Boosting India's Hospitality Sector: A Look at Budget Policies in 2024

Boosting India's Hospitality Sector: A Look at Budget Policies in 2024

By Author

Published on January 8, 2024

India, a land of diverse landscapes and cultural wonders, has long been a sought-after destination for both leisure and business travelers. The travel and hospitality industry, although impacted by the recent pandemic, is making a robust comeback, presenting significant growth potential for the Indian economy. With a focus on boosting this sector, the Union Budget 2023 laid the groundwork by investing in infrastructure, including airports, railways, roads, and waterways, enhancing last-mile connectivity to remote destinations.

The Hotel Association of India's recent report predicts substantial growth for the Indian hotel market, projecting a contribution of $1,504 billion to the country's GDP by 2047, up from $65 billion in 2022. This growth, however, necessitates strategic government interventions to bridge the gap between room supply and demand.

The industry has long advocated for tax rationalization, incentives, and easier access to finance, particularly for small and medium-sized enterprises. One critical concern is the restructuring of indirect taxes, especially the Goods and Services Tax (GST) on hotel tariffs and restaurant services within hotels. A reduction in the current GST rate of 18% to a globally competitive rate of 12% is seen as crucial for the global competitiveness of Indian hotels.

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Aligning with tax benchmarks observed in competitor countries like Singapore and Thailand, where hotel taxes range between 5-7%, would position India as an attractive destination, especially for inbound travel. Additionally, according hotels the status of an infrastructure industry, similar to highways and ports, could incentivize local investments and reduce operational costs for hotels.

To foster a conducive environment for hotel growth, streamlining the approval process is essential. Reducing the number of licenses and creating a single-window system for approvals would expedite hotel projects and operations. This move aims to cut down on the time and costs associated with acquiring licenses.

Furthermore, investing in skill development within the tourism workforce is crucial for delivering high-quality services. Government support for skill development initiatives ensures direct and indirect employment opportunities, enhancing the overall quality of the sector.

Encouraging sustainable practices within the tourism sector is imperative for preserving India's natural and cultural heritage. Allocating funds to promote eco-friendly accommodations and tourist sites aligns with the United Nations Sustainable Development Goals, fostering long-term preservation and positive engagement with conscious travelers.

Leveraging the vast potential of hotels can contribute significantly to job creation, economic growth, and the realization of India's vision for 2047 – a 'New India.'


MakeMyTrip Records Stellar Growth in FY2024 with Significant Profit and Booking Increases

MakeMyTrip Records Stellar Growth in FY2024 with Significant Profit and Booking Increases

By Nishang Narayan

Published on May 20, 2024

India’s leading travel service provider, MakeMyTrip, has reported exceptional financial results for the fiscal year ending March 31, 2024. Despite the fourth quarter typically being a slower period for leisure travel, the company experienced robust growth across its key financial metrics, reflecting the increased travel demand following the pandemic.

For FY2024, MakeMyTrip reported gross bookings of USD 7,954.4 million, marking a 24.9% increase year-over-year. The revenue, as per International Financial Reporting Standards (IFRS), reached USD 782.5 million, representing a 35.7% growth from the previous fiscal year. These figures showcase the company's strong recovery trajectory and its ability to capitalize on the resurgence of travel interest.

The Adjusted Operating Profit (EBIT) also saw a significant rise, reaching USD 124.2 million for the fiscal year, up from USD 70.3 million in FY23. The Profit for the Period for Q4 FY24 stood at an impressive USD 171.9 million, bolstered by a one-time credit and gain totaling USD 156.7 million.

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Rajesh Magow, Group Chief Executive Officer of MakeMyTrip, expressed his satisfaction with the results, stating, “The enthusiastic response from travelers, both leisure and business, has propelled our growth beyond pre-pandemic levels. Our strategic focus on offering a comprehensive portfolio of travel and ancillary products, tailored to the needs of millions including first-time travelers, has been instrumental in achieving these record-breaking results.”

 In addition to financial gains, MakeMyTrip has observed interesting trends in travel searches for Summer 2024. Family travel has increased by 20%, with domestic destinations like Ayodhya and Lakshadweep gaining significant interest. Internationally, destinations such as Baku, Phuket, and Abu Dhabi are seeing an uptick in search queries, reflecting the global appeal among Indian travelers.

These results not only highlight MakeMyTrip’s successful adaptation in a dynamic market but also indicate a positive outlook for the travel industry’s continued recovery and growth. As the company prepares for the upcoming travel seasons, it remains committed to enhancing its service offerings to meet the evolving preferences of its customers.

For more detailed insights into MakeMyTrip’s financial performance and future plans, visit their official website or contact their investor relations team.

