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.
The industry is expected to generate 13.45 million jobs! across sub-segments such as Restaurants (10.49 million jobs), Hotels (2.3 million jobs) and Travel Agents/Tour Operators (0.66 million). The Ministry of Tourism plans to help the industry meet the increasing demand of skilled and trained manpower by providing hospitality education to students as well as certifying and upgrading skills of existing service providers.
India has moved up 13 positions to 52nd rank from 65th in Tourism & Travel competitive index@.
India’s rising middle class and increasing disposable incomes has continued to support the growth of domestic and outbound tourism.
Domestic Tourist Visits (DTVs) to the States/Union Territories (UTs) grew by 15.5 per cent y-o-y to 1.65 billion (provisional) during 2016 with the top 10 States/UTs contributing about 84.2 per cent to the total number of DTVs, as per Ministry of Tourism.
As per Ministry of Tourism, foreign tourists’ arrival (FTAs) on e-tourist visa increased 56.6 per cent year-on-year in December 2016. In 2016, foreign tourist arrivals on e-visas more than doubled to 10,79,696 from 4,45,300 in 2015, partly because the e-visa facility was extended to 161 countries from 113 previously.
India is expected to move up five spots to be ranked among the top five business travel market globally by 2030, as business travel spending in the country is expected to treble until 2030 from US$ 30 billion in 2015.#
International hotel chains will likely increase their expansion and investment plans in India, and are expected to account for 50 per cent share in the Indian hospitality industry by 2022, from the current 44 per cent.*
The tourism and hospitality sector is among the top 10 sectors in India to attract the highest Foreign Direct Investment (FDI). During the period April 2000-December 2016, the hotel and tourism sector attracted around US$ 9.93 billion of FDI, according to the data released by Department of Industrial Policy and Promotion (DIPP).
With the rise in the number of global tourists and realising India’s potential, many companies have invested in the tourism and hospitality sector. Some of the recent investments in this sector are as follows:
- MakeMyTrip has agreed to buy Ibibo Group’s India travel business at a deal value of US$ 720 million, thus creating India’s largest online travel firm with a value of US$ 1.8 billion, as estimated by Morgan Stanley.
- Yellow Tie Hospitality Management Llp, specialising in franchise management of food and beverages firms, plans to invest up to US$ 15-20 million in five restaurant ventures of celebrity chef Mr Harpal Singh Sokhi, with the aim to have 250 outlets under these brands by 2020.
- Chaudhary Group (CG) Hotels & Resorts aims to have 200 hotels operational by 2020.
- DineEquity Incorporation has signed a franchisee partnership deal with food services firm Kwal’s Group, in order to enter the Indian markets with their breakfast chain IHOP.
- As per industry experts, mid-hotel segment in India is expected to receive investments of Rs 6,600 crore (US$ 990 million) excluding land over next five years, with major hotel chains like Mariott, Carlson Rezidor and ITC planning to set up upscale, budget hotels in state capitals and tier-II cities.
- Hyatt Hotels Corporation has outlined plans of bringing its Hyatt Centric brand to India soon along with three new hotels in Kochi, Rameswaram and Hyderabad by 2017.
- Vatika Hotels Pvt Ltd has raised Rs 495 crore (US$ 74.25 million) in debt from Axis Bank Ltd to expand its hotels and quick-service restaurant chain besides its business centres.
- AccorHotels, a French multinational hotel group, plans to expand its footprint in Guwahati and Kolkata by adding more 550 rooms to its portfolio of hotels in the next three years.
- The first Incredible India Tourism Investment Summit 2016, which was organised from September 21-23, 2016, witnessed signing of 86 Memoranda of Understanding (MoUs) worth around Rs 15,000 crore (US$ 2.24 billion), for the development of tourism and hospitality projects.
- Steigenberger Hotels, a German luxury hotel company, and MBD Group, a Delhi-based firm which runs 5-star Radisson Hotels in Noida and Ludhiana, have formed a joint venture to build five luxury hotels and manage another 15 luxury hotels in India by 2030.
- Keys Hotels, a premium brand of Berggruen Hotels, plans to launch three new hotels in India at Vishakhapatnam, Calicut and Jaipur, and further add up to 10 Keys Hotels in the country by the end of FY 2017.
- Stayzilla, a budget hotels and homestays aggregator, has raised over US$ 13 million in Series C round of funding from Matrix Partners and Nexus Ventures, which will be used to improve product, technology and marketing initiatives for its alternate stay business.
- Ctrip.com, China’s largest travel portal, has bought a stake in India’s largest travel portal MakeMyTrip for US$ 180 million via convertible bonds, which allows Ctrip to increase its share in MakeMyTrip up to 26.6 per cent.
- Global investment banking major Goldman Sachs has invested Rs 441 crore (US$ 65.76 million) to acquire an equity stake in Gurgaon-based hotel development and investment start-up SAMHI Hotels which will help fund SAMHI’s expansion plans.
