G20: A boost to the tourism economy of tier 2 and tier 3 cities

The Ministry of Tourism (Government of India) is likely to declare 2023 as ‘Visit India’ year with the target of attracting more international tourists. India’s Presidency of the G20 (December 1,2022- November 1, 2023) is a golden opportunity for India’s tourism sector. A number of senior officials from different countries will be visiting India through this year, and this could give a strong fillip to India’s hospitality sector — which has recovered over the past two years but could get a strong boost. The Dharamshala declaration adopted after a meeting of state tourism ministers held at Dharamshala (Himachal Pradesh) in September 2022 sought to raise the GDP contribution of tourism to India’s economy to USD 250 billion. 

Events related to the G20 are being held in several tier 2 and tier 3 cities. A total of 200 events are being held in over 50 Indian cities. This will not only increase awareness about many cities – which have immense economic and tourist potential — but could also see the hospitality industry of these cities benefitting significantly, apart from of course the upgrading of infrastructure in these cities. There is special potential for setting up budget hotels of a reasonable quality in these cities. Here it would be important to mention, that in recent years tier 2 and tier 3 cities have been drivers of India’s economic growth. Significantly, 50 percent of start-ups are based out of tier 2 and tier 3 cities. Given all these facts, Startups from the Tourism, Hospitality and Impact sector stand to gain significantly, as more focus shifts to Tier 2 and Tier 3 cities.  

G20 Meetings under the tourism track  are likely to be held amongst other cities in Rann of Kutch (Gujarat) and Siliguri (West Bengal). India is keen to give a push to sustainable tourism and to also focus on encouraging young entrepreneurs to explore opportunities in the areas of tourism – this includes not just budget hotels, but also MSME’s and online portals linked to the tourism sector.

Significantly, events are being held in North-Eastern India and already hospitality industry has shown interest in investing in the North-East. Not only will the economy of the North Eastern region benefit and the beauty of the region be showcased, but it will also provide an opportunity to young entrepreneurs in the North East and other parts of India to explore potential opportunities there, not just for setting up budget accommodations, but other start-ups related to tourism as well. This can include but not limited to tour companies focusing on specific types of tourism like green tourism and adventure tourism apart from aggregator platforms. Over the next few years,  air connectivity between the rest of India and North Eastern India is likely to give a boost to tourism in North Eastern India (in recent years there has been a growing interest amongst tourists with regard to the North East). Apart from this, air connectivity and business linkages between the North East and South East Asia are also likely to rise over the next few years, given the pivotal role of North Eastern India in India’s Act East policy, this will be important for the region’s economy. During the International Tourism Mart, 2022 held in Aizawl (Mizoram) in November 2022 to promote tourism in the region and also seek to benefit from the G20 related events being held in the North East.

While it is important to give a boost to tourism it is a welcome step that priority is being given to different parts of India – including North Eastern India – during India’s presidency of the G20. The emphasis on making use of technology, while focusing on environmentally friendly tourism is also a significant step. For young entrepreneurs the government’s thrust on the tourism sector as well as India’s Presidency of the G20 provides numerous opportunities. It is important to think out of the box and cash in on them. It is especially important to tap possibilities available in tier 2 and tier 3 cities in the hospitality sector.