According to a report, the direct contribution of the Indian hotel industry to the country’s GDP is expected to reach US$ 1 trillion by 2047, driven by a large increase in domestic tourist visits and international arrivals.
According to the Hotel Association of India (HAI) and Benori Knowledge research ‘Vision 2047: Indian Hotel Industry,’ the hotel industry’s direct contribution to GDP was US$ 40 billion in 2022 and is predicted to reach US$ 68 billion by 2027. It was also stated that it would be close to $1 trillion by 2047.
The hotel industry association also stated that in order for the sector to meet its targets, lodging expansion must extend beyond metro areas to two and three-tier cities, as well as rural areas.
However, the paper highlighted that the total contribution includes characteristics of services from relevant business verticals such as food and beverage, salon & spas, but excludes consideration of services market growth, therefore excluding scenario-based contribution estimations. According to the report, the predicted growth can be linked to variables such as GDP growth and income level increase, increase in the inflow of domestic tourists and foreign tourist arrivals (FTA).
Domestic tourist visits are predicted to expand from 677 million in 2021 to 1.5 billion by 2030 in the mid-term (2027-2037) and to 15 billion by 2047 in the long term (2037-2047), according to the report. According to the paper, Foreign Tourist Arrivals (FTAs) in India are expected to rise from 1.5 million in 2021 to 15 million by 2024, reach 25 million by 2030, and “are further projected to grow, attracting 100 million tourists by 2047”.
According to HAI Secretary General M P Bezbaruah, “overarching all factors will be the sustainability of the sector and all operations. We have said that the government’s policy of convergence of all stakeholders is a crucial factor because the hospitality and tourism will not achieve this target unless for example, the civil aviation grows to the same extent that we have expected, unless the connectivity to the remote areas which we are assuming there’ll be great growth, is happening through Gati Shakti and other things.”
Also on the accommodation front, Bezbaruah said in order to host the expected rise in both domestic and foreign tourists, destinations need to increase not in the metro cities but has to spread out far wider “otherwise there will be so much pressure that some of the places will become unviable”. He also emphasised the importance of providing the sector industry and infrastructure status, claiming that it will aid in the building of more rooms, bridging the demand and supply imbalance.
According to the report, the hospitality industry experienced a shift in customer demand during the pandemic, and service providers have found new ways to move forward, with hotel corporations recognising the huge potential of domestic tourism.
Major firms are diversifying into the mid-market segment to build affordable hotels and provide for an increase in inbound traffic, the report stated, adding that operations are getting leaner as the industry moves towards digital transformation.
