case study on hotel industry in india

Hospitality Industry in India Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Hospitality Market in India is Experiencing Growth Due To the Country's Rich Culture and Diversity, Attracting Global Guests. The Service Sector, Known for Spiritual Tourism, Has Seen A Rise in Domestic Travel, Driven by A Growing Middle Class and Increased Disposable Income. Innovations in Accommodation Like Airbnb and Oyo Rooms Offer Cost-Effective Stays, While the Government Develops Ports As Cruise Tourism Hubs, Providing Hotel Services, Retail, and Restaurants. The Hotel Industry is Expanding With New Projects From International Chains, Driven by Increased Travel and Government Efforts To Boost Tourism.

India Hospitality Market Size

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India Hospitality Market Analysis

The Hospitality Industry In India Market size is estimated at USD 247.31 billion in 2024, and is expected to reach USD 475.37 billion by 2029, growing at a CAGR of 13.96% during the forecast period (2024-2029).

India has been successful as a leading global destination for leisure and business travelers, which has undoubtedly positively impacted the country's hospitality sector. 

India’s attractiveness as a global travel destination has been further enhanced by its geopolitical stability, world-class infrastructure, and commitment to hosting international events. Therefore, these factors contribute to the growth of the tourism industry and, as a result, keep the hospitality industry firm.

India’s domestic tourism has shown remarkable resilience and strength, and an increasing preference for staycations among Indian residents has been noticed. This preference for staycation is driven by several factors, including convenience, safety, and the opportunity to discover hidden gems within India.

The growth rate of the hospitality and tourism sector has seen a notable increase. India is included in the list of the top 100 countries with favorable conditions for conducting business (EoDB) and holds the first globally regarding greenfield FDI ranking. To enhance the cruise tourism industry, the Government of India (GoI) has chosen to develop the Chennai, Goa, Kochi, Mangalore, and Mumbai ports as cruise tourism hubs. These ports will have various amenities such as hospitality services, retail outlets, shopping centers, and restaurants.

India Hospitality Market Trends

Increase in the number of hotel projects is driving the market.

India's hospitality sector has experienced a notable boost due to the surge in hotel projects. The industry saw an increase in occupancy rates ranging from 60-67% compared to the previous year. Despite this, average rates (ARR) have fully recovered, showing a significant rise of 37-39 % from the prior year. Consequently, Revenue per Available Room (RevPAR) has seen a remarkable growth of 89-91% in the current year compared to the previous year.

Driven by a robust rebound in demand, hotel companies have expedited their expansion strategies this year, leading to a more than 35% increase in brand signings by keys compared to the previous year. According to the TopHotelProjects construction database, India is set to welcome 481 projects with 57,879 rooms. For example, IHCL aims to incorporate 8,700 rooms, while LTH plans to add 2,600 rooms by FY26. Additionally, Marriott International anticipates opening 12 hotels in India this year, contributing around 1,200 rooms to the hotel chain's current portfolio in the country. Radisson Hotel Group has also extended its footprint in India by signing 21 hotels across nine brand portfolios last year. Hoteliers have been expanding their presence in leisure destinations and Tier-3 and -4 cities, acknowledging the vast untapped potential in these regions.

Moreover, during India's G20 presidency until November 2023, over 200 G20 meetings were held in 55 different locations nationwide. This significantly benefited the Indian hotel sector, as there was a notable increase in demand for hotels in the cities hosting these meetings.

Government Initiatives to Attract More Tourism and Rise in Tourism is Driving the Market

The Indian hospitality industry is primarily fueled by strong domestic demand and the Indian government's renewed focus on expanding the tourism sector. Recognizing the sector's potential as a major employment generator, the government actively promotes it through public-private partnerships and a mission-oriented approach involving all stakeholders. The government plans to revive 50 additional airports, heliports, and water aerodromes to enhance regional air connectivity. It also aims to develop fifty tourism destinations as comprehensive packages for domestic and international tourists. The government's continued emphasis on infrastructure development, including significant railways and last-mile connectivity investments, is expected to benefit the sector.

Moreover, the recent reduction in personal income tax will boost disposable income, thereby driving demand in the tourism and hospitality sectors. The Ministry of Tourism has undertaken a revitalization of its Swadesh Darshan Scheme as Swadesh Darshan 2.0 (SD2.0) and introduced the National Integrated Database of Hospitality Industry (NIDHI) to facilitate digitalization and ease of doing business in the hospitality and tourism sector. This initiative, now upgraded as NIDHI+, aims to include not only Accommodation Units but also Travel Agents, Tour Operators, Tourist Transport Operators, Food & Beverage Units, Online Travel Aggregators, Convention Centres, and Tourist Facilitators.

The top states in terms of domestic visits in India are Uttar Pradesh, Tamil Nadu, Andhra Pradesh, Karnataka, and Gujarat. India witnessed a promising recovery in the tourism sector, with a notable rise in Foreign Tourist Arrivals (FTAs) from various countries.

India Hospitality Industry Overview

The report on the Indian hospitality industry covers major international players and the leading domestic players in the hotel and hospitality industry. The Indian hospitality sector is dynamic and emerging. It holds greater potential to grow for national and international players interested in entering the nation's hospitality industry. Some of the major players in the market include Oberoi Hotels & Resorts, the Park Hotel, ITC Hotels, Lemon Tree Hotels, and Taj Hotels.

India Hospitality Market Leaders

Oberoi Hotels & Resorts

The Park Hotel

Lemon Tree Hotels

*Disclaimer: Major Players sorted in no particular order

India Hospitality Market News

• In March 2024, Suba Group of Hotels launched its third hotel i.e., Click Hotel, in Pithampur, Madhya Pradesh, designed to cater to the new age business travelers and features 63 premium contemporary rooms and suites.
• In February 2024, Radisson Hotel Group announced the signing and opening of the first internationally branded hotel in Ayodhya-Park Inn by Radisson Ayodhya.
• In September 2023, Parkside Hotels & Resorts announced its intentions to grow its collection by securing contracts for a minimum of 20 hotels in India by the conclusion of 2024.

