TOURISM AND HOSPITALITY INDUSTRY IN CONTEXT OF ECONOMY SUPPORT

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1 TOURISM AND HOSPITALITY INDUSTRY IN CONTEXT OF ECONOMY SUPPORT Mr.Rajesh Kumar Mishra, Research Scholar, Mysore Universit, Mysore. Dr.P.Shrinivas Raao, Director (ID), AMC Group of Institution, Bangalore. ABSTRACT The tourism and hospitality industry is the largest service industry globally in terms of gross revenue and foreign exchange earnings. It is also one of the largest employment generators in the world the driving forces of this industry lie in the recreational, knowledge seeking, religious and business interests of people around the world the human urge for new experience, adventure, and entertainment plays the role of a catalyst for the growth of this industry. it also has the potential to stimulate other sectors in the economy owing to the cross - synergistic benefits and its backward and forward linkages which makes tourism and hospitality both a cause and consequence of economic development. A study has been carried by taking the help of secondary data to understand the real position of the tourism and hospitality industry in the present context. Introduction The Indian Tourism and Hospitality industry is one of the largest segments under the services sector of the Indian economy and offers the most diverse products globally. The country's rich history, cultural heritage, diversity of religion, variety of landscapes and medicine fascinate both budget and luxury travelers. Tourism in India has registered significant growth over the years, which is led by rising incomes, increasing affordability, growing aspirations, increasing globalization, and a growing airline industry along with improvement in travelrelated infrastructure. The industry holds immense potential for the Indian economy and it can provide impetus to other industries through backward and forward linkages. This industry has materialized as one of the key drivers of growth among the services sectors in India. It contributes to 6.23 percent to the National GDP and 8.78 percent of the total employment in the country. Constant transformation, functional growth and improving standards have gained the hospitality industry of India approval all over the world. 28

2 The industry is broadly compartmentalized in two segments Tourism: The tourism sector includes medical and healthcare tourism, adventure tourism, heritage tourism, ecotourism, rural tourism, wildlife tourism and pilgrimage tourism. Hotels: These include business hotels, suite hotels, resort hotels, airport hotels, extended stay hotels, apartment hotels, resort hotels, timeshare hotels, casino hotels, convention centers and conference centers. Tourism in India has generated immense employment opportunities and is a vital source of foreign exchange for the country. The travel and tourism industry contributed Rs 2.17 trillion (US$ 36 billion) or 2 per cent to the country's gross domestic product (GDP) in 2013.The figures are expected to rise to Rs 4.35 trillion (US$ billion) by The revenue from domestic tourism is likely to grow by 8.2 per cent in 2014 as compared to 5.1 per cent a year ago, according to the World Travel and Tourism Council (WTTC). The Indian hospitality sector has been growing at a cumulative annual growth rate of 14 per cent every year adding significant amount of foreign exchange to the economy. The Travel and Tourism Competitiveness Report of 2013, published by World Economic Forum, India, stated that the ranking of India is 11 th in the Asia Pacific region and 65 th in the World Travel and Tourism Competitiveness Index As per the Planning Commission, the sector creates more jobs per million rupees of investment than any other sector of the economy. It is capable of providing employment to a wide spectrum of job seekers, from the unskilled to the specialized, even in the remote parts of the country. The sector s employment-generation potential has also been highlighted by the World Travel & Tourism Council (WTTC), which says India s travel and tourism sector is expected to be the second-largest employer in the world, employing approximately 50 lac people, directly or indirectly by Scope and objective of the study The scope of the hospitality industry comprises of a range of businesses that provide services and facilities such as accommodation, food and beverage, entertainment, gaming and related products. The present study is based on the secondary data. The objective of the study is to find out the contribution of tourism and hospitality industry in the economy, employment generation, and the future of the industry. Review of literature Praveen Sethi (1999) in his book "Nature and scope of Tourism" opines that "earnings from international tourism represent an invisible export; they are the result of selling the country's tourism product to tourists from abroad. Expenditure on tourism are the opposite. They represent an invisible import; one's residents are buying a tourism product elsewhere'. Gupta and Bansal (2001) in his presentation in the book "Tourism Towards 21st century" titled 'Sustainable tourism in the Hindu-Kush Himalayas' tells about the coordination of partici9pating agencies in tourism as 29

