Travel and Tourism Industry 2023 Overview 12.91% Share of tourism jobs during 2020-21 677.630 mn Domestic Tourist Visits all over the country (2021) $8.8 Bn Foreign exchange earnings (FEE) from tourism in 2021 6.19 mn Foreign Tourist Arrivals (2022) The tourism sector is projected to contribute $250 Bn to the country’s GDP by 2030 •States with highest tourist arrivals •Tamil Nadu •Uttar Pradesh •Andhra Pradesh •Karnataka •Maharashtra •Telangana Types of Tourism Adventure Wildlife Tourism Pilgrimage tourism Eco tourism Cultural Tourism Cruise Tourism Sectors Impacted Travel Hospitality Local Economy History • The Indian government released its first tourism policy in 1982. • Six main categories, including • • • • • • swagat (welcome), suchana (information), suvidha (facilitation), suraksha (safety), sahyog (cooperation), and Samrachana (infrastructure development), would be the focus of the policies • In 1982, the planning commission of India recognised tourism as an industry. • The National Committee on Tourism was established by the Indian Planning Commission in 1986 to create a future plan for the tourism industry. • With a capital fund of Rs. 100 crores, the Tourism Development Finance Corporation was established in 1987 to provide commercial financing for the tourist sector. • Another important National Action plan for Tourism was announced in 1992. • The Eighth Five Year Plan (1992-1997) strongly emphasised the private sector's increased involvement in the tourism sector as a means of promoting tourism planning in India • In the year 2002, the Government of India announced National Tourism Policy. • The Himalayan adventure and beach tourism were pushed under the tenth five-year plan. • Ayurveda, traditional craft markets, and pilgrimage sites all fall under the category of wellness tourism. • Subsequently, more funding has been allocated for tourism development in the eleventh five-year plan (2007-2012). • Later, The Ministry of Tourism has undertaken various initiatives to promote tourism in the country, such as the 'Incredible India Campaign', the 'Atithi Devo Bhavah program', and the 'Visit India campaign' (2009). Contribution to GDP Before the epidemic, India's travel and tourism sector contributed 7% of the country's GDP ($15.7 trillion, or $212 billion) in 2019, but that figure dropped to just 4.3% ($9.2 trillion, or $124 billion) in 2020, a startling 41.7% decrease. With an 8.3% increase in employment this year, there will be close to 35 million jobs in the travel and tourism industry. The sector's economic contribution to the country might increase by 1% from 2019 to almost $15.9 trillion (the U.S. $215 billion) in 2022. The prediction also shows that during the next ten years, the industry is predicted to add more than 24 million employment or more than 2.4 million new positions annually. Impacts of COVID - 19 Pandemic There were unavoidable job losses in both the formal and informal sectors. About 21.5 million people in the tourism industry have lost their jobs due to the three waves of COVID-19. The Indian companies' revenue during a half-year period was only 24.80% of what it was during the half-year. The loss of income over six months is equal to Rs. 23636.27 Crore, roughly equivalent to the nominal GDP of Manipur or the state of Arunachal Pradesh for the 2017–18 fiscal year. Companies net loss for that half-year period equals 74.70% of their income for the current half-year. There are thousands of small, unorganised travel and tourist service companies in India. Numerous people working in this sector were seriously impacted, and many still struggle to support themselves. https://www.drishtiias.com/blog/journey-of-the-tourism-industry-in-india Reasons for Growth ROBUST DEMAND • The Medical Tourism sector is predicted to increase at a CAGR of 21.1% from 2020-27. • The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. • International tourist arrivals are expected to reach 30.5 million by 2028. ATTRACTIVE OPPORTUNITIES • India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure. • *Travel and tourism are two of the largest industries in India, with a total contribution of about US$ 178 billion to the country’s GDP. • *The country’s big coastline is dotted with attractive beaches. POLICY SUPPORT • US$ 2.1 billion is allocated to Ministry of Tourism in budget 2023-24 as the sector holds huge opportunities for jobs and entrepreneurship for youth. • *Under the Union Budget 2023-24, an outlay of US$ 170.85 million has been allocated for the Swadesh Darshan Scheme. • *68 destinations/sites have been identified in 30 States/UTs for development under the PRASHAD Scheme as on March 31, 2022. Growth Drivers •The Ministry of Tourism is promoting the seven liberation destinations (Saptha Moksha Puri) of India through various promotional campaigns in both domestic and international markets. * •India’s first-ever "Night Sky Sanctuary" to be set up in Ladakh to boost Astro Tourism in India.