Hotels expected to do better this year as rush of foreign tourists begins
Alekh Angre 30 November 2010

After slipping back over the past couple of years, the tourism industry is seeing a turnaround with a significant growth in foreign tourist arrivals this year. And the industry is expecting it will get still better this season

The tourism industry is expected to bounce back this year, after slipping over the past few years on account of the terror attack focused on the Taj and Trident in Mumbai, the swine flu epidemic that has been brought under control and the global financial crisis that has abated.

The industry has witnessed sluggish growth over the past couple of years. Now experts are anticipating positive growth this year. The hospitality and tourism business is a key component of the Indian economy and also brings in valuable foreign exchange.

According to the Ministry of Tourism, foreign tourist arrivals in India for October 2010 was 4.87 lakh compared to 4.46 in October last year and 4.50 lakh in October 2008. This increase is significant as October is the beginning of the international tourist season in India.

Industry officials expect this to improve further following the economic recovery. Another important aspect, they say, is that global travellers are increasingly considering India as a 'must visit' destination, for both leisure and business.

Manoj Gurshahani, chairman,, said, "There is an absolute growth in the tourism sector. We are expecting 35-40% growth going forward. The sector is largely related to indicators such as the stock market and GDP and these have shown positive growth, hence we are seeing a boom in the sector."

 "The number of foreign tourists coming is pretty decent. While the financial crisis lingers on in some countries like Ireland and Portugal, there has been a growth of foreign tourists coming from other countries. Besides domestic tourism is also showing positive growth," Mr Gurushahani said.

According to an ICRA rating service report on the Indian hotels industry, titled 'Slow but Steady Recovery Under Way', around 51 lakh foreign tourists visited India in 2009, a decline of 3.3% from the year before. But there has been a noticeable improvement in the current year. The report states that there has been a 9.7% increase in the arrivals of foreign tourists in the period January-August 2010 from that in the corresponding period last year.

ICRA sees this growing further with a greater pull from specific attractions like the cricket world cup and Formula One racing. Figures from the tourism department indicated a 5.1% increase in foreign tourist arrivals at Delhi airport during the Commonwealth Games from the corresponding period last year.

"We will certainly see growth. Those who have backlogged their holidays will definitely plan this time," said Nancy Castelino, vice-president (marketing), Mercury Travels. In fact, in the coming summer we expect much more inflow of foreign tourists from the US and Europe compared to last year. There is a lot of money in the market, the stock markets are doing well and the economies are on an uptrend. All these factors will accelerate the growth of the tourism sector in India."

Ms Castelino also sees a growth in outbound travel with more people willing to spend on leisure travel. "Outbound travel has never dipped, though there was some stagnation. But this time it is expected to show positive growth."

Karan Anand, head of relationships and supplier management at Cox & Kings, is excited that both inbound and outbound tourism is seeing rapid growth. "According to the Ministry of Tourism, the inbound figure for January to September 2010 stands at above 3.8 million, which is a growth of over 10% compared to the corresponding period last year. In 2009, domestic tourism touched 650 million journeys, compared to 563 million in 2008, a growth of 15.5%. Outbound tourism is expected to grow by 25% in 2010," Mr Anand said. "All this indicates that we are on a growth path this year and expected to do exceedingly well.''

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