India Hospitality Market Report - Table of Contents

1. INTRODUCTION

1.1 Study Assumptions and Market Definition

1.2 Scope of the Study

2. RESEARCH METHODOLOGY

3. EXECUTIVE SUMMARY

4. MARKET INSIGHTS AND DYNAMICS

4.1 Market Overview

4.2 Market Drivers

4.2.1 Growth in Travel and Tourism in India

4.2.2 Increase in the Number of Hotel Projects

4.3 Market Restraints

4.3.1 Lack of Skilled Labor is a Challenge for the Market

4.3.2 Sustainability and Competition Threaten Industry Success

4.4 Market Opportunities

4.4.1 Government Initiatives to Expand the Horizons of the Industry

4.4.2 Online Marketing can be Leveraged to Expand the Customer Base

4.5 Impact of COVID-19 on the Hospitality Industry

4.6 Insights Into Revenue Flows from Accommodation and Food and Beverage Sectors

4.7 Leading Cities in India with Respect to Number of Visitors

4.8 Investments (Real Estate, FDI and Others) in Hospitality Industry

4.9 Technological Innovations in the Hospitality Industry

4.10 Shared Living Spaces Impact on the Hospitality Industry

4.11 Insights Into other Economic Contributors to the Hospitality Industry

4.12 Industry Attractiveness - Porter's Five Forces Analysis

4.12.1 Bargaining Power of Buyers

4.12.2 Bargaining Power of Suppliers

4.12.3 Threat of New Entrants

4.12.4 Threat of Substitutes

4.12.5 Intensity of Competitive Rivalry

4.13 Insights Into Types of Tourism and Travel Agencies Present in India

5. MARKET SEGMENTATION

5.1 By Type

5.1.1 Chain Hotels

5.1.2 Independent Hotels

5.2 By Segment

5.2.1 Service Apartments

5.2.2 Budget and Economy Hotels

5.2.3 Mid and Upper Mid-Scale Hotels

5.2.4 Luxury Hotels

6. COMPETITVE INTELLIGENCE

6.1 Market Concentration

6.2 Company Profiles

6.2.1 Oberoi Hotels and Resorts

6.2.2 ITC Hotels

6.2.3 The Park Hotel

6.2.4 The Leela Palaces, Hotels and Resorts

6.2.5 Taj Hotels

6.2.6 Lemon Tree Hotels

6.2.7 Hyatt Hospitality company

6.2.8 Marriott International Inc.

6.2.9 Radisson Hotel Group

6.2.10 OYO Rooms

• *List Not Exhaustive

6.3 Loyalty Programs Offered by Major Hotel Brands

7. MARKET OPPORTUNTIES AND FUTURE TRENDS

8. DISCLAIMER AND ABOUT US

India Hospitality Industry Segmentation

Hospitality is the term used to describe the connection between a host and a guest, where the host shows kindness towards the guest. This involves receiving and amusing guests, visitors, or unfamiliar individuals. A complete background analysis of the hospitality industry in India, which includes an assessment of the industry associations, overall economy, emerging market trends by segments, significant changes in the market dynamics, and market overview, is covered in the report. The Indian hospitality industry is segmented by type. The market is segmented into chain hotels and independent hotels. The market is segmented into service apartments, budget and economy hotels, mid- and upper-middle-middle-scale hotels, and luxury hotels. The report offers market size and forecasts in value (USD) for all the above segments.

India Hospitality Market Research FAQs

How big is the hospitality industry in india market.

The Hospitality Industry In India Market size is expected to reach USD 247.31 billion in 2024 and grow at a CAGR of 13.96% to reach USD 475.37 billion by 2029.

What is the current Hospitality Industry In India Market size?

In 2024, the Hospitality Industry In India Market size is expected to reach USD 247.31 billion.

Who are the key players in Hospitality Industry In India Market?

Oberoi Hotels & Resorts, The Park Hotel, ITC Hotels, Lemon Tree Hotels and Taj Hotels are the major companies operating in the Hospitality Industry In India Market.

What years does this Hospitality Industry In India Market cover, and what was the market size in 2023?

In 2023, the Hospitality Industry In India Market size was estimated at USD 212.79 billion. The report covers the Hospitality Industry In India Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Hospitality Industry In India Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

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Indian Hospitality Industry Report

The hotel and tourism industry in India has been witnessing steady growth due to the country's rich culture and diversity, drawing in guests from around the world. India's service sector has been acknowledged for spiritual tourism and has seen an increase in domestic travel due to the expanding middle class, growing disposable income, and heightened interest among millennials. Innovations like Airbnb and Oyo rooms have revolutionized the accommodation scenario, offering cost-effective stays in prime locations with flexible check-in and check-out options. The government has also taken steps to develop ports as cruise tourism hubs, providing facilities like hotel services, retail, shopping, and restaurants. The hotel industry has also seen a rise in new projects, with international hotel chains announcing their debut in India. The government's efforts to attract more tourism and the increase in travel have been driving the market. The report on the hotel and tourism industry in India covers major international and domestic players in the hotel and catering industry. For a more detailed understanding of key trends, a free PDF download of the sample report is available.

Indian Hospitality Market Report Snapshots

• Indian Hospitality Market Size
• Indian Hospitality Market Share
• Indian Hospitality Market Trends
• Indian Hospitality Companies
• Indian Hospitality News

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Hotel industry in India - statistics & facts

What makes the hotel market in india thrive, impact from the domestic tourism boost, sustainability & luxurious travel, key insights.

Detailed statistics

Number of classified star hotels India 2023, by category

Occupancy rate in hotels in India FY 2001-2024

Popular destinations for domestic luxury travelers in India 2020

Editor’s Picks Current statistics on this topic

Travel, Tourism & Hospitality

Travel market distribution in India FY 2018-2027, by type

Distribution of hotel market in India FY 2018-2027, by type

Further recommended statistics

Global overview.

