ABSTRACT The Global financial crisis from 2005 to the present is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It was triggered by a liquidity shortfall in the United States Banking system which resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In India, the global financial crisis badly impacted the Indian tourism and hotel sector that resulted in decline in the number of foreign tourists, decline of Foreign Direct Investment Inflows and affected the gross domestic product of India. The study is related with the Impact of Global Financial Crisis on Hospitality Sector based in Mumbai region, Mumbai region will include, Mumbai, Thane and Navi-Mumbai based Hospitality industries. The primary data is collected through interview method. The questionnaire is chosen as resource to collect the information. The secondary data is collected through various magazines, journals, scholarly articles, research papers and various authentic websites of various Hospitality industries. The paper attempts to analyse the impact of global recession on Hospitality sector in India especially Tourism and Hotel Industry in the country. Further the paper focuses on the challenges faced and opportunities that can be availed during and after global financial crisis.
Keywords: Challenges, Opportunities, Foreign direct investment, Foreign tourist inflows, Gross domestic product. INTRODUCTION The Hotel industry is linked to the tourism industry which forms the most important support service that affects the Foreign Tourist Arrivals to any Country. In recent years many international hotel chains like Marriott International, Intercontinental Hotels Group are setting up hotels in India and many international tour operators are establishing operations VOLUME NO.1, ISSUE NO.2 ISSN 2277-1182 1
NATIONAL MONTHLY REFEREED JOURNAL OF REASEARCH IN ARTS & EDUCATION www.abhinavjournal.com
from India. A rapidly growing middle class, the advent of corporate incentive travel and the multinational companies into India has boosted prospects for tourism. The turmoil in global financial markets had generated new concerns for the hospitality industry. India had a biggest drop in corporate travel spending falling to 25% in year 2009 compared to year 2008. Growth rate of the aggregate sale of hotel companies fell down to 9.1% during Dec. 2008 quarter from growth rate of 17.4% during Dec.2007 quarter. There was decline in India's average annual GDP Growth from historical high of 10.10 percent in September of 2006 and a record low of 5.50 percent in December of 2004.The financial year 2008-2009 was an unforgettable one for the Indian tourism and Hotel industry, with the Mumbai terror attacks and global economic down turn affecting the industries performance. The Hotel industry also, observed an overall decline in occupancy and Revenue per Available Room in most cities. The adverse impact of economic downturn on India‟s tourism was far less than global tourism industry. OBJECTIVES The objective of the study is To know how the Hospitality Sector of India was affected during recession. To know the current overall industry position and how can it be developed in future. To know the steps taken by the Government of India to curb the effect of recession on Hospitality Industry through its policies. REVIEW OF LITERATURE “The financial downturn that is impacting developed economies are likely to get worse as the European countries, the US and others go into a deeper depression due to the increase in Job losses which often follows recession. The slump in the market and increased job...