Rapid globalization, economic expansion, enhanced connectivity, and accessibility have shaped the evolution of the Indian hospitality and tourism industry. India’s financial prowess has seen a substantial increase over the last several years. A fast-growing domestic sector has further fueled the development of more restaurants, hotels, and entertainment venues.
The hospitality and tourism industry plays a critical role in the nation’s employment growth, proven by over 39 million jobs created by this sector in FY20, accounting for 8.0% of the total employment in the country. By 2029, it is expected to account for about 53 million jobs. The sector also attracts a major chunk of FDI inflow, which in turn facilitates its further expansion.
India - The Land of Generous Hospitality
The colossal market share of this sector in India relies on the pillars of domestic and international tourism. Experts feel that India's rich history and spiritual relevance to the rest of the world is a crucial element in attracting global travellers. Moreover, the country's unique national historic monuments, extensive nature reserves and animal parks contribute to its popularity among visitors. Given that India's traditions and values are deeply embedded in almost every aspect of life, hospitality captures the country's authentic spirit well. This, in turn, makes India a lucrative destination to commence hospitality operations. Several renowned hotel groups have started building hotels within the country. It helps that India is replete with several architecturally and structurally robust ageless buildings and heritage sites that serve as the perfect spot to develop new hotels, enabling the hotel chains to renovate existing sites and cut down their costs significantly.
Over the years, tourism has emerged as a major economic sector and a source of social and environmental change. Hospitality and tourism are closely interlinked to one another. A steady increase in the demand for tourism ensures that the hospitality sector can forecast the demand and unlock opportunities to make a greater financial impact. As per the statistics of 2020, the travel and tourism industry contributed US$ 121.9 billion to the country’s GDP. This figure is expected to reach up to US$ 512 billion by 2028. The nation’s rising middle class and expanding disposable incomes have propelled the growth of this industry, and even though it has yet to achieve its full potential, the industry’s rapid growth and development is attracting substantial investments.
Winning Over the Pandemic
COVID-19 pandemic led to major disruptions across the global hospitality industry. Subsequent lockdowns and stringent travel bans slowed down the sector significantly. While tourism accounted for 10.4% of the Global GDP in 2019 (valued at $9,170 billion), this figure came down to 5.5% (valued at $4,671 billion) in the year 2020. The hotel industry worked hard to survive the pandemic and faced extraordinary challenges.
In India, for the revival of the industry, major experts opined that the immediate emphasis must be on creating demand and promoting the nation globally. A deliberate intervention is required to build India's brand along with a tagline to focus on core offerings. This should be accompanied by COVID safe certification for airports, transport hubs and key tourist sites for restoring traveller confidence. The certification processes can also address operational and employee preparation, guaranteeing a safe experience and regaining trust and confidence.
Now is also an ideal time to launch the rebooted ‘Incredible India’ campaign with fresh efforts to promote event-based tourism in India, such as sports and entertainment. This new campaign should also promote India as a top MICE destination. With new MICE infrastructure being built around the country, there is an excellent mix of lodging and conference support services to host a successful world-class convention.
The actions to promote travel & tourism have become even more important now as the world is beginning to unlock steadily, and the hospitality industry is also gaining back its momentum. The robust vaccination programme and simplified COVID travel guidelines between states have had a significant effect on improved mobility across the country driving travel forward. There has been a consistent improvement in Average Room Rates as well as occupancy and this trend is expected continue throughout the upcoming season.
Technological Reforms and Uprising
Digital transformation has been the driving force behind the recovery of the hospitality and tourism industry. As travel interest rises globally, technological advancements in the hospitality sector welcome visitors with a fresh perspective.
Globally, sophisticated digital technologies have enabled new hospitality experiences. These include face recognition, voice control, RFID wristbands (which replace room keys and may be scanned to obtain access to rooms and other locations as well as make payments), chatbots, VR experiences, and more. These new-age amenities have not only made travel more accessible but also ensured the safety and cleanliness, a must in the post-COVID travel scenario. Travelport’s Global Digital Traveler League Table ranked India as the most digitally advanced traveller nation in terms of digital tools being used for planning, booking, and experiencing a journey. As per the survey, 69% of the nation’s travelers used voice search, over 60% preferred digital room keys and about 88% of the people surveyed were influenced to travel by friends on social media.
In addition to technological developments, there are a plethora of government initiatives that have helped realize the country’s potential in the tourism industry and transform it into a global tourism hub through an array of initiatives such as the expansion of the e-Visa scheme, allocating funds for new hospitality projects in various states, developing SAATHI (System for Assessment, Awareness & Training for Hospitality Industry) that effectively implements guidelines/SOPs issued regarding COVID-19 for safe operations of hotels, restaurants, B&Bs and other units.
The Way Forward
The hotel and tourism industry has huge growth potential. According to joint research undertaken by Assocham and Yes Bank, the sector has the potential to grow by 2.5%. It would be safe to conclude that the spirit of traveling will always find a way to emerge triumphant over challenges, no matter how insurmountable they might seem. Furthermore, with the advent of superior technology and newer trends post COVID-19, it’s the dawn of a new era for the Indian hospitality industry. It promises a bright future, replete with attractive career opportunities, economic expansion, and beyond.