Exploring the Prospects of the Indian Hotel Industry
The Indian tourism sector has emerged as a significant industry and is deemed as the sunrise sector of the overall economy, a significant employment generator, and a compelling source of foreign exchange for the country. According to data published by the World Travel and Tourism Council (WTTC), India has become one of the favorite tourist destinations and will continue maintain the trend in the coming years. Further, another report published by the World Economic Forum reveals that India is placed sixth in tourism and hospitality across the world. The development of the Indian hotel and tourism industry is mainly attributed to the Indian government, which has undertaken several steps to make India a global tourism hub.
Hotel industry is at the centre of tourism development in India
The hotel industry in India is thriving primarily on the back of growth in tourism and travel. Owing to the growing prominence of tourism with increasing number of foreign and domestic tourists, the hotel sector is expected to remain affluent going forward. There is an emergence of budget hotels in India to cater to the significant section of tourists who seek affordable stay. International hotel brands are increasingly venturing in the hotel industry in India to seize the sizeable opportunity in the market, which arises from the imbalance in the demand and supply of rooms for tourists in the country. The tourism industry in India is largely dependent on business travelers but tourist traffic is also on the rise. Also, there is an alarming increase in the demand for medical tourism.
Hotel industry in India on growth trajectory
The demand-supply gap for tourist accommodation in India is very real and needless to say, there is need for more hotels. The shortage is alarming within the budget hotels and the mid-market hotels segment and there is an urgent need for hotels in this segment as travelers seek affordable accommodation. Various domestic and international brands have made significant inroads into this space and more are expected to follow as the potential for this segment of hotels becomes more obvious. The hotel industry in India is also looking promising owing to the rising popularity of online travel agents (OTAs) that offer a single marketplace for all travel-related needs. There are also seen meta search engines like TripAdvisor and MakeMyTrip, that operate like travel discovery platforms. Further, online accommodation reservation services like Oyo Rooms are also gaining significant popularity. Apart from this, branded hotels are seen operating direct bookings through their websites.
The optimistic outlook on the Indian hotel industry is mainly down to the government initiatives that are catapulting the growth of the overall tourism in the country. Indian government has realised the country's potential in the tourism industry and has taken several steps to make India a global tourism hub. The "Clean India" campaign and development of inland waterways for transport and tourism are projects that have gained momentum over the previous year. Apart from these initiatives, the government is proactively seeking foreign investment to trigger a rise in business related travel to the country. The hotel sector has potential for growth on the back of increases in disposable incomes, increase in foreign tourist arrivals, momentum from government-led initiatives, and the burgeoning middle-class population.