Take a look on how travel sector in India is outperforming and playing major role in increasing India's GDP rate.

1. Industry Analysis
Travel Sector in India

2. Introduction
• Travel and tourism industry has emerged as one of the largest and fastest growing
economic sectors globally.
• According to the United Nations World Tourism Organization (UNWTO), tourism’s total
contribution to worldwide GDP is estimated at 9%. Asia pacific has recorded the highest
growth in number of international tourist arrivals in 2013 at 7% followed by Africa at 6%.
• International tourist arrivals are set to increase at 3.3% per annum and expecting
approximate amount of 1.6 billion by 2020 and 2.2 billion by 2030.
• Europe and USA are expected to witness growth rate of 2.2%-2.5% where as the Asia
Pacific regions, especially India are expected to witness growth rate of more than 5.5% by
2020.

3. Indian tourism industry
International(CAGR: 11.21%)
Domestic(CAGR: 16.5%)
17 19 21 24
748 865 1036 1205
2010 2011 2012 2013
• Travel and tourism sector holds strategic
importance in Indian economy.
• Generating employment, income, foreign
exchange, infrastructure, and development
expansion are some of the economic benefits
provided by the tourism sector.
• In 2013, market research reports witnessed an annual growth rate of 6.2% and over the next
decade the tourism industry is expected to grow at 9.6% per annum.
• Travel and tourism industry directly contributed INR 1,920 billion to
India’s GDP in 2012-13; reflecting growth CAGR of 14% in the last 5
years.

4. Employment in tourism sector
• The travel and tourism sector supported 25 million jobs in 2012-13 directly related to
tourism, constituting 4.9% of the total employment in the country and the number is
expected to rise to 31 million by 2023.
Tourism
Industry
Hotel &
Restaurants
Tour
Operator
Travel
Industry
• Hotels and Restaurants have contributed 1.4%-1.6%
over the last 7-8 years. As per estimation, Indian
hotels and restaurant industry are expected to be
worth of INR 2,000 billion with 10 million of
employment by 2023.
• Major players who are contributing in hotel industry
segments are ITC Hotels, Oberoi group of hotels,
Hotel Leela ventures, Indian hotels, and so on.
• As per the estimation of Ministry of Tourism of India,
there are nearly 6,000 travel trade companies and
firms. Thomas Cook, Kuoni India and Cox & Kings
are the major players in it.

5. Online Travel Agencies(OTAs)
• Riding on a high tide, Online travel market expected to reach INR 200 billion by 2020.
Competition in online ticket booking is moving away from air to non-air segment.
• Religious travel is becoming hot segment while meta search engine is the latest innovation
in online travel.
• Three stalwarts of Indian online market; MakeMyTrip, Cleartrip and Yatra have become a
long way, where MakeMyTrip is valued at INR 60 billion and the only listed company in
OTAs segment.
100
80
60
40
20
0
2011 2013
Growing
Internet
User

6. Major players in OTAs
10
2 4 6 8
0
Unique
Visitor(Millions)
Mobile
traffic(Millions)
• MakeMyTrip started its
operation in 2000 in much less
tech savvy era and its current
valuation is more than $1 billion.
• With growing number of Internet
and smartphone users, online
business is moving towards
mobile.
• According to Cleartrip CMO, mobile accounts for 20% of flights, 25% of
hotels, and 50% of train bookings; and they are expecting to get 50% of
its traffic from mobile by July 2015.
• However, packages have been the single biggest challenge for online
travel agencies as they are investing more on technology for scaling up
hotel industry and holiday business.

7. Comparative state assessment
250
200
150
100
50
0
No.of
tourist
(Millions)
CAGR
• Gujarat and Andhra Pradesh has consistently
stayed on top of the list even with the low level
of state expenditure towards tourism sector.
• Himachal witnessed the largest increase in
rank with increased spend towards tourism
sector at 0.63% of the overall likely state
expenditure.
• Gujarat with 0.71% of state expenditure allocated for tourism
sector witnessed a considerable increase in its budgetary
allocation proportion.
• Gujarat tourism campaigns with its brand ambassador as
Mr. Amitabh Bachchan and other marketing and promotional
activities.

8. Key drivers & Trends for Growth
Domestic tourism Inbound tourism Outbound tourism
Healthy economic growth New product offering Rising disposable income
Rising income level Rich natural source Attractive tour packages
Low cost airlines Government initiatives International events
Easy finance availability Multiple marketing &
promotion activities
Increase business travel
Diverse product offering Healthy economic growth Finance availability