Tourism: India (ministry data, internal travel)
I
Ministry data
This article has been sourced from an authoritative, official readers who wish to update or add further details can do so on a ‘Part II’ of this article. |
The source of this article
INDIA 2012
A REFERENCE ANNUAL
Compiled by
RESEARCH, REFERENCE AND TRAINING DIVISION
PUBLICATIONS DIVISION
MINISTRY OF INFORMATION AND BROADCASTING
GOVERNMENT OF INDIA
Tourism: India
Tourism has been a major social phenomenon of societies all over the world. It is driven by the natural urge of every human being for new experiences, and the desire to be both educated and entertained. The motivations for tourism also include religious and business interests. The basic human thrust for new experience and knowledge has become stronger, as communication barriers are getting overcome by technological advances. Progress in air transport and development of tourist facilities have encourged people to venture beyond the boundaries.
The importance of Tourism as an instrument of economic development and employment generation, particularly in remote and backward areas, has been well recognized the world over. It is a large service industry globally in terms of gross revenue as well as foreign exchange earnings. Tourism is recognized as a powerful engine for economic growth and employment generation in the country. The contribution of tourism to the country's GDP and the total jobs was 5.92 per cent and 9.24 per cent respectively during 2007-08.
India's performance in tourism sector has been quite in impressive. During the period 2002 to 2010. India witnessed an increase in the Foreign Tourist Arrivals (FTAs) from 2.38 million to 5.58 million resulting in the average annual increase of about 11.2 per cent. The growth rate of 8.1 per cent observed in FTAs in India i the year 2010 over 2009 was higher than the growth rate of 6.7 per cent observed in 2010 for the world as a whole. India's share in world tourism market during the yera 2002 was 0.34 per cent which grew to 0.60 per cent during the year 2010. Foreign Exchange Earnings (FEE) from tourism increased from Rs. 15064 crore in 2002 to Rs. 64889 crore in 2010 with an annual growth rate of 20.0 per cent. The FEE in US$ terms in 2002 was US$ 3.10 billion, which increased to US$ 14.2 billion in 2010 with an annual grwoth rate of 20.9 per cent.
Domestic tourism plays an important role in the overall development of tourism in the country. The number of domestic tourist visits increased from 270 million in 2002 to 650 million in 2009 with an average annual growth rate of 13.4 per cent.
Important initiatives during 2010-11 :
l Ministry of Tourism, in collaboration with other stakeholders, rewarded the spectacular performance of the Indian Medal Winners in CWG 2010 through incentives. These included complementary travel packages in luxury trains, two nights-three days hotel packages in selected hotels, and Golden Triangles (Delhi-Agra-Jaipur-Delhi) tour for three nights & four days.
l During the year 2010, Social Awareness Campaigns on TV, Radio and outdoor media were released with the objective of sensitizing the masses and stakeholders about the importance of tourism. Campaign on Radio and TV were released to promote Delhi as a tourist destination in the backdrop of Commonwealth Games 2010. Campaigns were released in print & electronic Media in various international source markets to project India as a holistic destination.
l As a successful culmination of the collaborative and proactive efforts of Ministry of Tourism with Ministry of Road Transport & Highways and other stakeholders, the seamless movement of commercial tourist vehicles took off as the first tourist vehicle left for Agra on 18th July 2010.
l The Code of Conduct for "Safe & Honorable Tourism" was adopted on 1st July, 2010. This initiative has been taken essentially to strengthen the critical pillar of 'Suraksha' (Safety) envisaged in the National Tourism Policy 2002, and ensure that Indian tourism follows international standards of safe tourism practices applicable for both tourists and local residents. The Code has been formed to sensitize travelers and the travel industry, prevent exploitation, specifically of woman and children, and to make India a safe and honorable tourism destination. Efforts were made towards sensitizing the stakeholders about the importance of sustainable tourism. Consequent to these efforts to pledge for commitment towards Sustainable Tourism was taken by stakeholders of travel trade and hospitality industry on 27th September, 2010 the World Tourism Day.
