The rapid growth in Indian hospitality and tourism sector has left the world in awe. Alroz Aviation, a leading aviation training institute in Delhi, takes on how the blooming hospitality sector is emerging as a big contributor to the economy’s growth.
India has a large market for travel and tourism, since it offers a diverse portfolio of niche tourism products − cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and religious tourism. The country has been recognized as a destination for spiritual tourism for domestic and international tourists.
With a consistently growing population that has disposable income, the tourism and hospitality sector is witnessing a healthy growth that accounts for 7.5 per cent of the country’s GDP. According to Alroz Aviation, one of the leading aviation training institutes in Delhi, the hospitality and tourism sector in India is expected to grow at 16.1 per cent to reach Rs 2,796.9 crore by the year 2022.
“The hospitality sector encompasses a wide variety of activities within the services sector and is a major job provider both direct and indirectly. The sector attracts the most FDI (Foreign Direct Investment) inflow and is the most important net foreign exchange earners for the country. It also contributes significantly to indirect tax revenue at the state and central level, which includes revenues from VAT, Service Tax, Luxury Tax, etc,” said an industry expert at Alroz Aviation.
According to Alroz Aviation, the growth in the hospitality sector and its contributions to the GDP will continue to be substantially higher than other sectors, owing to the huge tourism potential in the country. However, the hospitality sector is one of the most heavily taxed industries, and is saddled with multiple taxes, such as VAT, service tax, luxury tax, etc., ranging from 20-30 per cent. Multiple taxations add to operational costs and reduce profitability.
“The hospitality sector has enormous potential to be the main driving force behind the growth of the economy. However, this can be made possible only with the right amount of support and incentives from the government. I believe that the government must provide its full support in incentivizing the sector and the overall taxation on the hospitality sector should be reduced to stimulate its growth and make India competitive against other internationally renowned hospitality chains,” quipped an industry expert at Alroz Aviation.