Tourism and Hospitality November 2019 PDF
Tourism and Hospitality November 2019 PDF
Tourism and Hospitality November 2019 PDF
HOSPITALITY
Executive Summary……………….….…….3
Advantage India…………………..…..……..4
Growth Drivers……………………..............19
Opportunities…….……….......……….……28
Industry Associations……………....……...32
Useful Information……….......…………….34
EXECUTIVE SUMMARY
According to WTTC, India ranked 3rd among 185 countries in terms of travel & tourism’s total contribution to
Contribution to GDP GDP in 2018. During 2018, FEEs from tourism increased 4.70 per cent* year-on-year to US$ 28.59 billion.
above world average FEEs during the period January-September 2019 were Rs 1,51,480 crore (US$ 21.53 billion).
In India, the sector’s direct contribution to GDP is expected to grow by 7.1 per cent per annum during 2018-28.
Creating higher As of 2017-18, 81.1 million people were employed in the tourism sector in India which was 12.38 per cent of total
employment employment in the country.
Travel & tourism’s contribution to capital investment in India is projected to grow 6.7 per cent per annum during
2018–28.
Higher investments
Under the Swadeh Darshan and Prashad scheme various projects has been sanctioned of worth Rs 550 crore
(US$ 78.70 million).
Contribution of visitor exports to total exports is estimated to increase 5.5 per cent per annum during 2018–
Increasing visitor 2028.
exports
International Tourists arrival are expected to reach 30.5 Billion by 2028.
Electronic tourist authorisations, known as E-Tourist Visa, launched by the Government of India have resulted
in increase in number of tourist visa issued in the country. The facility has been extended to citizens of 166
New Visa Reforms countries, as of December 2018.
During January-September 2019, a total of 18,98,655 tourist arrived on E-Tourist Visa registering a growth of
20.4 per cent.
Note: CY - Calendar Year, FEE – Foreign Exchange Earning, * - Increased in US$ terms
Source: World Travel & Tourism Council’s (WTTC’s) Economic Impact 2018, Ministry of Tourism
ADVANTAGE INDIA
ADVANTAGE INDIA
By 2020, medical tourism industry of India India has a diverse portfolio of niche tourism
is expected to touch US$ 9 billion. products – cruises, adventure, medical, wellness,
sports, MICE, eco-tourism, film, rural & religious
During 2019 (till September 2019), 7.63
tourism
million foreign tourists arrived in the
country. In January 2017, Federation of Indian Chambers
of Commerce & Industry (FICCI) announced the
International tourist arrivals are expected to
launch of India Travel Tech Launchpad.
reach 30.5 million by 2028.
Note: UNESCO – United Nations Educational, Scientific and Cultural Organisation, MICE – Meetings, Incentives, Conferences, and Exhibitions, CY – Calendar Year
Source: World Travel & Tourism Council’s (WTTC’s) Economic Impact 2018, Ministry of Finance, TechSci Research
MARKET OVERVIEW
EVOLUTION OF THE INDIAN TOURISM AND
HOSPITALITY SECTOR
The National Tourism Policy was A national policy on tourism was announced in
announced in 1982 2002, focusing on developing a robust
The government formulated a infrastructure
comprehensive plan in 1988 to promote Online travel portals & low-cost carrier airlines
tourism gave a boost to domestic tourism
2015 onwards
Pre-1990 1990–2000 2000–05
Comprises airline companies, cruise services, railways, car rentals & more. A
Transportation
tourist’s choice of transport would depend on the travel budget, destination, time,
purpose of the tour & convenience to the point of destination.
Another major component of the travel & tourism industry is ‘attractions’ such
Tourism and as theme parks & natural attractions including scenic locations, cultural &
Attractions
hospitality educational attractions, monuments, events & medical, social or professional
causes.
A fragmented sector with several independent travel agents & many online
businesses. They also sell associated products such as insurance, car hire &
Travel agents currency exchange.
Business travel agencies specialise in making travel & accommodation
arrangements for business travellers & promoting conference trades.
