20th October, 2019
Startup India Related News

Major investment and policy revision boosts Tourism & Hospitality sector in India

Tourism in India accounts for 7.5 % of the GDP and is the third largest foreign exchange earner ($ 2.28 billion by April 2018) for the country. The tourism and hospitality sector’s direct contribution to GDP in 2016 is estimated at $ 47 billion and the contribution is expected to reach $ 160.2 by 2026.

Market Size of Tourism & Hospitality Industry

India`s rising middle class and increasing disposable income has continued to support the growth of domestic and international tourism. As per the Tourism Ministry, domestic tourist visits (DTVs) to the States and Union Territories grew by 15.5 % to a provisional figure of $ 1.65 billion whereas the foreign tourist arrivals (FTAs) grew by 19.5% to 6.3 lakh in May 2017. By 2030, India is set to be ranked as the top 5 business travel market globally. Consequently, international hotel chains will likely increase their expansion and investment plans in India and is expected to account for 50% share in the Indian hospitality sector by 2020.

Top Investment in the industry

Between April 2000 and March 2017, the hotel and tourism sector attracted around $ 10.14 billion in foreign direct investments (FDIs). Many companies have invested in India`s booming tourism and hospitality industry.

  • MakeMyTrip raised $ 330 million from Ctrip.com International Ltd., Naspers Ltd. and few undisclosed investors, in a bid to stay ahead in the ticketing segment competition. The startup also agreed to buy Ibibo`s travel business at a deal value of $ 720 million, in one of the largest consolidation in the travel space.
  • Yellow Tie Hospitality Management Llp plans to invest up to $ 20 million in five restaurant ventures of celebrity chef Mr Harpal Singh Sokhi with the aim to have 250 outlets by 2020.
  • Chaudhary Group (CG) Hotels & Resorts plans to have around 200 hotels by 2020.
  • Dine Equity Incorporation plans to enter the Indian market with their breakfast chain IHOP after partnering with Kwal`s Group.
  • Mid-hotel segment in India is expected to receive investments of Rs 6,600 crore with major hotels like Mariott, Carlson and ITC planning to start budget hotels in state capitals tier II cities.
  • Vatika Hotels has raised Rs. 495 Crore in debt from Axis Bank Ltd. to expand its hotels and restaurant chains.

Government Initiatives

In the Union Budget 2017-18, the Government has announced that it will set up 5 special tourism zones in the country, build special tourism or pilgrimage trains and launch the Incredible India campaign worldwide.

  • The Ministry of Environment, Forest and Climate Change is planning to open up the 7500 km long coastline for development activities like tourism and real estate.
  • Tourism Projects are going to be launched in Jammu & Kashmir
  • The tourism industry looks to expand the e-VISA scheme which is expected to double the tourist inflow in India.