Tourism & Hospitality

Sector

Tourism & Hospitality

Globally, travel and tourism industry contributed approximately $2.9 trillion to GDP in 2019.
Sejal-Hule
Sejal Hule

Sector Expert
   

Snapshot

Increasing per capita income is driving the growth of global tourism market leading to continuous growth in international tourism.The global travel & tourism industry has grown from US$ 6.03 Trillion in 2006 and reached US$ 8.27 trillion by 2017 growing at a CAGR of 2.9%.Government bodies and organizations such as World Tourism Organization UNWTO are promoting tourism in order to attract diverse tourists across the globe. These initiatives are leading to the growth of global tourism market.Adventure tourism is new concept in tourism market driving the overall tourism market.Further, medical tourism is also a new trend observed in global tourism market. The global market for hospitality is highly fragmented. The food and beverage services market accounted for the largest share of the hospitality market in 2018 at around 78%.Growth in the historic period resulted from improved earning capacity, emerging markets growth, travel, and tourism.
Global adventure tourism market size

INDUSTRY SCENARIO FOREIGN INVESTMENT INDUSTRY TRENDS MAJOR PLAYER

1.5 billion international tourist arrivals were recorded in 2019, globally. A 4% increase on the previous year which is also forecast for 2020, confirming tourism as a leading and resilient economic sector, especially in view of current uncertainties. All regions saw a rise in international arrivals in 2019. Against a backdrop of global economic slowdown, tourism spending continued to grow, most notably among the world’s top ten spenders.
Innovative Hotel Design - In the hotel industry guests are looking for more ‘inside the hotel’ experiences. This demand is driving hotel managers to ensure that all parts of their hotels are as welcoming as the lobby.

  • France reported the strongest increase in international tourism expenditure among the world’s top ten outbound markets (+11%), while the United States (+6%) led growth in absolute terms.
  • Some large emerging markets such as Brazil and Saudi Arabia reported declines in tourism spending.
  • Looking ahead, growth of 3% to 4% is predicted for 2020.
  • Increased Automation in Hotels - Hotels are using technologies that are transforming the customer experience
  • Some technologies are leading to significant improvements and savings in the hospitality market.

The Foreign Direct Investment (FDI) is required for a country, when domestic capital is inadequate for the purpose of enhancing economic growth. FDI has the potential to generate employment, raise productivity, enhancing competitiveness of the domestic economy through transfer skills and technology, strengthening infrastructure, enhance exports and contribute to the long-term economic development of the world’s developing countries.

  • The government has permitted 100 percent FDI in the automatic route
  • India will be the leader in the tourism industry in South Asia with 8.9 million arrivals by 2020
  • India is gradually emerging as the second most rapidly increasing (8.8 percent) tourism economy in the world

41% of the business and 60% of leisure travel arrangements are nowadays made online. The hospitality industry has been undergoing tremendous changes and disruptions over the last two decades. Virtual communities i.e. Social networks and in particular TripAdvisor have had a profound impact on customers. This has led to more transparency and, overall, to an improved quality of the services provided by hospitality companies. Airbnb represents a major disruption in the hotel industry, making the competitive landscape tougher than ever. This is further reinforced by the fact that lodging properties listed on Airbnb do not necessarily have to comply with the same rules and regulations than traditional hotels. Apps, in particular, are increasingly important in the way hoteliers manage the services they provide to their customers and can now control many aspects of the guest cycle and experience. More customization and specialization may enable increased value creation for hospitality companies. Low cost carriers enable more people to travel the world at a reasonable price. Moreover, several emerging markets have seen their GDP increase at a rapid pace, thereby enabling their citizens to travel the world. Customers from South Korea, China, India, and others, now constitute a large body of potential travellers. Their demand, of course, has a big impact on the offer.

  • Eco travel includes simple changes, such as the availability of carbon credits when booking a flight or the option to rent an electric instead of a conventional vehicle.
  • From enjoying local cuisine to celebrating regional festivals and holidays, local experiences are set to become some of the top tourist trends.
  • The concept of combining leisure and tourism with travel for business is hardly new: “bizcations” have been popular for many decades.
  • Many customers now book their travel and accommodation with the help of internet chatbots, specifically tailored AI who can handle queries and assist customers with useful information when human operators are unavailable.
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