ORGANISATION
Ministry of Tourism is the nodal agency to formulate national policies and programmes for the development and promotion of tourism. In the process, the Ministry consults and collaborates with other stakeholders in the sector including various Central Ministries/agencies, the State Governments/Union Territories and the representatives of the private sector.
Secretary (Tourism), who is also the ex-officio Director General (DG) of Tourism, is the executive Chief of the Ministry. The Directorate General of Tourism, which is an attached office of the Ministry, has 20 field offices within the country and 14 overseas offices. While the overseas offices are in constant contact with tourist, travel intermediaries and media to promote tourism in India, the field offices in India provide facilitation services to tourist and coordinate with the State Governments on tourism infrastructure development. The main objectives of the overseas tourist offices are to position India in the tourism generating markets as a preferred tourist destination, to promote various Indian Tourism products vis-a-vis competition faced from various destination, to promote various Indian Tourism products vis-a-vis competition faced from various destinations and to increase India's share in the global tourism market. These objectives are met through an integrated marketing strategy and synergized promotional activities undertaken in association with the Travel Trade and State Governments.
Some of the important organizations under the administrative control of Ministry of Tourism are Indian Institute of Tourism and Travel Management (IITTM), National Council for Hotel Management and Catering Technology (NCHMCT). India Tourism Development Corporation (ITDC), Indian Institute of Skiing and Mountaineering (IISM) and National Institute of Water Sports (NIWS) merged with the IITTM.
The Ministry of Tourism is responsible for formulation and implementation of policies and programmes for the development and promotion of tourism within the country and for attracting foreign tourists to India by way of developing tourism infrastructure, publicity and promotion, dissemination of information, co-ordination of activities of various segments of industry such as hotels, travel agencies, tour operators, etc.
India Tourism Development Corporation Limited
India Tourism Development Corporation (ITDC) is the only Public Sector Undertaking of the Ministry of Tourism. Incorporated on 1st October, 1966, the ITDC played a key role in the development of tourism infrastructure in the country. Apart from developing the largest hotel chain in India, the ITDC offered tourism related facilities like transport, duty free shopping, entertainment, production of tourist publicity literature, consultancy etc.
After the disinvestment of 18 hotels, ITDC consolidated its remaining activities and restructured itself to take up diversified service-oriented business activities like consultancy and execution of tourism and engineering projects, training consultancy in hospitality sector, event management and mounting of Son-et- Lumeire (SEL) Shows etc.
The Present network of ITDC consists of 8 Ashok Group of Hotels, 7 Joint Venture Hotels, 2 Restaurants, 11 Transport Units, 1 Tourist Service Station, 5 Duty Free Shops at airport/seaports, 1 Sound & light Show and 4 Catering Outlets. Besides ITDC is also managing a hltel at Bharatpur, Tourism Complex at Kosi.
Human Resoruce Development
The Ministry of Tourism has accorded high priority to the development of manpower to meet the growing needs of Hotels, Restaurants and other Hospitality based Industries. As of now, there are 33 functional Institutes of Hotel Management (IHMs) comprising 21 Central IHMs and 12 State IHMs and 5 Food Craft Institutes (FCIs). These institutes were set up as autonomous societies with specific mandate to impart/conduct hospitality education/training.
Indian Institute of Tourism and Travel Management
The Indian Institute of Tourism and Travel Managment (IITTM), set up in 1983, is an apex Institute located at Gwalior, is an autonomous body to provide education in Tourism and Trvel Management and to meet the demand for professionally trained people in the tourism industry. The IITTM conducts PG Diploma Programme besides training guides in its speical programme, namely, 'Earn while you Lean'.
National Institute of Water Sports, Goa
The Ministry of Tourism set up the National Institute of Water Sports (NIWS) at Goa as training cum resource centre for the Water Sports Tourism Industry. The NIWS conducts and facilitates courses in various activities like sailing, scuba diving, skilling, etc. The Institute also acts as a nodal centre for water sports-Oriented tourism activities in the country. The administrative control of NIWS stands entrusted to the IITTM.
