More money in people’s pockets and better transport are leading to record trips within the country and more foreign visitors for luxury and cultural stays
Highlighting that there is a massive room to grow, a report has revealed that India’s tourism and hospitality sector is expected to generate over Rs 5,12,356 crore (USD 59 billion) by 2028, with Foreign Tourist Arrivals (FTAs) hitting 30.5 million.
Capitalmind PMS emphasised that more money in people’s pockets and better transport are leading to record trips within the country and more foreign visitors for luxury and cultural stays. Domestic tourism is the real MVP, with Domestic Tourist Visits (DTVs) jumping 44.98 per cent from 1,731.01 million in 2022 to 2,509.63 million in 2023.
Uttar Pradesh (478.53 million) and Tamil Nadu (286.01 million) led the pack, while Maharashtra (3.39 million) and Gujarat (2.81 million) topped foreign tourist visits. FTAs reached 18.89 million in 2023, surpassing the 2019 peak of 17.91 million by 5.47 per cent. South Asia (29.02 per cent), North America (21.82 per cent), and Western Europe (20.40 per cent) were the top sources.
The report noted that domestic tourism is expected to double to 5.2 billion visits by 2030 from 2.5 billion in 2024 (13.4 per cent CAGR). Domestic visitor spending grew from Rs 12.74 trillion in 2019 to Rs 14.64 trillion in 2023 and is projected to hit Rs 33.95 trillion by 2034 (7.9 per cent CAGR), per WTTC’s Economic Impact Research, 2024.
Domestic air passenger traffic is set to more than double to 693 million by FY30 from 307 million in FY24. India’s hospitality industry boasts 3.4 million keys as of March 31, 2024, but the organised sector (branded, aggregators, quality independents) is just 11 per cent (3,75,000 keys).
The report highlighted that the demand-supply gap, especially in luxury, is widening due to rising incomes, premium preferences, and limited inventory. Barriers like scarce land, high capital costs, and long gestation periods keep supply constrained, driving ARR growth and occupancy (60 to 70 per cent in luxury).
