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Resource Center
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Domestic Travel Rules, the New Backbone of Indian Tourism


27 September, 2017

As India’s economy grows and consumption increases, more people are spending their discretionary income on lifestyle services, including travel. Rising consumer spending, mostly from a middle class of over 300 million people, infrastructure development and incoming air connectivity and lodging supply will push the Indian travel market to grow in excess of 10% each year through 2020. Akansha Pandey elaborates on the rapid expansion of the Indian travel market.

India’s strong travel and tourism figures are predominantly generated by domestic travel, which accounts for 88% of the sector’s contribution to GDP in 2016. Visitor exports, money spent by foreign travellers in India, only represents 12% of tourism revenues. The number of domestic tourist visits to all States/Union Territories (UTs), including the visits for religious and medical purpose, has increased to 161.4 crore in 2016 from 143.2 crore in 2015, registering a growth of 12.7% in 2016 over 2015. Overall, the domestic tourism sector continued its growth momentum with recording a jump of 15.5% in tourist visits to various states and Union Territories during 2016.

Changing lifestyles, increasing disposable income levels, rising urbanisation and growing fleet of low-cost airlines are anticipated have augur well for the growth of travel and tourism market in India in the past few years, and the momentum will continue. Simultaneously, increasing trend of comparative pricing and online bookings, is anticipated to fuel growth in India travel and tourism market through 2021.

According to a report, the market for travel and tourism in India is forecasted to grow at a CAGR of around 7.23% during 2016-2021, on account of increasing trend of medical, wellness and adventure tourism in the country and rising number of online bookings due to growing smartphone and internet penetration. Additionally, theGovernment of India has also been enhancing the  facilitation and capacity building across the country.

This is projected to further propel growth in India travel and tourism market over the course of next five years. Domestic tourism dominated India travel and tourism market over the years, on account of increasing number of local excursions, regional trips, national level trips, etc., and the segment is expected to maintain its dominance in the market through 2021. Additionally, leisure and recreation is anticipated to emerge as the highest revenue generating segment in India travel and tourism market during the forecast period.

Ashwani Lohani, Chairman, Railway Board, highlighted that the tourism sector in India has come a long way and is bound to grow bigger and better in the coming time. He recalled that there was a time during the late 1990s when India was struggling to reach 2 million foreign arrivals, which today stands close to 9 million.

“India tourism has the potential to grow by leaps and bounds given India’s increasing population, the rising middle income number and their disposable income,” he said. Outlining the importance of domestic tourism, Lohani said that there are different components to domestic tourism and it should not be just looked at as tourists coming from another state, but also pointed at the tremendous opportunity of growing intra-region tourism within the state.

Cruise Tourism

India, with 7,500 km of coastline, has taken steps on a war footing to promote cruise tour, which includes relaxation of policies and developing infrastructure. India saw 1.76 lakh cruise passengers in 2016-17, a merely 0.5% of the global pie. Domestic cruise passengers are estimated to grow to 1.5 million by 2031-32. Of the 12 major ports, only five — Mumbai, Goa, Cochin, New Mangalore and Chennai — have facilities to berth international cruise ships.

Going forward, a policy is in the works to make India a global destination for cruise shipping and efforts are on to identify such circuits, besides a slew of steps, to boost infrastructure. A high-level task force has been appointed and top global consultants are drawing up blueprint for it. Five circuits each are being identified for international and domestic cruise services and a report is likely by May this year, said Nitin Gadkari, Union Minister for Shipping, Road Transport and Highways.

MICE Tourism

India is a growing economy and as it stands now, the nation is among the top countries in the world for business. MICE travel is directly co-related with business activities. The future of MICE business in India is bright and that is the reason why multi-nationals are trying to enter Indian market. The apex body - ICPB (India Conventions Promotion Bureau) use to play a very important role in development of MICE industry but in the last few years its momentum has declined.

“The tourism industry under which MICE is one of the important segments needs better attention from all quarters. There is a huge business potential for MICE within India which Indian companies take to other destinations abroad instead of doing it in India presently. It is basically due to the fact that they are looking for new destinations to do their conferences. We are not able to offer this other than a few places in India like Goa, Delhi, Bengaluru and Hyderabad,” said Sanjeev Joshi, Director, Tourism India Management Enterprises Pvt. Ltd.

Adventure Tourism

Adventure tourism is resilient, supports local economies, attracts high-value customers and encourages sustainable practices. Adventure activities can be localised in a particular place or could be extended over a region defined across a district in a particular state or across states.

Captain Swadesh Kumar, President, ATOAI, said, “The UNWTO predicts, by 2013, arrivals in emerging economies will further increase to 57% arrivals in emerging economies by 2030. This provides a sea of opportunities for India, which has unparalleled destinations for exploration and experience. India offers soft and hard adventure activities that can be carried out by any traveller. Adventure tourists also follow cultural and environmental aspects of destinations they visit. These can greatly aide economic opportunities of local people in rural and remote communities in India. The best examples of which can be found in Jammu & Kashmir, Sikkim, North East India, etc. Apart from sustainable development of local communities adventure tourism also brings in socio-economic and cultural development in the region.”

Wedding Tourism

As per the Wedding Tourism Report by MRSS India, the wedding market in India is pegged at INR 110,000 crore of which around INR 23,438 crore can be attributed to destination wedding.The figure is slated to grow at a staggering rate to INR 45,000 by the end of 2020 as per leading ecosystem players. This in itself speaks volume of the opportunity that India has to place itself on the global map of wedding tourism.

India enjoys considerable advantage when placed head to head with the prime global destinations of wedding tourism. But sadly, the sheer lack of promotion and marketing of India as an experiential wedding destination coupled with the high tax burden has dampened the spirit of even Indian nationals to hold luxury thematic destination weddings in the country.

Agreeing to this, Aarti Mattoo, Founder and Chairperson, Momentum Group, said, “We need to take the wedding business beyond Rajasthan to other destinations of the nation. India is blessed with diverse destinations offering a range of experiences, food and culture. The Government of India needs to give a fillip to the sector by developing a policy framework for wedding tourism, in participation with all stakeholders. This will forge a better co-ordination and ensure swifter decision-making.”