Red Carpet For Foreign Arrivals Make India Inevitable: Hospitality Sector’s New Year Resolution

India's hospitality sector anticipates exceeding pre-COVID foreign tourist arrivals in 2025 and aiming for a USD 1 trillion economic contribution by 2047.

Industry leaders cite booming domestic travel, increased occupancies, and a shift towards travel as a non-discretionary open. However, they urge government support through policy interventions like unified licencing and infrastructure investment to achieve this ambitious goal.

As the Indian hospitality industry prepares to uncork the champagne to welcome 2025, it is gearing up to roll out the red carpet to foreign tourists whose arrivals are likely to cross pre-COVID levels next year while looking to continue its prominent contribution to the country's economy and make India inevitable. The sector, which is poised to contribute USD 1 trillion to India's economy by 2047 however, is looking up to the government for policy interventions such as unified licencing, workforce upskilling and targeted infrastructure investments to enable the vertical meet demand generated by India's drive towards becoming the world's third largest global economy.

"India aims to become the third-largest economy by 2047, and the hospitality sector is set to play a pivotal role in achieving this goal. The sector's multiplier effect on the economy surpasses manufacturing and agriculture," Hotel Association of India President KB Kachru.

Asserting that the future of the hospitality industry looks promising, he said, "There is an expectation of higher occupancies and average room recoveries". Citing a report by IBEF, the Chairman of South Asia at Radisson Hotel Group said, "India's travel market is projected to grow from an estimated USD 125 billion by FY27. Additionally, India's most international tourist arrivals are expected to reach 30.5 million by 2028." According to him hotel company rates are anticipated to rise to 75 per cent or higher driven by increased leisure and business travel. The Meetings, Incentives, Conferences, and Exhibitions segment is set to contribute significantly, with India hosting multiple high-profile global events. Overall, the hospitality sector is projected to grow by 10-12 per cent, substantially impacting GDP and employment," Shetty said. Similarly, Royal Orchid Hotels President Arjun Baljee said the industry is set for sustained growth fuelled by digital innovation, personalised experiences and eco-conscious travel.

We look forward to a promising 2025, creating memorable experiences for travellers and contributing to India's tourism growth," Baljee included. However, the hospitality sector's path to creating unforgettable experiences and playing its role in India's economic growth has not been smooth, and it has been seeking government intervention.

Apart from the emphasis put on infrastructure development in the recent budgets. The hospitality industry has yet to receive recognition for its critical role and immense potential for generating jobs, contributing to GDP growth and foreign exchange," Kachru lamented. Reiterated the demand for uniform recognition of hospitality as an industry across all rates, FHRAI's Shetty said, "This world brings benefits such as lower electricity enable to qualify for infrastructure status due to strict requirements which restricts their ability to access low-cost loans."

Reflecting on 2024, Baljee of Royal Orchid Hotels said it has been a year of strong growth and resilience for the Indian hospitality industry driven by a surge in domestic travel, a shift towards experiential stays and a focus on sustainability. Lachru acknowledged that prominent government investments in transportation infrastructure, such as new airports, high-speed rail networks, and imposed highways, have made travel more convenient and accessible. The improved connectivity has fuelled the growth of hotels and resorts and the development of tourism in new areas," he added.

A Chalet Hotels spokesperson said that India's hospitality sector is experiencing impressive growth, with record high occupancy rates and prominent increases in average daily rates nationwide. This undermines flexibility in the industry's resilience and ability to meet the rising demand for quality experiences among travellers. Shetty said, "2024 has been a milestone year for India's hospitality and tourism sector, collectively valued at over USD 24 billion."

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