Capacity Building for service Providers (CBSP)
For upgrading the skills and capacity building of service providers of the Industry, the Ministry commenced the scheme of Capacity Building for Service Providers, under which, trainings are undertaken to cover a wide range of services like health & personal hygiene, cleanliness, basic service techniques, cooking techniques, garbage disposal, etiquette and basic manners, basic nutrition values, energy saving and nutrition saving techniques, guide training etc. It, Inter-alia, covers service providers such as coolies/servers/waiters/helpers/front office staff/reception counter staff/food kiosk and dhaba staff/personnel engaged in handling tourists, airport security staff, immigration officials and custom officers.
The implementing agencies are, amongst others, India tourism Offices, Institutes of Hotel Management, Food Craft Institutes, Indian Institute of Tourism and travel Management (IITTM), Natinal Council for Hotel Managemnt & Catering Technology (NCHMCT), Tourism Departments of States/Ut Governments, State Tourism Development Corporations, India Tourism Development Corporation, State/Central training/academic institutions. Under the scheme, the participants of 4 day programmes are compensated for the loss of wages. The fee and other costs of training for all the programmes are covered. Tourism extends assistance for capacity building in selected villages.
National Council for Hotel Management and Catering Technology
For steering and regulating the academic efforts of the IHMs and FCIs, the Ministry had set up, in 1982, the National Council for Hotel Management and Catering Technology (NCHMCT). The mandate of the NCHMCT is to co-ordinate the growth and general advancement in the development of hospitality management education through its affiliated Institutes. The Council undertakes recruitment; its jurisdiction extends over a wide range of administrative matters including admission, fees, byelaws, syllabus for studies, courses, research and examinations, results; regulating building plans and equipment, training, publishing periodicals, magazines, etc.; as also carrying out of such government approved activities as prescribed from time to time. The NCHMET is also the affiliating body and the 33 IHMs and 6 FCIs that have come up with the support of Ministry are affiliated to it for admissions and regulations of examination. The NCHMCT has been given the mandate to affiliate private IHMs. As of now, 19 private Institutes are affiliated to the NCHMCT. The NCHMCT also conducts Joint Entrance Examination (JEE) on all-India hasis for admission to the first year of the 3-year B.Sc. programme in Hospitality and Hotel Administration in its affiliate institutes.
Approval and Classification of Hotels
To conform to the expected standards for different classes of tourists, especially from the point of view of suitability for international tourists, the Ministry of Tourism classifies hotels under the star system in six categories, from one to Five State Deluxe and Heritage Hotels (introduced in 1994) which is undertaken by the Hotel and Restaurant Approval and Classification Committee (HRACC), set up by the Ministry of Tourism. To expedite the ongoing process of classification/re-classification of functioning hotels in one to three state categories, five Regional Committees have also been set up in Delhi, Mumbai, Kolkata, Guwahati and Chennai to conduct inspection.
Heritage Hotels
A Special category for classification of heritage hotels has been introduced to cover functioning of hotels in palaces, havelies, castles, forts and residences built prior to 1950. As the traditional structure reflects the ambience and lifestyle of the bygone era and is immensely popular with the tourists, the scheme is aimed to bring such properties into the approved sector and this ensures that such properties, landmarks of India's heritage are not lost due to decay and misuse. Such hotels are categorized under three categories viz. Heritage, Heritage Classica nd Heritage Grand based on the standards of facilities and services as per the Guidelines.
Bed and Breakfast Scheme
The Scheme offers foreign and domestic tourists an opportunity to stay with Indian family and enjoy the warm hospitality and a taste of Indian culture and cuisine in a clean and affordable place. With a view to encourage the growth of such establishments and also to simplify the procedure of approvals, the Ministry of Tourism has recently reviewed the scheme and has simplified the guidelines by amending certain norms.
