India’s Missed Opportunity in Global Tourism
Tourism is one of the most dynamic and job-generating industries in the world. For a country like India—rich in heritage, diverse in geography, and vibrant in culture—tourism presents a tremendous opportunity to drive economic growth, create employment, and promote cultural diplomacy. From snow-capped mountains to serene backwaters, from Ayurveda retreats to heritage palaces, India has it all. Yet, the actual number of international tourist arrivals remains far below its potential.
In the post-COVID world, travel preferences have changed. Tourists are seeking meaningful, immersive experiences. Wellness, nature-based, sustainable, and tech-enabled tourism are rising trends. India must align its tourism strategies with these global shifts to stay relevant and competitive.
The Economic Potential of Tourism in India
Tourism is a vital contributor to India’s GDP and employment. According to the World Travel & Tourism Council (WTTC):
- Tourism contributed 9.2% of India's GDP in 2019.
- It supported over 40 million jobs—about 8% of total employment.
- The indirect benefits to industries like transportation, food services, handicrafts, and retail are even more extensive.
With the right support, this sector can not only recover from the pandemic but can become a core pillar of India's future economy.
Why Tourism Numbers Don't Match Our Potential
Despite having some of the most iconic tourist destinations in the world, India ranked only 40th in the world for international tourist arrivals as of recent data. Why is there such a disparity between potential and performance?
Key Reasons:
- Inadequate Infrastructure: Many destinations lack basic amenities like clean toilets, roads, signage, and tourist information centers.
- High Operational Costs: The hospitality industry faces steep costs related to licensing, taxation, and real estate.
- Fragmented Governance: Tourism is a state subject in India, leading to inconsistent policies and lack of coordination.
- Limited Digital Penetration: Many tourist destinations are not effectively promoted online, especially to global audiences.
Impact of Taxation: The GST Hurdle
India’s Goods and Services Tax (GST) has been a major talking point for the tourism sector. While GST simplified the overall tax structure, the hospitality industry has often found itself on the losing side.
- The current GST slab on hotel rooms often exceeds 12%, and in some cases goes up to 28%.
- This is much higher than competitors like Thailand (7%), Singapore (8%), and Japan (10%).
A rationalized GST—preferably a single slab below 12%—can make Indian travel packages more attractive to global travelers.
Product-Focused Tourism: A New Growth Strategy
To grow inbound and domestic tourism, India must shift toward product-based tourism. This means designing unique tourism products that meet emerging consumer preferences.
Trending Tourism Products:
- Ayurveda and Wellness Tourism: Create globally certified Ayurvedic centers in Kerala, Uttarakhand, and Goa.
- Cultural Trails: Package temple circuits, textile tours, or classical music trails.
- Eco-Tourism: Promote nature walks, camping, and jungle lodges with minimal environmental impact.
- Spiritual Tourism: Develop infrastructure around key pilgrimage sites with modern amenities.
- Rural Experiences: Homestays, farm stays, and craft workshops can give tourists a taste of real India.
Each of these product lines requires specialized marketing, trained local staff, and supporting infrastructure.
Start-Up and Innovation in Tourism
India’s start-up ecosystem is thriving, but tourism-tech is still underdeveloped. The government should create dedicated tourism innovation funds and R&D grants to encourage:
- AI-powered travel assistants
- Virtual reality (VR) tours of monuments and destinations
- Language translation apps for rural areas
- Digital itinerary builders
- Experience curation platforms for niche tourism segments
Incentivizing entrepreneurs to solve for last-mile connectivity, booking friction, and experience personalization will future-proof Indian tourism.
Enabling Smarter Hospitality with AxisRooms
For India’s thousands of boutique hotels, homestays, and heritage properties that struggle with discoverability and online management, tools like AxisRooms' Channel Manager bridge the digital gap—enhancing operational efficiency and boosting bookings. Their ability to offer PMS integrations also ensures smooth synchronization between front-office operations and distribution systems, streamlining day-to-day tasks for hoteliers.
