The Hospitality Industry in India

The Hospitality Industry in India – An Overview | MBA ESG, India

India is home to some of the world’s most ancient and spectacular monuments, historical sites, wonders, and legends. Every year millions of tourists visit India to experience the rich and diverse culture it has to offer. Besides being a huge draw for vacationers, tourism is also a huge employment generator. According to the latest report by IBEF (India Brand Equity Foundation), the travel & tourism sector in India accounted for 9.3% of the total employment opportunities generated in the country in 2016, providing employment to around 40.3 million people during the same year. The number is expected to rise by 2% per annum to provide 46.42 million jobs by 2026.

India’s culture and traditions are rooted in hospitality. It is, therefore, no surprise that the phrase “Atithi Devo Bhava”, which means “Guest equals God”, has become the official slogan for hospitality in India. Hospitality in India is witnessing a steady growth, thanks to the increase in the number of tourists and government initiatives to attract foreign investments. Tourism has a huge impact on the hospitality sector. Hence, an increase in investments in tourism will directly impact the hospitality industry as well.

A report by KPMG states that the hospitality sector in India is expected to grow at 16.1% CAGR to reach INR 2,796.9 thousand-crore in 2022. It is also the sector which attracts the most FDI. Increase in disposable income and a growing middle-class have further contributed to the growth of this sector.

Let’s look at some interesting statistics about the tourism and hospitality industry in India from IBEF (India Brand Equity Foundation).

  • In 2016, foreign tourist arrivals in India stood at 8.8 million. According to the World Tourism Organisation, by 2025, foreign tourist arrivals in India is expected to reach 15.3 million.
  • In December 2016, over 1,62,250 foreign tourists arrived on an e-tourist visa, in comparison with 1,03,617 foreign tourists in December 2015, registering a growth of 56.6% over the previous year.
  • As of December 2016, 8.8 million tourists have visited India, mostly from the UK, US, and Bangladesh. This has been due to flexible government policies, developed rail and road infrastructure, and ease of availability of e-visas to foreign tourists.
  • The number of Foreign Tourist Arrivals (FTAs) in April 2017 was 7.40 lakh as compared to FTAs of 5.99 lakh in April 2016 and 5.42 lakh in April 2015.
  • Contribution of visitor exports to total exports is estimated to increase 7.2% per annum during 2016– 2026 compared to the world average of 4.3%.
  • International hotel brands are targeting India, e.g. Carlson group is aiming to increase the number of its hotels in India to 170 by 2020.
  • In India, the travel & tourism sector’s direct contribution to GDP is expected to grow by 7.9% per annum during 2016–26.

These are just a few of the many factors that point towards a positive growth of the hospitality industry. With the right support from both government and private agencies, the industry has the potential to be a major game-changer in terms of tourist inflow as well as employment opportunities.

The business and culture of the hospitality industry in India is undergoing a massive shift. In terms of career opportunities, this sector is seemingly the most lucrative. With the MBA Hospitality Management program from MBA ESG, you too can be a part of this growing sector and contribute to its and, in turn, your success.

Author: Abhishek

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