Published on : Monday, January 8, 2018
When the current Indian government is being criticized for extremely bad job creation, the hospitality and tourism sector can be the silver lining amidst the dark clouds of joblessness. The travel and tourism industry is expected to create 13.45 million jobs across sub-segments such as Restaurants (10.49 million jobs), Hotels (2.3 million jobs) and Travel Agents/Tour Operators (0.66 million).
According to Pradip K Das, Director Finance and CFO, India Tourism Development Corporation (ITDC) Ltd., “Hospitality industry is evolving at a faster pace as compared to recent years. With the growth of tourist inflow, the hospitality industry has become one of the main sectors to increase foreign direct investment (FDI) influx. As more people come online, smartphone penetration increases and use of digital payments go up, the report estimates that India’s online hotel market will grow to $4 billion with 31 per cent penetration at a CAGR of 25 per cent.”
Another report predicts that the Indian passenger travel market would grow at 11-11.5 per cent to $48 billion by 2020. The report also projects the hotel industry growth at 13 per cent to $13 billion by the same period.
With an expanding middle class, better infrastructure, extension of e-tourist visa to 150 countries and several initiatives by the government such as Incredible India and Atithi Devo Bhava, India is witnessing a phase of incremental growth in the sector.
Last year, the unexpected storm of demonetization posed a lot of problems before the onset of winter travel season. However, the organized hospitality sector has somewhat come to terms with the situation. The tourism sector also looks at goods and services tax hopefully as in the long run, businesses would start moving from unorganized to organized sector.
Das doesn’t think negatively of demonetization for the organized sector hotel industry and appreciates government’s effort to boost the sector. India is expected to move up five spots and rank among the top five business travel market globally by 2030. International hotel chains will likely increase their expansion and investment plans in India and are expected to account for 50 per cent share in the Indian hospitality industry by 2022, from the current 44 per cent.
The tourism sector is also looking at goods and services tax expectantly, and will have to counter stiff competition from nearby destinations like Singapore, Dubai, Malaysia, Thailand, China, and others to stay in the bright spot for a long time.