Tourism in India

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  • Topic: Tourism, Hotel, Destination hotel
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  • Published : November 26, 2012
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The Travel and Hospitality Industry 

India’s travel, tourism and hospitality industry is one of the fastest growing service industries in the country thanks to a burgeoning middle class, increasing purchasing power, a rising inflow of foreign tourists, and successful government campaigns promoting ‘Incredible India'. In 2011 alone, travel and tourism contributed to 6.4% of the GDP, and is forecast to rise by 7.3% in 2012. In terms of employment, travel and tourism directly supported 24,975,000 jobs (5% of employment) in 2011, and is expected to rise by 3% in 2012. Foreign Exchange Earnings (FEE) from tourism in 2011 were $16,564 million with a growth of 16.7% over 2010.14

Clearly, India is fast becoming a popular tourist destination world over. Between April 2000 and December 2011, the hotel and tourism sector generated a total of $3,195.70 billion in Foreign Direct Investment (FDI).15In 2011 alone, the country welcomed 6.29 million foreign tourists, compared to 5.78 million in 2010.16By 2022, international tourist arrivals are forecast to total 11,276,000, generating an expenditure of `1,382.6 billion.17

In 2010-11, the travel and hospitality industry faced the challenge of a significant decline in corporate travel due to serious cost cutting by global corporate houses, as well as the fear of terrorism, and a lack of a sense of safety post the 2008 Mumbai terror attacks. However, the hospitality sector has shown resilience, improving its security management and performance.

With the growth of budget hotels along with low cost airlines, online travel bookings, and group travel, SMEs in the travel and tourism sector have shown rapid progress. They have been targeting niche markets specializing in corporate travel, leisure travel, and even hitherto unheard services like wedding travel and planning.

“IATA statistics show that today, maximum business is generated in Asia. Asia and particularly India now have a major role to play in shaping this sector while also enjoying maximum share. However, with more disposable income, Indians prefer to travel overseas rather than within the country. We have over 14 million Indians traveling overseas, but the figure for inbound tourism stands at a dismal 6 million - this can definitely increase if we begin to seriously promote India as a destination to be explored and discovered.”, says Vivek Dadhich, Managing Director of Noida-based Bluemoon Travels, a new age travel company offering leisure travel and MICE - travel planning services for Meetings, Incentives, Conventions, and Exhibitions.

As per an analysis done by retail consultancy Technopak, at the end of 2010 the Indian hotel industry’s worth was estimated around US$ 17 billion. The share of hotel and restaurant sector in the overall economy is still below 2 per cent. For the last five years the total contribution of the hospitality sector has remained stagnant. Although the overall share increased from 1.46 per cent in 2004-05 to 1.69 per cent in 2007-08, but then after the phase of economic meltdown in US the total share again decreased to 1.45 per cent in 2009-10. India ranks in the 153rd position spending 0.9% for tourism.   

The hotel and tourism industry’s contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.35 billion from April 2000 to February 2011, according to the Department of Industrial Policy and Promotion (DIPP). 

As per an analysis done by retail consultancy Technopak, at the end of 2010 the Indian hotel industry’s worth was estimated around US$ 17 billion. The share of hotel and restaurant sector in the overall economy is still below 2 per cent. For the last five years the total contribution of the hospitality sector has remained stagnant. Although the overall share increased from 1.46 per cent in 2004-05 to 1.69 per cent in 2007-08, but then after the phase of economic meltdown in US the total share again decreased to 1.45 per...
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