This comprehensive overview of MakeMyTrip’s fiscal achievements in 2024 underscores the company's resilience and innovative approach in adapting to the post-pandemic travel landscape, setting a robust foundation for future growth.


Middle East Hotel Construction Pipeline Sees Growth in Q1 2024

Middle East Hotel Construction Pipeline Sees Growth in Q1 2024

By Nithyakala Neelakandan

Published on May 19, 2024

The latest report from Lodging Econometrics (LE) provides valuable insights into the thriving hotel construction landscape in the Middle East, particularly during the first quarter of 2024. Amidst evolving trends and increasing demand, the region experienced a notable 5% increase in projects year-over-year, culminating in a total of 612 projects encompassing 144,222 rooms.

As of Q1 2024, the Middle East showcases a robust construction scene, with 302 projects actively underway. Furthermore, 133 projects are slated to commence construction within the next 12 months, indicating a 28% increase in projects year-over-year. Additionally, the early planning stage witnessed significant growth, with 177 projects in the pipeline, marking an 18% increase from the previous year.

Top Countries:

Saudi Arabia emerges as a frontrunner in hotel development, boasting a record-high of 318 projects, while Egypt closely follows with an impressive count of 103 projects. These nations demonstrate substantial investment in the hospitality sector, reflecting their commitment to meeting the growing demand for accommodations.

Major Cities:

Within the Middle East, certain cities and provincial regions stand out for their burgeoning hotel construction pipelines. Provincial areas, alongside cities like Riyadh, Jeddah, and Cairo, boast the largest number of projects and rooms. This concentration highlights the strategic importance of these urban centers in catering to the region's diverse tourism needs.

Future Outlook:

Looking ahead, the Middle East's hospitality sector is poised for continued expansion, with LE forecasting the opening of 107 new hotels and 26,743 rooms by the end of 2024. Furthermore, an additional 101 new hotels with 26,743 rooms are anticipated to be operational by the close of 2025. These projections underscore the region's enduring appeal as a global tourism destination and signal ample opportunities for stakeholders in the hospitality industry.

The growth witnessed in the Middle East's hotel construction pipeline reflects the region's resilience and adaptability in meeting the evolving needs of travelers. As major events and cultural attractions continue to drive demand, developers are capitalizing on these opportunities to enhance the region's hospitality infrastructure, ensuring a memorable and comfortable experience for visitors from around the world.


CYK Hospitalities Boosts QSR Expansion with Strategic Leasing

CYK Hospitalities Boosts QSR Expansion with Strategic Leasing

By Nithyakala Neelakandan

Published on May 17, 2024

CYK Hospitalities, an F&B consultancy firm, is making waves in the Quick Service Restaurant (QSR) sector with its strategic leasing initiatives. As urbanization in India surges, the QSR industry experiences unprecedented growth, welcoming both local and international players into the market. CYK Hospitalities recognized this potential early on, positioning itself as a key player in facilitating the growth and expansion of QSR brands.

Simranjeet Singh, Director of CYK Hospitalities, emphasizes the crucial role of location in the success of QSR brands amidst India’s rapid urbanization. Specializing in location mapping, legal documentation, and lease finalization, CYK Hospitalities has enabled over 30 QSR brands to establish their presence across diverse locations, including major cities like Delhi, Bengaluru, Gurugram, and Agra.

Collaborating with prominent names in the F&B industry such as The Waffle Company, Burger King, and Rage Coffee, CYK Hospitalities has solidified its reputation as a trusted partner for QSR expansion. The firm's recent venture into beauty brands, including Lovechild by Masaba, further diversifies its portfolio, showcasing its adaptability and industry expertise.

Pulkit Arora, Director of CYK Hospitalities, said “The QSR industry has come a long way in India and its remarkable 17% growth in India reflects the major shift in food trends and urban expansion. Across borders, strategic leasing remains the cornerstone for QSR success, offering prime locations that fuel profitability and customer engagement. At CYK Hospitalities, we are committed to empowering our clients with tailored leasing solutions that unlock prime locations and drive profitability. Our relentless pursuit of excellence ensures that we remain at the forefront of shaping the future of the F&B industry.”

Nidhi Singh, Co-founder of Samosa Singh, said “CYK Hospitalities’ expert service in leasing has been instrumental in identifying ideal locations for our brand in Bengaluru. Their valuable insights and thorough research is commendable. We anticipate a long and fruitful association with them!”

As CYK Hospitalities continues to strengthen its leasing portfolio, it remains at the forefront of driving QSR expansion in India, unlocking opportunities for growth and innovation in the dynamic F&B landscape.

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