Moreover, AxisRooms supports properties in crafting a sound hotel revenue strategy, allowing them to make data-driven pricing decisions that improve profitability. Such innovations are essential if India wants to scale up its experience-led tourism in a globally competitive environment.
Visa Policy Reforms: Make India Accessible
India's visa regime has improved with e-Visas and Visa-on-Arrival options, but there's still scope for expansion.
Key Improvements Needed:
- Expand e-Visa facility to more countries, including emerging markets in Africa and Latin America.
- Increase validity and allow multiple entries for longer stays.
- Simplify group visas for conferences, weddings, and business tours.
- Faster visa processing times and better communication for rejected applicants.
Making travel to India easier and more welcoming will directly translate to higher tourist footfall.
Infrastructure Investments: Where the Gap Is
India needs robust, long-term investments in tourism infrastructure to match its ambitions.
Focus Areas:
- Transport Connectivity: Improve air, rail, and road access to remote tourist destinations.
- Smart Signage and Digital Helpdesks: Install multilingual, interactive kiosks and mobile apps.
- Urban Cleanliness: Collaborate with local bodies under Swachh Bharat to maintain hygiene at tourist spots.
- Tourist Police and Safety Measures: Build confidence among solo travelers and international tourists.
- Waste Management and Sustainability: Ensure ecological balance, especially in hill stations and coastal areas.
These investments will pay long-term dividends by enhancing the tourist experience and reputation.
Policy Reforms and Public-Private Partnerships (PPP)
Key Policy Actions Required:
- National Tourism Zones: Special zones with relaxed taxation and business regulations for tourism enterprises.
- Single-Window Clearance: Simplify licensing, land allotment, and safety certifications.
- PPP Models: Encourage private players to adopt and maintain heritage sites, public spaces, and national parks.
Government and private stakeholders must work hand-in-hand to ensure consistent quality and branding across India.
Success Stories to Learn From
Several Indian states have demonstrated the power of targeted tourism investment:
Kerala – Ayurveda and Backwaters
- Internationally branded as "God’s Own Country"
- Strong public-private cooperation
- Focus on Ayurveda and eco-tourism
Rajasthan – Heritage Tourism
- Palaces turned into luxury hotels
- Investment in cultural festivals and rural experiences
Sikkim – Sustainable Tourism
- Organic state identity
- Emphasis on cleanliness and responsible tourism
These models can be replicated in other parts of the country with customization.
Global Models India Can Emulate
Bali, Indonesia
- Offers seamless packages, beach tourism, and cultural experiences
- Excellent digital marketing
Dubai, UAE
- Turned desert into a global tourism hub through aggressive infrastructure development
India needs to learn, adapt, and localize such models to unlock its full potential.
Emerging Opportunities in Indian Tourism
The next decade offers several promising avenues:
- Digital Nomad Visas: Attract remote workers with long-term stay options.
- Cruise Tourism: Develop ports and luxury cruise terminals.
- Medical and Wellness Packages: Package surgeries, post-op recovery, and retreats.
- Film and Sports Tourism: Market destinations featured in movies and sports events.
- Adventure and Wildlife Tourism: Expand offerings in Himachal, Ladakh, Uttarakhand, and Northeast India.
By embracing these trends, India can diversify its tourism income sources.
Conclusion: A Time for Bold Action
India’s tourism industry has the potential to become a $500 billion sector in the coming decade. But to achieve this, the government must:
- Lower GST rates for the hospitality sector
- Invest strategically in tourism infrastructure
- Promote product-based, experiential tourism
- Encourage innovation and startup participation
- Ease visa norms and enhance safety
This is not just an economic priority—it’s a cultural and strategic one. With the right blend of investment, innovation, and inclusion, India can become a global tourism powerhouse that benefits not just travelers—but millions of local livelihoods across the country.