The hospitality industry has witnessed significant growth in India over the past few years, emerging as one of the country’s key drivers of employment and economic development. With a combination of factors including increased domestic tourism, globalization, and the rising standards of living, the sector has demonstrated a remarkable capacity for job creation.
Economic Landscape Post-Pandemic
The COVID-19 pandemic was a significant hurdle for the hospitality sector, leading to a temporary decline in employment and business operations. However, as restrictions eased and the economy reopened, the industry rebounded much faster than anticipated. According to the Ministry of Tourism in India, the hospitality sector’s recovery began in late 2021, with a targeted focus on enhancing domestic tourism and improving hospitality standards.
Data Snapshot:
– Pre-Pandemic Figures (2019): The travel and tourism sector contributed approximately 9.2% to India’s GDP, accounting for around 42 million jobs.
– Pandemic Impact (2020): Employment numbers plummeted by nearly 30% due to lockdowns and international travel bans.
– Recovery Phase (2021-2023): Recent reports from the World Travel & Tourism Council (WTTC) indicate that the direct contribution of travel and tourism to GDP is set to rebound to approximately ₹16.9 trillion (about $220 billion) by 2023, suggesting a strong recovery trajectory. This translates to the creation of about 13 million jobs in the tourism and hospitality sectors alone. ( India has secured the 39th position among 119 countries in the 2024 TTDI. This ranking reflects India’s overall performance across various indicators that contribute to a robust and sustainable tourism sector.)
Photo: Heritage Village Resort
Factors Contributing to Growth
1. Increase in Domestic Tourism
Post-pandemic, there has been a noticeable shift toward domestic tourism, with Indians exploring their own country more than ever before. The government’s “Dekho Apna Desh” initiative encouraged citizens to travel within India, significantly boosting the demand for hotels, restaurants, and travel services. The surge in domestic travel has led to a spike in hospitality employment opportunities, especially in tier-2 and tier-3 cities.
2. International Tourist Arrivals
India has also seen a steady increase in international tourist arrivals, bolstered by initiatives like e-Visa schemes, improved infrastructure, and global marketing campaigns. As per the Ministry of Tourism, foreign tourist arrivals were projected to reach 30 million by the end of 2023, which translates to increased demand for hospitality services across various segments, including luxury hotels, budget stays, and travel services. In the first half of 2024, India received 4,778,374 foreign tourist arrivals (FTAs), which is a slight increase from the same period in 2023.
BLTM 2024
3. Technological Advancements
Digitalization and the adoption of advanced technologies have also transformed the hospitality landscape in India. Online booking platforms, contactless services, and smart hotel management systems have made significant inroads, creating new job roles in IT, marketing, and customer service. The emphasis on artificial intelligence and big data analysis is shaping how businesses understand consumer preferences, which in turn fuels higher employment rates in tech-savvy hospitality operations.
4. Rise of Startups and Innovative Business Models
India’s startup ecosystem is flourishing, and the hospitality sector is a significant part of this trend. Innovative business models such as homestays, service apartments, and budget hotels are gaining traction. This boom provides opportunities for young entrepreneurs and creates various job roles, from hospitality management to culinary arts. According to a report by Startup India, the hospitality startup ecosystem is expected to create over 2 million jobs by 2025.
Photo: Homestaysofindia
5. Enhanced Training and Skill Development
To meet the rising demand for skilled professionals in the hospitality sector, various institutes across India have ramped up training programs. The National Skill Development Corporation (NSDC) has been actively involved in promoting skill development initiatives tailored to the hospitality industry, ensuring a steady pipeline of qualified personnel.
Future Outlook
The outlook for hospitality employment in India looks bright. Recent Labor Market reports suggest that the sector could witness a CAGR (Compound Annual Growth Rate) of about 8.5% over the next five years. The emphasis on sustainable tourism, culinary tourism, and experiential travel is expected to create dynamic job opportunities.
“India’s hospitality industry is witnessing significant growth, driven by rising global demand for skilled and semi-skilled talent. As international hotel chains increasingly manage bookings and operations from India, the country is emerging as a key hub for various hospitality roles. Consequently, entry-level positions in food and beverage, housekeeping, billing, and technical jobs like AC maintenance are seeing notable salary spikes of 8-10%, with incentives pushing peak earnings up to ₹3 lakh per month. Additionally, the industry has recorded a 37% year-on-year increase in demand for fresh graduates, underscoring its rapid expansion. Currently employing 40-50 lakh people in the formal sector, the workforce is expected to grow to 14 crores by 2028, driven by an annual growth rate of 16-17%. This surge, combined with a talent supply-demand mismatch, fuels wage growth and creates attractive opportunities for young graduates, marking a transformative era for India’s booming hospitality industry. Apprenticeships will play a pivotal role in enhancing the productivity of new hires. By combining hands-on experience with formal education, apprenticeships ensure fresh talent is well-prepared to meet the industry’s demands from day one. This practical training fosters a more engaged and skilled workforce, leading to higher retention rates and improved overall performance. Additionally, apprenticeships help address the talent supply-demand mismatch by creating a consistent pipeline of job-ready workers, driving productivity gains, and supporting India’s hospitality sector’s long-term growth and competitiveness.”
– Dhriti Prasanna Mahanta, Vice- President and Business Head at TeamLease Degree Apprenticeship
Organizations and government bodies are continually working to establish frameworks for skill development, tourism infrastructure enhancement, and improvement of service standards, all aimed at making India a preferred global tourism destination.
The rebounding hospitality sector in India is testimony to the dynamic and resilient nature of the country’s economy. As the industry continues to evolve in response to changing consumer preferences and market trends, we can expect to see not only growth in employment but also the emergence of new career paths that cater to a diverse and vibrant job market. The rise of hospitality employment not only contributes to economic growth but also fosters cultural exchange and promotes sustainable practices that benefit communities nationwide. As we look ahead, it is clear that the hospitality sector will play a critical role in India’s journey toward becoming a global tourism powerhouse.
