Hospitality Industry

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Hospitality Industry

The hospitality industry or the tourism sector in India is expected to contribute US$250 billion to the country’s GDP by 2030, ensuring employment for 137 million public. Due to its cultural diversity, India attracts massive global guests and tourists, thus experiencing growth in the tourism sector. India has both domestic and international travel for various purposes, such as spiritual tourism, historical monuments, nature, etc. With the advancement of technology, various innovations have been created for easier access to hotel bookings and stays, such as Airbnb, OYO rooms, etc. Moreover, the hospitality industry is expanding with new projects like international chains in hotels, resorts, and restaurants, which are mostly driven by the increased number of tourists and government initiatives to boost the tourism industry in India.

The market size of the hospitality industry in India is approx. At USD 24.61 billion in 2024, and expected to reach USD 31.01 by 2029. Over the past few years, the hospitality industry in India has been achieving moderate growth with great potential to score more in the coming future. India has improved its position in the World Economic Forum's travel and tourism competitiveness index by moving from the 65th position in 2013 to the 34th position in 2019.

During the COVID-19 pandemic, the hospitality industry was the worst-hit sector, with a percentage occupancy decline of 77%. During 2020, less than 3 million foreign tourists visited India. However,

Understanding Hospitality Industry

The hospitality industry is that industry or business connected with leisure services and satisfaction of the customer experiences. The key framework of this hospitality industry is to engage in serving luxury, pleasure, and enjoyment, serving the customer's best experiences. It is indeed broad when we say the hospitality industry as it focuses more on luxury rather than satisfying the basic needs of a customer. The hospitality industry comprises various activities connected with the economic and business activities connected to the travel and tourism industry. Some of the major examples of the hospitality industry are hotels, resorts, travel agencies, etc., which are responsible for contributing essential services and requirements that enable travel and tourism. Some of the services like transport, catering, and supplier may indirectly contribute to the business operation of the hospitality industry, but these industries are not solely dependent on the hospitality industry for their revenue.

History of the Hospitality industry

The history of the hospitality industry goes back to around 40 BC when both hospitality services and religious gatherings were quite common phenomena among the people. It was way back in 15,000 BCE when historians and archaeologists discovered the existence of ancient symbols in the hospitality industry in the form of French caves. Archaeologists and historians understand that these caves were used to welcome and greet guests visiting the place.

It is also said that the Greeks around 40 BC came up with the concept of thermal baths designed for customers' relaxation and recuperation. This thermal bath concept is what in the modern era is famously known as Spa. Then came the Romans, who introduced the concept of accommodations for travellers on the premises of government houses.

Segmentation of Indian Hospitality Industry

Hospitality's literal meaning is a relationship that comes between the host and the guest, where the responsibility of a host is to comfort and greet the guest with the highest service with a due measure of goodwill. Such hospitality of a customer includes an initiative taken by the host to welcome and entertain the customers or guests. Evaluating and analyzing the Indian hospitality industry includes an evaluation or an assessment of Indian hospitality Industry associations, economy strength, and emerging market trends, significant changes in the market trends and their dynamics, and various other market overviews. In India, the hospitality Industry is segmented by hotel chains, independent houses, service apartments, economy hotels, luxury hotels, etc.

What are the Types of Hospitality Industry

The hospitality industry is expansive, and it has a diverse range of businesses, companies, and experts. Here are the most common types of hospitality industry

Travel & Tourism

It is common among people to interchangeably use travel and Tourism in the hospitality industry. However, the travel and tourism industry is specifically connected with airlines, shuttle services, travel agencies, holiday packages, destination marketing, and various other services that serve or provide the physical travel necessary for tourism customers. This travel and tourism help tourists across the globe to decide which destination to explore.


Accommodation plays a key role in the hospitality industry which includes a broad market comprising lodging to organising events and venues. Accommodations in the hospitality industry include diverse businesses such as hotels to motels, luxury, long-stay hotels, serviced apartments, Airbnb, resorts, inns, all-suites, boutique hotels, wedding venues etc.

Food & beverage

Food and beverages are a large part of the hospitality industry as they meet the needs and requirements of the customer's food and drinks. People, through food and beverage accommodations, spend leisure time and enjoy the experience of socialization. Moreover, this food and beverage industry covers many customers from various sectors, such as tourists, locals, expats, and passers-by. The food and beverage industry is one of the powerful revenue generators that contribute to the hospitality industry. It not only provides services in hotels or resorts but also meets the comprehensive requirements in meetings and various other events like parties, birthdays, weddings, and corporate events on a large scale.

