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Tourism & Hospitality About the Sector GrowthSource Tourism & Hospitality Industry Report Tourism & Hospitality About the Sector January 2020 For Tourism & Hospitality Skills Council By: GS Advisors Private Ltd. www.growthsource.in 1 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report Disclaimer r All information contained in this document has been obtained by GrowthSource (GS Advisors Private Limited) from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and GrowthSource in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion, and GrowthSource shall not be liable for any losses incurred by users from any use of this document or its contents in any manner. Opinions expressed in this document are not the opinions of GrowthSource (GS Advisors Private Limited) and should not be construed as any indication of recommendation by anyone. 2 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report Contents Global Industry Overview 4 Hospitality and Tourism Industry in India 10 Hotel Industry 16 Restaurants Industry 21 Facilities Management 26 Tours and Travel 32 Adventure Tourism 39 3 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report Global Industry Overview Tourism is an important component of export diversification both for emerging and advanced economies, with a strong capacity to reduce trade deficits and to compensate for weaker export revenues from other goods and services. The Tourism and Hospitality industry is one of the fastest growing industries in the world. According to the World Tourism Organization (UNWTO) 1.5 billion international tourist arrivals were recorded in 2019, globally. A 4% increase on the previous year, which is also forecast for 2020, confirming tourism as a leading and resilient economic sector, especially in view of current uncertainties. By the same token, this calls for such growth to be managed responsibly to best seize the opportunities tourism can generate for communities around the world. 1 This is the tenth consecutive year of growth, although slower compared to the exceptional rates of 2017 (+7%) and 2018 (+2018). Demand was slower in advanced economies and particularly in Europe. 1 Economic growth is projected to pick up to 3.4% in 2020 from 3.0% from 2019, according to the International Monetary Fund’s World Economic outlook update of October 2019, reflecting primarily an improvement in a number of emerging markets in Latin America, the Middle East and Europe. Yet, with uncertainty about prospects for several of these countries projected, projected slowdown in China and US, and prominent downside risks, a much more subdued pace of global activities could well materialized. 1 India’s Position in The World The Tourism and Hospitality industry in India is one of the largest service industries. Tourism is an integral pillar of the Make in India program. The Tourism industry in India generated USD 247.3 Bn showing a growth of 6.7% during the year 2018, accounting for 9.2% of the total economy.2 References: 1 UNWTO World Tourism Barometer January 2020 Excerpts, https://webunwto.s3.eu-west-1.amazonaws.com/s3fs-public/2020- 01/UNWTO_Barom20_01_January_excerpt.pdf 4 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report 2 Tourism and Hospitality https://www.makeinindia.com/sector/tourism-and-hospitality Some important fact of Indian Tourism: 2019 3 Inbound Tourism in India: 3 Reference: 3 India Tourism Statistics at a Glance 2020, https://tourism.gov.in/sites/default/files/2020- 09/ITS%20at%20a%20glance_Book%20%282%29.pdf 5 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report Month-wise Foreign Tourist Arrivals in India, Jan 2018-June 2020 (Provisional): 3 P: Provisional, @ Growth rate over January-June of previous year. Purpose wise foreign Tourists Arrival in 2019: 3 Reference: 3 India Tourism Statistics at a Glance 2020, https://tourism.gov.in/sites/default/files/2020- 09/ITS%20at%20a%20glance_Book%20%282%29.pdf 6 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report Top 10 Source Countries for Foreign Tourist Arrivals (FTAs) in India in 2019: 3 The Indian tourism & hospitality industry has emerged as one of the key drivers of growth among the services sector in India. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country. According to World Travel Tourism Council, India ranked third among 185 countries in terms of travel and tourism’s total contribution to GDP in 2018, and 34th in the Travel and Tourism Competitiveness Report 2019 published by the World Economic Forum. 4 During 2019, foreign tourist arrivals (FTAs) in India stood at 10.89 million, achieving a growth rate of 3.20% y-o-y. During 2019, FEEs from tourism increased 4.8% y-o-y to Rs 1,94,881 crore (US$ 29.96 billion). In 2019, arrivals through e-Tourist Visa increased by 23.6% y-o-y to 2.9 million. 