Policy Reforms: A Roadmap to Boost the Indian Tourism Industry

by Jun 7, 2024Hotel Development, Hotel Finance, Travel & Tourism

India has one of the fastest growing travel & tourism economies in the world owing to its diverse landscape, rich heritage, and cultural diversity. This industry is an important contributor to India’s overall economy: According to World Travel & Tourism Council’s 2022 Annual Research, the Travel & Tourism industry in India contributed 5.8% of the country’s GDP in 2021 (despite COVID-19), accounting for 7% of the total employment generated in that year and providing employment to around 32.1 million people

The reforms mentioned in this whitepaper will be crucial for India’s Travel & Tourism industry and without any negative financial implication to the exchequer. As the hospitality sector of India moves on to a new growth curve after the global pandemic, a parity of laws and frameworks across the States and Union Territories is a much-needed reform that will not only boost investor confidence but will also facilitate employment generation. The country’s slow development of hospitality infrastructure results from a range of challenges posed by inefficient policies & regulations and inconsistent norms & restrictions. These inefficiencies end up increasing the development cost of a hotel by 20-30%, thereby lowering the project returns and acting as deterrent for investors. There is an urgency to fine-tune policies and norms in the hospitality sector to bring in consistencies across hotel categories from a development and operational point of view. These structural reforms, policy tweaks and revisions are the need of the hour to ensure that the Hotel and Hospitality sector grows and contributes to the economy, while continuing to attract investors and owners.

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