India’s hospitality sector is undergoing a dramatic transformation as the spending power of domestic tourists surpasses that of foreign visitors, prompting a shift in focus for hoteliers and industry leaders. This shift, highlighted at the 54th annual convention of the Federation of Hotel & Restaurant Associations of India (FHRAI), is driving growth and reshaping the travel landscape across the country.
Gajendra Singh Shekhawat, India’s Union Minister for Culture and Tourism, emphasized the critical role of domestic tourism in the sector’s development. He noted that over the past decade, Indian hoteliers have increasingly prioritized catering to the needs of Indian travelers, recognizing their significant spending power. This change in strategy has been fueled by a rising middle class and a growing desire among Indians to explore their own country.
Shekhawat further revealed ongoing discussions with Finance Minister Nirmala Sitharaman concerning critical issues impacting the tourism and hospitality industry, such as infrastructure status and GST rates. He expressed optimism about positive developments in these areas in the near future.
The Minister also underscored the importance of standardization across the industry. To encourage uniform implementation of best practices, the tourism ministry has compiled a report showcasing successful initiatives from various states, presenting it to state governments on World Tourism Day.
In terms of infrastructure development, Shekhawat announced that the ministry has invited state governments to submit proposals for large-scale tourism projects. As of this week, 87 proposals worth INR 8,000 crore have been received. These projects will be integrated into the INR 1 lakh crore interest-free infrastructure loan being provided to states this year.
Additionally, the tourism ministry is collaborating with the Ministry of External Affairs (MEA) to explore the possibility of offering visas on arrival for tourists from key source markets, a move aimed at further boosting inbound tourism.
The FHRAI convention also witnessed participation from key industry figures, including Goa Chief Minister Pramod Sawant and Goa Tourism Minister Rohan Khaunte. Puneet Chhatwal, MD & CEO of IHCL, highlighted the unparalleled employment potential of the tourism sector and urged for government policies that support its growth. FHRAI President Pradeep Shetty acknowledged the challenges in accurately mapping the size of India’s tourism and hospitality industry, as a significant portion remains in the unorganized sector.
The significant shift towards domestic tourism in India’s hospitality sector signifies a positive trend for the industry. The government’s commitment to infrastructure development, policy support, and collaboration with various stakeholders promises a brighter future for the sector, further propelling its growth and strengthening its position as a major contributor to the Indian economy.