Hotel Industry’s Contribution to India’s GDP to Hit USD 1 Trillion by 2047: HAI

Hotel Industry’s Contribution to India’s GDP to Hit USD 1 Trillion by 2047: HAI

It will approximate $1 trillion by 2047, it was said. The organization representing the hospitality industry also made the point that for the sector to meet its goals, the expansion in lodging would need to extend beyond metro areas into second and third-tier cities and rural areas.

Research projects that by 2047, the direct GDP contribution of the Indian hotel industry will reach USD 1 trillion, driven by a sharp increase in domestic and foreign travel.

The Hotel Association of India and Benori Knowledge released research titled “Vision 2047: Indian Hotel Industry” that estimates the direct GDP contribution of the hotel sector at USD 40 billion in 2022 and USD 68 billion in 2027.

However, the analysis made it clear that the overall contribution includes elements of services from relevant business verticals like food and beverage and salons & spas but excludes consideration of services market growth, hence removing scenario-based contribution estimations.

Per the research, the predicted growth may be ascribed to elements like GDP expansion, income level development, and an increase in domestic and international visitor arrivals (FTA).

Domestic tourist visits are anticipated to grow from 677 million in 2021 to 1.5 billion by 2030 in the mid-term (2027-2037), and then further to 15 billion by 2047 in the long-term (2037-2047), it continued.

According to the survey, there will be 1.5 million international visitors arriving in India in 2021, 15 million by 2024, 25 million by 2030, and “are further projected to grow to attract 100 million tourists by 2047.”

“For both business and pleasure, more and more local and foreign visitors travel to different Indian states. According to the survey, these variables have opened up new prospects in the tourist and hospitality sectors.

M P Bezbaruah, secretary general of HAI, told PTI that “overarching all the factors will be the sustainability of the sector and all the operations”, notwithstanding the importance of macroeconomic issues, technology, environmental and social sustainability, and governmental assistance.

Regarding policies, he stated, “We have said that the government’s policy of convergence of all stakeholders is a crucial factor because the hospitality and tourism will not achieve this target unless, for example, civil aviation grows to the same extent that we have expected, unless the connectivity to the remote areas, which we are assuming there’ll be great growth, is happening through Gati Shakti and other things.”

Regarding lodging, Bezbaruah added that to accommodate the anticipated growth in both domestic and international travellers, destinations must expand outside of major cities because “otherwise, there will be so much pressure that some of the places will become unviable.”

“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 of the major planks of the future tourism because tourists are looking for new experiences,” he emphasized.

Bezbaruah also emphasized the necessity of giving the sector industry and infrastructure status, claiming that doing so would encourage the construction of additional rooms and close the gap between the supply and demand for them.

According to the survey, the hospitality sector saw a shift in customer preferences due to the pandemic, and service providers have discovered innovative methods to go forward. Hotel firms have begun to recognize the enormous potential of domestic tourism.

“Major players are diversifying into the mid-market segment to develop budget hotels and cater to increase the inbound travel,” noted that operations are getting leaner as the industry moves towards digital transformation.

The Indian economy is expected to undergo unprecedented growth in the upcoming decades, and one sector that stands out in its contribution is the hotel industry. According to the Hotel Association of India (HAI), the sector can contribute up to USD 1 trillion to India’s Gross Domestic Product (GDP) by 2047. The hotel industry has been a significant component in driving the country’s tourism, employment, and infrastructural development. This article delves into the multiple facets that substantiate this ambitious claim by HAI.

As of the latest reports, the hotel industry already contributes significantly to India’s GDP. With a rising middle class, easier accessibility to travel options, and international tourism picking up, the sector has seen robust growth. The COVID-19 pandemic did present a temporary setback, but the industry has shown resilience through strategies like digitalization, hygiene innovations, and localized experiences.

The USD 1 trillion contribution mark is expected to be hit thanks to the exponential growth rate forecasted for both domestic and international tourism. Various reforms and investments, both public and private, are expected to catalyze this growth further.

The hotel industry is labour-intensive, requiring various managerial and manual skill sets. It is estimated that for every USD 1 million invested in this industry, nearly 78 direct and indirect jobs can be generated. With the sector growing at an unprecedented rate, employment opportunities will be massive, supporting the country’s socio-economic framework.

Infrastructure development is another aspect where the hotel industry leaves its mark. Expanding hotels and related services adds value to the local infrastructure from urban cities to rural landscapes. It brings in better roads, promotes the growth of adjacent businesses, and necessitates improvements in utilities like electricity and water supply.

India’s hotel industry is adopting cutting-edge technology to cater to a tech-savvy generation and optimize operations. From AI-based customer service to blockchain technology for secure transactions, this adds to GDP and pushes the country forward in technological adoption.

The government’s focus on ‘Ease of Doing Business’ is expected to impact the hotel industry significantly. Measures such as single-window clearance, tax benefits, and incentives for investment in tourism infrastructure make India an increasingly attractive market for global hotel chains.

By 2047, the hotel industry aims to align itself with sustainable development goals. Eco-friendly hotels, waste management systems, and community engagement programs are just a few initiatives that will add to the economy and contribute to sustainable living.

The development is expected to be more than just centralized in critical cities but also in regional areas. This widespread growth is set to contribute to balanced regional development, which is a significant factor in the overall GDP of the country.

The ambitious target of USD 1 trillion in contributions by 2047, as set by the Hotel Association of India, is a testament to the hotel industry’s potential and a blueprint for multi-dimensional growth.

Employment, infrastructure, technological advances, and sustainable development are all facets roped in to achieve this monumental figure. With adequate policy support and innovative business models, the industry is well on its way to becoming a cornerstone of India’s economy in the coming decades.