A peep into the hospitality sector in India

The World Economic Forum ranks India as the 40th most favored destination for tourists out of 185 countries – in its Travel and Tourism Competitiveness report 2017. Similarly, according to a research by World Travel and Tourism Council (WTTC), India has been one of the most favorite tourist destinations since 2009.

This has made travel, tourism and hospitality as one of the most lucrative sectors among the top 10 sectors in India to attract high Foreign Direct Investment (FDI).

Between 2000 and 2018, an estimated US$12 billion has been pumped into India as FDI by international hotel chains – as per sector report by the Department of Promotion of Industry and Internal Trade (DPIIT).

Increase in local and international travelers have increased the occupancy rates which has resulted in more income to hotel owners across India.

Realizing the importance of the sector and to cope up with global trends, Government of India has taken various steps to improve the tourist spots across India on par with global standards.

The key vision is to achieve 1 percent share in the world’s international tourist arrivals by the year 2020 and to improve it to 2 per cent by mid next decade. With this vision, Indian government came up with the “Swadesh Darshan” scheme and has allocated US$160.78 million (2019-20 budget) to improvise the tourist circuits across the nation.


tourism ibef report


Under Swadesh Darshan scheme, US$54.81 million worth of projects have already been sanctioned and work is under way. Clean up of all tourist locations (under Swach Bharat), digital ticketing, subsidies to organisations enabling cultural heritage through arts and crafts etc. are part of the initiatives. Government has also encouraged private flyers to provide seamless air connectivity to world heritage sites across India.

Given all the above initiatives, as of 2018, Foreign tourist arrivals (FTAs) reached 1.05 million. This is 5.2 percent more compared to the previous year. This further went up to 1.10 million FTAs as of January 2019.

Travel, Tourism and hospitality has become a significant sector in India this decade, providing considerable amount of employment and one of the major sources of foreign exchange.

According to Indian Brand Equity Foundation (IBEF), the sector employs 8% of the entire workforce in India (as of 2017) amounting to 41.6 million people. This is poised to grow at a healthy rate of 2 percent every year and is expected to touch 52.3 million jobs by 2028.

Both Government and the private sector is very much positive about the long-term outlook of travel, tourism and hospitality sector. With improving exploratory travelers, global nature of work assignments, increase in foreign tourist arrivals and a higher disposable income of the new Indian middle class and young millennial workforce is only going to help improve the growth of this sector further.

Please share your thoughts about the hospitality industry in the comments section.

Krishnan Sethuraman

Founder & CEO at Geedesk SaaS Entrepreneur, Passionate about building businesses that impact the world in small ways.