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Indian tourism and hospitality sector - Evolution over the years

Based on IBEF’s Tourism and Hospitality Report 2021

At present time the tourism sector is one of the most vibrant tertiary activities and a multi-billion industry in India but the evolution of the tourism and hospitality sector took thousands of years to reach the current level. In ancient times, people used to travel a lot in search of food, trade or even education but, at that time it was just limited to nearby places for various reasons like unavailability of proper roads, transportation systems and even lack of knowledge about places and routes. Today tourism has acquired many dimensions as it is an efficient and profitable means to develop economic activity in many countries. Because of this increasing demand and popularity among people, proper attention is now given to providing all the facilities needed by the tourists which include but are not limited to transportation, food and beverages, accommodation and comfort. The Indian tourism industry will continue to grow at the fastest pace in the coming years but it may have to cope up with several challenges which will limit its growth.

PRE 1990:

During the pre-1990 era tourism became a global phenomenon with better and faster means of communication which resulted in a massive movement of people throughout the world. The various attractions which are in India hold virtually an immense potential for tourism development and therefore the endeavor was to convert this vast potential into reality through well-planned, well-defined and fully integrated programs of tourist development. Thus in order to maximize the benefits of tourism, it was necessary to introduce a policy which will boost this sector and take certain measures to involve youths and private players which eventually will broaden the tourist base in the existing market. Therefore, in the year 1982, a National Tourism Policy was launched by the government with the aim to develop an exceptional tourist infrastructure with special attention to develop the social tourism which will ultimately benefit the weaker section of the society. It was introduced with the hope that it will find wide acceptance and will help to enrich our lives and bring great prosperity to our people in the coming years. Later on, in 1988 the government formulated a comprehensive plan to promote tourism.


During this period the government introduced a National Action Plan for Tourism with the aim to develop socio-economic areas, increase employment opportunities, preservation of national heritage and environment, develop domestic as well as international tourism and increase India’s share in world tourism. To achieve this objective, there was a need to improve the tourism infrastructure and increase the capacity of hotel rooms so as to make the accommodation affordable and comfortable for the tourists. Under this scheme, the government provided an interest subsidy for the construction of hotels and also to new heritage hotels whose cost of construction was more than 50 lakhs. Apart from this, a new scheme was scheduled to be launched for low-budget tourists and a scheme of Paying guest accommodation will also be introduced. The overall goal and strategy for the development of the tourism industry are to ensure that its development is closely tied to the national development priorities of the country.


In the year 2002, another national policy on tourism was announced which focused on developing a robust infrastructure. The main aim of this policy was to position tourism as a major driver of economic growth. Under this scheme, the government has to provide a legislative framework to regulate tourism trade and industry, ensure the safety and security of tourists and create basic infrastructure and healthcare facilities. Sustainability was the guiding star of this new policy within which improvements and environmental up-gradation of protected monuments and the area around them should be considered as a linchpin of the tourism industry. Along with this greater emphasis was to be laid on eco-tourism whose parameters should be broader than those of nature tourism alone. It must help in eliminating poverty, unemployment, enhancing the status of women, preserving cultural heritage and many more. Special consideration should be given to rural tourism and tourism in small settlements.


The use of digitalization, innovation and technology is one of the key guiding principles for the promotion and development of the tourism sector. In November 2018, India attained 3rd position in the world tourism sector. The government has taken various marketing initiatives to attract tourists. The plan is to increase the support provided to the tourism industry in the digital transformation of its digital models and processes which will help tourism expand its market reach, increase growth and sharpen its competitive edge. The e-tourist visa was launched by the government to simplify the procedure of obtaining a visa which eventually attracted more foreign tourists. During this time the government also introduced various initiatives like Aatmanirbhar Bharat, Azadi ka Amrut Mahotsav and many more. Tourism has been one of the foremost affected sectors by the covid-19 pandemic. This pandemic has highlighted the vulnerability of the tourism sector and our capacity to respond to such kinds of crises. Post covid-19 it was itself a challenge to return to business as usual, as safety and hygiene became a key factors to select any destination for tourism. The crisis was an opportunity to consider the long-term implications of the pandemic and reimagine the future of tourism and coordinate actions across all levels whether government or private sector.

Beyond the Pandemic:

Now that the pandemic is almost over let’s take a brief look at how it has changed our life and the tourism sector completely. The pandemic has now shifted our whole focus to safety and more use of technology. Hotels are working on increasing occupancy at reduced rates in order to step up the pace as a new notion of revenge travel is introduced, where individuals desire to escape their dull routine as they were confined inside their homes. Additionally, a lot of businesses have permitted WFH for their employees, giving them additional free time to travel and cross things off their bucket lists which eventually resulted in the recovery of resorts better than business hotels. In order to make up for the financial shortfall brought on by the travel ban, the government is also implementing a number of measures to boost tourism. The major changes in the tourism and hospitality sector are that they are now more lenient with their airline and hotel cancellation and date change policies.


India’s great competitive strength from a tourism point of view is its ancient and yet living civilization, the rich and natural rural landscape, cultural diversity of its people through its languages, cuisines, tradition, customs etc. The economic development of any nation, whether developed, developing or under-developed country, is significantly influenced by its tourism sector. The main aim of the government was always to enhance and maintain the competitiveness of India as a tourist destination. The employment potential is certainly the highest in the tourism sector as compared to any other sector and India has the potential to more than triple its travel and tourism job. As a result, the tourism sector is attracting a large number of visitors to India and generating a large number of employment and income-earning opportunities.


Written by Nidhi K. for ProMiller

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