Notwithstanding the economic slowdown, India’s hospitality sector is likely to witness high growth in the long run, driven by increasing domestic travel, according to an industry survey.
“The majority of respondents from the hospitality industry believed India will not be affected by the economic downturn over the long run. The growth in the sector is largely expected from domestic travel – business or leisure,” industry body CII and consultancy firm PwC said in a joint study.
It said with consumers becoming more demanding and price-conscious, the budget and mid-market segments are the possible growth areas. “Therefore, budget and mid-market segments have emerged as the most preferred investment categories,” the study said.
“There has been a huge upsurge in the Indian domestic travel, due to which these have emerged as strong opportunities, especially in view of the recessionary trends in the West,” CII director-general Chandrajit Banerjee said.
The study said there are a number of challenges faced by the industry in managing talent and tax and regulatory issues. “The high costs of real estate and lack of tax sops are hurdles. These are accentuated by the infrastructure deficit,” it said.
“Rationalisation of the number of tax levies and implementation of a single-tax regime will benefit,” it added.