India must seize job-creation opportunity provided by tourism sector

India needs to seize the opportunity provided by the tourism sector that represents a relatively low-hanging fruit for job creation amid a challenging environment in services and manufacturing industries due to the rise of AI, protectionism and supply concerns, the Economic Survey said.

India’s tourism industry showed positive signs of revival post-pandemic and witnessed over 92 lakh foreign tourist arrivals in 2023, implying a YoY increase of 43.5 per cent, while the hospitality industry has risen to meet the increasing number of tourists' needs by creating the highest amount of new supply in 2023 with the addition of 14,000 rooms, it noted.

Citing the World Economic Forum's (WEF) Travel and Tourism Development Index (TTDI) 2024 Report, the Economic Survey 2023-24 emphasised the need for improvements in tourist services and infrastructure and the development of a skilled workforce.

“In a challenging environment for employment generation in services due to the rise of AI and manufacturing due to rising protectionism, transportation costs and supply concerns, the tourism sector represents a relatively low-hanging fruit for job creation. India has to seize the opportunity,” the Survey asserted.

To formalise employment within this sector, the Ministry of Tourism has initiated the Incredible India Tourism Facilitator Certificate Programme.

It aims to create a skilled cadre of tourist facilitators nationwide through a digital platform that offers online learning opportunities and certification courses, it noted.

The Survey acknowledged that India's travel and tourism (T&T) sector has been influenced by global inflationary pressures and delays in the recovery of capacity, similar to other economies.

“However, the decline in price competitiveness since 2021 has been minimal compared to its peers, with only a 0.7 per cent drop. India's decline is particularly slight at just 0.1 per cent from 2021 levels, which reflects the government’s consistent efforts to maintain stability despite the slowdown caused by the COVID-19 pandemic,” it said.

India has significantly earned foreign exchange receipts amounting to over Rs 2.3 lakh crore through tourism, indicating a 65.7 per cent YoY increase.

The country's share of foreign exchange earnings in world tourism receipts increased from 1.38 per cent in 2021 to 1.58 per cent in 2022, the Survey noted.

Similarly, it said the hospitality industry has risen to meet the increasing number of tourists' needs and to elevate the overall guest experience.

“In 2023, the highest amount of new supply was created with the addition of 14,000 rooms, bringing the total inventory of chain-affiliated rooms to 183,000 in India,” the Survey said adding, that hoteliers are increasingly leveraging technology to personalise guest experiences and improve operational efficiencies.

Hotels are also adopting innovative operational strategies, such as leasing or managing external restaurant, spa, and lounge brands, to capitalise on established concepts that attract hotel residents, thereby boosting revenue. In FY24, the average daily rate increased from Rs 6704 to Rs 7616, marking a YoY growth of 13.6 per cent, it said.

Noting that the tourism sector has embraced the digital revolution, the Survey said, “One such initiative is E-Marketplace, designed to facilitate interactions between tourists and certified tourist facilitators and guides through web and mobile applications.”