OUR EXTERNAL ENVIRONMENT
The trends that shape our markets
At IHCL, we respond swiftly to emerging market trends. We look to capitalise effectively on the macro trends by framing and implementing strategies accordingly. Here are some of the opportunities that will act as facilitators to our future growth.
Strong prospects of the global travel and tourism industry
There are visible signals of improvement in the travel and tourism industry across most markets. According to the data collated by United Nations' World Tourism Organization (UNWTO), global international tourist arrivals is estimated to have grown by 5.6% for CY 2018. This growth has been broad-based across all major world regions. This trend is likely to continue going forward and will augur well for hospitality companies present globally.
TRAVEL & TOURISM GREW
Source: WTTC
India emerging
as a key destination
Over the past few years, the Government of India has put in place critical enablers to promote India as a travel and tourism destination. Campaigns like ‘Incredible India!’, ‘Atithi Devo Bhava’ and allowance of 100% FDI in the hotel and tourism sector via the automatic route, tax holidays for two-star, three-star and four-star hotels around UNESCO World Heritage sites, speedy visa issuances are some of these initiatives. Growing domestic tourism, rising foreign tourist arrivals and robust travels drive industry optimism.
3X INCREASE IN NUMBER OF INTERNATIONAL TOURIST ARRIVALS IN INDIA
million 2018
million 2028 (estimated)
Robust
consumption growth
India has significant demographic advantage owing to its growing share of the working population and a higher proportion of youth in the overall population (over 60% of the population is below the age of 35). This advantage is accentuated further by favourable government policies aimed at facilitating economic activity and driving ease of doing business. These factors contribute to a buoyant trend in domestic consumption and the trend is likely to continue in the foreseeable future. Market leaders with compelling brand recall that provide services across the entire value chain will be among the key beneficiaries from this trend.
STRONG OUTLOOK FOR DOMESTIC CONSUMPTION (`)
Growing incomes
and affordability
Over the past few years, the Government of India has launched many programmes to bolster income. These include, but is not limited to, improved availability of funds to small-scale and medium-scale enterprises, Seventh Pay Commission payout and income tax benefits announced in the interim Union Budget 2019. This translates to rising affordability. Rapidly growing number of visas in India, higher air travel and traction in e-commerce indicate an improving consumption trend. These will drive growth of the domestic travel and tourism industry.
RAPID GROWTH IN INDIA'S PER CAPITA INCOME
Fastest growth in
the past five years
Demand for
rooms outpacing supply
India’s hospitality industry is seeing a gradual but steady turnaround. For the past two years, demand for rooms has grown faster than supply for rooms. This trend is expected to continue and will lead to improvement in occupancy levels and pricing of Indian hospitality players. Market players with significant brand recall have headroom to grow their pricing power in this scenario.
Growth in demand across segments
*All figures are for calendar year 2018
**Does not include midscale and budget segments
