According to the Travel and Tourism Development Index (TTDI) 2024 report published by the World Economic Forum (WEF), India is ranked 39th among 119 countries. In the previous index published in 2021, India was ranked 54th. However, due to a revision in the WEF's methodology, India's 2021 rank was adjusted to 38th place. As per the latest edition of the HVS ANAROCK monthly industry update, Indian hotel sector occupancy rates increased by 8-10 percentage points year-on-year (y-o-y) in November 2024 and 10-12 percentage points compared to the previous month. The strong growth in ARR, which saw a 11-13% rise compared to the previous year, further bolstered RevPAR, driving overall performance upward. All key markets witnessed significant increases in occupancy rates compared to the same period last year. In November 2024, nearly all major markets, except Ahmedabad and Kolkata, recorded an increase in average rates compared to the previous year.
National Tourism Policy
The Ministry of Tourism has prepared a draft of the National Tourism Policy incorporating suggestions received from Central Ministries, State Governments/UT Administrations and Industry Stakeholders. The draft focuses on the following key objectives: (i) Enhancing the contribution of tourism to the Indian economy by increasing visitation, length of stay, and visitor spending, and establishing India as a year-round tourist destination, (ii) Creating jobs and entrepreneurial opportunities in the tourism sector while ensuring a skilled workforce supply, (iii) Enhancing the competitiveness of the tourism sector and attracting private sector investment, (iv) Preserving and enhancing the country's cultural and natural resources and (v) Ensuring sustainable, responsible, and inclusive development of tourism across the country.
Ministry of Tourism has revamped the Swadesh Darshan Scheme as Swadesh Darshan 2.0 (SD 2.0) with the objective to develop sustainable and responsible tourism destinations, following a destination & tourist-centric approach.
Ministry of Tourism launched the Incredible India Content Hub on the revamped Incredible India digital portal which is a comprehensive digital repository, featuring a rich collection of high-quality images, films, brochures, and newsletters related to tourism in India.
Ministry of Tourism has sanctioned a total of 76 projects for an amount of Rs 5287.90 crore under the Swadesh Darshan Scheme, out of which 75 projects are physically complete.
Under ‘Scheme for Special Assistance to States/Union Territories for Capital Investment (SASCI)’ Government of India has recently sanctioned 40 Projects in the country for Rs 3295.76 crore.
Ministry of Tourism has been providing financial assistance to State Governments/ UT Administrations for organising fairs/festivals and tourism related events.
Ministry of Tourism has launched a handbook offering a step-by-step guide to support efforts of States/UTs in granting and implementing ‘industry status’ for the tourism and hospitality sector with the aim to attract greater investments and generate job opportunities within this sector across States/UTs.
Expectations from Union Budget 2025:
Infrastructure status for the sector: The domestic hospitality sector has been asking for an ‘infrastructure’ status for the hotel industry. If provided, this would facilitate easier access to financing and spur investment in the sector.
Reduction in tax burden: Industry stakeholders have called for a series of reforms, including reductions in income tax rates for hospitality businesses, removal of Tax Deducted at Source (TDS) on automated bookings, and tax exemptions on Leave Travel Allowance (LTA). LTA is a tax exemption salaried employees get for expenses incurred on domestic travel. It allows them to claim tax benefits on the cost of travel (by rail, air, or road) for themselves and their immediate family members while on leave. However, it does not cover expenses such as hotel stays, food, or sightseeing.
Ease of doing business: The industry is expecting enhanced funding for medical, eco-tourism in India. Recent government marketing efforts have been promoting a broader range of tourism types including eco-tourism and adventure tourism.
Rationalisation of GST: There is continued demand for a simplified licensing process to set up hotels and the rationalisation of the Goods and Services Tax (GST) structure. There is a need to merge the 18 per cent GST for hotels with room rates above Rs 7,500 into a lower category.
Better connectivity: The government is expected to provide greater investment toward infrastructure that facilitates tourism growth beyond the traditional areas. This will likely enhance accessibility to emerging destinations that promote local experiences and cultural tourism.
Outlook:
International tourist arrivals are expected to reach 2019 levels in 2024. International tourism receipts had already virtually achieved pre-pandemic levels in 2023. While a large number of destinations already exceeded pre-pandemic arrival numbers in 2023, or have done so in 2024, there is still room for recovery across several subregions and destinations. However, for the domestic tourists, overall scenario is slightly cautious following slowdown in economic growth. The consumer confidence has declined marginally as Reserve Bank of India’s (RBI) November 2024 round of its bi-monthly consumer confidence survey (CCS). Broad macroeconomic undertone remains firm though. India’s economic growth is expected to remain steady for the next two fiscal years, starting from April 2025, according to a World Bank report. The World Bank said that India’s growth is projected to remain steady at 6.7% a year for the next two fiscal years, beginning April 2025. The services sector is expected to enjoy sustained expansion, and manufacturing activity will strengthen, supported by government initiatives to improve the business environment. Investment growth is projected to be steady, with moderating public investment offset by rising private investment.