- Thai firm Onyx Hospitality and Kingsbridge India hotel asset management firm have set up a joint venture (JV) to open seven hotels in the country by 2018 for which the JV will raise US$ 100 million.
- Goldman Sachs, New-York based multinational investment banking fund, has invested Rs 255 crore (US$ 38.02 million) in Vatika Hotels.
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.
In the Union Budget 2017-18, the Government of India announced some initiatives to give a boost to the tourism and hospitality sector such as setting up of five special tourism zones, special pilgrimage or tourism trains and worldwide launch of Incredible India campaign among others.
Some of the major initiatives taken by the Government of India to give a boost to the tourism and hospitality sector of India are as follows:
- The Central Government has taken a number of steps for smooth transitioning to cashless mode of payment to ensure that no hardship is faced by the tourists and the tourism industry remains unaffected from government’s demonetisation move.
- • Maharashtra Tourism Development Corporation (MTDC) has come up with a unique tourism experience of visiting the open cast coal mine of Gondegaon and underground coal mine of Saoner, which are near Nagpur and part of Western Coalfields Limited.
- A Tripartite Memorandum of Understanding (MoU) was signed among the Indian Ministry of Tourism, National Projects Construction Corporation (NPCC), National Buildings Construction Corporation (NBCC) and Government of Jammu and Kashmir for the implementation of tourism projects in Jammu and Kashmir.
- The Ministry of Tourism has approved projects worth Rs 450 crore (US$ 67.10 million) under the SwadeshDarshan scheme, for the improvement and creation of tourism infrastructure in Madhya Pradesh, Uttarakhand, Tamil Nadu, Uttar Pradesh and Sikkim.
- The Union Cabinet has approved a MoU between India and South Africa, aimed at expanding bilateral cooperation in the tourism sector through exchange of information and data, establishing exchange programmes and increasing investments in the tourism and hospitality sector.
- The Union Cabinet has approved the signing of Memorandum of Understanding between the Ministry of Tourism of India and the Ministry of Trade Industry and Tourism of Colombia in order to boost cooperation in the field of tourism between the two countries.
- The Central Government has given its approval for signing of a MoU between India and Cambodia for cooperation in the field of tourism with a view to promote bilateral tourism between the two countries.
- The Heritage City Development and Augmentation Yojana (HRIDAY) action plans for eight missions cities including Varanasi, Mathura, Ajmer, Dwaraka, Badami, Vellankini, Warangal and Amaravati have been approved by HRIDAY National Empowered Committee for a total cost of Rs 431 crore (US$ 64.27 million).
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 is projected to be the fastest growing nation in the wellness tourism sector in the next five years, clocking over 20 per cent gains annually through 2017, according to a study conducted by SRI International.
JW Marriott plans to have 175-200 hotels in India over the next four years.
AccorHotels India has adopted a ‘born in France, made in India’ approach to increase its properties in India, which has reached a total of 45 hotels and is expected to increase to 55 hotels by 2017.
Global hospitality major Carlson Rezidor Hotel Group, which is also the largest foreign hotel brand in India by number of hotels, plans to increase its total count to 120 hotels in India by 2020.
Exchange Rate Used: INR 1 = US$ 0.015 as on February 9, 2017
References: Media Reports, Ministry of Tourism, Press Releases, Department of Industrial Policy and Promotion (DIPP), Press Information Bureau (PIB), Union Budget 2017-18
Note – ! – As per the report of National Skill Development Corporation on “Human Resource and Skill Requirements in the Travel, Tourism & Hospitality Sector (2013 -17, 2017 – 22)”, @ – World Economic Forum (WEF) report, # – According to a report by KPMG and FCM Travel Solutions, * – According to data from Indian Credit Rating Agency (ICRA).
