2012

Hospitality & Tourism in India

Sustainable tourism & its impact
Bhupinder Singh

Diploma In

Hospitality &

Destination

Management

TEC International College

Hospitality & Tourism in India 2012 Table of contents Sr no. 1 2 3 4 5 6 7 8 Introduction Hospitality industry in India Opportunities in hospitality sector Tourism Industry in India Opportunities in tourism industry of India Impact of sustainable tourism Conclusion References Index Page 2 3 4 5 6 7 7 8

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1. Introduction
Tourism, is defined as the activities of people from different countries traveling to and staying in places outside their usual environment for a specific period. It can be for leisure, business or other purposes. Tourism industry is a dynamic and competitive industry. It requires to constantly adapting to customers' changing needs and desires, as the customers satisfaction, safety and enjoyment is the motto of tourism businesses.Tourism has been especially important in the developing world, it is a business providing and entertainment for tourists. Tourism as we understand the term today is of relatively modern origin. It is a business, which creates to the need of the tourists like provides lodging, transport, entertainment and information. It is identified as one of the worlds largest industries with annual growth rate of 5 percent over the past twenty years. It generates substantial economic benefits to both host countries and tourists home countries. There are different types of tourism. The recent trend is moving toward niche segments of tourism: Medical/healthcare tourism Adventure tourism Heritage tourism Ecotourism Rural tourism Pilgrimage tourism

Hospitality, on the other hand includes services, which involves act of kindness in welcoming and looking after the needs of guests or strangers, mainly relating to food, drink and accommodation. These services are provided by Hospitality industry, which includes companies or organizations providing food/drinks/accommodation to people who are their guests. This industry compromises of two services provided, which are Accommodation:-it mainly consists of places like public houses, resorts, inn, hotels, hostels, serviced apartments, and motels, where a place is provided to the guests to rest or accommodate during their stay in place away from home Entertainment areas:- it includes clubs and bars, restaurants, fast foods, and nightclubs, where other facilities relating to hospitality are provide such as food, entertainment etc.

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2. Hospitality industry in India
The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India. It has evolved into an industry that is sensitive to the needs and desires of people. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry. The Indian hospitality industry has recorded healthy growth fuelled by robust inflow of foreign tourists as well as increased tourist movement within the country and it has become one of the leading players in the global industry. Foreign tourist arrivals (FTAs) into the country increased steadily from 2002 to 2008. However, they dipped in 2009, due to the global economic slowdown; but the impact on the Indian industry was much lower than that on the global counterparts. FTAs are expected to increase in 2012. On the other hand, domestic tourist movement within the country was the highest in 2009. The Indian hotel industry normally experiences high demand during October April, followed which the monsoon months entail low demand. Usually the December and March quarters bring in 60% of the years turnover for Indias hoteliers. However, this trend is seeing a change over the recent few years. Hotels have introduced various offerings to improve performance (occupancy) during the lean months. These include targeting the conferencing segment and offering lucrative packages during the lean period.Here is an overview of the Indian hotel industry:-

