The travel and tourism sector has been witnessing an exponential rise in the recent years. One of the major reasons attributed to this rise is the increase in disposable incomes among the rising Indian middle class.
This can be seen in the number of total outbound trips which has increased by 8.7 per cent to 19.9 million in 2015. On the other hand, India was recognized as one of the fastest-growing tourism destinations worldwide. As a result, the industry was instrumental in directly providing more than 23.5 million jobs in recent years.
In 2015, the travel and tourism industry contributed a total of 124.8 billion U.S. dollars to GDP in India, thereby, accounting for approximately six percent of India’s total GDP.
The growth shows no signs of slowing down as the direct contribution of travel and tourism to GDP in India was expected to grow an average of 6.4 percent annually between 2014 and 2024.
While the industry sees a steady growth, it has certain challenges ahead to face. To begin with, Travel and tourism has become a highly taxed industry in the country, making India an expensive destination.
Far from a good sign, the service tax added at present has Indian travel packages fall back on account of price competitiveness as they are unable to match the prices on holiday packages offered by other countries.
Also, the travel and tourism sector requires urgent updates in terms of transport services and technology support to all sections of the industry. Another critical sector that needs attention is Cruise tourism. Cruises still haven’t received the due attention it deserves, in spite of being great income generators.
To tackle these challenges, the government should focus its attention on the improving the infrastructure of various sections of industry, especially the online and cruise sectors. Also, leniency in tax structure is another measure that would really help the industry by making inbound tourism much more affordable.
With start-ups and young businesses coming up with incredible ideas to facilitate industry growth, they must be encouraged by including them in government plans and help them raise seed capital affordably.
Viren Batra, CEO & Co Founder of nirvana excursion said, “with the government helpful intervention and current growth rates, India is projected to be one of the fastest growing nations in the tourism sector in the next five years, clocking over 20 per cent gains annually through 2017. While demonetization did threaten to shake up the sector, the Union Budget 2017-18 is expected to make sweeping changes to the sector. Thus, many in the industry look forward to it hopeful of better measures in the days ahead. “