-term development. The Budget proposals hold significant implications for the hospitality sector’s trajectory. Speculations abound regarding potential reductions in GST rates and infrastructure development incentives, each with profound implications for the industry’s growth and competitiveness. Lowering GST rates could make travel more affordable, encouraging more extensive travel and ultimately contributing to increased revenue for the hospitality industry.
By implementing supportive policies and financial measures, the government can unlock the full potential of the hospitality sector and contribute to its sustainable growth. India’s hospitality sector has significant opportunities for future growth, allowing stakeholders to establish thriving businesses that contribute significantly to the economy and provide travellers with exceptional experiences by leveraging market opportunities, addressing challenges, and fostering innovation. The future prospects of the hospitality industry in India are bright and promising, as the sector is expected to sustain and enhance its growth momentum in the coming years.
(The author is graduate engineer trainee, Department of Food Technology, Bannari Amman Institute of Technology, Sathyamangalam, Erode. She can be reached at snehaganesh17001@gmail.com)
|
|
|
|
|
|
|
|
|
|