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What are the challenges faced by the hospitality industry in India?
Edited by Vinnie Jauhari and Meghna Rishi
Introduction
Increasing connectivity and growing interdependence of world economies and markets over the past quarter of a century bear testimony to the wave of globalization sweeping across the world. The removal of trade and travel barriers and the resultant growth in global travel in the context of the changing dynamics of international business has been a significant driver of economic progress the world over. The services sector has been at the core of this global economic transformation with significant progression taking place in the hospitality and tourism sectors. The phenomenon of globalization has unleashed the latent economic potential of the international hospitality industry. Concurrently, it has brought to the fore several challenges faced by the hospitality sector in the context of its functional areas, such as human resource management, marketing management and cross cultural communications.
The hospitality and tourism industry is one of the most rapidly growing sectors, accounting for more than a third of the total global services trade ([24] ILO, 2010). There has been an evolution in the consumption behaviour in the industry given the increased levels of importance attributed to leisure time pursuits ([47] Williams, 2006). This is evidenced by the fact that over the past 25 years, international tourist arrivals have increased about one percentage point faster than global gross domestic product (GDP) in real terms ([24] ILO, 2010). According to [45] UNWTO (2011) estimates, tourism contributes approximately 5 per cent to the worldwide GDP, while its contribution to employment is pegged a little higher and is estimated to be in the region of 6-7 per cent of the overall number of jobs worldwide (both direct and indirect).
The hospitality and tourism sector saw recessionary trends in 2008-2009 due to the global financial crisis and hospitality industry-specific events such as terrorist attacks on hotels in certain key tourism destinations like India. Despite this, in 2010, world tourism recovered more strongly from the shock than expected with worldwide international tourist arrivals hitting 940 million in 2010, almost 6.6 per cent higher than the previous year ([45] UNWTO, 2011).
The human factor
The hospitality industry espouses the typical characteristics of a services industry: intangibility of...