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3. Opportunities in hospitality sector
The Indian Hospitality industry contributes around 2.2 per cent of Indias GDP. The industry is expected to reach INR 230 bn (US$ 5.2bn) by 2015, growing at a robust CAGR of 12.2 per cent. India will be investing around INR 448 bn (US$ 10.1 bn) in the hospitality industry in the next five years, according to a report The Indian Hotel Industry Report - 2011 Edition by CYGNUS Business Consulting & Research Firm. In the next two years, a total investment of US$ 12.2 bn (INR 545.2 bn) is expected that will add over 20 new international brands in the hospitality sector. Around 500 mn domestic tourists are projected to travel across India by 2010 compared to around 325 mn in 2006 and growing at over 10% annually.India's hospitality sector is expected to see an estimated investment of US$11.41 bn in the next two years, and around 40 international hotel brands making their presence in the country by 2011, providing over 400,000 jobsaccording to a report by MaFoi Management Consultants. Other important aspects of Indian hospitality industry are given as below:According to Department of Tourism,the industry supports 48 million jobs, directly or indirectly or 8.27 per cent of total employment and accounts for 5.83 percent of the GDP, estimates. According to an HVS International report, average employee to room ratio is 1:8 in Indian hotels across all markets and drops to 1:5 for three star category of hotels. The report also states that the hotel sector would need a fresh workforce of atleast 94,000 by 2011-12. India currently has over 200,000 hotel rooms spread across hotel categories and guest-houses and is still facing a shortfall of over 100,000 rooms (source: FHRAI). The country is witnessing an unprecedented growth in hotel constructions and will be adding almost 114,000 hotel guest rooms to its inventory over the next five years. (source: HVS) In conclusion, we can say that, the prospects for the hotel industry in India are bright. With revival in the global economy, international tourist inflow into the country is expected to rise. Additionally, hosting of international sports events and trade fairs and exhibitions in the country are expected to aid both inflow of international tourists and domestic tourist movement.The upcoming industrial parks, manufacturing facilities and ports across the country provide a good opportunity for budget and mid-market hotels. Although around 89,500 additional rooms are expected to come up in India in the next five years, the supply of branded/quality rooms in India is much lower compared to other countries across the globe. Hence, there exists huge potential for investors and operators across all the segments of hotel industry in India. The increase in room inventories is expected to make the hotel industry more competitive and hotels would be under pressure to maintain quality and service levels at competitive prices. While there isimmense potential, concerns for growth of the industry remain. These include high real estate prices in the country, security threats, shortage of manpower, high tax structure, and non-uniformity in taxes.
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4. Tourism Industry in India:Indian tourism offers most diverse pr oducts globally. The countrys rich history, cultural heritage, beauty, diversity of religion and medicine fascinate budget and luxury travelers. Tourism in India has registered significant growth over the years. This has been led by growth in both leisure and business tourism. Rising incomes, increasing affordability, growing aspirations, increasing globalization, and a growing airline industry along with improvement in travel-related infrastructure have supported industry growth. Tourism holds immense potential for the Indian economy. It can provide impetus to other industries through backward and forward linkages and can contribute significantly to GDP. Some of the statistical data about tourism in India is given below:-

Indias travel and tourism industry is expected to generate revenue of Rs. 1,970 bn (US$ 42 bn) in 2010, according to the World Travel & Tourism Council (WTTC). This would be around 3.1% of total GDP. However, since travel and tourism touches all sectors of the economy, its real impact is greater and the travel and tourism economy directly and indirectly accounts for ` 5,533 bn (US$ 118 bn), equivalent to 8.6% of total GDP.The breakup for Indian tourism industry is as follows:-

