The hotel industry's contribution to India's GDP is expected to reach $1 trillion by 2047 HAI
The direct contribution of the Indian hotel industry to the country's GDP is estimated to touch $1 trillion by 2047, driven by a significant jump in domestic tourist visits and international arrivals. As per the 'Vision 2047: Indian Hotel Industry' by the Hotel Association of India (HAI) and Benori Knowledge, the direct contribution of the hotel industry to GDP was $40 billion in 2022 and is expected to reach $68 billion by 2027. By 2047, it will reach around $1 trillion, it added.
The hospitality industry body also pointed out that for the sector to achieve its target, the accommodation growth will have to go beyond the metros to two and three-tier cities and also to the rural areas. The, however, clarified that the total contribution includes aspects of services from corresponding industry verticals such as food and beverage, salon & spas but excludes consideration of services market growth and thus taking out scenario-based contribution estimates.
"The number of domestic and international tourists visiting various states in India for business and recreational reasons is rapidly increasing. All these factors have created new opportunities in tourism and the hospitality industry," they said. While macroeconomic factors, technology, environment and social sustainability, and policy support will be important factors, HAI Secretary General M P Bezbaruah said that "overarching all the factors will be the sustainability of the sector and of all the operations."
"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 major plank of the future tourism because tourists are looking for new experiences," he asserted. Bezbaruah also reiterated the need for giving industry and infrastructure status to the sector, saying it would help in the development of more rooms in order to bridge the demand and supply gap.
They pointed out that after the pandemic, the hospitality industry witnessed a shift in consumer preference, and the service providers have found new ways to move forward, with hotel companies acknowledging the significant 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 said, adding the industry is on its journey for digital transformation, where operations are becoming leaner.
The hospitality industry body also pointed out that for the sector to achieve its target, the accommodation growth will have to go beyond the metros to two and three-tier cities and also to the rural areas. The, however, clarified that the total contribution includes aspects of services from corresponding industry verticals such as food and beverage, salon & spas but excludes consideration of services market growth and thus taking out scenario-based contribution estimates.
"The number of domestic and international tourists visiting various states in India for business and recreational reasons is rapidly increasing. All these factors have created new opportunities in tourism and the hospitality industry," they said. While macroeconomic factors, technology, environment and social sustainability, and policy support will be important factors, HAI Secretary General M P Bezbaruah said that "overarching all the factors will be the sustainability of the sector and of all the operations."
"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 major plank of the future tourism because tourists are looking for new experiences," he asserted. Bezbaruah also reiterated the need for giving industry and infrastructure status to the sector, saying it would help in the development of more rooms in order to bridge the demand and supply gap.
They pointed out that after the pandemic, the hospitality industry witnessed a shift in consumer preference, and the service providers have found new ways to move forward, with hotel companies acknowledging the significant 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 said, adding the industry is on its journey for digital transformation, where operations are becoming leaner.
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