Travel Trade
The Ministry of Tourism has a schemes of approving Travel Agents, Inbound Tour Operators, Adventure Tour Operators, Domestic Tour Operators and Tourist Transport Operators. The aims and objectives of this schemes is to encourage quality, standard and service in these categories so as to promote tourism in India. This is a voluntary scheme open to all bonafide agencies. The Travel Trade Division also interacts with the travel trade associations like travel Agents Association of India (TAAI). Indian Association of Tour Operators (IATO), Indian Tourist Transport operators Associations, (ITTA) etc, and other agencies like India Convention Promotion Bureau (ICPB), Pacific Asia Travel Association (PATA) etc. It also deals with all matters pertaining to the regulation and training of tourist guides at Regional level, and also co-ordinates with other Ministries such as Civil Aviation, Culture, Railways, Surface Transport, External Affairs, Home Affairs on Various issues to improve the faculties for the tourists visiting various destinations in India. Complaint cell of the Ministry for tourist complaints is also under Travel and Trade Division.
Tourist Visa-on-Arrival
Ministry of Tourism introduced "Tourist Visa-on-Arrival (TVoA) Scheme on a pilot basis for a period of one year w.e.f. 1st January, 2010 for tourists from five countries viz. Finland, Japan, Luxembourg, New Zealand, and Singapore at the airports of Chennai, Delhi, Kolkata and Mumbai. (Since 2013 Bangalore, Hyderabad, Kochi and Thiruvananthapuram airports have also had this facility.) The Tourist Visa-on-Arrival Scheme has been now extended for six more countries viz. Cambodia, Laos, Philippines, Vietnam, Myanmar and Indonesia w.e.f. 1st January 2011.
Marketing and Promotion
The Ministry of Tourism, through its 14 ofices overseas endeavors to position India in the tourism generating markets as a preferred tourism destination, to promote various tourism products and to increase India's share in the global tourism market. The objectives are met through an integrated marketing and promotional strategy and a synergized campaign in association with the Travel Trade, State Government and Indian Mission.
Some Major Promotional Activities Undertaken for Overseas Promotion
The Ministry of Tourism, undertook a series of promotional initiatives to aggressively promote tourism to India. The specific element of promotional efforts undertaken overseas included advertising in the print & Electronic Media, Participation in Fairs & Exhibition, organising Seminars, Workshops, Road Shows & India Evening, Printing of Brochures and Collaterals, Brochure Support/Joint Advertising with Travel Agents/Tour Operators, Inviting the Meida and Travel Trade to visit the country under the Hospitality etc. As part of the promotional initiatives undertaken, Road Shows were organized in important tourist generating markets overseas with participation of different segments of the travel industry.
l India tourism ofices overseas participated in the major international Travel Fairs and Exhibitions in important tourist generating markets the world over as well as in emerging and potential markets to showcase and promote the tourism products of the country. These include Arabian Travel Market (ATM) in Dubai, PATA Travel Mart in Macau, World Expo 2010 in Shanghai, China International Travel Mart in Shanghai, ITB-Asia in Singapore, World Travel Market (WTM) in London, IMEX in Frankfurt, FITUR in Madrid and ITB in Berlin.
l Road shows, in collaboration with the Indian Association of Tour Operators were organized in CIS Countries during the months of September-October 2010. Road Shows in collaboration with the PATA India Chapter were organized in May 2010 in USA and Canada.
l Advertising and Outdoor publicity during the Vancouver Winter Games 2010 in Vancouver and also Paralympics Games 2010 from February to March 2010.
l Participated and supported the 3rd France-India Business Cup Golf Tournament helt at St. Tropex, France During 13th-17th October 2010.
l Organized the Gold Tournament at Ras Al Khaimah, United Arab Emirates.
l Organized "Know India" seminar to the group of 12 people travelling to India and for the group of 6 ladies travelling to south India giving information about shopping, hotels Ayurveda and spas and safe traveling for women.
