NEW DELHI: 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. In FY20, 39 million jobs were created in the tourism sector in India; this accounted for 8.0% of the total employment in the country. The number is expected to rise by 2% annum to 52.3 million jobs by 2028.

According to World Travel & Tourism Council (WTTC), India ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019. During 2019, contribution of travel & tourism to GDP was 6.8% of the total economy, approximately US$ 194.30 billion.

Market Size

India is the most digitally advanced traveler nation in terms of digital tools being used for planning, booking, and experiencing a journey. India’s rising middle class and increasing disposable income has supported the growth of domestic and outbound tourism.

During 2019, foreign tourist arrivals (FTAs) in India stood at 10.89 million, achieving a growth rate of 3.20% y-o-y. During 2019, foreign exchange earnings (FEEs) from tourism increased 4.8% y-o-y to US$ 29.96 billion. In 2019, arrivals through e-Tourist Visa increased by 23.6% y-o-y to 2.9 million.

International hotel chains are increasing their presence in the country, and it will account for around 50% share in the tourism and hospitality sector of India by 2022.

Investments

India was globally the third largest in terms of investment in travel and tourism with an inflow of US$ 45.7 billion in 2018, accounting for 5.9% of the total investment in the country. Hotel and Tourism sector received cumulative FDI inflow of US$ 15.48 billion between April 2000 and June 2020.

Government Initiatives

The Indian Government has realized 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 boost the tourism and hospitality sector of India are as follows:

• In October 2020, Prime Minister Shri Narendra Modi inaugurated four new tourist attractions in Gujarat namely, Arogya Van, Ekta Mall, Children’s Nutrition Park and Sardar Patel Zoological Park / Jungle Safari, near the Statue of Unity at Kevadiya in Narmada district.
• The initiative is a part of 17 new projects that are planned. Additionally, the government will also launch seaplane service from Ahmedabad to Statue of Unity in a major push to India’s tourism.
• The Ministry of Tourism developed an initiative called SAATHI (System for Assessment, Awareness & Training for Hospitality Industry) by partnering with the Quality Council of India (QCI) in October 2020. The initiative will effectively implement guidelines/SOPs issued with reference to COVID-19 for safe operations of hotels, restaurants, B&Bs and other units.
• Ministry of Tourism launched Dekho Apna Desh webinar series to provide information on many destinations and sheer depth and expanse on the culture and heritage of India.
• Ministry of Tourism launched Audio Guide facility App called Audio Odigos for 12 sites in India (including iconic sites).
• Prime Minister, Shri Narendra Modi urged people to visit 15 domestic tourist destinations in India by 2022.
• Statue of Sardar Vallabhbhai Patel, also known as ‘Statue of Unity’, was inaugurated in October 2018. It is the highest standing statue in the world at a height of 182 metre. It is expected to boost the tourism sector in the country and put it on the world tourism map.
• Government of India is working to achieve 2% share in world’s international tourist arrivals by 2025.
• Under Budget 2020-21, the Government of India has allotted Rs. US$ 171.70 million for development of tourist circuits under Swadesh Darshan for eight Northeast states.
• Under Budget 2020-21, the Government of India has allotted Rs. US$ 29.70 million for development of tourist circuits under PRASHAD scheme.
• In 2019, Government reduced GST on hotel rooms with tariffs of Rs. 1,001 (US$ 14.32) to Rs. 7,500 (US$ 107.31) per night to 12% and those above Rs. 7,501 (US$ 107.32) to 18% to increase India’s competitiveness as a tourism destination.

Road Ahead

Staycation is seen as an emerging trend were people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation offers were guests can choose from a host of curated experiences, within the hotel.

India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India’s travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility according to a joint study conducted by Assocham and Yes Bank.