The association for the hotel industry also made the point that, in order for the sector to reach its goal, lodging growth must expand outside of metro areas into second- and third-tier cities as well as rural areas.
A large increase in domestic travel and foreign visitors is expected to boost the Indian hotel industry’s direct GDP contribution to reach $1 trillion by 2047, according to a report.
According to the Association of India (HAI) and Benori Knowledge, the hotel sector’s direct GDP contribution was $40 billion in 2022 and is projected to increase to $68 billion by 2027.
It will top $1 trillion by 2047, it was said.
The association for the hotel industry also made the point that, in order for the sector to reach its goal, lodging growth must expand outside of metro areas into second- and third-tier cities as well as rural areas.
The report made it clear that the total contribution does take into account aspects of services from related business verticals, such as food and beverage and salons and spas, but does not take into account the expansion of the services market, eliminating scenario-based contribution estimations.
The paper claims that variables including GDP growth, rising income levels, a rise in both domestic and international visitor arrivals (FTA) are to blame for the predicted gain.
Domestic tourist visits are anticipated to rise from 677 million in 2021 to 1.5 billion by 2030 and then further to 15 billion by 2047 in the long term (2037-2047), according to the report.
According to the survey, there would be 1.5 million international visitors arriving in India in 2021, 15 million by 2024, 25 million by 2030, and “are further projected to grow attracting 100 million tourists by 2047.”
“For both business and pleasure, more and more local and foreign tourists are traveling to different Indian states. According to the survey, all of these variables have opened up new prospects in the tourist and hospitality sectors.
The sustainability of the industry and of its activities will be the most essential aspect, according to HAI Secretary General M P Bezbaruah, who told PTI that macroeconomic factors, technology, environmental and social sustainability, and governmental support will all be significant factors.
Regarding policies, he stated, “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.”
On the subject of lodging, Bezbaruah added that in order to accommodate the expected rise in both domestic and international travelers, destinations must expand outside of major cities because “otherwise there will be so much pressure that some of the places will become unviable”.
“Our vision is that the accommodation growth will have to go to two-tier, three-tier cities and also to the rural areas because real tourism is going to be one of the major planks of the future tourism because tourists are looking for new experiences,” he asserted.
Bezbaruah also emphasized the necessity of giving the sector industry and infrastructure status, claiming that doing so would encourage the construction of more rooms and close the gap between the supply and demand for them.
According to the report, the hospitality sector experienced a shift in consumer preferences as a result of the pandemic, and service providers have discovered innovative ways to move forward. Hotel operators have begun to recognize the huge potential of domestic tourism.
“Major players are diversifying into the mid-market segment to develop budget hotels and cater to increase the inbound travel,” it added, noting that operations are getting leaner as the industry moves toward digital transformation.