l Outdoor advertising campaigns including advertising on taxes/buses/ trams, hoardings & billboards have been undertaken in Beijing, Shanghai, Guangzhou & Kumming, Tokyo,. Seoul, Osaka, Sydney, Singapore, Dubai, Bahrain, Kuwait, Doha Riyadh, Ras-al-Khaimah, Johannesburg, Helsinki, Stockholm, Oslo, Amsterdam, Rotterdam, London, Manchester, Edinburgh, Belfast, Moscow, ST. Ptersburg, Vienna, Frankfurt, Munich, Dusseldorf, Hamburg, Berlin, Davos, Paris, Cannes and Nice, New York, Washington, Miami, Boston, San Franciso. Los Angeles, Vancouver, Ottawa, Torontol and Buenos Aires.
l Road Shows focusing on Promotion of tourism to India as part of the Queen's Baton Relay (QBR) were organized in Sri Lanka, Singapore, Malaysia, London, Glassgow, Toronto, Ottawa, Syndnye, Melbourne and Auckland including holding run or walk relay through the towns.
II
Competitiveness in travel, tourism sector
2017: Delhi tops
Swati Mathur, November 15, 2017: The Times of India
From: Swati Mathur, November 15, 2017: The Times of India
See graphic:
GST on luxury hotels, before and after the imposition of GST in 2017, state-wise
Delhi pips Goa, Maharashtra to emerge most tourist-friendly
There’s a bright spot in the haze that’s covered Delhi over the last one week. The national capital has been ranked Number One among 30 Indian states for its relative competitiveness in the area of travel and tourism.
The biennial state ranking survey, released by the World Travel and Tourism Council India Initiative (WTTCII) and Hotelivate on Tuesday, employed 11 key parameters to evaluate the performance of each participating state and to identify the winner.
While Delhi climbed to the top spot by nudging Maharashtra and Goa to the second spot, Tamil Nadu, Gujarat, Kerala, West Bengal, Punjab and Andhra Pradesh followed in the list of Top 10. The north eastern states, held back by their access to air and rail connectivity, are among the poor performers on the WTTCII list of 30. Delhi also won the Destination Leader Award in the survey released on Tuesday.
States were evaluated on the basis of state expenditure on tourism, tourist arrivals, per capita gross state domestic product, presence of branded hotel rooms, effectiveness of marketing campaigns, extent of urbanisation, air, rail and road infra and connectivity, ease of doing business, and literacy rates, along with other intangible aspects.
Delhi, which improved its position this year, has topped on five out of 11 parameters, but failed to secure a good rank in Ease of Doing Business, on state expenditure on tourism as well as effectiveness of its marketing campaign. Delhi has also done poorly on an assessment of intangible aspects; the perception of safety and security, for its inability to make qualified human resources available for the travel and tourism industry, and on the political stability parameter, which the research shows has deterred tourism in the state.
Maharashtra, on the other hand, has slipped from being topper to the second slot. The study says that while the state boasts of a strong economy, good infrastructure and a large inventory of branded hotel rooms, it has only secured the top rank in the ‘Intangible Aspects’ category, where Delhi performed poorly.
Aside from ranking states on their performances, the research also points to concerns over the impact of GST on travel and tourism industry. A comparative analysis of taxation structures on hotel services shows customers will have to shell out more after GST imposition . “As part of a host of taxes, luxury tax contributed between 0% to 20% additional tax over and above other taxes levied, taking effective taxation to 18 to 29% on hotel services.... However, as compared to previous tax structures, the effective tax rate has now increased significantly as a result of GST implementation,” the research said. Arunachal Pradesh, J&K, Odisha, Manipur, Mizoram, Nagaland and Sikkim, which levied no luxury tax have registered spike in taxes with 28% GST levy.
Growth rate
2015: Growth rate slows down
The Times of India, Dec 12 2015
Himanshi Dhawan
Tourist arrivals dip, forex earning hit
Are foreign tourists keeping away from India? Latest data from the tourism ministry appears to suggest so. Growth in foreign tourist arrivals has dropped to a two-year low of 4.5% with 7.1 million visiting India till November 2015. In fact popular tourist haunts like Goa, Delhi, Maharashtra, Andhra Pradesh and Kerala have all shown a drop in foreign tourist visits in 2014 as compared to 2013.
