THE DEVELOPMENT CURVE

We know why the hospitality segment is booming in India. Now read about the markets that the big hospitality groups are expanding to and the potential they hold — from Raipur to Siliguri, and Kolkata to Chennai

- DEEPALI NANDWANI

Let me put before you a few numbers about the Indian tourism and hospitality industry:

• In 2018, the tourism segment earned India Foreign Exchange Earnings of US$ 28.59 billion, an increase of 4.70 per cent* year-on-year. Overall, the sector generated USD 247.3 billion (INR 16.91 trillion) in 2018, accounting for 9.2% of the total economy.

• According to IBEF, the tourism and hospitality sector’s direct contribution to GDP surged by 23.6% in 2017, raising the share of the industry (direct & indirect) to INR 5.9 trillion (US$ 91.3 billion).

• India has only 103,000 hotel rooms in all categories compared to Bangkok city, which alone boasts 125,000 rooms, according to the Federation of Hotels and Restaurant Association of India (FHRAI).

• Foreign tourist arrivals are likely to touch 15 million by 2020. And then there are domestic tourists, business travellers and leisure travellers. India needs a minimum of 180,000 more hotel rooms at the least (again, FHRAI figures).

• According to CARE Ratings, the expected future inventory in 11 major markets (across categories) is lower at around 49,400 rooms for the next five years (FY19 to FY24). With increasing demand, the major markets can sustain average room rates (ARRs) and grow at 3.5-4.5% per annum, CARE stated. The occupancy is expected to inch up to an average of about 68-70% by the end of FY23 compared with 66.6% in FY18.

• The Indian government is working to garner a 1 per cent share of the world's international tourist arrivals by 2020 and 2 per cent share by 2025.