Thanks to concerted efforts by the government and the sector itself, hospitality industry is growing fast and that's good news for the economy
India set to gain from major tourism push
India’s tourism sector has enormous potential for growth given the range of natural and cultural attractions it has on offer, and the government and hospitality sector are working hard to put in place measures needed to take advantage of this, say those in the industry.
“India’s tourism has a huge upside potential,” says Arun Nanda, chairman of travel company Mahindra Holidays & Resorts. “Nobody has so much to offer.”
Mr Nanda says the focus now is to boost the image of the country as a premium holiday destination.
“We have to improve the perception of safety, cleanliness, hygiene in the minds of the market,” he says.
And the market potential is enormous. India may be geographically vast, with landscapes of mountains, deserts, beaches and jungles, along with a huge variety of cultural and historical attractions on offer, but it only has a 1.18 per cent share of international tourism arrivals, according to the Ministry of Tourism.
But thanks to concerted efforts by the government and the sector itself, tourism is growing fast.
Last year, India attracted more than 10 million international tourists, accounting for 6.8 per cent of GDP, up from 8.8 million the previous year, while foreign exchange earnings from tourism increased by 20.8 per cent to $27.69 billion (Dh101.70), the ministry’s figures show. India has outlined plans to double its tourist arrivals to 20 million annually by 2020.
“I think that India’s tourism industry is very, very well-poised in terms of growth,” says Anand Kandadai, executive vice president of Cleartrip, an online travel booking company headquartered in Mumbai.
“Infrastructure is an integral part of tourism. Getting a certain level of hygienic accommodation is something that tourists genuinely expect, and these are areas where there is scope for improvement,” he says.
“From a connectivity standpoint, a lot more needs to be done, but there’s a lot of clarity of thought in what needs to happen. Tourist safety is something that is going to be of priority.”
While cities are generally well-connected in India, there is room to improve air, road and rail links to many of the country’s more remote areas, where there are attractions such as wildlife reserves that appeal to different travel audiences. Industry chiefs say the issue is very much at the forefront of the government’s plans.
“I think infrastructure is one of the major areas, and right now there are promises to get better, but the roads should be good, the connectivity should be in place,” says Sunil Gupta, the chief executive of WelcomHeritage Hotels, which is part of ITC Hotels, India’s second-largest hotel chain with over 100 properties.
He points out that having tourists arrive with certain expectations and not being able to fulfil them would be a problem.
But like the rest of the sector, he is optimistic about how tourism is growing and developing.
Government initiatives include the introduction of e-visas and expanding visas-on-arrival offerings to attract foreign tourists by simplifying the process of entering India.
Most recently, India’s union budget, presented on February 1, saw the announcement of further measures to help grow the hospitality sector.
These include ambitious plans to develop 10 prominent tourist sites into “iconic tourism destinations” by developing infrastructure, skills and technology and attracting private investment, along with branding and marketing initiatives. It also includes plans to upgrade tourist amenities at 100 monuments of the Archaeological Survey of India .
“India is blessed with an abundance of tourist attractions,” said Arun Jaitley, India’s Finance Minister, in his presentation of the budget.
The government also wants to connect 56 unserved airports – those with no scheduled airline service – and 31 unserved helipads across the country, another major move that will further strengthen and widen India’s appeal as an easily navigable and wide-ranging destination for tourists of all types.
“We propose to expand our airport capacity more than five times to handle a billion trips a year under a new initiative,” Mr Jaitley said.
Peter Kerkar, the group chief executive of Cox & Kings, one of the oldest tour operators headquartered in India, said: “All this will generate huge economic activity as it also involves infrastructure and skill development in the region.”
The airport plans “will open up huge opportunities for the travel industry as connectivity will improve and people in these areas will be able to travel seamlessly within India and overseas, thereby giving a boost to domestic and outbound tourism,” he said.
It is, of course, early days. Mr Nanda points out that some of the “exact details are not known” on these tourism development plans “and we’ll have to see and hope that it really fuels [the sector]”.
Analysts say the role of aviation is fundamental to the growth of any tourism market and the Indian hospitality sector is well aware of the challenges and how to tackle them.
“The biggest obstacle to India’s tourism growth is airport development and proliferation,” says Saj Ahmad, the chief analyst at StrategicAero Research.
“Given the land mass, there simply aren’t enough smaller airports that would allow the development of smaller airlines using smaller airplanes to connect cities that full-service or low-cost carriers could not operate profitably.
“Having the infrastructure in place allows this growth to be realised – investment and more relaxed policies from the government are a must.
“India wants to be the go-to place for business and leisure.”
Reducing red tape will also provide speedy benefits, he says.
Marketing and branding are key. The ministry of tourism last month said its “Incredible India 2.0 campaign” running this year is designed to position the country as a “must-experience destination among overseas travellers and to increase foreign tourist arrivals to the country”.
Through this wide-ranging campaign, the ministry aims to promote various tourism products, including medical and spiritual tourism.
There have been a lot of positive initiatives, says Mr Kandadai.
The government’s tourism campaigns are “building awareness” and helping to “position India as a far more diverse place for people to come an experience right now” – a move away from just focusing on the traditional, core attractions such as the Taj Mahal, the state of Rajasthan and Goa’s beaches.
“There’s a lot of unexplored places in the country, such as architectural tourism in the south, which is very interesting, incredible historical tourism, and the diversity in the north-east of India,” Mr Kandadai says. “There is a lot of progressive traffic to these destinations as well.”
It is not only international tourists who are valuable to the industry. With a huge market on its own doorstep, domestic tourism is vital to hotels, airlines, and the broader industry.
The number of trips taken by Indians within India totalled more than 1.6 billion in 2016, official statistics show.
Rising middle-class incomes and the expansion of budget airlines mean this segment is also poised to expand.
“We believe that we have the potential for our tourism industry to beat all the countries,” says Amit Sukhija, the project director at King’s Park Street, a cultural hub set up by Delhi Tourism.
He says public-private partnerships for the development of tourism projects could help India boost the sector.
For India’s tourism sector, all the signs point to spectacular growth.