The Indian hospitality industry is primed to make a significant contribution to the country’s economy, according to Pradeep Shetty, President, Federation of Hotel & Restaurant Associations of India (FHRAI).
Addressing the 54th FHRAI Annual Convention on Day 1, Shetty projected that the sector will contribute a substantial $250 billion to India’s GDP by 2030, supporting 137 million jobs.
To achieve this ambitious target, Shetty emphasised the need for long-term financing and regulatory reforms. The industry aims to contribute $3 trillion to the GDP by 2047.
FHRAI Calls for Regulatory Reforms
Shetty highlighted the critical need for long-term financing in the sector, noting that current funding options are limited to 7-8 years. He urged the government to implement regulatory reforms, such as streamlined licensing procedures and single-window systems, to unlock the industry’s full potential.
Hospitality Sector Outperforms Other Industries
The Indian hospitality industry is already making a substantial impact on the economy, contributing 12-13 per cent to the GDP and employing over 12 per cent of the workforce. These figures surpass those of the automobile and IT sectors, highlighting the industry’s economic significance.
Sector to Add 50,000-60,000 Rooms in Next Five Years
The President announced that the hospitality sector is set to expand significantly, with plans to add between 50,000 and 60,000 new hotel rooms over the next five years. This expansion will further boost employment opportunities and contribute to the country’s economic growth.
FHRAI Submits Ease of Doing Business Report
To address the challenges faced by the industry, FHRAI has submitted a comprehensive report on the ease of doing business in hospitality to the government. The report focuses on critical areas for reform, including simplifying regulatory compliance, reducing licensing burdens, and lowering high GST rates.
FHRAI Launches Centre of Excellence
In a bid to drive innovation and research, FHRAI has launched a Centre of Excellence at the Annual Convention. The centre will focus on conducting research, providing industry insights, and fostering transformation in the hospitality sector.
GST Rates a Competitive Disadvantage
Shetty called for a revision of India’s high GST rates for hotels, which currently stand at 12-18 per cent. He pointed out that most Southeast Asian countries have single-digit GST rates, making India less competitive. A reduction in GST rates would level the playing field and boost the industry’s growth.
