Keeping pace with the general trend in the economy, the Indian hospitality industry too is poised for significant growth. This article digs deep into the segments of the industry and analyzes the same.

The hospitality industry in India is undergoing a rapid growth. With the tourism industry showing an excellent performance in terms of foreign tourist arrivals, the hospitality industry is poised to grow at a faster rate. During the third quarter of the financial year 2006, the arrival of foreign tourists increased by 12.8% and the foreign earnings increased by 21% when compared to the same period of the previous year. The services sector is expected to contribute about 60% of the total GDP in the financial year 2008 as compared to 55% in the financial year 2007. These trends have given a fillip to the hospitality industry. The primary drivers of hotel demand are the business travelers and international tourists. Both these drivers have picked up significantly in recent times and the outlook remains positive.

In view of all these positive vibes, there is a need to analyze the Indian Hospitality industry not only from the international perspective but also domestic. This article takes into account the investment opportunities for investors in the years to come. The hotel industry in India can be classified on the basis of the "service to the target clientele" as premium segment (five-star deluxe and five-star hotels), mid-market segment (three and four-star hotels) and budget segment (two-star and below).

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