Hotel Industry

India is renown around the world for its rich wildlife, unique transport system, romantic Hindu culture and also for its imposing ancient buildings, most famously the Taj Mahal.

It goes without saying that such attractions have led to a booming tourism industry in the country thereby contributing significantly to the economy in India.

A well to do tourism industry will invite huge investments as well as a lot of government attention in any country and India is not an exception.

The tourism and hotel industries are permanently linked and the good health of one is infected on the other. India’s hotel industry has benefited enormously over the years from tourism as well as the increasing economic growth and business opportunities.

This has naturally attracted a concerted effort by all parties involved to market India as a tourism destination and also a thoughtful formulation of policies and incentives to ensure further success.

The hotel industry has stood to gain from a number of government actions aimed at promoting both foreign and domestic tourism. These include significant tax cuts in the local air industry, reduction of excise tax on aviation fuel, fewer restrictions on chartered flights in terms of frequency and size as well as the innovative decision to categorize conference centers as core infrastructure with the aim of channeling more funding towards them, a factor that has resulted in to heavy demands for hotel rooms.

According to a recent survey on the hotel industry in India, it currently boasts around a hundred and ten thousand rooms with a shortage of a hundred and fifty more which has led to the sharp increase of room rates in the country.

It is now common for big hotels to offer the same room to two or three different guests in a day while charging them full rates and with the persistent of such shortage, it is widely believed that the rates will only go up as demand increases, a fact that will eventually take its toll on the entire industry as a result of the country losing its appeal as a pocket friendly tourism destination.

The Indian government has reacted sharply to this trend by offering substantial incentives to prospective hotel owners in a bid to increase room capacity of which 50% are expected to be luxurious ones although there is a huge rise in potential for less the less costly ones.

This implies good times ahead for the industry.