4 By 2029 Indian Tourism Sector is expected to grow 6.7% to reach Rs. 35 trillion (US$ 488 billion), and accounting for 9.2% of the total economy. International Tourists arrival in India is expected to reach 20.5 million by 2028. 4 Reference: 3 India Tourism Statistics at a Glance 2020, https://tourism.gov.in/sites/default/files/2020- 09/ITS%20at%20a%20glance_Book%20%282%29.pdf 4 https://www.ibef.org/industry/tourism-hospitality-india/infographic 7 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report A growing Travel & Tourism Industry not only drives the country’s economic growth in other sectors but also places it on the global map. Due to various measures adopted by the government such as Incredible India, Athithi Devo Bhava, introduction of E-tourist visa and many others, inflow of foreign (FTAs) and domestic tourists (TAs) has risen significantly in the last five years. The Finance Minister has allocated a budget of Rs. 2500 Crore for 2020-21 for the development of tourism sector in the nation. During the budget announcement the fact that Tourism growth is directly related to economic growth and employment generation. The travel and tourism industry has accepted the measures positively and have lauded the initiatives. 5 The budget proposes 100 more airports by 2024 under the subsidised UDAN scheme, introduction of more Tejas trains from iconic destinations and development of five iconic destinations. 5 It has also been a positive step to increase the infrastructure spending like creating five ‘smart cities’ and extending grant to states for destination development. Five archaeological sites, Rakhigarhi in Haryana, Hastinapur in UP, Dholavira in Gujarat, Shivsagar in Assam and Adichanallur in Tamil Nadu will be developed as iconic destinations with museums on the site to provide boost to the tourism sector. 5 The budget also proposes to allocate Rs. 3150 crores for the Ministry of Culture. The first Indian Institute of Heritage and Conservation will be set up with the status of a deemed university to be operated under the Ministry of Culture. 5 Reference: 5 https://www.traveltradejournal.com/2020/02/india-union-budget-2020-views-of-tourism-and-hospitality-industry/ 8 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report As of the overall year of 2019 share of top 10 States/UTs of India in Number of Domestic Tourist Visits: 3 P: Provisional # Figure for the year 2019 has been estimated using All India growth rate Major Countries availing e-Tourist Visas in 2019 & January-March 2020 (provisional): 3 Reference: 3 India Tourism Statistics at a Glance 2020, https://tourism.gov.in/sites/default/files/2020- 09/ITS%20at%20a%20glance_Book%20%282%29.pdf 9 www.growthsource.in GrowthSource Tourism & Hospitality Industry Report Hospitality and Tourism Industry in India The Hospitality and Tourism Industry is one of the key drivers for economic growth among the services sector in India. It not only promotes different cultures and cuisines, but also fuels employment generation and expansion of other sectors leading to a robust economy. Total contribution by travel and tourism sector to India’s GDP is expected to increase from Rs 15.24 lakh crore (US$ 234.03 billion) in 2017 to Rs 32.05 lakh crore (US$ 492.21 billion) in 2028. Total earning from the sector in India is targeted to reach US$ 50 billion by 2022. 6 Under the Swadesh Darshan scheme, 77 projects have been sanctioned of worth Rs 6,035.70 crore (US$ 863.60 million). In Union Budget 2020-21, the Government has allotted Rs 1,200 crore (US$ 171.70 million) for the development of tourist circuits under Swadesh Darshan for Northeast. 6 The launch of several branding and marketing initiatives by the Government of India such as ‘Incredible India!’ and ‘Athiti Devo Bhava’ has provided a focused impetus to growth. The Indian Government has also released a fresh category of visa - the medical visa or M-visa, to encourage medical tourism in the country. The Government is working to achieve one per cent share in world's international tourist arrivals by 2020 and two per cent share by 2025. 6 The Government is also making serious efforts to boost investment in the tourism sector. In the hotel and tourism sector, 100 per cent FDI (Foreign Direct Investment) is allowed through the automatic route. A five-year tax holiday has been offered for 2-, 3- and 4-star category hotels located around UNESCO World Heritage sites (except Delhi and Mumbai). 6 Ministry of Tourism launched DekhoApnaDesh webinar in April 2020 to provide information on the many destinations and the sheer depth and expanse of the culture and heritage of Incredible India.
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