Govt focus may turn tour & travel stocks into wealth creators





According to data from the Department of Industrial Policy and Promotion (DIPP), the hotel and tourism sector attracted around $10.14 billion FDI between April 2000 and March 2017. NSEBSEThomas CookLoading data…

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        ChartsValuation & Peer ComparisonCommunity BuzzPEER COMPANIES By DK Aggarwal

        The Indian tourism industry has grown exponentially in recent years, witnessing a growth rate of 10.7 per cent year-on-year in 2016. As many as 88.9 lakh foreign tourists arrived in India, compared with 80.27 lakh in 2015. If data is to be believed, India expects 18 per cent growth in foreign tourist arrivals (FTAs) in 2017 buoyed by conducive environment for foreign visitors in the country and other favourable government initiatives.

        Besides foreigners’ foot fall, the domestic tourism sector is growing on rising middle class and increasing disposable income. The number of foreign visitors has significantly gone up 32 per cent and revenues touched $2.278 billion in April, 2017.

        According to data from the Department of Industrial Policy and Promotion (DIPP), the hotel and tourism sector attracted around $10.14 billion FDI between April 2000 and March 2017.

        ‘Atithi Devo Bhava’ and ‘Incredible India’ are our mantras. Since long, India has been promoting tourism by creating niche products like adventure tourism, cruise tourism, caravan tourism, heliport tourism, medical tourism, wellness tourism etc. The Indian tourism and hospitality industry has been a key driver of growth within the services sector.

        In order to give the boost, the government has identified tourism and hospitality among 29 industries that are priority areas for skill development. In the Union Budget, the Finance Minister announced plans to set up five special tourism zones, special pilgrimage or tourism trains and worldwide launch of Incredible India campaign, among others.

        Also with the government’s initiative such as UDAN (Ude Desh ka Aam Nagrik ), local connectivity is set to get a major boost and this would play a crucial role in supporting the tourism sector. Besides, low crude oil prices have lowered aviation costs allowing businesses and consumers to spend their savings on vacations.

        The government’s sharp focus on building improved connectivity, particularly investment in road, railways and airport infrastructure across the length and breadth of the country, is expected to give an impetus to the industry. The focus on digital infrastructrue development and announcement of AadhaarPay are positive moves for the entire travel ecosystem.

        Undoubtedly, tourist traffic is attaining new heights and the industry is moving ahead to gradually tap its vast potential. India with its vast cultural value and natural resources and the concerted and innovative initiatives which are taken by the government will certainly give further impetus to the industry and India will become one of the major players in the world tourism industry.

        As per industry estimates, the total market size of Indian tourism and hospitality industry stood at $117.7 billion in 2014 and is expected to touch $418.9 billion by 2022. The industry is likely to continue its happy journey and among the top picks from the space, investors can considers stocks like India Tourism Development Corporation, Thomas Cook, and Cox and Kings. From the hotel industry, stocks like Kamat Hotel and Indian Hotel look good prospects.

        (The author is Chairman and MD, SMC Investments and Advisors Ltd. Views and recommendations given in this section are his own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned)




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