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| Specialization: Hospitality |
The Indian tourism and hospitality industry is on a roll, driven by the huge surge in both business and leisure travel by domestic and foreign tourists. The year 2007 was not only a record year for India's inbound tourism but was the fifth consecutive year showing a double-digit increase in foreign tourist arrivals.
The growth of tourist inflow into India was well above world average, leading to a rise of India's share in World arrivals from 0.37 per cent in 2001 to 0.53 per cent in 2006. Also, as noted by UN World Tourism Organization (UNWTO), the growth of Indian tourism industry was instrumental in the 'emergence' of South-Asia as a tourist destination.
Further, tourism is an important industry in Indian economy contributing around 6.8 per cent of the Gross Domestic Product and providing employment to over 41 million persons.
The booming tourism industry has had a cascading effect on the hospitality sector with an increase in the occupancy ratios and average room rates. While occupancy ratio is around 75-80 per cent, the average increase in room rates has been hovering around 22-25 per cent.
And with the continuing surge in tourist inflow, this sector is likely to offer tremendous opportunity for investors. The estimated number of required hotel rooms is around 240,000, the current availability is just 90,000 rooms - leaving a shortfall of 150,000 rooms to be provided.
With such a huge potential available in this segment, several global hotel chains like the Hilton, Accor, Marriott International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI), Intercontinental Hotels group and Hampshire among others have all announced major investment plans for the country.
The Government's move to declare hotel and tourism industry as a high priority sector with a provision for 100 per cent foreign direct investment (FDI) has also provided a further impetus in attracting investments in to this industry.
It is estimated that the hospitality sector is likely to see an investment of US$ 11.41 billion in the next two years, with around 40 international hotel brands making their presence in the country by 2011.
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Indian hotel sector is on a high growth path with the surge in business as well as leisure travelers in the country |
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Foreign arrivals growing at a steady rate of 11-15% p.a. and are expected to grow further with increased investment n the tourism sector |
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Approximately 30,000 rooms in the premium segment entailing an investment around Rs. 428 billion are expected to come up in the top 10 cities of India |
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Significant shortage of rooms across all categories in the country |
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Mid-end and budget hotels presenting a potential growth opportunity |
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Increased interest by foreign hotel brands and investors |
Government initiatives
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To unlock the huge potential in this sector, the Government has taken various initiatives for the development of this sector. |
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Launch of Incredible India campaign to promote tourism both in domestic and international markets. |
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Recognition of spare rooms available with various house owners by classifying these facilities as "Incredible India Bed and Breakfast Establishments”, under 'Gold' or 'Silver' category. |
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A new category of visa, "Medical Visa" (M'-Visa), has been introduced which can be given for specific purpose to foreign tourists coming into India. |
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Guidelines have been formulated by Department of AYUSH prescribing minimum requirements for Ayurveda and Panchkarma Centres. |
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Ministry of tourism has tied up with United Nations Development Programme (UNDP) to promote rural tourism. |
International Recognition
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Along with the growth of this industry, international accolades have been pouring in, rising India's appeal as a leading global tourist destination. |
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India has been elected to head the UN World Tourism Organisation (UNWTO), the highest policy making world tourism body represented by 150 countries. |
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The world's leading travel and tourism journal, "Conde Nast Traveller", ranked India as the numero uno travel destination in the world. |
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The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50 places for 2006. |
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The "Incredible India" campaign has been ranked as the Highest Recall Advertisement worldwide by "Travel and Leisure". |
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India was adjudged Asia's leading destination at the regional World Travel Awards (WTA). |
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India's Taj Mahal continues to figure in the Seven Wonders of the World. |
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Bangalore-based Leela Palace Kempinski has been rated as the favourite business hotel in the world in a Readers' Choice Awards by Conde Nast Traveller. |
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