Ladies and Gentlemen
The Indian Travel and Tourism Industry enjoyed reasonable growth in 2018/2019.
The contribution of the Travel and Tourism Industry this year was 9.2% of IndiasGDP. However it was marginally lower compared to 9.4% in the previous year. Worldwide thegrowth has been lower due to various factors. The interest rate hikes by the FederalReserve in United States have had a predictable adverse effect on the emerging markets.Institutional investors have been selling equity and debt investments as relative returnshave become less attractive due to the weakness of local currencies.
Geopolitical instability has become more pronounced in the past one year. The UnitedStates Governments negotiations with the North Korean regime have ended abruptly.The rhetoric against Iran has sharpened with the deployment of aircraft carriers in regionby the United States. The Brexit conundrum continues as the United Kingdom has obtained afurther extension until the end of October. Crude oil prices have seen recent fluctuationsdue to serious differences between the United States and Iran. Uncertainty is never goodfor the Travel and Tourism Industry.
The Modi Government has received a strong endorsement from the electorate in therecent General Election. The next 5 years are critical for economic growth creation ofjobs and further improvement in Indias infrastructure thus creating prosperity. Wehave full confidence in Prime Minister Modi and his newly nominated cabinet.
We continue to be impacted adversely by GST for published tariffs for hotel roomscharging Rs. 7500 and above. Much lower rates of between 6% to 10% in Asian countriessuch as China Thailand and Malaysia will attract leisure travellers away from India. Withleisure spending accounting for 95% of total Travel and Tourism spending it is notsomething that we should take lightly.
It is our earnest hope that the Government will lower the GST rate by at least to 12%.
It is estimated that over 120 million will travel out of China to travel destinationsaround the world. International travellers bring valuable foreign exchange which Indiapresently needs. The Government should take note not only of visitor numbers but also thequality of visitors. We must take immediate steps to attract travellers from China whoaccount for 20% of Tourism proceeds worldwide.
The Travel and Tourism Industry should work with the Government to create acomprehensive campaign to improve Indias image as a global tourist destination. Thee-visa scheme has made significant progress in the last 5 years and can now be availed ofby residents from 166 countries; the Government of India must consider eliminating visaapplicants from certain markets and simplify the process so that travellers can staylonger in the country.
In summary the hotel sector has demonstrated that improvement in Tourisminfrastructure increases the demand for hotel rooms. The Oberoi Group is recognised as apremium hospitality company. In December 2018 for the second consecutive year The OberoiGroup was recognised as "The Best Hotel Group" by the Telegraph travel awardsU.K. The Oberoi Groups Hotels were voted as the best business hotel chain byTripAdvisor.
The Companys hotels in India and abroad continue to be awarded and recognised bytravellers and the hospitality Industry.
The Oberoi New Delhi has completed its first full year of operations. This propertyhas set very high benchmarks in room rates and in financial performance
I continue to be optimistic about the future of the Indian hospitality Industry but theGovernment must pay heed to the suggestions made by the Indian Hospitality
In conclusion I thank our Board of Directors our employees who work so hard to serveour guests. I also thank other stakeholders for their continued support.
New Delhi 15th June 2019