Visa reforms will fuel a 7.5% growth for the Indian travel and tourism industry in 2015...
Visa reforms will fuel a 7.5% growth for the Indian travel and tourism industry in 2015, the highest level for any major economy in the world, predicts the World Travel & Tourism Council (WTTC).
As per the WTTC, the industry contributed R7,642 billion and 36.7 million jobs to the Indian economy in 2014. During 2015, the industry’s GDP contribution is forecast to grow by 7.5% and employment by 1.8%. This demonstrates the sector’s enduring ability to generate economic growth and create jobs at a faster rate than the national economy, which is due to grow by 6.7% in 2015. By the end of 2015, the travel and tourism sector will contribute Rs 8,21,500 crore, 7% of India’s GDP, and 37.4 million jobs, almost 9% of total employment, once all direct, indirect and induced impacts are taken into account.
In an exclusive interaction with FE, David Scowsill, president & CEO, WTTC, said, “India has an excellent opportunity to benefit from visa reforms and infrastructure improvements under the new government. India’s travel and tourism economy is due to grow by 7.5% in 2015, which is the highest level of growth for any of the major economies in the world. But the overall contribution of India’s travel and tourism sector to the overall economy is still relatively low (6.7% of GDP, against a global average of 9.8%). This reveals the depth of the problem that India faces, but also the opportunity.”
Scowsill, however, cautioned that with inbound growth, there needs to be systematic and simultaneous infrastructure development. He felt that while the recent Budget announcement of greater investment in high-speed rail infrastructure is a positive step, there is still greater potential for high-speed rail connectivity between destinations, leveraging the massive railway network.
Touching upon the sensitive issue of taxation, he said, “India has high luxury taxes in hotels and complicated taxes on travel and tourism services and products generally that should be addressed. However, I would also urge India to step up its Incredible India campaign globally to help counter-balance some of the negative perceptions about tourism, particularly the safety of women, which is a global concern.” WTTC also felt that the recent insistence upon biometric data for visitors from France and UK will have far-reaching impact on travel to India from these countries.
Further, WTTC’s research also warns that nearly 1.6 million jobs are at risk in India’s travel and tourism sector if the government and the private sector do not act now to address the talent shortage in the sector.
The sector could employ 1,584,000 fewer people and contribute R54,800 crore less in GDP to the economy over the next 10 years, when compared to current WTTC growth forecasts, if the government and private companies fail to implement policies that promote proactive and careful talent management.
Scowsill continued: “According to WTTC forecasts, travel and tourism has the potential to contribute 46 million jobs to the Indian economy by 2025. But this growth will not happen by itself, and needs careful management, particularly in the area of human capital development. Failure to plan properly for talent requirements leads to lower growth, reduced investment, less innovation and declining competitiveness—for both countries and companies.”