* •GOI launched the digital booklet 75 incredible sites to visit in India and Incredible India 2022 digital calendar. •68 destinations/sites have been identified in 30 States/UTs for development under the PRASHAD Scheme as on 31st March 2022. * Ministry of Tourism has set up a 24x7 MultiLingual Tourist Info-Helpline in 12 Languages including 10 international languages.* The Water Taxi services in Mumbai is going to give huge impetus to the tourism sector, especially travel to the historic Elephanta caves from Navi Mumbai. Visitors will be able to travel easily from Navi Mumbai to Gateway of India. * 'Medical Visa’ has been introduced, which can be given for specific purpose to foreign travellers coming to India for medical treatment. To promote Medical Tourism in the country, Government of India is extending e-medical visa facility to the nationals of 156 countries.* Eight Craft Villages taken up under ‘Linking textile with Tourism’ to promote craft and tourism at a single location.* Investment An investment-linked deduction under Section 35 AD of the Income Tax Act is in place for establishing new hotels under 2-star category and above across India, thus permitting a 100% deduction in respect of the whole or any expenditure of capital nature. Government reduced GST on hotel rooms with tariffs of Rs. 1,001 (US$ 14.32) to Rs. 7,500 (US$ 107.31) per night to 12% and those above Rs. 7,501 (US$ 107.32) to 18% t In Union Budget 2023-24, US$ 290.64 million was allocated to Ministry of Tourism An app will be developed covering all relevant aspects of tourism. States will be encouraged to set up Unity Malls in State Capital as the most prominent tourism centres to promote One District One Product, GI products, handicrafts and products of other States In 2021, Government of India announced 40,000 e-tourist visas out of 500,000 free regular visas to the tourist,. Government of India has set a target to create 220 new airports by 2025 The Emergency Credit Line Guarantee Scheme (ECLGS) covered through a liberal definition of MSME (micro small and medium enterprises) has been expanded to include tourism and hospitality stakeholders. •A separate liquidity window of Rs. 15,000 crore (US$ 1.8 billion) has been released for the sector. •FDI inflows in the Tourism & Hospitality sector reached US$ 16.48 billion between April-June 2022. •Hospitality unicorn OYO has acquired Europe-based vacation rental company Direct Booker for US$ 5.5 million in May 2022. •Accor, a French hospitality major will expand its India's portfolio by adding nine additional hotels in the midscale and economy categories, bringing the total number of hotels 54 in India. Government Initiative US$ 290.4 million has been allocated to the Ministry of Tourism. Under the Union Budget 2023-24, •To ease travels for international tourists, the Government of India has launched a scheme wherein five lakh tourists will get free visas. Ministry of Tourism has sanctioned 76 projects under the scheme •Visa reforms include a significantly expanded Golden Visa scheme, a fiveyear Green residency and new entry permits, including one for job seekers. •In June 2022, the Ministry of Tourism along with Associations of Indian Universities (AIU) initiated a 12 episode webinar series under ‘Azadi Ka Amrut Mahotsav’ (AKAM) Ministry of Tourism signed a Memorandum of Understanding (MoU) with Indian Railway Catering and Tourism Corporation to strengthen hospitality and tourism industry. The ministry has also signed a MoU with Easy My Trip, Cleartrip, Yatra.com, Make My Trip and Goibibo. the government launched NIDHI 2.0 (National Integrated Database of Hospitality Industry) scheme which will maintain a database of hospitality sector components. •Government is planning to boost the tourism in India by leveraging on the lighthouses in the country. 71 lighthouses have been identified for development as tourist spots. •The Indian Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat Darshan tourist trains aimed at taking people to various pilgrimages across the country. •During 2019-20, an additional fund Rs. 1,854.67 crore (US$ 269.22 million) was sanctioned for new projects under the Swadesh Darshan scheme. •Ministry of Tourism sanctioned 18 projects covering all the North Eastern States for Rs. 1,456 crore (US$ 211.35 million) to develop and promote of tourism in the region under Swadesh Darshan and PRASHAD schemes. •Statue of Sardar Vallabhbhai Patel, also known as ‘State of Unity’, was inaugurated in October 2018 and the total revenue generated till November 2019 stood at Rs. 82.51 crore (US$ 11.81 million). https://www.ibef.org/industry/tourism-hospitality-india Foreign Brands •The Four Seasons Group (Canada) •Thomas Cook (UK) •Marriott Hotels (USA) •Expedia (USA) •Premier Travel Inn (UK) •Cox & Kings (UK) •Hyatt Hotels Corporation (USA) •Airbnb (USA) •Accor (France) Further reading and reference • https://www.makeinindia.com/sector/tourism-and-hospitality • https://tourism.gov.in/sites/default/files/202302/MOT%20Annual%20Report_2022-23_English.pdf • https://static.investindia.gov.in/s3fs-public/202212/Rebuilding_tourism_for_the_future2022.pdf • https://www.pib.gov.in/PressReleasePage.aspx?PRID=1885714