Tour operators Offer customised tours, including travel, accommodation & sightseeing
The aim is to develop interest in heritage and culture; & promote visits
to village settings to experience & live a relaxed & healthy lifestyle
Direct Contribution of Travel and Tourism to GDP at Real 2017 Total Contribution of Travel and Tourism to GDP at Real 2018
Visakhapatnam port traffic (million tonnes) Visakhapatnam port traffic (million tonnes)
Prices (US$ billion) Prices (US$ billion)
500.00
200.00
512.00
194.69
400.00
150.00
300.00
100.00
268.29
247.37
200.00
98.17
232.01
219.72
91.27
87.17
201.43
79.56
185.63
172.91
72.74
67.77
50.00
63.73
100.00
0.00 0.00
2012 2013 2014 2015 2016 2017 2018E 2028F 2013 2014 2015 2016 2017 2018 2019F 2029F
India ranked 7th in the world in 2017 contributing US$ 234 billion in terms of absolute direct contribution of travel & tourism sectors to its GDP. It
is the 3rd largest foreign exchange earner for the country.
India was ranked 34th in the Travel & Tourism Competitiveness Report 2019 published by the World Economic Forum.
The tourism & hospitality sector’s direct contribution to GDP in 2017, was Rs 5.94 trillion (US$ 91.27 billion). This is expected to reach Rs 12.68
trillion (US$ 194.69 billion) in 2028, implying a CAGR of 7.23 per cent during 2012-28.
According to 2018 report of the World Travel and Tourism Council (WTTC), India was ranked third in the tourism sector
During 2018, foreign tourist arrivals (FTAs) in India stood at 10.55 Visakhapatnam
Foreign touristsport
arriving
trafficin(million
India (million)
tonnes)
million, achieving a growth rate of 5.20 per cent year-on-year.
20.00
tourist visa increased by 20.4 per cent year-on-year to 1.5 million.
10.55
10.18
world's international tourist arrivals by 2020 and 2 per cent share by
8.80
2025.
8.00
7.63
7.40
7.00
6.60
During January-September 2019, Foreign Tourist Arrivals (FTAs)
6.30
5
5.80
5.30
5.20
5.10
were 76,33,454 with the growth of 2.3 per cent.
4.40
3.90
0
Note: CY – Calendar Year, E- Estimated, T-Target., FTAs – Foreign Tourist Arrivals, CAGR upto 2018
Source: Ministry of Tourism
Tourism is an important source of foreign exchange in India similar Foreign Exchange Earnings from tourism in India
Visakhapatnam port traffic (million tonnes)
to many other countries. (US$ billion)
28.59
27.69
2020, according to the World Trade Organization. This rapid 25
21.60
increase in outbound tourism from India is going to benefit forex
23.15
providers in the country.
20
21.10
20.20
In September 2019, Foreign Exchange Earnings (FEEs) were Rs
18.40
17.70
1,51,480 crore (US$ 21.60 billion) with the growth of 5.1 per cent
16.60
15
from previous year during same.
14.20
11.80
11.40
10
10.70
5
Jan…
2019(
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Note: FEE – Foreign Exchange Earnings
Source: Ministry of Tourism, Economic Times
Visakhapatnam
Share of tourists
portby
traffic
expenditure
(million tonnes)
(2018) Expected share of tourists by expenditure (2028E)
Foreign visitor
spending
Domestic travel revenues are estimated at Rs US$ 215.38 billion in 2018 and are anticipated to further increase to US$ 405.8 billion by 2028E
Note: E- Estimated
Source: : World Travel & Tourism Council’s Economic Impact 2019
Segment –wise
Visakhapatnam portrevenue
traffic (million
share (2017)
tonnes) Expected segment-wise revenue share (2028E)
Leisure spending
5.2% 5.45%
Leisure Spending
Business spending
Business Spending
94.8% 94.55%
Share of revenues from leisure travel to the total tourism revenue stood around 94.8 per cent in 2018.
