The Importance of the Hospitality Industry

8/11/2019 The Importance of the Hospitality Industry

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The Importance of the Hospitality Industry

The hospitality industry is one of the biggest in the world, rivaling even fuel and

rice production companies. Every year,hotel schools in South Africa take in

greater numbers of students, showing that the industry is continuing its growing

streak. Almost every country in the world has a hospitality industry, including both

developed and developing ones. Why is this so? Why are hospitality industries so

popular?

The short answer is that they are vitally important to any countrys economy we

have put together a list of why this is so:

Any destination that could serve as a tourist attraction needs to have a

hospitality industry. Tourists need food and accommodation, so restaurants,guesthouses and hotels are a necessity to make their stay enjoyable.

Information centres run by various governments tourism industries areessential in making any tourists experience a happy one. Providing visitors

with enough information on the people and sites inhabiting the place they arevisiting, as well as directing them towards a specific place they may be looking

for and answering any questions they may have is absolutely essential .Without centres such as these, tourists would get lost often and countrieswould lose business fast.
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The amount of revenue generated from tourism and hospitality every year is

significant. Hardly any country would be able to survive financially withoutinput from the tourism industry, with some places reaping up to 90% of theirGDP from tourism (which, naturally, cannot function without the hospitalityindustry).

The level of job creation that comes with a successful hospitality industry issubstantial. Concierges, chefs,hotel management staff and waitresses all need to

be hired in order to ensure that every guest or patron is taken care of. Thousands of

jobs are created annually as a direct result of the hospitality industry.The hospitality industry is undoubtedly one of the biggest in the world. It is an

extremely exciting environment to be part of as the only constant in this industry is

change. It is because of the dynamic nature of the hospitality industry that it has

become so important worldwide
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INTRODUCTION TO HOSPITALITYINDUSTRY

Introduction

The tourism and hospitality industry is one of the largest segments under theservices sector of the Indian economy. Tourism in India is a key growth driver anda significant source of foreign exchange earnings. In India, the sector's direct

contribution to gross domestic product (GDP) is expected to grow at 7.8 per centper annum during the period 2013-2023.The tourism sector in India is flourishing due to an increase in foreign touristarrivals (FTA) and a larger number of Indians travelling to domestic destinations.According to statistics available with the World Travel and Tourism Council(WTTC), revenues gained from domestic tourism rose by 5.1 per cent in 2013 andis expected to increase by 8.2 per cent this year. Hotels are also an extremelyimportant component of the tourism industry. The Indian hospitality sector has

been growing at a cumulative annual growth rate of 14 per cent every year, adding

significant amount of foreign exchange to the economy.The role of the Indian government, which has provided policy and infrastructuralsupport, has been instrumental in the growth and development of the industry. Thetourism policy of the government aims at speedy implementation of tourism

projects, development of integrated tourism circuits, special capacity building inthe hospitality sector and new marketing strategies.

Market size

The total market size of the tourism and hospitality industry in India stood at US$117.7 billion in 2011 and is anticipated to touch US$ 418.9 billion by 2022.

FTAs during the period January-June 2014 stood at 3.54 million as compared toFTAs of 3.36 million during the corresponding period of 2013, registering agrowth of 4.5 per cent. FTAs during June 2014 were 492,000 as compared to451,000 during June 2013, a growth of 11.5 per cent.


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Billion) during the same period last year, registering a growth of 17.9 per cent.FEEs during June 2014 were R s 8,458 crore (US$ 1.41billion).The number of tourists availing the tourist Visa on Arrival (VOA) scheme duringJanuary-June 2014 have recorded a growth of 28.1 percent. During the period, atotal number of 11,953 VOAs have been issued as compared to 9,328 VOAsduring the corresponding period of 2013.

Investments

The foreign direct investment (FDI) inflows in hotel and tourism sector during the

period April 2000March 2014 stood at US$ 7,348.09 million, as per the datareleased by Department of Industrial Policy and Promotion (DIPP).The following are some of the major investments and developments in the Indiantourism and hospitality sector:

India's largest integrated travel company Thomas Cook's human resourcesand staffing arm Ikya Group plans to buy Hofincons Infotech and IndustrialServices. The deal is estimated to be valued around Rs 75-100 crore(US$12.47-16.63 million).

Hyatt has announced the opening of Hyatt Raipur, its sixth Hyatt-brandedproperty in India. "We are delighted to introduce the first Hyatt-brandedhotel to Raipur. Hyatt hotels are intimate, upscale hotels that offer authentic

hospitality in a vibrant environment," as per Mr Pablo Graf, Senior VicePresident -Operations, Hyatt Hotels & Resorts, South West Asia.

Lemon Tree Hotels plans to invest Rs 1,000 crore (US$ 166.35 million) toramp up room capacity from 2,800 to 8,000 across the country by the end of2017. "Our ramp-up will include rooms in our upscale brand Lemon TreePremier, mid-scale brand Lemon Tree Hotels and economy brand Red Fox,"said Mr Sumant Jaidka, COO, Lemon Tree Hotels.

Oberoi Realty plans to bring iconic luxury brand Ritz-Carlton to Mumbai.

The American brand hotel is being planned in Worli and is expected to comeup by 2016 at a cost of Rs 750 crore(US$ 124.75million).

Movenpick Hotels and Resorts has signed a management agreement tooperate a new hotel in Kochi, its third property in India. The hotel will beowned by ITMA Hotels India Pvt Ltd, an associate company of Jomer


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Government Initiatives

The Ministry of Tourism has launched a web-based Public Delivery System to easethe process of filing applications by the travel trade service providers seekingrecognition from the Ministry, and also to bring in transparency in granting theapprovals. All the applications will now be examined, processed and approvedwithin 45 days from the receipt of completed applications.Tripigator.com, a travel planning engine, was launched in Delhi in partnership withIncredible India of Ministry of Tourism, on May 5, 2014. The website instantlygenerates personalised travel itineraries with fewer inputs and significantly reducesusers' efforts by replacing 10 tabs with one tab.The Ministry has also launched a campaign 'Clean India' to sensitise all sections ofthe society on the importance of cleanliness and hygiene in public places,

particularly monuments and tourist destinations. The campaign is a blend ofpersuasion, education, training, demonstration and sensitisation of all sections ofthe society.The Ministry of Tourism has been making efforts to develop quality tourisminfrastructure at tourist destinations and circuits in the country. It has sanctioned Rs4,090.31 crore (US$ 680.52 million) for a total number of 1,226 tourism projects,which includes projects related to Product/Infrastructure Development forDestination and Circuits (PIDDC), Human Resource Development (HRD), Fairsand Festivals, and Adventure and Rural Tourism for infrastructure augmentation.


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The Importance of the Hospitality Industry