• Premium Statistic Revenue of travel and tourism market in selected countries worldwide 2023
• Premium Statistic Global hotel and resort industry market size worldwide 2022-2023
• Premium Statistic Countries planning the largest number of business events and trade fairs 2023
• Basic Statistic Leading hotel brands in the world 2022, by traveler ratings

Revenue of travel and tourism market in selected countries worldwide 2023

Travel and tourism market revenue in selected countries worldwide in 2023 (in billion U.S. dollars)

Global hotel and resort industry market size worldwide 2022-2023

Market size of the hotel and resort industry worldwide in 2022 and 2023 (in trillion U.S. dollars)

Countries planning the largest number of business events and trade fairs 2023

Leading host countries for conferences and trade shows planned worldwide as of August 2023, by number of events

Leading hotel brands in the world 2022, by traveler ratings

Best-rated hotel brands worldwide in 2022, based on traveler scores

Indian hotel market

• Premium Statistic Travel market distribution in India FY 2018-2027, by type
• Premium Statistic Value of hotel market in India FY 2018-2027
• Premium Statistic Distribution of hotel market in India FY 2018-2027, by type
• Premium Statistic Distribution of the hotel market in India FY 2018-2027, by booking channel

Distribution of Indian travel market from financial year 2018 to 2020, with an estimate for 2027, by type

Value of hotel market in India FY 2018-2027

Value of hotel market in India from financial year 2018 to 2020, with an estimate for 2027 (in billion U.S. dollars)

Distribution of the hotel market across India from financial year 2018 to 2020, with an estimate for 2027, by type

Distribution of the hotel market in India FY 2018-2027, by booking channel

Distribution of the hotel market across India from financial year 2018 to 2020, with an estimate for 2027, by booking channel

Key indicators

• Premium Statistic Number of approved hotels in India 2022, by category
• Basic Statistic Occupancy rate in hotels in India FY 2001-2024
• Premium Statistic Number of hotel rooms in India FY 2001-2023
• Basic Statistic Average daily rate of hotels in India FY 2016-2023

Number of approved hotels in India 2022, by category

Number of approved hotels in India in 2022, by category

Occupancy rate in hotels in India from financial year 2001 to 2023, with estimates of 2024

Number of hotel rooms in India FY 2001-2023

Number of hotel rooms across India from financial year 2001 to 2023, with an estimate until 2027 (in 1,000s)

Average daily rate of hotels in India FY 2016-2023

Average daily rate of hotels across India from financial year 2016 to 2023 (in Indian rupees)

Regional breakdown

• Premium Statistic Hotel occupancy rate in India FY 2023, by major cities
• Premium Statistic Average rate of Indian hotel rooms FY 2023, by city
• Premium Statistic Revenue per available hotel room across Mumbai in India FY 2010-2023
• Premium Statistic Revenue per available hotel room across New Delhi in India 2010-2023
• Premium Statistic Revenue per available hotel room across Hyderabad in India FY 2010-2023

Hotel occupancy rate in India FY 2023, by major cities

Hotel occupancy rate in India in the financial year 2023, by major cities

Average rate of Indian hotel rooms FY 2023, by city

Average daily rate (ADR) of hotel rooms across Indian cities in financial year 2023 (in Indian rupees)

Revenue per available hotel room across Mumbai in India FY 2010-2023

Revenue per available hotel room across Mumbai in India from financial year 2010 to 2023 (in 1,000 Indian rupees)

Revenue per available hotel room across New Delhi in India 2010-2023

Revenue per available hotel room across New Delhi in India from financial year 2010 to 2023 (in 1,000 Indian rupees)*

Revenue per available hotel room across Hyderabad in India FY 2010-2023

Revenue per available hotel room across Hyderabad in India from financial year 2010 to 2023 (in 1,000 Indian rupees)

Key players

• Basic Statistic Leading hotel and restaurant companies in India 2023, by market capitalization
• Premium Statistic Indian Hotels Company Limited's revenue FY 2016-2024
• Premium Statistic Consolidated revenue of EIH in India FY 2018-2023
• Premium Statistic Number of keys in Chalet Hotels in India 2022, by hotel
• Premium Statistic Number of Lemon Tree Hotels in India 2023, by brand

Leading hotel and restaurant companies in India 2023, by market capitalization

Leading hotel and restaurant companies in India as of 2023, based on market capitalization (in billion Indian rupees)

Indian Hotels Company Limited's revenue FY 2016-2024

Revenue of Indian Hotels Company Limited from financial year 2016 to 2024 (in billion Indian rupees)

Consolidated revenue of EIH in India FY 2018-2023

Consolidated revenue of East India Hotels (EIH) in India from financial year 2018 to 2023 (in billion Indian rupees)

Number of keys in Chalet Hotels in India 2022, by hotel

Number of keys in Chalet Hotels in India in 2022, by hotel

Number of Lemon Tree Hotels in India 2023, by brand

Number of Lemon Tree Hotels Limited (LTHL) across India in 2023, by brand

Emerging players

• Premium Statistic PE/VC investment deals in travel and hospitality 2013-2022
• Premium Statistic Value of M&A deals in the travel and hospitality India 2014-2021
• Premium Statistic Value of PE/VC deals in the travel and hospitality sector India 2022, by company
• Premium Statistic Revenue of OYO across India FY 2019-2023

PE/VC investment deals in travel and hospitality 2013-2022

Number of private equity and venture capital deals in the travel and hospitality sector in India from 2013 to 2022

Value of M&A deals in the travel and hospitality India 2014-2021

Value of mergers and acquisition deals in the travel and hospitality sector in India from 2014 to 2021 (in million U.S. dollars)

Value of PE/VC deals in the travel and hospitality sector India 2022, by company

Value of private equity and venture capital deals in travel and hospitality sector in India in 2022, by leading company (in million U.S. dollars)

Revenue of OYO across India FY 2019-2023

Revenue of OYO across India from financial year 2019 to 2023 (in billion Indian rupees)

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Taj Hotels case study

Zamri Raman

24 February 2021

4 mins read

Delivering the “ Tajness” – a signature touch that is unmistakably Taj.

Introduction

Back in the 1890s, Jamsetji Tata was denied entry into the Royal Navy Yacht Club for the simple reason of being an Indian. The Tata founder vowed to set up an Indian hotel that gave world-class service and showcased prime Indian hospitality at the same time. This brought about the dawn of India Hotels Company Limited (IHCL) in 1899 and the iconic Taj Mahal Palace Hotel, Mumbai in 1903.