Leisure travel spending reached US$ 234.16 billion in 2018 and is expected to reach US$ 432.3 billion by 2028E.
Business travel revenues were US$ 12.84 billion in 2018 and are projected to increase to US$ 24.4 billion by 2028E.
Note: E- Estimated
Source: World Travel & Tourism Council’s (WTTC’s) Economic Impact 2019, TechSci Research
Revenue
Company Segment Other major players
(US$ millions)
675
448 486 Yatra.com, cleartrip.com,
Online booking
travelocity.com, travelchacha.com, ixigo.com
FY17 FY18 FY19
658
382 410
Hotel ITC, Oberoi, Marriott
FY17 FY18 FY19
1,165
1,121
1,009
Tour operators SOTC, Raj Travels
FY16 FY17 FY18
RECENT TRENDS
AND STRATEGIES
NOTABLE TRENDS IN THE TOURISM INDUSTRY IN
INDIA
Over 70 per cent of air tickets are now being booked online in the country
Online travel operators Several online travel & tour operators, which provide better prices & options to consumers, have emerged in
India
The widespread practice of Ayurveda, yoga, siddha & naturopathy that is complemented by the nation’s
Wellness tourism
spiritual philosophy makes India a famous wellness destination.
Government of India has estimated that India would emerge with a market size of 1.2 million cruise visitors by
2030-31. The government is planning to set up five cruise terminals in the country.
Cruises As of January 2019, Zen cruises announced its plan to start cruise services in India starting April 17, 2019.
In November 2019, Chipsan Aviation introduced helicopter services from Willingdon Island, Cochin Port.
Adventure tourism is one of the most popular segments of tourism industry. Owing to India’s enormous geo-
physical diversity, it has progressed well over the years. Moreover, the government has recognised Adventure
Adventure Tourism as a Niche Tourism product to attract tourists with specific interest.
Part of India’s tourism policy, almost every state has definite programme to identify & promote Adventure
tourism.
Promotion of camping sites has been encouraged with adequate acknowledgement of its adverse effects on
environment
Camping sites
Besides providing unique rewarding experiences, responsible conduct of camping can be a major source for
both additional economic opportunities in remote areas as well as an instrument of conservation
Players are trying to ensure convenience for their customers by providing all services available on a single
portal. For example, makemytrip.com & a host of other websites provide a comprehensive basket of offerings
One stop solution
which include outbound & inbound travel for leisure & business trips, hotels & car booking, holiday packages
within India or abroad, etc
Players are opting for many channels to maximise sales & ensure convenience for their customers. For
example, Thomas Cook & Kuoni India launched their online portals to compete with others. On the other hand,
Multiple channels
makemytrip.com is planning to go for the offline channel to complement its existing portal & has already
launched mobile apps for maximising sales.
The launch of several branding & marketing initiatives by the Government of India such as Incredible India! &
Branding Athiti Devo Bhava provides a focused impetus to growth
The Government of India has launched the Incredible India 2.0 campaign to market specific promotional plans.
Indian government has also released a fresh category of visa – the medical visa or M visa, to encourage
M-visa
medical tourism in India. Indian medical tourism is expected to reach US$ 8 billion by 2020
Companies have started using data analytics to create a 360-degree profile of their customers.
Data Analytics and
Makemytrip has also started using AI powered chatbots. 25 per cent of its post-sales requests are now
Artificial Intelligence
services by these chatbots
India has been known as the seat of spiritualism & India’s cosmopolitan nature is best reflected in its pilgrim
centres
Spiritual tourism India has been recognised as a destination for spiritual tourism for domestic & international tourists
In March 2019, Rs 720 crore (US$ 103.02) had been allocated by Uttar Pradesh towards strengthening the
infrastructure for tourism.
