As the world moves on, the service sector — travel and tourism business included — is emerging as a major growth engine for the Indian economy. People are once again flying in great numbers, airports are crowded, hotels are well booked, and travelers want to explore, connect and feel alive through the exhilarating emotion of travel. Despite several difficulties and challenging infrastructure and connectivity, the industry has fared extremely well.
As India takes on the G20 presidency and starts preparing for the summit in 2023, positioning the country as a safe, tourist-friendly destination hinges on how the government can work together with the industry and provide world-class experiences to visiting dignitaries. Around 300 plus meetings are expected to take place during the summit, most of which will be hosted within the corridors of the finest hotels across the country. Hospitality companies are leaving no stone unturned to showcase India’s cultural essence, and the inherent warmth of Atithi Devo Bhava in our service philosophy. Using the summit to highlight the country’s unique and differentiated travel offerings, India can claim its position on the world tourism stage.
Tourism is seen as a major driving force for any economy. It has a multiplier effect on associated industries like hospitality. The spillover of earnings from tourism into other industries not only improves economic conditions but also enhances the standards of living of the local population. This is most apparent at the popular beach destination of Goa. Contributing over 16 per cent to the GDP and 35 per cent to direct employment within the state as per the IBEF Report 2022, the domino effect of the sector on indirect job creation is unrivaled. Moreover, what is often unseen are the tertiary tangible and intangible impacts on livelihoods — for instance, the maintenance of Fort Aguada and beaches in the vicinity and the preservation of cultural heritage and the local way of life at the many homestays across Goa. Today, led by tourism, Goa leads the nation in per capita NSDP (Net State Domestic Product) as per the RBI.
As per trends, every hotel room generates five to seven jobs, both directly and indirectly, further leading to a significant impact on other high-employability sectors such as real estate and infrastructure. In fact, according to the latest World Travel and Tourism Council (WTTC) report, the sector is expected to create nearly 126 million new jobs globally within the next decade with at least 20 percent of these from the Indian subcontinent. However, government support will be instrumental in achieving this. With Indian companies reporting positive earnings from this fiscal sector, the sector is poised to potentially grow three times compared to the pre-pandemic levels to touch $250 billion by 2030 and further accelerate to reach $1 trillion by 2047.
The travel and tourism industry is constantly evolving, catering to rapidly changing consumer demands by creating several product options, elevating customer experiences, and continuing to deliver innovative digital solutions. If this were to be supported with improved infrastructural reforms, it could make travellers’ journeys even more memorable and seamless. A capital-intensive industry, the hospitality sector needs to continually plow back to keep the ball rolling.
A good start will be the Center according “infrastructure” status to the sector, which will boost the industry, incorporating required incentives including regulatory ease, cheaper loans, tax concessions and contributing to a cycle of attracting more investments. In addition, industry status at the state and Union territories level and augmenting the infrastructure growth will also have a much-needed positive impact. States like Maharashtra, Karnataka, Assam, Goa, Gujarat, Madhya Pradesh and Rajasthan have taken the lead, and more should follow suit. India’s growth story remains immensely encouraging. On the back of strong consumer demand, travel and tourism offers promising growth and are at an important reflection point.
Hospitality companies have consistently added supply across all segments — budget, business and luxury hotels, homestays, villas and so forth — by developing new circuits and offerings that tap into the diverse and myriad potential of Incredible India.
Through collective action between industry stakeholders and government, we can undoubtedly shape an even more thriving future for the industry — one that can have a positive impact on the economy and society at large.
The writer is president, Hotel Association of India (HAI) and chairman, CII National Committee on Tourism and Hospitality. Views are personal