How is the hospitality industry contributing to the 5trillion$ GDP target for the Indian Economy

India is a rapidly growing economy, thanks to the increasing workforce and revenue contributed by the services sector. Hospitality industry has grown to become a significant part of it that previously included tourism, Information Technology, logistics, securities and investement, etc. While Covid-19 acted as a major jolt, the overall industry has seen a rapid recovery and is likely to grow at a CAGR of around 3.3%. While the current size of the industry is 65$ billlion, it is expected to reach 110$ billion by 2027.

But these numbers are nothing comapared to the leaps and bounds it is making in contributing to the Indian growth story. In this blog we discuss the same at an in-depth level.

Generating employement - Hospitality industry creating jobs

A hotel requires various tasks to be done with high efficiency. Hence, skilled professionals are required for this job which includes front desk recption, cleaning staff, chef, security guard, butler and many more. This way the hospitality industry contributes to diversified employment from various walks of life.

Vocal for Local - Hospitality industry supporting small businesses

The hospitality industry requires the services of various other industries to function. The guests require laundry and dining services. Usually local vendors are chosen for these purposes since not all hotels have a laundry service and large fabrics such as bedsheets and coveralls require huge washers. Similaryly local vegetable and spice vendors provide the ingredients required to prepare food. Hence, despite not being one of the biggest, the hopitality industry supports other smaller businesses.

Hospitality industry contributing to the economy via taxes

Since real estate tax rate are high in India and a hotel being a commercial entity, hospitality industry contributes immensely to the tax system of India. Also, gst on the services falls under the 18% tax bracket, which is secong highest bracket of taxation. Hence, tax levied by hotels has one of the largest contributers of tax compared to the annually generated revenue.

Made in India, Serving Internationally - Hospitality industry supporting tourism

India is a beautiful country and the rich cultural diversity offers many tourist attractions. But often, the conditions might not be suitable for non-local guests to have a comfortable stay that does not affect the pocket. Therefore, secure, relaxed staycations must be a part of the journey This is where the hospitality industry fullfills its purpose. Better hotel experiences mean longer stays and repeat customers, especially international ones. This ensures a continued boom in the tourism industry.

Hospitality industry contributing to startup revolution

With the advent of a startup revolution in India fuelled by the passion of the millenial generation who do not want to limit themselves to job-seekers, but become job creators, neo age unicorns are being born. Oyo hotels is one such shining beacon. Various large and small chain hotels have tied up the company to enable remote pre bookings, discounted stays during non-holiday season which has benefitted the customers a lot. The hospitality is likely to continue to build such collaborations and keep firing up the startup revolution.

Impressed by the hospitality industry, but want to know more? Read this blog on "The Latest Trends and Innovations deployed by hotels in Gurugram" to know more.