As 2025 dawns upon us, for those in India’s tourism industry, it is becoming apparent that hospitality business is the key driver for our tourism.
First, that domestic segment has boomed like never before, with Indians willing and keen to travel, spend, never blink at prices that they may have balked at in earlier days. That hotel spends, offerings, promotions have visualised traditional and modern concepts – from weddings and events to staycations, meaning taking a vacation in your own city of residence, to packages that take care of food and beverages, outdoor catering, health foods, and so much more. Inbound tourism has picked up, yet to reach the 2019 levels, but nevertheless will remain inadequate to feed the existing rooms supply.
Destination promotions are increasingly being generated by hotels, with the industry being the new driver of demand. It is not early days, but an opportune time, for state governments to dovetail infrastructure that ensures last mile connectivity and visitor conveniences. Also, state tourism organizations will do well to do joint marketing, or specific marketing in areas that need support.
New investments, ploughing back of profits: With the increased revenues coming in, hotels are essentially ploughing back into their business. This is resulting in new infrastructure across the country, both in old and newer markets becoming tourist destinations. Such confidence among investors has never been witnessed before; hospitality meanwhile, has become more driven by corporate responsibility, signalling a big change from days when promoters siphoned off earnings towards other businesses. Modern promoters are vying to be noticed for ethical growth, vying for leadership among brands, bringing in expertise and professionalism matching global standards.
Technology is a big help in this direction. Online is the big disruptor, now being seen as the big enabler. It has brought greater transparency for the customers always seeking the best deal. Equally, within every organization, technology enables solutions to inventory, pricing, budgeting have changed the structure – dealings are on record, as are earnings. Government regulations over time, like limiting cash transactions to two lakhs only, have helped. Increased spending on credit cards is another. While money is king, it is not cash.
Healthy supply line: Most hotel companies are talking of robust growth projection, in number of projects in progress, both in number of properties and rooms, across brands, across price points, though the mid-market, traditionally unknown in India, is blossoming. Small are becoming big, big are becoming bigger. IHCL (Taj Group) is envisaging a 700-hotel portfolio in the next few years, companies like Lemon Tree are signing a new hotel almost every other week. Hilton Hotels signed one single deal for 150 properties with Olive by Embassy under the Spark brand. Marriott Hotels have 150 operational hotels with 83 in the pipeline. Home grown Royal Orchid Hotels passed the magical 100 properties mark. Minor Hotels, with brands like Anantara, plan over 50 hotels in the next decade.
In Keeping with infrastructure growth: Such a robust pipeline augurs well to match accommodation growth to keep pace with growth in airport, airline and highways sectors. As we open more airports, add airline capacity, add highway infrastructure, we need more quality accommodation. Growth in business in hospitality, this new confidence and capacity building, therefore, could not have come at a better time in the growth of both the economy in general and for tourism specifically.
Hospitality as Lobbyist for Tourism: In the absence of a well defined ‘tourism’ lobby in the country, hotels and hospitality have emerged as the key promoters.