International tourists’ spend on hotels in India to grow by 14% by 2022

International tourists’ spend on hotels in India expected to grow at a CAGR of approximately 14 per cent by 2022, as per a latest study by KPMG and Google. Indian players currently enjoy a 55 per cent share of revenues in the accommodation industry. This is expected to reduce to 50 per cent by 2022 as international players plan to expand aggressively into Tier I and Tier II cities in India. Accommodation providers in these cities are set to witness influx of international travellers. Cities like Manali, Ooty, Gangtok are gaining popularity. Tier I and Tier II cities see the majority of leisure travel spending (approximately 87 per cent of overall international tourist spending is for leisure purposes). The accommodation market in these cities is dominated by several small and unorganised Indian players.
Indian players have tapped into the opportunity through tie-ups with multiple sales representation companies for lead generation, global promotion campaigns and loyalty programmes. Promotional activities are supported by comprehensive marketing campaigns globally.
Select large players have set up hotels overseas whereas smaller players depend on international travelers visiting India as it is challenging for these players to operate internationally without the desired scale. Online travel aggregators play an important role in organising the fragmented market and bridging the accessibility gap for international travelers by creating a transparent ecosystem.