Recreation & Entertainment

Recreation and entertainment are unlike the other categories of the hospitality industry mentioned above, as this industry is based on the customer's disposable income. Anything that people do to entertain themselves and enjoy their leisure time falls under this category. The recreational and entertainment industry focuses on activities that are designed to assist customers or people in resting, relaxing, and having fun. The true purpose of the hospitality industry is to ensure customers have the best enjoyable experiences in their leisure time, whether it's a meal or a relaxation at the SPA. Some examples of the recreational and entertainment hospitality industry are theatres, music, comedy acts, zoos, museums, spas, casinos, swimming pools, amusement parks, etc.

Market Size of the Hospitality Industry

According to the World Travel & Tourism Council, India stands at the 10th position across the globe in terms of travel & tourism industries contributing to the 2019 GDP. In addition to that, the Indian hospitality industry and travel and tourism sector have contributed a worth of Rs. 15.9 trillion in 2022 to the Indian economy, as per the report of WTTC.

According to the report of WTTC, it is expected that the GDP from the hospitality industry and travel and tourism will grow at an average of 7.8% annually. In 2020, India accounted for massive growth in the Indian tourism industry, providing 39 million jobs to the Indian public. This was 8% of the total employment in the country. However, the Hospitality industry and travel and tourism industries are expected to reach US$ 512 billion by the year 2028. By the year 2029, it is hopeful that this hospitality industry and travel tourism sector will circulate 53 million jobs among the Indian crowds.

As per the source during October 2023, the percentage share of foreign tourist Arrivals in India was highest in the Delhi Airport at 34.74% followed by Mumbai Airport at 14.75%, Haridaspur Land Check Post at 9.03%.

Globally, the hospitality industry pre-pandemic has employed approx. 173 million workers in the hotel and motel industries. Moreover, the hospitality industry post-pandemic has remained a massive global employer. The hospitality industry is still facing a shortage of staff despite being the largest global employment provider.

Analysis of Hospitality Industry in India

 Due to Indian cultural diversity, the Indian hospitality industry is attracting global tourists and guests visiting India. Moreover, India is also considered a spiritual nation attracting a massive number of domestic tourists, who are pushed by the growing middle class and increased disposable income.

The Indian hospitality industry is growing massively due to the growing number of hotel projects. Indian hospitality industry ended in 2023 with a 59-61 percent range of occupancy, increased by 15-17 percent points as compared to the previous year.

India has recently hosted a G20 meeting across 55 destinations within the Indian states, this program initiated by the government has boosted the hospitality industry leading to a substantial increase in the demand for hotels in the respective cities where G20 meetings are held. In April 2023, a luxury brand of three international hotel chains was introduced in India.

These luxury brands include Hilton Waldorf Astoria, Minor Hotels, and Anantara Brands, which made a debut in Jaipur, India, whereas Radisson was introduced in Hyderabad. Furthermore, a famous luxury hotel brand named Fairmont Hotels and Resorts is likely to launch in Agra by 2025. 

The government of India has also taken huge steps to initiate the hospitality industry to attract more tourism across the globe by setting up airports, helicopters, and aerodromes, ensuring proper connectivity within the major tourist destination spots across the Indian states. In addition, the Indian government is spending a huge amount on developing infrastructure like railways, highways, bridges, flyovers, etc. Moreover, the government of India has taken an initiative to reduce the personal income tax of Indian citizens, eventually increasing disposable income and leading to an increase in the demand for the hospitality industry and tourism.

Travel and tourism Hospitality industry in India is also expected to contribute to the GDP by USD 250 billion by 2030. It also generates employment for the youths of India and emphasizes the promotion of the active participation of multiple stakeholders, including public and private partnerships. As per the report of Indian Tourism Statistics, India has received 677.63 million domestic tourists in 2023. This percentage has increased by 11.05% from 610.22 in the 2022. The major states that were visited the most by domestic travellers in India last year were Tamil Nadu, Uttar Pradesh, Andhra Pradesh, and Karnataka. India has also played a major role in the global hospitality industry by contributing to foreign tourist arrivals. The total number of FTAs in India has increased by 406,6% to 2,764,975 compared to the 2021 report. The primary reason behind the increase in FTA is the result of various driving forces such as the COVID-19 vaccination campaign, the Heal in India, heal by India campaigns that are launched by the government of India, and various other development projects in boosting the infrastructure.

How does the Hospital Industry Impact the Environment?

As per the report of 2022, the hospitality industry was considered responsible for contributing to global carbon emissions of approximately 1 %. The hospitality industry impacts the environment by using various products and services such as single-use plastics, and high-water consumption. Energy usage etc.

With the growing evolution of the economy, various programs for preserving the environment have been incorporated among businesses or companies. The hospitality industry has also taken a global initiative on various sustainable development programs to ensure greener and more robust global initiatives in day-to-day hospitality industry business practices.

