Indian Tourism and Hospitality Industry Analysis (Travel Courses – Mumbai, Thane & Mumbai)

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 recognized as a destination for spiritual tourism for domestic and international tourists. In his Independence speech from Red Fort, Prime Minister Mr. Narendra Modi urged people to visit 15 domestic tourist destinations in India by 2022 to promote tourism. India ranked 34 in the Travel & Tourism Competitiveness Report 2019 published by the World Economic Forum.

India is the most digitally advanced traveller nation in terms of digital tools being used for planning, booking, and experiencing a journey. India’s rising middle class and increasing disposable income has supported the growth of domestic and outbound tourism.

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In India, the industry’s direct contribution to the GDP is expected to record an annual growth rate of 10.35% between 2019 and 2028.

By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor exports compared with US$ 28.9 billion in 2018.

The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports.

The Indian hotel market including domestic, inbound and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travelers and sustained efforts of travel agents to boost the market.

The Tourism & Hospitality sector has seen some major developments, investments and support from the Government in the recent past.

Foreign Tourist Arrivals (FTAs) in May 2022 were 423,701 with a positive growth rate of 2,043.7% as compared to 19,765 in May 2021.

The percentage share of Foreign Tourist Arrivals in India during May 2022 among the top 15 source countries was highest from USA (27.80%) followed by Bangladesh (23.47%), UK (7.58%), Australia (4.02%), Canada (3.65%), Sri Lanka (2.84%), Singapore (2.36%), Nepal (2.12%), Malaysia (1.66%), Germany (1.65%), France (1.47%), Maldives (1.26%), Portugal (1.13%), Oman (1.13%) and Korea (Rep of) (0.85%).

FDI inflows in the Tourism & Hospitality sector reached US$ 16.38 billion between April 2000-March 2022.

In the Union Budget 2022-23,Rs. 2,400 crore (US$ 309.13 million) has been allocated to the Ministry of Tourism which is 18.42 % higher than the allocation for FY 2021-22, Rs. 1,181.30 crore (US$ 152.16 million) is allocated for the Swadesh Darshan Scheme, Rs. 235 crore (US$ 30.27 million) for the Pilgrimage Rejuvenation and Spiritual and Heritage Augmentation Drive (PRASHAD) Scheme.

A total of 46,873 accommodation units (both classified and unclassified) have been registered on the National Integrated Database of Hospitality Industry (NIDHI) portal and 11140 units have self-certified for SAATHI standards.

In August 2022, Ministry of Tourism sanctioned 76 projects for Rs. 5,399.15 crore (US$ 678.39 million) under Swadesh Darshan Scheme for development of tourism infrastructure in the country. In June 2022, the Ministry of Tourism along with Associations of Indian Universities (AIU) initiated a 12 episode webinar series under ‘Azadi Ka Amrut Mahotsav’ (AKAM) to engage and expose young minds of our country to the rich and diverse heritage of the country.

Till the end of June 2022, a total of 142 Dekho Apna Desh webinars have been organized by Ministry of Tourism.

Accor, a French hospitality major will expand its India’s portfolio by adding nine additional hotels in the mid-scale and economy categories, bringing the total number of hotels 54 in India.

The Medical Tourism sector is expected to increase at a CAGR of 21.1% from 2020-2027.

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20.

The Ministry of Tourism has approved 16 projects for over Rs. 1,300 crore (US$ 171.2 million) in India’s North East.

The Ministry of Road Transport and Highways has introduced a new scheme called ‘All India Tourist Vehicles Authorisation and Permit Rules, 2021’, in which a tourist vehicle operator can register online for All India Tourist Authorisation/Permit. This permit will be issued within 30 days of submitting the application.

The United Nations World Tourism Organisation selected Pochampally in Telangana as one of the best tourism villages in November 2021.

OYO estimates India to present a US$ 26 billion opportunity by 2030. To further strengthen its position in India, in October 2021, the company filed its draft red herring prospectus (DRHP) for an initial public offering (IPO) of Rs. 8,430 crore (US$ 1.2 billion) with the Securities and Exchange Board of India (SEBI).

By 2029, it is expected to account for about 53 million jobs. International Tourists arrival is expected to reach 30.5 billion by 2028.

E-Visa facility was offered to 171 countries as of March 2021. The government introduced a scheme to boost the tourism sector by providing one-month free tourist visa to 5 lakh tourists until March 31, 2022.

During 2019, contribution of travel & tourism to GDP was 6.8% of the total economy, Rs. 1,368,100 crore (US$ 194.30 billion).

There has been an increase in the demand for luxury stay among Indian consumers, due to rising consumer spend. In line with this, key players are expanding their presence to cater to this demand.

The Ministry of Tourism launched the NIDHI portal to understand the geographical spread of the hospitality sector, its size, structure and existing capacity in the country. NIDHI will serve as a common data repository for the Ministry of Tourism, State Departments of Tourism and Industry; this will enable the Central and State Governments to deliver better support and services including policies and strategies for the tourism sector. As of December 31, 2020, 34,399 accommodation units have been registered on the portal.

The launch of several branding and marketing initiatives by the Government of India such as ‘Incredible India!’ and ‘Athiti Devo Bhava’ has 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 is working to achieve 1% share in world’s international tourist arrivals by 2020 and 2% share by 2025.

Post the pandemic crisis, the government plans to tap into regional tourism by opening doors for South Asian country tourists.

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In November 2021, the Ministry of Tourism signed a Memorandum of Understanding (MoU) with Indian Railway Catering and Tourism Corporation to strengthen hospitality and tourism industry. The ministry has also signed a MoU with Easy My Trip, Cleartrip, Yatra.com, Make My Trip and Goibibo.

In November 2021, the Indian government planned a conference to boost film tourism in the country with an aim to establish domestic spots as preferred filming destinations. This move is expected to create jobs and boost tourism in the country.

The Government is also making serious efforts to boost investment in the tourism sector. In the hotel and tourism sector, 100% FDI (Foreign Direct Investment) 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).

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Government is planning to boost the tourism in India by leveraging on the lighthouses in the country. 71 lighthouses have been identified in India which will be developed as tourist spots. The lighthouses will feature museums, amphi-theatres, open air theatres, cafeterias, children’s parks, eco-friendly cottages and landscaping according to its capacity. India is often termed as the hotspot for bio-diversity and its rich natural heritage is unparalleled in many ways. As of December 2020, the country comprised ~104 national parks and 566 sanctuaries.

Ministry of Tourism has introduced the Incredible India Tourist Facilitator (IITF) and Incredible India Tourist Guide (IITG) Certification Programme, aimed at creating an online learning platform of well-trained tourist facilitators and guides across the country. The IITF concept is aimed to promote micro-tourism, i.e., tourism in less explored areas of the country.

The future outlook of the Tourism & Hospitality sector looks on track with pandemic easing out.

India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India’s travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility according to a joint study conducted by Assocham and Yes Bank.