His legacy stands strong to this day, with IHCL being the largest hospitality company in the Southeast Asian region. Spanning across 118 years, IHCL owns more than 150 hotels in over 100 locations.

IHCL has diversified its business into various brand segments, including luxury hotels, select hotels, upscale hotels, service retail, and volume catering. The Group applies world-class services to its customers while maintaining the warmth of Indian hospitality. The combination of the two is what “ Tajness ” is all about.

– Jamsetji Tata, Founder of the Tata Group, Chairman (1868 – 1904)

• IHCL records a consolidated revenue of INR 4,596 Crore (USD 630.8 million) for FY 2019-2020
• Taj Hotels rank 1 st in India for customer experience (CX), according to a report by KPMG Global CX Excellence Report in 2018
• Wins Gallup Great Workplace awards for eight years

Opportunities

Among the strengths showcased by Taj hotel:

• The Group strives on building a stellar empowerment culture. They place a strong emphasis on an organisational value where employees put customers’ needs above everything else. This customer-centricity has developed an army of heroes, the likes for which is truly unparalleled. Their stakeholders’ courage was featured in news headlines during the Mumbai terrorist attack crisis. Employees were committed to saving the lives of the customer instead of their own, displaying customer centricity in its extreme value.
• Aspiration 2022 is a strategic priority plan drawn to drive the company forward. It is based on three “Rs” – Re-structure, Re-engineer and Re-imagine. The strategic plan encapsulates all stakeholders with key priorities, including monetisation and divestments, technology expansion, brandscape management, and portfolio multiplication.

Best practices

Employee experience.

• Value-driven recruitment – Taj Hotels has a longstanding tradition of hiring their frontline employees from small and semi-urban areas of India. The Group believes that this is where wholesome traditional Indian values can be found to this day, including respect for the elderly, humility, discipline, and honesty. In return, this value-specific workforce has helped Taj make their CX aspiration a reality.
• Empowerment of employees through extensive training – Every employee goes through an 18-month training period, instead of the usual 12-month offered by most hotels. Under the program, employees are guided through mentors, as well as classroom and on-the-job training. Emphasis is placed on technical skills, hygiene factors, and customer management. The training aims to produce highly empathic employees that can provide a seamless and personalised customer experience.
• Boosting motivation through recognition – The heart of delighted customers lies with satisfied employees. With that in mind, Taj Hotels created STARS (Special Thanks and Recognition System), which links customer delight to employee rewards. Through the system, points are collected on compliments from guests and colleagues, leading to an award for their outstanding service.

Digital experience

• Zero-touch economy – IHCL has rolled out a new system across its hotel chains, the IHCL Zero-Touch Service Transformation (I-ZEST). The system enables touchless services and interfaces with customer safety in mind. I-ZEST’s digital features ensure that guests can have secure and seamless engagement, ranging from digital invoicing and online payments to QR codes for restaurant menus.
• Mobile-first hotel – Taj has implemented keyless room entries to expand on the hotel’s frictionless experience. With mobile technologies such as Bluetooth 4.0 and the Taj mobile app, customers can now access their room with an in-app room key. This frugal innovation has made the customer journey easier, as it removes concerns usually raised with a physical key, such as loss or key recognition failure.

Brand experience

• Fostering brand partnership to expand customer base – In 2016, The Taj Group and Shangri-La joined forces to offer the best of both worlds to their customers via a loyalty-led programme known as Warmer Welcome. Through this partnership, customers can enjoy collecting and converting points between the hotels. Additionally, they enjoy benefits across 200 hotels and 131 destinations worldwide.
• Empowering community – In the aftermath of the terrorist attack in 2008, Taj Hotel established the Taj Public Service Welfare Trust (TPSWT) with the purpose to support individuals and communities affected by disasters. TPSWT has contributed INR 10 million (USD 0.14 million) towards the Kerala and Kodagu flood relief in 2018. The Group ensures continuity in the founder’s social legacy and aids communities with the motto “Giving Back to Society” on the forefront.
• Taj has an employee retention rate of 80%. This is an outstanding achievement, considering its base of 32,000 employees globally.
• The Group has a unique digital path with its customers. There is 95% customer engagement, with a record of 10 million unique website visitors and two million social media users to-date.
• Mobile web revenue has seen a full 100% increase since 2016.
• Customer loyalty revenues have gone up by 29% through the Taj InnerCircles and Warmer Welcomes programmes.

Key takeaways

• Empowering employees to deliver CX aspirations should be a business’ strategic focus. There is intense competition among enterprises to elevate their customer experience, either through services, products, or processes. To materialize their CX aspirations, companies need to first empower their employees. In the case of Taj Hotels, value-driven recruitment, extensive training, and appropriate recognition have helped build an outstanding experience for their guests.
• The post-COVID future lies in a contactless economy. Customer experience is now an integral part of any business’ decision-making process. Taj Hotels was swift in navigating the pandemic by putting CX at the heart of their product innovations. The Group has introduced multiple mobile and contactless solutions, making guest experience both secure and seamless.
• Businesses need to connect brands to the people – The pandemic has catalysed a major shift in customer consumption, behaviour, and expectation. Similarly, businesses should switch focus from their shareholders to stakeholders. Customers also tend to lean towards brands that contribute towards the greater good, which in turn translates to strengthened brand loyalty.

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Tourism and Hospitality

Tourism & hospitality industry in india, india's tourism and hospitality sector is expected to yield revenue exceeding us$ 59 billion by 2028. moreover, foreign tourist arrivals (ftas) are forecasted to hit 30.5 million by the same year., advantage india, robust demand.

* Drawing upon world-class healthcare amenities and traditional healing practices, medical tourism and wellness retreats entice 21% of international travelers.

* The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20.

* International tourist arrivals are expected to reach 30.5 million by 2028.​

* According to WTTC, over the next decade, India’s Travel & Tourism’s GDP is expected to grow at an average of 7.1% annually.

Attractive Opportunities

* India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure.

* Travel and tourism are two of the largest industries in India, with a total contribution of about US$ 199.6 billion to the country’s GDP.

