Guest Column: Emerging Hospitality Trends
The Travel and Tourism industry has today become pivotal to the overall economic growth of India. It accounts for approximately 7% of our GDP and is the third largest foreign exchange earner for the country. We are ranked 7th among 184 countries in terms of travel and tourism’s total contribution to GDP. In 2016, India had approximately 9 million foreign tourist arrivals (FTAs), registering an annual growth of 5.2 per cent over the previous year; by 2025, FTAs are expected to reach 15.3 million. Our Hotel industry has grown almost 2.5 times over the last 10 years, currently amounting to approximately 123,000 rooms.
These numbers are indeed all very encouraging and have been made possible owing to some key trends that have paved the way for the industry to grow and evolve into its current state. At InterGlobe, we have been well entrenched to have effected some of these changes and have made concerted, institutional investments for the long term and continue to believe very strongly in the potential of the industry.
Let’s look at four of these key trends:
Growth of Hotels in the Mid-Segment: Today, almost 50% of the existing inventory of organized hotel rooms in India is represented by this segment; by 2022, this number is expected to rise to almost 60%. At InterGlobe hotels we have been an active part of this journey with the first of our 16 Ibis hotels opening back in 2008. Over the last 10 years our portfolio has grown at an impressive compounded rate of 33% per annum and we are committed to continue adding new properties in key locations across the country.
Introduction of Low Cost Carriers (LCC): The historic and future growth of our industry may be directly correlated to air travel within India as well as overseas becoming affordable and within reach of the Indian Middle Class. LCCs today dominate the Indian Aviation space and InterGlobe has once again been at the helm of this change. Air travel today has opened doors to so many more locations within the country leading to Indians travelling far more within India than ever before.
Growth of the Indian Middle Class and Domestic Tourism: The size of the Indian middle class today stands at approximately 300 million and is projected to reach 550 million by 2025. The liberalization of our economy in the mid-2000s led to an influx several multinational setups and new companies which in turn boosted disposable income amongst India’s young working class. The Indian traveler today, is consequently far more discerning, well-travelled and familiar with international hotel brands. Domestic tourism in India today is at an all-time high and its contribution to the growth our industry has and will continue to be immense.
Technology, Digitization, Social Media: Technology has evolved leaps and bounds and is perhaps one of the key catalysts for effecting change across multiple industries. For us specifically, it has provided us with the power of significantly increasing distribution as well us enabling closer engagement with our customers through Social Media platforms.
All in all, our industry is poised for aggressive growth over the long term. While there may be several other factors which have and will continue to effect change to Travel and Tourism, these four and likely to be key to most developments. At InterGlobe Hotels, we will continue to our strong growth focus as well as continue to evolve ourselves both from a product as well as a customer standpoint in everything that we do.
(The Author is Shwetank Singh. He is Vice President - Development & Asset Management - InterGlobe Hotels).