Hotel Booking

An Overview Of The Indian Tourism and Hospitality Industry

Sector Overview

The Indian tourism and hospitality industry has major connection with other sectors such as agriculture, horticulture, transportation, handicrafts and construction. The tourism industry includes travel agencies, tour operators and tourist transport operating agencies. An average of 43 million global tourists is expected every year.

 According to the Planning Commission, the sector creates more jobs per million rupees of investment than any other sector of the economy and is capable of providing employment to a wide range of job seekers, from the untrained to the specialized, even in the very remote parts of the country.

The size of the Indian hospitality industry is estimated as a sum of revenues of two segments — revenues generated from travel and revenue generated by consumers eating out at any form of outlet.

The Indian tourism sector includes medical and healthcare tourism, adventure tourism, heritage tourism, eco tourism, rural tourism and spiritual tourism. Medical tourism also known as health tourism has emerged as an important segment, owing to India’s skilled healthcare professionals and the lower cost of healthcare facilities in the country. Wellness tourism is regarded as a sub-segment of medical tourism and it involves the promotion and maintenance of good health and well being. India, with its widespread use of Ayurveda, Yoga, Siddha and Naturopathy, complemented by its spiritual philosophy, is a well-known wellness destination.

 Heritage tourism is oriented towards exploring the cultural heritage of a tourist location. India is well known for its rich heritage and ancient culture. The country’s rich heritage is amply reflected in the various temples, majestic forts, gardens, religious monuments, museums, art galleries and urban and rural sites.

Due to its varied topography and distinctive climatic conditions, India is endowed with various forms of plants and wildlife. Wildlife tourism includes wildlife photography, bird watching, jungle safari, elephant safari, jeep safari, jungle camping, ecotourism, etc.

MICE (meetings, incentives, conferences and exhibitions) are associated with business travelers. It caters to various forms of business meetings, international conferences and conventions, events and exhibitions. India is gaining pace to become an ideal MICE destination due to the flourishing business here.

 Policy and Promotion

The government has permitted 100% foreign direct investment (FDI) in the sector under the automatic route, FDI into all construction and development projects including construction of hotels and resorts, recreational facilities, and city and regional-level infrastructure.

In terms of incentives, a five-year tax holiday is extended to organizations that set up hotels, resorts and convention centers at specific destinations. Further, the government has initiated measures to strengthen the sector, such as provision of visa on arrival for tourists from some countries, and launch of several schemes that promote rural tourism and infrastructure related with the sector. The government has also launched campaigns such as Incredible India! Colors of India, Atithi Devo Bhavah ('The guest is God' or 'Guest become God') and the Wellness Campaign to promote the Indian tourism and hospitality industry.

For instance, the government has introduced a new category of visa, ‘medical visa’ (‘M’-Visa), to promote medical tourism. Further, it has tied up with the United Nations Development Program (UNDP) to promote rural tourism. The ministry has sanctioned more than 100 rural tourism infrastructure projects to spread tourism and socio-economic benefits to identified rural sites with tourism potential.

Sector Outlook

WTTC has named India as one of the fastest-growing tourist destinations in the world for the next 10-15 years. From 11 million travelers in 2008, the figure in expected to touch 29 million visitors by 2018. There is an opportunity in the inbound MICE sector, which has already registered a growth of 15% to 20% during the last five years.