* The government has taken steps to boost investments in facilitate spiritual tourism with states like Uttar Pradesh developing tourist circuits and Uttarakhand and West Bengal enhancing infrastructure for pilgrims.

Policy support

* In the 2024 interim Budget, Finance Minister Ms. Nirmala Sitharaman allocated Rs. 2,449.62 crore (US$ 294.8 million) to the tourism sector, a 44.7% increase from the previous fiscal year.

* The Ministry of Tourism launched the Swadesh Darshan Scheme to develop theme-based tourist circuits, sanctioning 76 projects. Upgraded to Swadesh Darshan 2.0 (SD2.0).​

* The Prime Minister, Mr. Narendra Modi inaugurates and unveils 52 tourism sector projects valued at over Rs. 1,400 crore (US$ 168.5 million) under the Swadesh Darshan and PRASHAD Scheme.​

Diverse Attractions

* India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure.​

* Airport enhancement and the spread of regional airports are opening new opportunities for business, and for drawing larger visits from tourists.

* The country’s big coastline is dotted with attractive beaches.​

Tourism and Hospitality Industry Report

Introduction.

With a total area of 3,287,263 sq. km extending from the snow-covered Himalayan heights to the tropical rain forests of the south, India has a rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. This provides a significant opportunity to fully exploit the potential of the tourism sector. The government has taken steps to boost investments in facilitate spiritual tourism with states like Uttar Pradesh developing tourist circuits and Uttarakhand and West Bengal enhancing infrastructure for pilgrims.

India being one the most popular travel destinations across the globe has resulted in the Indian tourism and hospitality industry emerging as one of the key drivers of growth among the services sector in India. The tourism industry in India has significant potential considering that Tourism is an important source of foreign exchange in India similar to many other countries.

It is widely acknowledged that the tourist and hospitality sector, which encompasses travel and hospitality services like hotels and restaurants, is a development agent, a catalyst for socioeconomic growth, and a significant source of foreign exchange gains in many countries.

India's rich and exquisite history, culture, and diversity are showcased through tourism while also providing significant economic benefits. The consistent efforts of the central and state governments have helped the tourism industry to recover from the COVID-19 pandemic shock and operate at the pre-pandemic level.

Market Size

According to WTTC, India is ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019. According to WTTC, the contribution of India's travel and tourism sector to India's economy was worth US$ 199.6 billion in 2022.

The Indian travel and tourism industry is expected to record an annual growth at 7.1% per annum. In WTTC’s Economic Impact 2023 report, India’s Travel and Tourism GDP contribution grew by 5.9%.

In 2021, the travel & tourism industry’s contribution to the GDP was US$ 178 billion; this is expected to reach US$ 512 billion by 2028. By 2029, it is expected to account for about 53 million jobs. In India, the industry’s direct contribution to the GDP is expected to record an annual growth rate of 7-9% between 2019 and 2030.

The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. The Indian airline travel market was estimated at ~US$ 20 billion and is projected to double in size by FY27 due to improving airport infrastructure and growing access to passports. The Indian hotel market including domestic, inbound, and outbound was estimated at ~US$ 32 billion in FY20 and is expected to reach ~US$ 52 billion by FY27, driven by the surging demand from travellers and sustained efforts of travel agents to boost the market.

By 2028, international tourist arrivals are expected to reach 30.5 billion and generate revenue of over US$ 59 billion. However, domestic tourists are expected to drive the growth, post-pandemic. International hotel chains are increasing their presence in the country, and they will account for around 47% share of the tourism and hospitality sector of India by 2020 and 50% by 2022.

As per the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) in December 2023 were 1,070,163. FTAs during the period January-December 2023 were 9,236,108 as compared to 6,437,467 in January-December 2022.

The percentage share of Foreign Tourist Arrivals in India during December 2023 among the top five ports was highest at Delhi Airport (29.92%) followed by Mumbai Airport (18.46%), Haridaspur Land Check Post (7.09%), Chennai Airport (7.02%), Bengaluru Airport (6.20%). FTAs during the period January-December 2023 were 9.24 million.

The percentage share of Foreign Tourist Arrivals in India during April 2024 among the top five source countries was highest from Bangladesh (26.30%), followed by USA (13.74%), UK (8.36%), Australia (4.41%) and Canada (3.55%).

In 2023, 26.52% of foreign tourists visited for Indian Diaspora which marks 9,236,108 foreigners.

FEE during the period January-December 2023 were US$ 28.1 billion. And FEE during the January-April 2024 period is US$ 10.90 billion

Domestic visitor spending increased by 20.4% in 2022, only 14.1% below 2019. International visitor spending rose by 81.9% in 2022, but still 40.4% behind 2019 numbers.

Cumulative FDI equity inflow in the Hotel and Tourism industry is US$ 17.2 billion during the period April 2000-March 2024. This constitutes 2.54% of the total FDI inflow received across sectors.

