The Indian tourism industry is one of the largest service industries in the country in terms of its contribution to GDP and foreign exchange earnings, in addition to being a diverse employment provider. Although spending comes primarily from international tourism, the domestic expenditure for this sector was projected to have a linear growth until 2028. Therefore, domestic tourism plays a crucial role in the overall development of the industry.
With the emergence of private tour operators, Indians are exploring their country beyond pilgrim sites and local attractions. The great Indian middle-class has increasingly tapped into the trend of saving up for travels along with a change of mindset in travel expectations. Budget airlines have led to a soaring number of travelers opting to fly within the country, and the government is planning to open new airports in the coming years.
Indian railways has been an ideal economical alternative for many of the country’s long-distance travelers. India has one of the most extended railway networks in the world, operating over more than 65 thousand kilometers. Some of the long-distance trains have sleeper coaches with an onboard pantry that provides hot beverages and meals.
Several players occupy the travel service market leading to high fragmentation in this sector in India. In recent years, there have been changes across the hotel industry, providing improved opportunities for a wholesome travel experience. One such successful entrepreneurial startup was OYO, a new business model that has taken over the hotel market by surprise.
Regular efforts have been made by the government to better the infrastructure and make domestic travel more accessible and affordable to people. With the hope of promoting local tourism, some of the significant tourism states have an exemption from luxury taxes and have brought about policy changes to attract more tourists.