Difference between the Hospitality Industry and the Travel Industry

Both the hospitality industry and the travel industry are interconnected, yet there is a slight difference between them. Here are the common differences between the hospitality industry and the travel industry

  • The hospitality industry is concerned with the customers' leisure and satisfaction services. Whereas the travel industry is a service connected with people traveling outside their homes or residences relatively for a short time.
  • The hospitality industry's primary focus is to provide customer services connected with accommodations, dining, guest services, etc. Meanwhile, the travel industry is connected to a service that facilitates transport, tours, and various other travel experiences for customers.
  • The hospitality industry's scope of service objectives is focused on the customer experience, such as hotels, restaurants, and resorts. At the same time, the travel industry comprises broader concepts such as travel planning, transportation, and destination activities.
  • The hospitality industry generates its capital revenue from accommodations, dining, and various other on-site services. Whereas, the travel industry incurs its capital revenue from transportation bookings, tour packages, and various other activities related to travel and tourism.

Hospitality Industry Trend in 2024

With the growing economy of the hospitality industry across the globe, it is indeed important to stay updated with the current trends to stay relevant in this comprehensive landscape of the travel and tourism industry. As we come closer to 2024, the hospitality industry is undergoing a massive change. Given below are some of the major hospitality industry trends that are moving around and are set to redefine the structure and trend of the hospitality industry beyond the current scenario.

  • Sustainable development is the next thing that every industry is focused on. Thus, the hospitality industry has taken green initiatives, often seeing that various hotels and restaurants are going by the concept of eco-friendly practices. This initiative attracts consumers to the next level as sustainable ideas are indeed taken seriously nowadays.
  • With the increasing popularity of veganism, restaurants have started offering a vegan menu, raising health and environmental awareness. With the increasing food inflation, offering an alternative to a plant-based menu maintains a healthy cost of Goods Sold (COGS) percentage.
  • With the coming of COVID-19, various methods of technological inventions have introduced contactless technology to maintain healthy protocols of paying the bills through a QR code ensuring the safety of guests along with streamlining business operations, minimizing the wait time, and improving the overall experience of the Customer.
  • With the advancement of technology, data-driven technology has enhanced the customer experience by identifying loyal customers through a method of capturing the data or details, unlike the earlier traditional method. The hospitality industry investing in data and analytics tends to have a better understanding of the behaviour of the customer and guests by offering various personalized services and driving sales through targeted promotions, which leads to a gain in this competitive market.
  • We are in 2024, where artificial intelligence is boosting the level of technology by assisting manual work, streamlining business operations, and reaching new heights. This AI-powered chatbox and various other virtual assistants have enhanced the customer service experience by reducing the customer wait time and easing the reservation procedures, tickets, etc. The hospitality industry by adopting AI-based technology or software creates efficient and resilient business operations along with the reduction of operational costs.


Thus, the hospitality industry is a major part of the travel and tourism industry, and the hotel industry is a huge part of the hospitality industry that is increasingly important in this modern era. Various businesses related to the hospitality industry include hotels, restaurants, cafes, nightclubs, and various types of accommodations. It is indeed important for a hospitality business owner to keep oneself updated with the market trends of the hospitality industry to offer excellent, updated services to prospective travellers or tourists. While we have outlined the major points connected to the hospitality industry, it is recommended that you improve your skills and the viability of a hospitality industry operation with the market trends.

Frequently Asked Questions

The 5 hospitality industries are the food and beverages industry, lodging industry, recreation industry, travel and tourism, and meetings and events industry.

The six segments of the hospitality industry are tourism, lodging, food service, restaurants, attractions, and entertainment.

The 4 main categories of the hospitality industry are food and beverages, accommodations, travel and tourism, and entertainment and recreation.

A hospitality company is a versatile company consisting of various economic activities that directly or indirectly make a massive contribution to travel and tourism hospitality. Some of the common examples in the hospitality industry are hotels, motels, resorts, restaurants catering, etc.

Yes, hospitality is a major part of the tourism industry as it is connected to providing services and necessities to tourists. Moreover, tourism is the broader concept of the industry comprising multiple sectors such as transportation, accommodation, and attraction.

The Indian Hospitality Industry's size of the market is expected to increase by USD 24.61 billion by 2024 and grow at CAGR at a CAGR of 3.73% to reach USD 31.01 billion by 2029.

The hospitality industry in India is expected to reach USD 24.61 billion in 2024.

The major players in the Hospitality Industry in India are The Park Hotel, ITC Hotels, Lemon Tree Hotels, Oberoi Hotels and Resorts, and Taj Hotels.

The 4 A’s of tourism are accommodation, Access, Amenities, and attraction.

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