Investments/Developments

• In April 2024, EaseMyTrip.com launches its first franchise store in Karnal, Haryana, as part of its expansion via the franchise model, reinforcing its dedication to offering superior experiences across offline and online channels.
• As of February 2024, Ayodhya is anticipated to host between 50 to 100 hotels over the next 3 to 4 years. The city, acclaimed as a global religious destination, is primed for substantial development, with Taj Hotels poised to establish its fourth property in the area.
• In March 2024, MakeMyTrip revealed a partnership with the Department of Tourism, Madhya Pradesh, and redBus to boost tourism in the region, aiming for sustainable development and positioning Madhya Pradesh as a premier destination.
• In March 2024, Indian Hotels Corporation Ltd (IHCL) has announced plans to recruit 2,000-2,500 employees in the fiscal year 2025. This expansion of the workforce aligns with IHCL's ambitious plans, which include a pipeline of 85 hotels.
• In February 2024, Mahindra Holidays & Resorts India Ltd (MHRIL) intends to invest around Rs. 4,500 crore (US$ 541.6 million) over the next three to four years, aiming to double its room capacity to 10,000.
• In February 2024, Oberoi Realty, a real estate developer, has partnered with Marriott International, a global hospitality leader, to develop two Marriott properties in Mumbai.
• In February 2024, OYO announced its venture into sports hospitality, selecting 100 hotels across 12 cities like Delhi, Chennai, and Bangalore. The focus is on catering to large sports events by providing accommodation and services for athletes and officials.
• In February 2024, the Radisson Hotel Group announced its rapid expansion in India, securing agreements for 21 hotels across nine distinct brands in 2023.
• In February 2024, Lemon Tree Hotels intends to launch 30 new properties across the country this year, potentially increasing its room capacity by over 2,000 rooms. The hospitality chain is optimistic about the demand driven by middle-class consumers.
• In December 2023, IHCL expanded its presence in Maharashtra as it signed a hotel in Bandra, Mumbai. The Brownfield project will be branded an IHCL- SeleQtions hotel.
• In December 2023, TAJ won the ‘World’s finest luxury grand palaces’ award at the ‘101 Best Executive Summit’ in Germany.
• In November 2023, Indian Hotels Company (IHCL) announced the opening of Ginger Mumbai, Airport. The 371 Keys flagship Ginger hotel, strategically located near the domestic airport will introduce the brand’s lean luxe design and service philosophy of offering a vibrant, contemporary, and seamless hospitality experience to its guests.
• In September 2023, Easemytrip signed an MOU with the Government of Uttarakhand (UK) to invest Rs. 1,000 crore (US$ 120.16 million) and build 4-5 large marquee resorts over the next few years in Uttarakhand.
• An investment of Rs. 2,400 crore (US$ 289.89 million) was allocated to the Ministry of Tourism as the sector holds huge opportunities for jobs and entrepreneurship for youth.
• An investment-linked deduction under Section 35 AD of the Income Tax Act is in place for establishing new hotels under the 2-star category and above across India, thus permitting a 100% deduction in respect of the whole or any expenditure of capital nature.
• In 2019, the Government reduced GST on hotel rooms with tariffs of Rs. 1,001 (US$ 14.32) to Rs. 7,500 (US$ 107.31) per night to 12% and those above Rs. 7,501 (US$ 107.32) to 18% to increase India’s competitiveness as a tourism destination.
• In Union Budget 2023-24, US$ 290.64 million was allocated to the Ministry of Tourism as the sector holds huge opportunities for jobs and entrepreneurship for youth in particular and to take the promotion of tourism on mission mode, with the active participation of states, the convergence of government programmes and public-private partnerships.
• An app will be developed covering all relevant aspects of tourism. States will be encouraged to set up Unity Malls in State Capital as the most prominent tourism centres to promote One District One Product, GI products, handicrafts, and products of other States.
• In 2021, Government of India announced 40,000 e-tourist visas out of 500,000 free regular visas to the tourist, to ensure a geographical spread of the incentive to important source markets globally.
• Government of India has set a target to create 220 new airports by 2025.
• The Emergency Credit Line Guarantee Scheme (ECLGS) covered through a liberal definition of MSME (micro small and medium enterprises) has been expanded to include tourism and hospitality stakeholders. Infrastructure status has been granted to exhibition-cum-convention centres.
• A separate liquidity window of Rs. 15,000 crore (US$ 1.8 billion) has been released for the sector.
• A total of 48,775 accommodation units (both classified and unclassified) have been registered on the National Integrated Database of Hospitality Industry (NIDHI) portal and 11,220 units have self-certified for SAATHI standards in September 2022.
• In October 2022, Indian Hotels Company (IHCL) announced the launch of its new Indian-concept restaurant brand, Loya. Debuting at Taj Palace, New Delhi, Loya captures the culinary essence traversing the landscape of North India.
• Hospitality unicorn OYO has acquired Europe-based vacation rental company Direct Booker for US$ 5.5 million in May 2022.
• Accor, a French hospitality major will expand its India's portfolio by adding nine additional hotels in the mid-scale and economy categories, bringing the total number of hotels 54 in India.
• The Medical Tourism sector is expected to increase at a CAGR of 21.1% from 2020-2027.
• India was globally the third largest in terms of investment in travel and tourism with an inflow of US$ 45.7 billion in 2018, accounting for 5.9% of the total investment in the country.
• Indian government has estimated that India would emerge with a market size of 1.2 million cruise visitors by 2030-31. Dream Hotel Group plans to invest around US$ 300 million in the next 3-5 years for the development of the cruise sector in India.
• India is the most digitally advanced traveller nation in terms of digital tools being used for planning, booking, and experiencing a journey. India’s rising middle class and increasing disposable income has supported the growth of domestic and outbound tourism.
• The United Nations World Tourism Organisation selected Pochampally in Telangana as one of the best tourism villages in November 2021.

Government Initiatives

The Indian Government has realised the country’s potential in the tourism industry and has taken several steps to make India a global tourism hub. Some of the major initiatives planned by the Government of India to boost the tourism and hospitality sector of India are as follows:

In the 2024 interim Budget, Finance Minister, Ms. Nirmala Sitharaman allocated Rs. 2,449.62 crore (US$ 294.8 million) to the tourism sector, a 44.7% increase from the previous fiscal year. This marks a positive change from the 2023 Union Budget's initial allocation of Rs. 2,400 crore (US$ 288.8 million), later revised to Rs. 1,692.10 crore (US$ 203.6 million).

The Ministry of Tourism launched the Swadesh Darshan Scheme to develop theme-based tourist circuits, sanctioning 76 projects. Upgraded to Swadesh Darshan 2.0 (SD2.0), it targets sustainable tourism, selecting 57 destinations for development, with States/UTs preparing plans accordingly.

The Prime Minister Mr. Narendra Modi inaugurates and unveils 52 tourism sector projects valued at over Rs. 1400 crore (US$ 168.5 million) under the Swadesh Darshan and PRASHAD Scheme.

 Ministry of Tourism has partnered with the Quality Council of India (QCI), to assist the Hospitality Industry in their preparedness to continue operations safely and mitigate risks arising out of the COVID-19 pandemic through an initiative called SAATHI (System for Assessment, Awareness and Training for Hospitality Industry). A hotel/unit goes through the SAATHI framework and agrees to fully follow the requirements wherever applicable possible, and a self-certification is issued. Self-certified Hotel/units attend webinars to clarify doubts through live interactions. If Hotel/unit desires, they may undertake site-assessment based on SAATHI framework through QCI accredited agencies and an assessment report with opportunities for improvement is shared with the assessed unit.