Source: Make in India, Company websites, Ministry of Tourism, KPMG – Expedition 3.0, VC Circle
GROWTH DRIVERS
GROWTH DRIVERS FOR THE TOURISM MARKET
More than half of the Ministry of Tourism’s Plan Domestic expenditure on tourism is expected to
budget is channelised for funding the development rise due to the growing income of households
of destinations, circuits, mega projects as well as
rural tourism infrastructure projects. Several niche offerings such as medical
tourism & eco tourism are expected to create
Tourism Ministry is currently developing several more demand.
theme-based tourist circuits of Swadesh Darshan
Scheme to promote tourism. By 2029, India’s tourism sector is expected to
reach Rs 35 trillion (US$ 488 billion) by 2029
with a growth of 6.7 per cent and accounting for
9.2 per cent of the total economy.
Growth drivers
Hotel & Tourism sector has received A web based Public Service Delivery System
cumulative FDI inflows of US$ 12.96 billion (PSDS) had been launched by the Ministry of
between April 2000 and June 2019. Tourism to enable all the applicants seeking
International hotel brands are targeting India. approval for hotel projects and track their
Carlson group is aiming to increase the applications online on a real time basis.
number of its hotels in India to 170 by 2020. The Government of India will develop 17
Hospitality majors are entering into tie ups to penetrate iconic tourist sites in India into world-class
deeper into the market, such as Taj & Shangri-La entered destinations, as per Union Budget 2019-20.
into a strategic alliance to improve their reach & market Campaigns such as Swadesh Darshan,
share by launching loyalty programme aimed at integrating theme-based tourist circuits were launched to
rewarded customers of both hotels. harness the tourism industry’s potential
India’s GDP Per Capita at current prices is estimated to have 3,500 CAGR 6.84%
reached US$ 2,036.20 in 2018. It is expected to reach US$
3,277.28
3,277.28 by 2024, implying a compounded annual growth rate of
3,000
3,023.39
6.84 per cent during 2012-24.
2,791.31
As of April 2019, OYO has created over 100,000 direct and
2,500
2,578.11
indirect jobs in India and expects to double the number by 2020.
2,378.67
2,198.59
2,000
2,036.20
2,014.01
1,761.63
1,639.69
1,500
1,610.36
1,485.60
1,481.56
1,000
500
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Note: * Estimates after 2013
Source: International Monetary Fund, World Economic Outlook Database, April 2019
405.84
350.00
300.00
250.00
200.00
199.63
186.03
179.33
150.00
163.82
149.42
139.55
131.61
100.00
50.00
0.00
2012 2013 2014 2015 2016 2017 2018E 2028F
Note: F – Forecast, E – Estimated, *at real 2017 prices converted at USD = INR 65.12, Update is expected in May 2019
Source: WTTC - Travel & Tourism Economic Impact 2018
Based on specific themes, government has identified 15 circuits which includes Krishna Circuit, Buddhist
Circuit, Himalayan Circuit, North East Circuit, Coastal Circuit, wildlife circuit & tribal circuit.
So far 73 projects have been sanctioned under the Swadesh Darshan Scheme since FY15. During 2018-19,
a total of six projects worth Rs 304.3 crore (US$ 42.18 million) were sanctioned under the Swadesh Darshan
Swadesh Darshan scheme. Four new projects for Rs 190.46 Crores are sanctioned under the tourism infrastructure
development schemes, Swadesh Darshan and PRASHAD in the states of Meghalaya, Gujarat and Uttar
Pradesh recently.
Under Budget 2019-20, the Government of India allotted Rs 1,106 crore (US$ 158.25 million) for development
of tourist circuits under Swadesh Darshan for eight north-eastern states.
Pilgrimage Rejuvenation National Mission on Pilgrimage Rejuvenation & Spiritual Augmentation was implemented by the Ministry for
and Spiritual, Heritage enhancing the facilities provided & infrastructure at pilgrimage centres of all cities
Augmentation Drive Under Budget 2019-20, the Government of India allotted Rs 160.50 crore (US$ 22.25 million) for development
(PRASHAD) of tourist circuits under PRASHAD.