Foreign tourist arrivals (FTAs) during the period JanuaryNovember 2015 was 7.1 million with a growth of 4.5%, as compared to FTAs of 7.68 million with a growth of 10.2% in 2014. In comparison, India received 6.97 million visitors registering a growth of 5.9% in 2013 from 2012.
As a consequence, foreign exchange earnings have declined from USD 2023 million in 2014 to 1768.5 million reflect ing a negative growth of 3.8%.
In fact, foreign exchange earnings in November 2015 registered a decline of a drastic 15.2% over November 2014 as compared to positive growth of 6.9% in November 2014 over November 2013. This could spell bad news since this is India's peak tourist season.
The dip in interest is also reflected in the reduced duration of stay . Union tourism minister Mahesh Sharma recently admitted that in 201112, foreign tourists used to stay for an average of 20-22 days in India which has now come down to 18-20 days. India receives less than 1% of international tourists annually .
Industry insiders say it is a combination of factors that could be impacting India's tourism appeal.
2015-18: Indians travelling abroad and within India
Indians flying abroad
Indians travelling within India
Travel and tourism spending in India and other countries, 2017/8
The Indian states that receive the highest number of visitors
foreigners in India
From: May 7, 2019: The Times of India
See graphic:
2015-18
Indians flying abroad
Indians travelling within India
Travel and tourism spending in India and other countries, 2017/8
The Indian states that receive the highest number of visitors
foreigners in India
The tourism economy of India
Expenditure/ spending on tourism, travel
2018: India leads the world
From: Swati Mathur, When it comes to leisure trips, Indians are the ones to beat, March 24, 2019: The Times of India
Indians are world leaders when it comes to spending on leisure tourism and travel and have beaten Mexico, Thailand, Spain, Turkey, US and China, among others, to emerge as global leaders according to the World Travel and Tourism Council’s (WTTC) Economic Impact 2019 report.
The WTTC Economic Impact, which represents the global private sector of travel and tourism, measured country-wise contribution of travel and tourism to GDP and found that while India spent 94.8% of its total GDP contribution to travel and tourism on leisure, countries like US and China were far behind at 71.3% and 81.4%, respectively. Mexico, Thailand, Spain and Brazil are the next biggest spenders on leisure after India.
In contrast, India spend just over 5% on work-related or business travel.
In 2018, travel and tourism contributed 9.2% of India’s GDP, with a total value of $247.3 billion. The bulk of India’s leisure spending, however, was on domestic travel at 87%, while the remaining 13% was on international leisure travel.
The WTTC Economic Impact report for 2019 also says the Indian travel and tourism sector outpaced the global and regional growth rates in 2018. While the global sector averaged a growth rate of 3.9%, Asia grew by 6.4% and India by 6.7%. The travel industry also created 4.27 crore jobs for the Indian economy.
India, the WTTC report said, is home to the thirdlargest travel economy in Asia, behind only China and Japan, and is also the largest in South Asia. India’s largest inbound international markets were the US and Bangladesh, which accounted for 9% of all tourist arrivals in the country, followed by 7% from UK, and 2% from Canada and Sri Lanka.
At a time of falling employment levels in the country, tourism has also emerged as one of the biggest employment generators. The travel sector alone is responsible for 8.1% of employment in India, which translated to over 4 crore jobs in 2018.
WTTC president and CEO Gloria Guevara said, “Over the last decade, the Indian travel and tourism sector has experienced tremendous growth with the sector now almost double the size it was in 2008 in terms of contribution to the GDP.
“The government’s ETourist Visa on Arrival (ETVoa) has had a very positive effect on increasing international tourism arrivals and could be made even more competitive with other destinations in the region in terms of pricing.”
Guevara also said India is among the world’s fastest growing aviation markets.