Under this Loan Guarantee Scheme for Covid Affected Tourism Service Sector (LGSCATSS), loan up to US$ 12,110 will be extended to each Tour Operators/ Travel Agents/ Tourist Transport Operators approved/recognized by the Ministry of Tourism.

Guarantees for Skill Development Loans by the member banks of IBA up to Rs. 1.5 lakh (US$ 1,801) extended by lending institutions to eligible borrowers without collateral or third-party guarantee.

• Visa reforms include a significantly expanded Golden Visa scheme, a five-year Green residency and new entry permits, including one for job seekers. The new system also offers additional benefits to sponsor family members
• To ease travels for international tourists, the Government of India has launched a scheme wherein five lakh tourists will get free visas.
• In August 2022, Ministry of Tourism sanctioned 76 projects for Rs. 5,399.15 crore (US$ 678.39 million) under Swadesh Darshan Scheme for development of tourism infrastructure in the country.
• In June 2022, the Ministry of Tourism along with Associations of Indian Universities (AIU) initiated a 12 episode webinar series under ‘Azadi Ka Amrut Mahotsav’ (AKAM) to engage and expose young minds of our country to the rich and diverse heritage of the country.
• Till the end of September 2022, a total of 155 Dekho Apna Desh webinars have been organized by Ministry of Tourism.
• The Ministry of Tourism has launched the National Strategy for Sustainable Tourism and Responsible Traveller Campaign in June 2022.
• From November 15, 2021, India allowed fully vaccinated foreign tourists to visit India, which in turn will help revive the Indian travel and hospitality sector.
• In November 2021, the Ministry of Tourism signed a Memorandum of Understanding (MoU) with Indian Railway Catering and Tourism Corporation to strengthen hospitality and tourism industry. The ministry has also signed a MoU with Easy My Trip, Cleartrip, Yatra.com, Make My Trip and Goibibo.
• In November 2021, the Indian government planned a conference to boost film tourism in the country with an aim to establish domestic spots as preferred filming destinations. This move is expected to create jobs and boost tourism in the country.
• In September 2021, the government launched NIDHI 2.0 (National Integrated Database of Hospitality Industry) scheme which will maintain a database of hospitality sector components such as accommodation units, travel agents, tour operators, & others. NIDHI 2.0 will facilitate the digitalisation of the tourism sector by encouraging all hotels to register themselves on the platform.
• Government is planning to boost the tourism in India by leveraging on the lighthouses in the country. 71 lighthouses have been identified for development as tourist spots.
• The Ministry of Road Transport and Highways has introduced a new scheme called ‘All India Tourist Vehicles Authorisation and Permit Rules, 2021’, in which a tourist vehicle operator can register online for All India Tourist Authorisation/Permit. This permit will be issued within 30 days of submitting the application.
• The Indian Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat Darshan tourist trains aimed at taking people to various pilgrimages across the country.
• During 2019-20, an additional fund Rs. 1,854.67 crore (US$ 269.22 million) was sanctioned for new projects under the Swadesh Darshan scheme.
• Ministry of Tourism sanctioned 18 projects covering all the Northeastern States for Rs. 1,456 crore (US$ 211.35 million) to develop and promote of tourism in the region under Swadesh Darshan and PRASHAD schemes.
• Statue of Sardar Vallabhbhai Patel, also known as ‘State of Unity,’ was inaugurated in October 2018 and the total revenue generated till November 2019 stood at Rs. 82.51 crore (US$ 11.81 million).

State Government Initiatives

• In Jammu and Kashmir, in April 2021, a mega tourism promotion event “Tapping the Potential of Kashmir: Another Day in Paradise” was organised in Srinagar. The event aimed to showcase the myriad tourism products of Jammu & Kashmir and promote tourism in the region as the destination for leisure, adventure, eco, wedding, films and MICE tourism steps have been taken by the government to provide better facilities to the old.
• The strategy of Uttarakhand Tourism is to identify key originating regions and tourist segments, which would then be the focus of marketing campaigns.
• Madhya Pradesh tourism board has opened the door for private investment within the state by providing all the aid and facilities to the investors.
• The AP Tourism Development Corporation (APTDC) plans to establish 100 kiosks across the state in the first phase, providing employment opportunities to the youth.
• In October 2021, the Tripura government collaborated with Infovalley Educational & Research (P) Ltd. as part of a public-private partnership (PPP) to run the State Institute of Hotel Management (SIHM). Through the SIHM, the government aims to empower the youth and contribute to the growth of hotels and hospitality management in the state.
• The Ministry of Tourism sanctioned three projects for a total amount of Rs. 179.68 crore (US$ 24.24 million) under the Swadesh Darshan scheme in Gujarat. The Ministry of Tourism has approved 16 projects for over Rs. 1,300 crore (US$ 171.2 million) in India's Northeast under the “Swadesh Darshan” Scheme.
• In July 2021, the Tamil Nadu state government decided to implement an integrated mega tourism plan, which included new lighting arrangements for the Thiruvalluvar statue at Kanyakumari, starting renovations at Poompuhar tourist spot and improving roads leading to tourist spots, spiritual places, and adventure tourism spots. It also includes unveiling a new tourism policy, establishing more hotels, resorts, and convention centres, and increasing contribution of public and private sectors in the tourism sector.
• In July 2021, Andhra Pradesh Tourism Authority urged stakeholders in the tourism sector in the state to register with the Andhra Pradesh Tourism under the Tourism Trade Registration and Facilitation Guidelines 2020.
• Jharkhand Tourism Policy Offers Attractive Incentives and Opportunities for Investors.
• Nagaland Launches Initiatives to Promote Off-Road Tourism

Staycation is seen as an emerging trend were people stay at luxurious hotels to revive themselves of stress in a peaceful getaway. To cater to such needs, major hotel chains such as Marriott International, IHG Hotels & Resorts and Oberoi hotels are introducing staycation offers where guests can choose from a host of curated experiences, within the hotel. India’s travel and tourism industry has huge growth potential. The industry is also looking forward to the expansion of e-Visa scheme, which is expected to double the tourist inflow in India. India's travel and tourism industry has the potential to expand by 2.5% on the back of higher budgetary allocation and low-cost healthcare facility according to a joint study conducted by Assocham and Yes Bank.

