More Indians embrace luxury travel, growth to be exponential
INDIA, once a haven primarily for backpacker tourists and soul-searching types, is expanding its tourism sector by providing more luxury offerings.
More luxury hotels, infrastructure and services are seen in India, a far cry from what was decades ago.
According to Skift, India’s Commerce and Industry Minister Normal Sitharaman said at the Luxury Symposium 2017 the country’s luxury sector is projected to grow from its current US$7 billion to US$100 billion in just eight years.
The report stated luxury travel is growing at a much quicker rate than overall travel in India, which is forecast to increase just 7.5 percent in the same period.
A separate report in Observer noted premium departmental store Saks Fifth Avenue will set up shop in India, following the steps of Louis Vuitton, Gucci, and Dior.
The emergence of high-end fashion labels in India is a sign of increased demand. There’s also no denying the value of India’s lucrative wedding industry – its US$40 billion bridal wear industry is called “the most expensive in the world”.
“A major reason for the upsurge of foreign investment in India is the current political stability and friendly business environment created by our government,” veteran Indian designer Payal Jain told Observer.
“The wedding industry is the biggest user of luxury goods and brands. Every Indian household truly splurges.”
This is largely due to the influence of Bollywood whose blockbuster films often portray larger-than-life imageries and lavish weddings.
On top of that, last year’s abrupt demonetization of large rupee bills to keep corruption at bay has reportedly helped with bringing back billions of rupees into the country.
Established hotel groups like Hilton and Hyatt Hotels and Resorts have also expressed they won’t be going anywhere despite a recent imposing of 28 percent on luxury hotels under the goods and services (GST) regime.
The GST rate is higher than that of even the most expensive cities such as New York, London, and Paris. However, Indian hotels are still buoyant about raking in revenues.
Hilton India vice-president in development Kaushik Vardharajan told The Economic Times: “Since tourism and hospitality industry is of high priority on the government’s agenda, we believe the authorities will continue to be thoughtful of the implications GST percentage has on the industry.”
Other luxury groups, such as The Oberoi Group and Taj Hotels Resorts and Palaces, are also seeing continuous interest from tourists owing to properties that mirror India’s opulent ancient palaces.
On the other hand, India is estimated to generate 6.5 million outbound luxury travelers by 2020 next to its current 3.6 million, reinforcing the country’s status as a key market for luxury travel.
Dubai and Abu Dhabi were noted as cities that welcomed the most number of visitors in 2016.
“In 2015, India became Dubai’s number one source market for overnight visitors,” Dubai Business Events and City Operation director Steen Jakobsen said.
“Figures released by the Department of Tourism and Commerce Marketing reported 1.8 million overnight tourists had traveled from India to Dubai in 2016, and in the first quarter of 2017, India was the first-ever market to record nearly 580,000 visitors in any one quarter, with a massive 23 per cent growth in arrivals between January and March.”