Formulation of National Tourism Policy 2015 that would encourage the citizens of India to explore their own
National Tourism Policy country as well as position the country as a ‘Must See’ destination for global travellers
2015 Under Union Budget 2019-20, US$ 82.27 million was allocated for promotion & publicity of various
programmes & schemes of the Tourism ministry.
Statue of Sardar Vallabhbhai Patel, also known as ‘State of Unity’, was inaugurated in October 2018. It is the
highest standing statue in the world at a height of 182 metre.
It is expected to boost the tourism sector in the country and put India on the world tourism map. In February
Statue of Unity 2019, the visiting hours has been increased by two more hours and has been equipped with e-bike tours.
The total revenue generated till July 2019 is Rs 52.9 crore (US$ 8.58 million) and revenue of Rs 50 crore
(US$ 7.15 million) is estimated annually.
Note: National Mission on Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive
Source: Union Budget, TechSci Research
The Ministry has set up a Hospitality Development & Promotion Board, which will monitor & facilitate hotel
Special Boards
project clearances/approvals
In March 2018, Ministry of Tourism initiated State Governments/Union Territory administrations of India to
Tourist Police deploy Tourist Police
An investment-linked deduction under Section 35 AD of the Income Tax Act is in place for establishing new
Tax Incentives hotels in the 2-star category and above across India, thus permitting a 100 per cent deduction in respect of
the whole or any expenditure of a capital nature
Ministry of Tourism launched a 24x7 Toll Free Multilingual Tourist Infor-Helpline in 12 languages which will
provide information relating to travel in India
Ministry of Tourism issued guidelines on Safety and Security for States/UTs along wit h tips for travelers
Safety and Security
Launched Social Media Awareness Campaign in the spirit of ‘Atithidevo Bhava’ to develop importance of
Initiatives
good conduct and behavior towards tourists
Initiative to conduct constant dialogue with State/UTs for drawing ideas for development and promotion of
tourism
Source: World Travel & Tourism Council, Union Budget 2015 – 16, TechSci Research
Incentives from Ministry Support to Public Private Partnerships in infrastructure development such as viability gap funding.
of Tourism Under budget 2019-20, government introduced a Tax Refund for Tourists (TRT) scheme like in countries such
as Singapore to encourage tourists to spend more in India and boost tourism.
Under ‘Project Mausam’ the Government of India has proposed to establish cross cultural linkages & to revive
Project Mausam historic maritime cultural & economic ties with 39 Indian Ocean countries. In 2015, Government of India linked
China Silk Road project with Project Mausam.
The number of tourists arriving on e-tourist visa grew by 20.4 per cent year-on-year to 1.89 million in 2019 (till
September 2019).
E – Tourist Visa
Foreigners travelling to India on e-tourist visa will receive a BSNL SIM card which will be pre activated and
loaded with talktime and data.
In September 2019, second session of India Tourism Mart (ITM 2019), was organised. It was a three-day
India Tourism Mart event organised by FAITH (Federation of Associations in Indian Tourism and Hospitality) and the Ministry of
Tourism, Government of India.
2019
160 exhibitors from across the country the industry came together to interact and transact business.
95.3
In November 2019, TAJ opens new hotel in Tirupati under religious tourism 80.0
segment.
60.0
In September 2019, Japan joins a band of Asian countries, including Taiwan
40.0
47.8
and Korea among others to enter into the Indian tourism market.
36.6
35.0
34.6
33.7
33.0
32.2
31.3
In August 2019, MakeMyTrip launched an initiative “#MyIndiaMyTrips” to 20.0
28.9
23.8
assist Indian travellers to plan their travel and explore the best of India. 0.0
Hilton plans to add 18 hotels pan India by 2021, along with 15 operational
hotels under its brands namely Hampton, Hilton Garden Inn, Conrad, Hilton
Hotels & Resorts & DoubleTree by Hilton.