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5. Opportunities in tourism industry of India
According to the latest Tourism Satellite Accounting (TSA) research, released by the World Travel and Tourism Council (WTTC), the demand for travel and tourism in India is expected to grow by 8.2 % between 2010 and 2019. This will place India at the third position in the world. India's travel and tourism sector is expected to be the second largest employer in the world. Capital investment in India's travel and tourism sector is expected to grow at 8.8 % between 2010 and 2019. The report forecasts India to get more capital investment in the travel and tourism sector and is projected to become the fifth fastest growing business travel destination from 2010 through 2020.According to World Travel and Tourism Council, India will be a tourism hot-spot from 20092018, having the highest 10-year growth potential. The Tourism sector is expected to contribute around INR 3,414.8 billion (US$ 77.0 billion*) by 2021, according to a report by the World Travel and Tourism Council (WTTC). According to the Tourism Satellite Accounting (TSA) research, released by World Travel and Tourism Council (WTTC) and its strategic partner Oxford Economics in 2011: India is expected to attract 6,179,000 international tourist (overnight visitor) arrivals in 2011, generating INR 678.6 billion (US$ 15.3 billion) in visitor exports (foreign visitor spending, including spending on transportation). By 2021, international tourist arrivals are forecast to total 11,149,000, an increase of 6.1 per cent pa generating expenditure of INR 1,344.7 billion (US$ 30.3 billion*). The Travel & Tourism sector is expected to attract capital investment of INR 1,233.0 billion (US$ 27.8 bn), rising by 8.7 per cent pa to INR 2,827.5 bn (US$ 63.7 bn). This means that the sectors share of total national investment will increase from 4.7 per cent in 2011 to 4.8 per cent in 2021. The TSA research also states that the Travel & Tourism sector is expected to support directly 24,931,000 jobs (5.0 per cent of total employment) in 2011, rising by 2.0 per cent pa to 30,439,000 jobs (5.2 per cent) by 2021. At last we can say that the country has the potential to become a major global tourist destination, with the Tourism sector expected to contribute around INR 3,414.8 billion (US$ 77.0 billion*) by 2021, according to a report by the World Travel and Tourism Council (WTTC).With changing times and global business conditions, significant changes have been observed in the Indian travel and tourism industry. Lifestyle changes and higher disposable incomes have resulted in shifting travel preferences and travelers are looking for out-of-the-box experiences. Consequently, travel service providers are offering niche, customized tourism products. This has led to emergence of niche segments such as wine tourism, popculture tourism, cruise tourism, wellness tourism, monsoon tourism etc. Tour companies are also willing to customize products as per travelers choices/preferences.
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6. Impact of sustainable tourism:The World Tourism Report defines sustainable tourism "as a model form of economic development that exemplifies stewardship of environment and sensitivity to community and cultural aspirations." A new dimension has been added by sustainable tourism. It takes into account both the conservation and preservation of the physical and cultural environment of a particular region. Hence, under sustainable tourism natural resources of the locality are to be located within the parameters, which would not degrade the natural assets and the traditional livelihood of the community. Tourism is also a major contributor to this bleak future for mankind. Tourism market is growing at a faster pace than ever before. This is true for most of the countries that are known as the major tourism destinations in tourism map. However, the pace of popularization of the buzz words such as ecotourism, sustainable tourism, environmental tourism etc. is much faster than the growth in tourism in India. The Ministry of Tourism in its initiative to achieve Sustainable Tourism growth is in the process of evolving the Sustainable Tourism Criteria for India. In recent years tourism industry in India has registered a considerable growth. A Steering Committee with representatives from all the sectors of the tourism and hospitality industry of India has been constituted to develop draft Sustainable Tourism Criteria which would eventually be adopted by the different sectors of the industry.

7. Conclusion:The Tourism sector in India is providing an important contribution towards the growth of the countrys economy, with the sector recording double digit growth in FEEs and FTVs in the recent past. Further, the Government measures such as promoting India thro ugh Incredible India project is not only providing a holistic experience to the tourists visiting India but is also showcasing the opportunities to the investors in the tourism sector.

The sector is further expected to gain through the development of a comprehensive and coordinated framework, by capitalizing on the existing infrastructure and building upon the strength of Indias position as the fastest growing free market economy.

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8. References:Literature 1. K. V. Ravisankar, Tourism: A Social Uplifter, Tourism India, Vol.,11, March, 2011 2. FauziaFarha, The Impact of September 11 Attack on Tourism Industry inIndia, MTA Project Report, submitted to the Department of Commerce,A.M.U. Aligarh, 2003. 3. G. GanapathySubramaniam, Tourism Industry Aims Global Tie- ups to boostBrand India, Times News Network, Chennai, December, 8, 2003. 4. Meier and Baldwin, Economic Development: Theory and Policy. 5. Charles P. Kindleberger and Bruce Herrick, Economic Development. 6. Dudley Seers, The Meaning of Development, 11thWorld Conference of theSociety of International Development. 7. Sustainable tourism II by Ca. A. Brebbia, F. D. Pineda 8. Bhatia A.K (2010) Tourism in India, sterling publishers Pvt. Ltd., New Delhi. 9. Leos notes, Burst of activity in tourism sector, the Hindu, Friday, december22, 2010,p.18 10. Dharmarajan s. and aviation, s (1996) tourism a close linkage, yojana, vol. 40, no. 8, p. 27. 11. Ecomomic impact, no.29 international communication agency, Washington. D.C; USA, 2011/1, pp.34-37. 12. Harisha, N., jayasheela and basil hans, V.(2008) tourism Industry in Karnataka: An overview , Southern economist , vol. 46, no. 20, pp. 33-36. 13. Revathy, s. (2008) tourism: Indian awakens to incredible opportunities , Southern economist , vol. 45,no. 14,pp. 18-20. 14. Bheemaraj, p. (2008) importance of tourism in Economic development: a micro study ,Southern economist, vol. 46 no. 20, pp. 35-38.

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