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Contribution to economy

Contribution to economy

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Published by Sumit Pratap
Front Office Handout in regards to the Contribution to economy.
Front Office Handout in regards to the Contribution to economy.

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Categories:Types, Research
Published by: Sumit Pratap on Jan 28, 2013
Copyright:Attribution Non-commercial


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Contribution of the Hospitality Industry to Indian & Global Ecnomy:
The Hotel & Catering Industry is an important sector in the touristic infrastructure of the country. The state policy towards the Industry has been influenced by the general attitude toward the service industries. The stateaim’s is to improve the standard of living of the country’s inhabitants. Due attention is given to the environment and social life where-ever development projects are started. Changes in travel are carrying the hotel industryinto a new area where the dimensions are unlimited. The average traveler in the new age asks for 
 good food 
while traveling away from home.Today, tourism, including ‘hotels’ is the second largest industry in the world with a rapid rate of growth and is predicted to overtake ‘oil’ in the coming decade. In the old days, international travel and tourism was hindered by war, strife and political climates. Today, there is freedom of approach that compels the domestic privateCompanies to exploit international relationships, such as with international chains of hotels. Sucharrangements are economic and aid the country to develop its tourism ,thus becoming more competitive on theworld stage. India is a relatively new member in the international tourist market, largely with the advent of new hotel companies in different parts of the country. India is thus taking off with the expansion of more investment,increasing competition between larger member organizations of the industry and overall making an atmospherethat gives the common tourist a wider choice and more value for money. Many hotel entrepreneurs are attracted to the Industry, to invest in hotels, because of its vast potential to earn‘ 
 foreign exchange’ 
. It needs to be noted that ‘for every rupee directly earned ,there is another two rupees spent by the foreign tourist.’ Contributions to the economy are many:
Employment Avenues
:The Hospitality industry is mainly a ‘service industry’. The impact is spread widely over the national economy. It effects almost all parts of the service and other sectors. Employment generation, a major contributor to theeconomy, is related to the income created in the first and subsequent rounds of spending of the ‘tourist rupee’ on the consumer goods industry. The main contribution can be measured in terms of direct and indirect employment. The direct impact of the tourism industry on employment creation can be estimated by the tourist expenditure on the following:1)Boarding & Lodging (including restaurant & entertainment)2)Transpor
 Purchase of handicrafts, souvenirs, jewellery, leather goods, postcards etc. In addition to the direct employment provided by the tourist industry, it further created additional indirect employment in many other activities such as shops and construction activities(ii)
Impact on Rural development
The hotel Industry is a direct employer. It is estimated that the room to staff ratio for a hotel varies between 1 :1.5 to 1 : 3 . There are also a number of other employment avenues created by the hotel Industry. The number of workers engaged in other industries that supply goods and services to the hotel industry. Hotels have a direct impact on rural development. It uses thousands of meters of the cottage industry’shandlooms’ for furnishings and curtains. Thousands of meters of carpets are used for the hotel’s floor coverings , and a large number of artifacts, curio’s and decorations are required in hotels.
Investments in Shops, Arcades, & Malls
:The hotel industry encourages a substantial investment in shops in hotels. These, while producing revenue for the hotels, create a large number of opportunities for self-employment. On the other hand, the well-being of the shops are largely dependent on the foreign traveler (tourist) who provide benefits like:(1)Earning of foreign exchange(2)Marketing outlets for the goods produced by the labour intensive small scale & cottage industry.(3) Effective show-windows and sales locations for generating and booking export orders.(iv)
Supporting other consumer goods manufacturers
:The industry gives encouragement and aids with finance , existing and new fabrication for items such askitchen equipment, furniture, solar energy , heating , electronic control panels, computers hardware and  software etc. Airconditioning equipment, construction materials, food stuffs, perishable goods( fruits ,vegetables etc) breweries producing liquor, crockery, cutlery, glassware etc are some of theindustries directly benefited by the hotel industry.(v)
:The industry also requires the services of professionals like architects, accountants
 , contractors, interior decorators. They all get the benefits of income from providing consultancy and service.(vi)
Improvement of standard of living
:The operation of a hotel in a particular locality leads to the general improvement of the standard of living of the people living in the vicinity.(vii)
Spread of awareness
: Hotels provide an opportunity to their guests to sample and savor their county’s culture , the etiquettes and way of life of a particular region. During the last two decades, famous International hotel chains like ‘Hilton International’, ‘Sheraton Corporation’ 
 , ‘Inter-Continental Hotels,’ ‘Holiday Inn’, ‘Hyatt International’ 
 , Accor,‘Choice Hotels’, ‘Best Western’, ‘Mariott Hotels’, etc have come to dominate the world hotel industry, and  India. In the national field, we have international-class chains of our own, with
Oberoi Hotels
, The
 , The
Welcom group
 , Clarkes Group, The Asoka group , etc making their presence felt overseasbesides expanding in India into 5 star, four star and 3 star hotel segment markets.
Educational institutions
in the Hospitality field:With the hotel industry’s requirement of skilled and semi-skilled manpower, junior and middle level management increasing as the industry expands at a rapid pace,
 Hotel Management Institutes
are becoming a source of direct investment by entrepreneurs and business-men. These institutes need to be affiliated to variouseducation-regulatory bodies like the ‘All India Council For Technical Education (AICTE)’, the UniversityGrants Commission(UGC),and Universities in India and overseas to impart a standard level of education.Universities and Govt .bodies
 gain from the income they get 
when they conduct examinations ,and 
theaffiliation fees
they demand.The institutes provide employment and income to the manufacturing sector for equipping their Kitchen, Restaurant, Housekeeping and Computer Labs. They also generate employment and increase the standard of living for the people living in and around the area. ________________________________ 

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