As of April 2019, Radisson Hotel Group, global hospitality firm plans to Collective government spending on tourism (US$
Visakhapatnam port traffic (million tonnes)
double its portfolio of hotel in India to 200 by 2022. billion)
Louvre Hotels Group, world’s fifth largest hotel group, plans to increase its
6.00
business in India to 10-15 per cent by 2021 from 5-7 per cent, as of CAGR 7.91%
September 2018.
5.65
5.00
Collective government spending in India on travel and tourism is expected to
reach Rs 367.9 billion (US$ 5.85 billion) in 2028 from Rs 169.8 billion (US$ 4.00
2.81 billion) in 2017.
3.00
Oyo Rooms is planning to invest about Rs 1,400 crore (US$ 200 million)
2.89
2.61
towards capital expenditure, technology and leadership in its Indian and 2.00
2.31
1.97
South Asia business over 2019.
1.88
1.76
1.00 1.67
Airbnb Inc, largest home-sharing platform has invested about US$ 200
million in OYO’s Series E funding round, 0.00
Note: E – Estimated, F- Forecast 2012 2013 2014 2015 2016 2017 2018E 2028F
Source: World Travel & Tourism Council’s Economic Impact 2018, 2017, TechSci Research
1,000,000
1,080,000
1,697,000
2,369,941
500,000
1,898,665
445,300
39,046
-
Note: P- Provisional
Source: Ministry of Tourism, TechSci Research
OPPORTUNITIES
NICHE SEGMENTS OFFER GOOD OPPORTUNITIES
The presence of world-class Cruise shipping is one of the The potential for the India is often termed as
hospitals & skilled medical most dynamic & fastest development of rural tourism in hotspot of bio-diversity & this
professionals makes India a growing segments of the global India is high as most of its rich natural heritage is
preferred destination for leisure industry population resides in rural unparalleled in many ways.
medical tourism areas
Government of India has Such valuable resource base
India’s earnings from medical estimated that India would This can benefit the local gives impetus for the practice
tourism could exceed US$ 9 emerge with a market size of community economically & of variety of alternate tourism
billion by 2020 1.2 million cruise visitors by socially, and facilitate forms & many of which are
2030 – 31 interaction between tourists & already in existence.
Tour operators are teaming up
locals for a mutually enriching
with hospitals to tap this Moreover, India is looking to For example: The national
experience
market take advantage of its 7,500Km parks, wildlife sanctuaries &
coastline to tap growth biosphere reserves
Foreign tourist arrivals for
potential of the cruise tourism
medical purpose increased
segment.
from 427,014 in 2016 to
495,056 in 2017(P). The construction of cruise
terminal in Chennai was
started in April 2018.
Growth in low-cost airlines is expected to lower tourism costs & increase domestic spending on tourism. Low
Low-cost airlines cost flights under the Ude Desh ka Aam Naagrik (UDAN) scheme are expected to connect under served
regions in the country and promote domestic tourism.
The market is likely to become more competitive due to the entry of an increasing number of international
Increase in international flight operators expected to offer improved services to tourists. JVs such as Air Asia and Tata SIA are
flight operators beginning services in India and can provide better services
Some new players that have entered the country are Etihad & Vistara.
Increasing number of The Airports Authority of India aims to start operating 250 airports across the country by 2020. As of 2019,
airports there were 132 operational airports in India.
In the Union Budget 2018-19, the government has proposed to develop 10 prominent sites into iconic tourist
Higher investments
destinations.
Domestic air traffic in India increased 3.15 per cent year-on-year in January-July 2019. International air traffic
Higher passenger traffic of India has more than doubled in a decade to reach 65.47 million in 2017-18. By 2020, passenger traffic at
Indian airports is expected to increase to 450 million people.
INDUSTRY
ASSOCIATIONS
INDUSTRY ORGANISATIONS
USEFUL
INFORMATION
GLOSSARY
Indirect contribution: Travel and tourism investment spending, and government collective travel and tourism spending
US$: US Dollar
Wherever applicable, numbers have been rounded off to the nearest whole number
Year INR INR Equivalent of one US$ Year INR Equivalent of one US$
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