India tourism aims to capitalise on improved air connectivity

Hotels, FDIs, start-ups and new frontiers discussed at investment summit

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September 23, 2016

/ By / New Delhi

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The Indian travel and tourism sector is poised to become the most investment-friendly market of the world in terms of attracting global investors, anticipating quick solution to some old challenges.

The fast-improving air connectivity, growing network of highways and finer railway infrastructures promises a lot of tourism opportunities throughout the nation. During his inaugural speech at the Incredible India Tourism Investors Summit in New Delhi day before, the Indian Minister of Finance and Corporate Affairs, Arun Jaitley, asserted the development of a business model for the hotel industry all over India. The emergent drive in tourism will bring a huge demand of capacity for the hospitality sector, he said.

The rise of the Indian middle class and the increase in disposable incomes has continued to support the domestic tourism and outbound tourism in and out of India over the last five years. Figures such 19.9 million outbound trips an 8.7 pc increase in 2015 or inbound tourist volume growth at a Compound Annual Growth Rate (CAGR) of 6.8 per cent during 2010-15 speaks volumes about the future potential of India’s tourism industry.


A plenary session on state investment opportunities in India - Third day of Incredible India Tourism Investment Summit 2016

A plenary session on state investment opportunities in India on the third day of Incredible India Tourism Investment Summit 2016

The Investment summit will hold unique sessions on various investment opportunities in India especially in the tourism sector. Why invest in Incredible India, sessions on state presentations encompassing all investible properties, and encouraging MSME (Ministry of Micro, Small and Medium Enterprises) in tourism sectors are some of the highlights of the opening keynotes of the Ministry of Tourism.

Air connectivity boosts tourism

Speaking at the Plenary Session on ‘Core Infrastructure for Tourism’ at the Summit, Ashok Gajapathi Raju Pusapati, Minister of Civil Aviation was contented while speaking about how the government facilitated a number of initiatives to make tourism affordable and accessible to the international travellers.  The latest Civil Aviation Policy opened gates for greenfield and brownfield investments in airports allowing 100 pc foreign direct investment (FDI) in the civil airline industry of India.

According to the minister, the government is also working towards an open sky policy with South Asian Association for Regional Cooperation (SAARC), which means an international free market among member nations in terms of the aviation sector. However, the recent tensions with neighbour Pakistan, and Islamabad being the venue of the next SAARC summit, a quick execution is unlikely.

100 pc FDI in hotel sector

Investments and expansions from global hotel chains are surging as a response to the growing tourism outlook of the nation. Prominent names in the global hotel industry such as Marriott International, Steigenberger Hotels (which runs 5-star Radisson Hotels) and the likes are enhancing a huge footprint all over the country. ITC Ltd has renewed its 40-year partnership with Starwood Hotels & Resorts to operate 11 luxury hotels in India.

Dr Mahesh Sharma, Minister of State (I/C) for Tourism and Culture said, “The government is working towards addressing the requirements of tourist infrastructures such as roads, rail, waterways and civil aviation, among others. We have liberalised the policy environment including allowing 100 pc FDI in hotels, railways, etc and invited the private sector to address the gaps.”

Mr Rajeev Menon, COO, Marriott International, pointed out five key attributes such as unique places, infrastructural facilities, ease of doing business, skilled manpower, safety and security – and he thinks the destination will automatically become an attractive hotspot for national as well as global travellers. He strongly advocated in favour of providing infrastructure status to the hotel industry for long-tenure loans.

Moreover, the tourism ministry plans to modify its strategy and exempt homestays facilities from service tax or commercial levies along with facilitating the licensing process online. This is also an effort to encourage entrepreneurship in tourism which is expected to encourage people to offer homestays to the growing influx of national and international tourists.

“Gaps such as lack of moderately-priced hotel rooms offer tremendous opportunity for foreign investors. They can choose from a diversified product portfolio to invest in,” said Vinod Zutshi, the Secretary at Indian Ministry of Tourism.

The tourism minister acknowledged the participants in the event with his latest tweet:

Films can boost tourism

The tourism minister laid a lot of stress on cleanliness, connectivity and security to boost tourism. Moreover, the prospects of film tourism were discussed vividly by the Minister of Information and Broadcasting, Colonel Rajyavardhan Singh Rathore. Addressing the fact that films and advertisements can play a key role in popularizing India, he announced initiatives taken by the government to make filming in India easy. The Ministry has set up a film facilitation office as a single window for all clearances and approvals required to shoot in India. Innovative awards such as the most Film-friendly State Award were announced to promote shooting in India.

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