How India's hospitality sector is shaping its future

The hotel industry is poised for substantial growth in the coming years, influenced by several key factors that will shape both demand for services and operational strategies. Government initiatives, including visa liberalisation, tourism promotion campaigns, and investments in infrastructure, are set to significantly drive this expansion. 

“The recent surge in domestic tourism, fuelled by international travel restrictions, is expected to persist as travellers increasingly explore local and regional destinations, driving demand for hotels beyond the traditional tourist hubs. The expansion of infrastructure and economic opportunities in Tier II and Tier III cities, is leading to more travel within these regions, thereby spurring hotel development and increasing occupancy rates,” shares KB Kachru, President, Hotel Association of India and Chairman - South Asia, Radisson Hotel Group.

He adds that the travellers are increasingly looking for unique experiences than just a place to stay. “Hotels that provide immersive cultural experiences, adventure activities or wellness retreats are likely to attract these experience-seeking travellers. Additionally, improved transportation infrastructure, including new airports, high-speed rail and enhanced road connectivity, is making travel easier, thereby boosting hotel stays,” feels Kachru.

The rise of flexible and hybrid work models is also contributing to increased travel. Industry players are responding by offering experiential-based travel and stays tailored to guest preferences. Many hotels are now providing pet-friendly spaces, special facilities for senior citizens and other personalised services. “The future looks promising for the industry, with everyone striving to put their best foot forward. Developing unique experiences including local arts and culture, and cuisines, providing flexible cancellation policies, deploying advanced and latest technology to make guest experiences seamless, skilling employees to adapt to changes, deploying data analytics to enhance guest satisfaction, and adopting sustainable practices can equip stakeholders to address challenges going forward,” he adds.

Key priorities as HAI President 
India is at a critical juncture to realise its full development potential and emerge as the world’s third-largest economy by GDP. “It is increasingly recognised worldwide that tourism and hospitality  can play a crucial role in driving this growth. Showcasing tourism and hospitality as a driving force to achieve the National Vision 2047 for employment creation and inclusive growth would, therefore, be HAI’s key priority,” says Kachru.

Recent research initiated by HAI suggests the hospitality sector could contribute up to US$ 1 trillion by 2047. To ensure this growth, HAI will address key concerns such as securing industry benefits uniformly across states and achieving infrastructure status at the national level. Skilling and employment will also be central priorities. “We will collaborate closely with state and Central governments to shape policies favourable to the hotel industry, including tax reforms, streamlined business operations and regulatory simplifications,” Kachru explains.

Additionally, HAI will advocate for initiatives that enhance tourism in India, focussing on infrastructure development, safety and promoting the country as a prime global tourist destination.

Encouraging environmentally sustainable practices, such as energy conservation, waste management and efficient water usage, is another priority. “Prioritising upskilling and bridging the talent gap of the hospitality sector’s workforce through targetted training programmes and collaborations with educational institutions are key areas where HAI will focus as an industry body,” adds Kachru. He also emphasises on the importance of forging a strong industry fraternity and collaboration to raise awareness about the role of tourism and hospitality and present a unified voice for the industry.

Promoting women empowerment 
A notable trend in the hospitality industry is the increasing presence of women in leadership roles. Prominent international and domestic brands are now led by female executives, signalling a shift towards greater gender empowerment. The HAI President highlights that women should “walk shoulder to shoulder and lead industries, including hospitality.” He emphasises that “Diversity and Inclusion should be a key focus and driven top down, from the government to the industry,” advocating for gender-balanced policies, mentorship programmes, work flexibility and family-friendly work options.

Many HAI members are committed to advancing gender balance, with larger hotel groups embedding diversity and inclusion into their core policies, particularly at leadership levels.

Kachru observes that “Hotel groups aspire to establish a significantly higher percentage of women at director and above positions at corporate offices and at the hotel GM level,” and promotes equal gender representation in career development programs from the beginning.

HAI member hotels are working to ensure a level playing field for women by implementing gender-neutral career paths and special measures for their safety and security. “HAI members provide greater freedom and flexibility to women in non-guest contact areas, such as HR and accounts, allowing work-from-home options and flexible hours,” Kachru says. These initiatives include training programmes, financial support for women entrepreneurs and policies aimed at creating a safer and more inclusive work environment.

Significance of law and order in successful operations
The HAI President emphasises that the importance of law and order for the success of businesses, including the hospitality sector, cannot be overstated. The industry is highly sensitive to its social and legal environment. Law and order are essential for ensuring the safety and security of guests and staff, protecting property, ensuring regulatory compliance and enhancing industry’s reputation and trust. Kachru points out, “The status of law and order can even impact the cost of operations in terms of the level of premiums for public liability insurance.” A stable law and order environment supports economic stability, effective crisis management, and sustainable tourism—key factors for the sector’s long-term success. “We’re working diligently with the National Safety Council of India to ensure the highest safety standards are maintained,” he says.

Priority demands requiring urgent attention
India aims to become the third-largest economy by 2047 and the hospitality sector is poised to play a crucial role in achieving this vision. “The sector’s multiplier effect on the economy is notably higher compared to manufacturing and even agriculture. For instance, each hotel room generates two direct jobs and numerous indirect jobs. Additionally, hotels serve as key providers of tourism infrastructure, much like roads, railways, ports, and airports. While recent budgets have emphasised infrastructure development, hotels have not yet been given the same status.

HAI has consistently advocated for policy changes that would classify hotels as infrastructure, which would grant them access to softer financing with better interest rates and longer repayment 
terms, thereby attracting more investment,” informs Kachru.

HAI believes such a classification would help draw investment by providing hotels with access to better financial terms. The Association has not asked for any subsidies but has and will continue to advocate that the sector be given due recognition for its contribution to GDP and jobs and hotels be allowed the benefits that are available to the manufacturing industry and agriculture by all the state governments in terms of better utility tariffs, lower property tax rates etc.

Collaboration with tourism and allied ministries
HAI is a part of important advisory committees and various boards instituted by the Ministry of Tourism, Government of India, and thus provides industry insights for all important decisions, and policies that have to do with the development and growth of India tourism and hospitality. “HAI works closely with the Ministry of Tourism to align with national tourism policies, participate in promotional campaigns, and contribute to tourism infrastructure development. As a key member of FAITH and of industry bodies like CII, FICCI and PATA, the Association collaborates with the Government at all levels. It works together with WTTCI, FHRAI and other industry associations to have a unified voice for the industry,” he adds.

India's investment climate and appeal to global investors
India’s ranking of 39 in the World Economic Forum’s Travel and Tourism Development Index (TTDI) highlights significant progress despite some challenges. As Kachru notes, “The essence of tourism lies in the diverse hospitality ecosystem a country offers.” India’s broad range of hospitality options and competitive pricing boost accessibility, while robust infrastructure enhances connectivity.

The country’s natural landscapes and cultural heritage attract tourists, though performance has declined since 2019. The increase in sustainable long stays reflects a growing preference for responsible tourism. The HAI President adds, “Sustainable practices are crucial for maintaining a destination’s appeal.” Continued efforts in eco-friendly practices will be essential for further growth. India’s top position among middle-income economies and in South Asia underscores its potential for increased tourism and investment.