It is irrefutable that the tourist industry is becoming a more significant economic force and has the potential to be used as a tool for development. The tourist industry not only drives growth, but it also raises people's standards of living with its ability to provide significant amount of diverse employment opportunities. It promotes environmental preservation, champions diverse cultural heritage, and bolsters international peace. By 2028, Indian tourism and hospitality is expected to earn US$ 50.9 billion as visitor exports compared with US$ 28.9 billion in 2018.

Note: *in US$ terms

Note: Conversion rate used in April 2024, Rs. 1 = US$ 0.012

References: Media Reports, Ministry of Tourism, Press Releases, Department for Promotion of Industry and Internal Trade (DPIIT), Press Information Bureau (PIB), Union Budget 2023-24, Economic Survey 2022-23

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States with Largest Domestic Tourist Arrivals in 2021

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• Andhra Pradesh
• Maharashtra

Industry Contacts

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• Palace on Wheels
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How sustainable boutique hotels are revamping the environment and local communities in India

Across india, boutique retreats are working in harmony with the environment while providing support to local communities to ensure all parties prosper.

Our jeep rolls down a dusty road in Tehla village, flanked by expanses of dry earth peppered with boulders, in clusters, and green shrubs, the cascading blue shadows of northwestern India’s Aravalli mountains in the distance.

Women in bright orange and green dupattas herd goats across the rocky terrain. A group of children scamper by, waving and shouting, their words carried off by the wind.

Sitting up front in the jeep, Franklin Dolder waves back. “They know me from my visits to their school”, he explains.

A young man on a bike stops and Dolder and Chouhan introduce him as a wildlife tracker. They chat animatedly about a recent leopard spotting.

The Utsav Camp team is well entrenched in the local community through outreach initiatives that have included the dousing of forest fires with their water tankers; the training of the park’s guides to make the safari experience more engaging for visitors; and the documenting of wildlife movements.

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Heritage Hotels in India: Offering Unique Experiences to Customers with Sustainable Practices as a Differentiator

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Adaptive reuse of heritage structures in the form of hotels has shown impressive growth in India in recent years. While this conversion poses challenges, it also presents opportunities as end users are showing interest in staying at heritage hotels to experience our rich cultural heritage. As sustainable practices, conservation of heritage and social responsibility take center stage, heritage hotel owners/management are increasingly marketing the overall experience with its intended societal benefits to its consumers. It is important to establish if the existing heritage hotels have been sensitive to concerns of the local communities while setting up and managing their business. In the current paradigm of development, where the process of any project conception and implementation is professed to be based on stakeholder participation, the best practices represented by existing heritage hotels can chart the way forward for responsible development and management of heritage resources as hotels to ensure superior consumer experiences in a sustainable manner.

The objective of the research is to explore the success of heritage hotels in India in offering a value-added product to the customers, and also probe the sociocultural and economic impact of heritage hotels from a perspective of sustainability. The study focuses especially on heritage hotels, because these have emerged as a high growth segment, typically located in areas with historical contexts. They offer an inimitable experience due to the physical features and heritage value on one hand and are also receiving patronage due to the sustainable practices they are adopting.

An update of the heritage hotel scenario in India has been presented, as extracted from the Ministry of Tourism database and other heritage hotel associations. Secondary research in the form of existing literature and data has been used to build the understanding of various factors that contribute to the social, cultural and economic impact and sustainability. The analysis 327and inferences of the study are based on information collected on sample cases of heritage hotels. The approach is to document qualitative inputs based on a questionnaire instrument to draw inferences on respective experiences of heritage hotel developers. The sustainability indicators prescribed by the Ministry of Tourism have been used to assess the impact of selected heritage hotels taken up for study.

The research effort highlights the success or challenges that the case study hotels have achieved in offering a unique experience to its expanding customer base, with the practice of principles of sustainability as a distinguishing feature. These findings can be helpful directives for more reutilization of heritage structures as potential heritage hotels.

Heritage hotels represent opportunities for putting heritage assets to commercial use and simultaneously ensuring their conservation. Many such structures are unlikely to find resources required to sustain these without reuse options that open revenue streams. Integration of such reuse with the local socioeconomic context will render feasibility to any projects conceived by developers, private or government linked.

The inferences can help establish heritage hotels as drivers of social development, especially in regions that are suffering from poverty, unemployment and lack of education. If appropriate processes are followed, a mutually interdependent and beneficial relationship can be forged and promoted that can sustain the cultural component at the local, regional and as a result, national level.

The target audience includes all stakeholders in the realm of heritage and hospitality such as hoteliers, governmental and nongovernmental organizations, students of hospitality and heritage studies schools, heritage property owners and heritage consultants.

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Worldwide Hospitality and Tourism Themes

ISSN : 1755-4217

Article publication date: 6 April 2012

This paper aims to introduce the theme issue and the reasons for focusing on the strategic question: “What are the challenges faced by the hospitality industry in India?”

Design/methodology/approach

The paper provides an introduction to the scope of the global hospitality industry and the key issues and challenges, especially as they relate to the industry's development in India.

The paper profiles the approach adopted by theme issue contributors and their respective contributions to addressing the strategic question.

Practical implications

The theme issue draws extensively on roundtable discussions with senior level practitioners so as to balance the analysis drawn from published sources.

Originality/value

India's hospitality industry is developing rapidly and yet there is limited data relating to these developments. This theme issue draws extensively on practitioner inputs and published sources to provide an authoritative contribution that addresses the Indian context and additionally explores the implications for other developing economies.

• Human resources
• Destination management
• Hospitality industry

Jauhari, V. and Rishi, M. (2012), "Challenges faced by the hospitality industry in India: an introduction", Worldwide Hospitality and Tourism Themes , Vol. 4 No. 2, pp. 110-117. https://doi.org/10.1108/17554211211217299

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