GDP, contribution to
2019, 2020
From: May 15, 2021: The Times of India
See graphic:
The contribution of tourism and travel to the GDPs of India, China, France, Germany, Italy, Japan, the UK and the USA, in 2019, 2020.
The travel habits of Indians
2016: Travelling young, spending more money, time
The Times of India, Sep 09 2016
Himanshi Dhawan
Indians travelling young, spending more money, time
30% of new travellers are in the age group of 18 to 24 years, compared to 24% last year and both spending and average vacation time period is up by 10%.
Data collated from bookings on MakeMyTrip scanning over 400 cities shows that on an average Indians holidayed for 7-9 days last year which has increased to 12-14 days this year with people clubbing multiple destinations in their itinerary. Spending has increased to Rs 50,000 for short-haul destinations and a lakh for long-haul trips.
More people are taking 3-4 long weekend breaks in a year and a couple of short-holidays, especially during the festi ve season, said the survey conducted between January-June 2016. The India Travel Report 2016 also revealed that Indians took 1.7 trips this year as compared to 1.5 in the same time period in 2015.
Speaking on the report, Rajesh Magow, co-founder and CEO-India, MakeMyTrip said, “Travellers are increasingly becoming younger.Just like financial or career ambition, people now have travel ambition especially the younger generation. This has had a direct effect on the travel landscape of the country which is now being driven by young Indian travellers.“
Indians made more impromptu international travel booking as 65% of international travellers now plan within four weeks compared to 59% until June last year. South-east Asia, middle-east, Gulf continue to be the top searched international destinations for Indian travellers. While Mumbai-Dubai was the top searched route in 2016 and saw the highest growth (71%), DelhiGoa were the most popular route for domestic travel and saw the highest growth (200%).
Consequent to younger travellers, mobile usage has also increased. Mobile transactions saw a growth of 313% and constitutes for 54% of the total transactions, as compared to 25% in 2015.
2018: Online bookings, air vs. rail, lodging
‘Online travel bookings to see $24bn more spending’, April 17, 2019: The Times of India
From: ‘Online travel bookings to see $24bn more spending’, April 17, 2019: The Times of India
Indian travellers are set to spend an additional $24 billion in three years on online travel bookings, according to a report.
As India’s travel spending is set to grow at 13% CAGR from $94 billion in 2018 to $136 billion by 2021, around 57% ($24 billion) of the incremental bookings will happen online, revealed a report by management consultancy firm, Bain & Company.
“The contribution of travel and tourism’s spend in India has reached developedmarket levels, from 6.7% of GDP in 2013 to 9.4% in 2018. This growth, combined with a rapidly growing internet user base and adoption of online bookings will lead to incremental revenues through online channels by 2021,” said Joydeep Bhattacharya, partner at Bain & Company.
Online penetration of hotel bookings, too, is expected to increase to around 35% by 2021 from 26% at present, fuelled by rapid growth in internet availability and hotel aggregators, including Oyo, Airbnb and Makemytrip. While mid-market and budget hotels, which account for half of the total market, are set to fuel future growth at 15% CAGR, lodging spending at luxury hotels is expected to grow at 11%. The share of business generated by domestic tourists is currently 50% for luxury hotels, up from 30% in the last three years.
There will be a 12% growth in transportation ($50 billion), as well as a 13% growth in lodging ($21 billion) and consumption. This includes spending on shopping, recreation and food, which are set to grow at 13% CAGR ($65 billion) over the next three years.
Apart from digital disruption, government initiatives and infrastructural enhancement, factors including private funding for tech-enabled players and emergence of new tourist destinations are creating fundamental shifts in the Indian travel and tourism market. For instance, new locations such as Sikkim (84% CAGR) and Karnataka (39% CAGR) have witnessed strong growth in tourism during 2016 & 2017.
Despite the potential scope of growth for online players, the study said while a majority (86%) of Indian consumers use online channels to research before travel, there is a significant drop in online use during actual booking. Only around 50% travellers go online to book due to reasons such as lack of trust in payment systems and better pricing offline.
