Scope Of Hospitality Sector

In 2003-04 the hospitality industry contributed only 2% of the GDP. However, it is projected to grow at a rate of 8.8% between 2007-16, which would place India as the second-fastest growing
tourism market in the world. This year the number of tourists visiting India is estimated to have touched the figure of 4.4 million. With this huge figure, India is becoming the hottest tourist destination. The arrival of foreign tourists has shown a compounded annual growth of 6 per cent over the past 10 years. Besides, travel and tourism is the second highest foreign exchange earner for India. Moreover, it is also estimated that the tourism sector will account for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.
  GDP Employment Visitor Export Personal T&T Capital Investment

Govt. Expenditure
Outlook for 2006 7.80% 1.40% 10.90% 6.90 % 8.30% 7.70%
Outlook for 2007-2016 6.60% 1.00% 7.80% 6.70% 7.80% 6.60%

Future of hospitality sector:

To boost up the growth of tourism in India, the government has proposed to invest Rs. 520 crore in 2007-2008. Tourism in expected to grow further over the next few years due to the changes taking place on the demand and supply sides. The factors that will account for the further growth of tourism will include the following:

  • Change in standards of living
  • More disposable income
  • Better education
  • Long leisure time
  • Aging population

    Owing to growth of tourism sector, infrastructure will improve, competition will increase, new
    products will come into markets and better services will be provided. Due to the rapid growth in tourism, the hotel industry is also booming. Many international players like Le Meridien and Accor are heading towards Indian markets to expand their business. With government's full support in developing infrastructure, increase in demand, open sky policies and increased competition, the hospitality industry is getting consolidated and has many more opportunities to grow further.