The boom in India's tourism industry and the surge in tourist inflow to the country have percolated to other associated sectors like hospitality. The The boom in India's tourism industry and the surge in tourist inflow to the country have percolated to other associated sectors like hospitality. The revenues for the Indian hotel and restaurant industry in the year 2006-07 exceeded US$ 118.85 million, an increase of nearly 22 per cent over the previous year. The industry is poised for rapid growth and is projected to be well worth over US$ 158.49 million by the year 2010.

And with the continuing surge in tourist inflow, this sector is likely to offer tremendous opportunity for investors. For example, while the estimated number of required hotel rooms is around 240,000, the current availability is just 90,000 rooms - leaving a shortfall of 150,000 rooms to be provided. India's hospitality sector is expected to see an estimated US$ 11.41 billion in the next two years, and around 40 international hotel brands by 2011, according to a report by Ma Foi Management Consultants. Moreover, the sector is expected to provide over 400,000 jobs.

Along with these large-scale expansion plans, international hotel asset management companies are also likely to enter India. Several global hotel chains see immense investment opportunities in the sector with global chains like Hilton, Marriott International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI), InterContinental Hotels group and Hampshire amongst others have announced major investment plans in India with others likely to follow suit.

Latest Trends

Hotels are no longer satisfied with the plain-vanilla room concept but are now getting ready for alternate hospitality formats such as residential hotels, destination resorts, condo hotels, vacation ownership and private residents' club.

• Four Seasons is developing a destination resort in Puthenkayal, Kerala, which will have 75 villas and also 20 branded, luxury private residences. The resort will be operational by 2012.
• Nearly 11 per cent of the hotel demand in the country is from long stay guests. The Leela Group is looking at tapping this market. Its property in Gurgaon will have 90 apartments called 'The Residence' aimed at the long stay guests.
• India's largest real estate player, DLF, is building India's first residential hotel in Goa with the Hilton Group. DLF plans to invest US$ 2 billion to have six hotels on a similar format in the next five years.

Expansion Plans

With India being on the global tourist map and more and more people coming to India for tourism or business, hotels are looking at expansion in a major way.

• The Taj Hotels Resorts and Palaces — in a joint venture with CC Africa, a leading safari operator and ecotourism company from Africa is opening two safari lodges in Madhya Pradesh at Panna and Kanha National Parks. It already has a safari lodge each at Bandhavgarh and Pench National Parks.
• Marriott, which manages six hotels in India at present, is looking at a steady growth in the number in the next four years. It expects to have 25 hotels by 2011 with room strength of 8,000–10,000.
• EIH, which owns the Oberoi and Trident group of hotels, is looking at opening 10 hotels in India and abroad in the next three years. These include a luxury Oberoi Hotel in Gurgaon to be opened in 2009, a 320-room Trident hotel at the Bangalore International Airport to be opened in 2010, and two hotels to be opened in Hyderabad in 2010.
• Hotels in Hyderabad are on an expansion spree and a whooping 4,000 rooms will be added in the next couple of years. Around 20 major properties including that of Park Hyatt, Trident, Marriott, Leela and Taj among others will effectively double the current capacity of 4,000 rooms across all types of hotels.

International Recognition

India's booming tourism sector has not only witnessed international investments but also achieved international accolades with its increasing appeal as the leading global tourist destination. The government has been instrumental in making tourism a priority sector. Its efforts have borne fruits with a series of international recognition and awards.

• India has been elected to head the UN World Tourism Organisation (UNWTO), the highest policy making world tourism body represented by 150 countries.
• The world's leading travel and tourism journal, Conde Nast Traveller, has ranked India as the 'numero uno' travel destination in the world.
• India was adjudged Asia's leading destination at the regional World Travel Awards (WTA).
• India's Taj Mahal continues to figure in the Seven Wonders of the World.
• Bangalore-based Leela Palace Kempinski was voted the favourite business hotel in the world in a Readers' Choice Awards by Conde Nast Traveller in 2007.
• India bagged the World's leading Destination Marketing Award for the Incredible India campaign.

Government Initiatives

To unlock the huge potential in this sector, the government has taken various initiatives for the development of this sector.

• Launch of Incredible India campaign to promote tourism both in domestic and international markets.
• Recognition of spare rooms available with various house owners by classifying these facilities as "Incredible India Bed and Breakfast Establishments"', under 'Gold' or 'Silver' category.
• A new category of visa, "Medical Visa" ('M'-Visa), has been introduced which can be given to foreign tourists coming into India for medical tourism.
• Ministry of Tourism has tied up with United Nations Development Programme (UNDP) to promote rural tourism.