Tourism And Hospitality Companies
Established in 1989, the Country Club is a pioneer in the concept of offering 360° leisure hospitality membership services in India. A full range of Country Club specialty services include member exclusive clubbing hubs, splendid holiday destinations, trendy fitness centers and star-studded entertainment events. The Country Club has over 50 ow…
The Park Group of Hotels is a pioneer in the concept of luxury boutique hotels in India. Over the 40 years since it was first established, the group has grown in popularity and prestige, achieving global standards of product quality and service excellence. Located in some of the biggest cities around the country, The Park is a likely choice of …
Established in 1881, Thomas Cook (India) Ltd (TCIL) is the leading integrated travel and travel related financial services company in the country offering a broad spectrum of services that include foreign exchange, corporate travel, mice, leisure travel, insurance, visa and passport services and e-business. TCIL’s footprint currently exte…
Cox & Kings (C&K) is the longest established travel company in the world. Its distinguished history began in 1758 when it was appointed as general agents to the regiment of Foot Guards in India under the command of Lord Ligonier. By 1878, C&K were agents for most British regiments posted overseas, including the Royal Cavalry, Artillery and Infa…
Cleartrip Pvt Ltd is a private company registered on May 12, 2005. The company has an authorized capital of Rs 2.35 billion (US$ 38.02 million) and paid-up capital of Rs 2.3 billion (US$ 37.22 million). Its registered office is situated at Unit No 001, Ground Floor, DTC Building, Sitaram Mills Compound, N M Joshi Marg, Lower Parel, Mumbai, Mahar…
Expedia Inc. is the world’s leading online travel company and operates localised websites for travellers in the US, Canada, France, Germany, Italy, Denmark, Austria, Belgium, Ireland, The Netherlands, Norway, Spain, Sweden, UK, Australia, New Zealand, Japan, China and India. With the launch of domestic and worldwide flight bookings and holiday pac…
The Leela Palaces, Hotels and Resorts is owned and managed by Hotel Leelaventure Ltd which was established in 1983 in Mumbai. The company is a part of The Leela Group whose portfolio includes hotel and resort properties; IT and business parks; as well as, real estate development. The Group was founded by Late Capt C P Krishnan Nair, Chairman Eme…
Indian Tourism Development Corporation Ltd (ITDC) came into existence in October 1966 and has been the prime mover in the progressive development, promotion and expansion of tourism in the country. The corporation is running hotels, restaurants at various places for tourists, besides providing transport facilities. In addition, the corporation is e…
Mahindra Holidays & Resorts India Ltd (MHRIL) was incorporated in 1996 and the company’s flagship brand ‘Club Mahindra Holidays’ today has a fast growing customer base of over 170,000 members and 40 beautiful resorts at some of the most exotic locations in India and abroad. MHRIL is a part of the leisure and hospitality sector of the Mahindra Gr…
Goibibo is one of the top three online travel aggregators in India. Goibibo’s core value differentiator is delivery of fastest and trusted user experience – be it in terms of quickest search and checkout flow, fast payments, settlement and refund processes. All this is backed by customer service excellence and innovations in operations and backend….
Yatra.com is an Indian online travel agency and a travel search engine, with headquarters in Gurgaon, Haryana in India. It was incorporated in 2006 by entrepreneurs Mr DhruvShringi, Mr Manish Amin and Ms Sabina Chopra. Yatra.com is ranked as the leading provider of consumer-direct travel services in India and provides information, pricing, ava…
SOTC, India’s leading outbound tour operator, was acquired by Kuoni Travels – one of the world’s leading premium tour operators – in 1996. SOTC is a leader in several travel segments, namely escorted tours, free individual travel and domestic holidays, among others. SOTC Corporate Tours is also a leader in incentive, trade fair tours and sp…
Incorporated in 1903, by the founder of the Tata Group, Mr Jamsetji N Tata, the company opened its first property, The TajMahal Palace Hotel in Bombay. The Taj Hotels Resorts and Palaces comprise the Indian Hotels Company Limited (IHCL) and its subsidiaries and is recognised as one of Asia’s largest and finest hotel company. The IHCL operate in t…
The Indian Hotels Company Limited (IHCL) and its subsidiaries, collectively known as Taj Group, is one of Asia’s largest and finest hotel groups. The company was incorporated by the founder of the Tata group, Jamsetji Tata and launched its first property, the TajMahal Palace, in Bombay in 1903. IHCL has 93 hotels across 55 locations in India, …
MakeMyTrip.com, India’s leading online travel company, was founded in the year 2000 by Deep Kalra. Created to empower the Indian traveller with instant booking and comprehensive choices, the company began its journey in the US–India travel market. It aimed to offer a range of best-value products and services along with cutting-edge technology…
Incredible India is the name of an international marketing campaign initiated by the Government of India to promote tourism in India in 2002 to a global audience. The campaign projected India as an attractive tourist destination by showcasing different aspects of Indian culture and history like yoga, spirituality, etc. The campaign was conducte…
About Tourism Industry
India is a large market for travel and tourism. It offers a diverse portfolio of niche tourism products – cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and religious tourism. India has been recognised as a destination for spiritual tourism for domestic and international tourists.
Total contribution by travel and tourism sector to India’s GDP is expected to increase from US$ 136.3 billion in 2015 to US$ 275.2 billion in 2025. Travel and tourism is the third largest foreign exchange earner for India. A sum of US$ 1.76 billion was earned under foreign exchange through tourism during the month of September 2016.
The launch of several branding and marketing initiatives by the Government of India such as Incredible India! andAthitiDevoBhava have provided a focused impetus to growth. The Indian government has also released a fresh category of visa – the medical visa or M visa, to encourage medical tourism in the country.
The Government has also been making serious efforts to boost investments in tourism sector. In the hotel and tourism sector, 100 per cent FDI is allowed through the automatic route. A five-year tax holiday has been offered for 2, 3 and 4 star category hotels located around UNESCO World Heritage sites (except Delhi and Mumbai). The investment in tourism sector is expected to be US$ 12.4 billion in the 12th Five Year Plan; of these, private investments are likely to total US$ 9.2 billion