3 'coordination and complementarily among different sectoral agencies is a must for the success of a tourism policy because tourism, in practice is not the responsibility of a single agency but of a number of agencies'. The Indian Tourism and Hospitality sector contributes around 6.23% to the national GDP and 8.78% of the total employment of the country. The direct contribution to the GDP totaled US$ Bn in 2012 and is expected to rise to US$ 40.8 Bn this year. The market size of the tourism and hospitality industry stood at US$ Bn. The industry grew at a CAGHR of 36.50% during and growing at a forecasted CAGR of 15.15%, it is expected to become a US$ Bn industry by Methodology The study has been based on secondary data. The data have been collected from the books, journals, government notifications, etc. Factors Responsible for Growth Rising income in households Increase in niche tourism such as eco-tourism, luxury tourism and medical tourism Tourism and hospitality sector attracted second highest FDI i.e. US $3.2 billion in the year percent FDI allowed through automatic route in hotel and tourism sector Diversity of the country attracts an ever increasing number of tourists every year Government initiatives in improvement of infrastructure like airports, highways, ports and railways India is a labour intensive country India has been ranked as the fourth most preferred travel destination by Lonely Planet selecting the country among the top five destinations from 167 countries. Employment Opportunities The hospitality industry is a labour intensive one and India has a large concentration of English speaking individuals, which prove as a catalyst in advancement and prosperity of the industry. Besides the regular jobs of a travel agent, tour guide, air hostess, chef, waiter and managers other opportunities await those who are keen on taking up a job in the sector. The new trends that have been emerging off late are as follows: Cruise Ship Management Club Management and Recreation and Healthcare Management Airline Catering and Cabin Service Hotel Tourism and Association Fast Food Joint Management and Restaurant Management Beverage, food and confectionery production Institutional and Industrial Catering and Government owned catering departments like armed forces mess, ministerial conventions and railways services. The Future of Hospitality The Indian economy is opening up its horizons as it continues to integrate with the world economy. Therefore, the advantages of conducting business with and in India are many. This has lead to the maneuvering of variety 30

4 of jobs to the shores of India, bringing in its wake transit travelers, business travelers, business meets and holiday seekers. India is the ninth largest civil aviation market in the world in The sector is projected to be the third largest aviation market globally by India s aviation market caters to 117 million domestic and 43 million international passengers in Over the next decade the market could reach 337 million domestic and 84 million international passengers. Government Initiative The Government of India and the Ministry of Tourism have contributed significantly to the growth and development of the industry by providing various policy measures, tax incentives and infrastructural support such as Promotion of rural tourism by Ministry of Tourism in collaboration with the United Nations Development Programme Availability of Medical Visa for tourists coming into the country for medical treatment 100 percent FDI allowed through automatic route in hotel and tourism sector Insurance of visa on arrival for tourists from select countries like Finland, Japan and New Zealand Capital subsidy programmes for budget hotels Elimination of customs duty for import of raw materials, equipment, liquor etc. Five-year income tax holidays for 2-4 star hotels established in specified districts having UNESCOdeclared 'World Heritage Sites' Industry overview Accommodation and catering Tourist destinations Events Travel and tour formats 31

5 Accommodation and catering: This segment is highly fragmented and it is further divided in two broad sub segments namely; Restaurants and Hotels. It is the largest segment of the industry and it is mostly dominated by the unorganized sector. Tourist Destinations: This segment comprises India's vast array of tourist destinations varying from world heritage sites to beautiful scenic destinations and extravagant festivals among other attractions Events: It is the newest segment of the industry and it is driven by the rising trend of concerts, youth festivals and weekenders in the country Travel and tour Formats: This segment works under two broad categories; offline mode and online mode and it comprises various tour and travel formats such as eco-tourism, medical tourism, adventure tourism etc. Development of Industry Pre The National tourism Policy was announced and the government formulated a comprehensive plan to promote tourism in Government stressed on public-private partnership in the sector and the polices gave a boost to the hotel industry. Many such partnerships are still active A new policy on tourism was announced in 2002 with focus on developing infrastructure and online travel portals and low cost carriers were launched The government undertake marketing initiatives and the domestic spending on tourism accounted for over 80.3% of the total tourism revenues Present Foreign tourists visiting India rose to 6.36 Mn and new products such as Medical tourism and Ecotourism came into existence 32

6 Conclusion All-round development of the tourism and hospitality sectors, governments support, development of infrastructures and initiations from the new entrepreneurs are very essential. If these facilities will be extended from all connected areas definitely this sector will contribute a lot in the Indian economy and create better employment opportunities. Reference Ajith Kumar MK, Ph.D Thesis: Psychographic and Demographic Profiles of Foreign Tourists Visiting Kerala With Secuak Reference to Spending Patterns' CUSAT August 1998 Clare A Gunn: Tourism Planning - Basics, Concepts, cases: Taylor and Francis, Washington DC 1994 Gupta and Bansal SP (Es); Tourism Towards 21st Century, Deep Deep Publications (P) Ltd., New Delhi 2001 Muraleedhara Menon K; Tourism Management in India, Printwell Publishers & Distributors Jaipur 1999 Pankaj Dinodia, Indian Tourism and Hospitality Industry: Rising ahead of the overcast Dinodia, January 2014 Philip Kotler; Principles of Marketing; Prentice Hall and Engle wood Cliff 1982 Praveen Sethi; Nature and scope of Tourism; Rajat Publications, Delhi 1999 p3 Sankar S; Project study ' Environmental Impact assessment of the Thenmala Eco Tourism Development Project" KFRI Peechi 1999 Veerasekharan R.; 'Significance of Tourism in India' The Southern Economist Vol.32 No.9 Sept