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The Growing Indian Hospitality Industry

India has the potential to become the number one tourist destination in the world with the demand growing at 10.1 per cent per annum, the World Travel and Tourism Council (WTTC) has predicted.

The WTO (World Travel Organisation) predicts that India will receive 25 million tourists by year 2015.

Major attractions in India are the world's highest mountains, miles of coastline with excellent beaches, tropical forests and wildlife, desert safari, lagoon backwaters, ancient monuments, forts and palaces, adventure tourism and, of course, the Taj Mahal.

India currently has over 200,000 hotel rooms spread across hotel categories and guest-houses and is still facing a shortfall of over 100,000 rooms (source: FHRAI).

The country is witnessing an unprecedented growth in hotel constructions and will be adding almost 114,000 hotel guest rooms to its inventory over the next five years. (source: HVS)

The earlier setbacks in global tourism have strengthened the Department of Tourism's resolve to promote India's tourism through aggressive marketing strategies through its campaign 'Incredible India'.

The 'marketing mantra' for the Department of Tourism is to position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination.

The Indian Hospitality Industry – An Overview

The current scenario
•    Existing hotel rooms in India: 202,963, source FHRAI
•    Revenue of the Indian hotel industry FY 2009-10: US$ 137.36 (INR 47,889.03 crore)
•    30% of this revenue i.e. US$ 41.2 million (INR 14,366.7 crore) went back into the market in FY 2008-09 as operating expenses

 

Number of hotels and restaurants in India:

Hotel category
No. of Hotels
No. of Rooms
5 star deluxe/5 star 165 43, 965
4 Star 134 20, 770
3 Star 505 30,100
2 Star 495 22,950
1 Star 260 10,900
Heritage 70 4,200
Uncategorised 7,078 -
Total 8,707 1,32,885
Restaurants 12,750  

What the future holds:

  • Despite the global recession, inflation, terrorism and other factors, the overall outlook for the Indian hospitality market is optimistic and will remain so says HVS 
  • India remains the second fastest growing economy in the world and the economic growth of the country is at 7.1% of the GDP as declared by Mr. Pranab Mukherjee, Finance Minister, India.
  • The Tourism Ministry, Government of India, has set a target of 10 million tourists to India by 2010
  • The WTO (World Travel Organisation) predicts that India will receive 25 million tourists by year 2015

Projected investments years 2009-015

  • Rooms being built across hotel categories: 114,000, source HVS
  • Investment in rupees - approximation of INR 400 million