India's hotel sector could contribute $1 trillion to GDP by 2047
The hotel sector in India is projected to break through the $1 trillion barrier sometime in the 2040s, according to a new report by the Hotel Association of India.
The Indian hotel sector is predicted to contribute $1.5 trillion to the economy by 2047, up from $65 billion in 2022, on the back of a compound annual growth rate of 15% in the overall hospitality and tourism industry. The total contribution of the wider hospitality and tourism includes related services like food, beverages, and accommodation, and could create 53 million jobs by 2029, according to the report.
Being such a huge and wildly diverse country, India’s tourism industry has a lot to offer. The country attracts all types of visitors in different niches – from business and religious visits to the up-and-coming luxury, adventure, and eco-tourism.
Of the more than 6 million tourists that visited India in 2022 (a dramatic drop from the pre-pandemic 17.4 million in 2019), the majority were domestic tourists, who largely drive the nation’s tourism industry.
To reach $1 trillion, the sector must be able to count on the government for support. There must also be a plan to increase international visits and the sector needs to make more accommodations in India’s smaller and less developed cities.
According to the report, domestic tourist visits are projected to rise from 677 million in 2021 to 1.5 billion by 2030 and 15 billion by 2047 in the long term. International visitors are expected to reach 15 million by 2024, 25 million by 2030, and 100 million by 2047.
“The tourism industry is going through a significant transformation and technology has helped us enhance customer engagements. Convergence of efforts at different levels and collaboration between the government and private stakeholders will be the key to the successful realization of the vision of creating jobs and contributing to the national growth story,” said Puneet Chhatwal, the president of the Hotel Association of India.
Above all, the Indian tourism sector should prioritize recovering from the dramatic drop in foreign tourist visits. The top visited states for foreign visitors in India are Punjab (29%), Maharashtra (17.6%), and Delhi (9.5%), with the majority of those tourists coming from the United States and Europe.
Around 40% of the foreign tourists that visited India last year were from the Indian diaspora and some 20% were medical tourists.
