SIGNIFICANCE OF HOSPITALITY AND TOURISM IN A COUNTRY’S ECONOMY
I went to a sea beach resort for my last holidays. Few of my friends went to a hill station in the country. Another group travelled to a foreign location for vacationing. Tourists travel to new places for spending their holidays, for business purposes and due to many other reasons. These people visiting new places require accommodation and many other facilities for a comfortable stay. Thus both Tourism and Hospitality are closely interlinked
This industry is one of the largest and fastest-growing industries in the world. It is projected to create 328 million jobs and support 10 percent of the work force of the world, by 2022.
It makes a significant contribution to the economies of the different nations of the world in varied ways.
The biggest contribution that the industry makes to the economy of a country is creating a host of new jobs. Direct job opportunities are available as tour guides, tour planners and operators, travel consultants and in hotels, restaurants and resorts. As Hospitality and Tourism grows so do these jobs. Jobs are also created in several related industries such as the cruise industry, airlines, event management, amusement parks etc.
Boosts Other Local Industries
Indirect jobs are also created for instance in the agriculture and food production sector, in retail industry and so on. In India, the growth of the services sector has been largely due to the tourists visiting different destinations.
Restaurants, trade and repair services stand third as a sub segment of the services sector in India. This sub segment contributed 12.5 % that is 187.9 billion dollars to the Gross Domestic Product in 2014-15.
Hospitality and Tourism generates income in a variety of ways.
The Government earns revenue from the industry. The tourists put in a lot of money in their travel plans these days. Tour businesses and individuals involved in the sector also earn much. They, in turn, put the money back for the further growth of the industry.
Besides, income is also generated through the use of various services like hotels, restaurants, monuments and other places of tourist interest. These facilities are improved and better maintained to attract more tourists. So the benefit is all round.
Money is spent by tourists also on many other human needs when visiting a new place. They spend on medicines, clothes, food, transportation, entertainment and also on souvenirs. This supports global trade.
Foreign Exchange Earnings
This is the most important contribution the industry can make to the economy of a country. All touring expenditure incurred by foreign tourists is a source of foreign exchange earnings. Many countries of the world make it mandatory for tourists from abroad to carry a certain amount of foreign currency for the entire length of their stay. So, foreign tourists are the best means of bringing in foreign currency to the host nation.
In 2015 Foreign Exchange Earnings for India from the industry were 16.94 billion dollars. This was 1% more than the previous year.
Foreign Direct Investment
As Hospitality and Tourism in a nation, is strengthened by the Government of the country investments in the sector rise, too. Foreign direct investment is found more in economies which are open and have excellent growth prospects.
India is witnessing a period of growth in FDI with many global hotel groups establishing business in the country. This sector is included in the topmost 15 sectors which bring in the maximum foreign direct investment.
Preserves Traditional Industries
Another advantage that the Hospitality and Tourism industry confers on to an economy is preservation of traditional industries and handicrafts. Tourists all over the world take great interest in the indigenous products of the places they visit. So communities make all efforts to maintain any quaint industry or form of art they specialize in.
In places where only a single industry predominates, Hospitality and Tourism comes as a lucrative industry. Be it farming, mining, manufacturing or any other industry an economy depends on, this sector develops diversification and reduces risk.
This functions both ways. More and more tourists are attracted by good infrastructural facilities. At the same time, when tourists come, much development of infrastructure takes place with the income generated.
Thus Hospitality and Tourism is an industry that benefits almost every sector of the economy of a nation. Both developing and developed nations of the world are working to promote this industry to accelerate growth and development in their individual nations and in the world as a whole.