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Forbes
27-06-2025
- Business
- Forbes
India's Hotel Dream: Why Tech And Demand Are Driving The Story
Sanjay Ghare, Founder & CEO, Vervotech (A Constellation Inc. company), Investor in Travel startups. From my experience, having observed the global travel industry for decades, I can say that India's hospitality sector is not just experiencing growth—it is demonstrating an upward trajectory whose base was prepared by many stakeholders. This story has many heroes; I'll discuss each in greater detail. Before I move to that, the reality of the day is that India's accommodation industry is expected to reach an INR 1 trillion valuation ($11.7 billion) by the end of this financial year, with projections extending to INR 1.1 trillion ($13 billion) by 2026-27, supported by a CAGR of 10.5%. This trajectory is not accidental. It is a cumulative outcome of growing domestic demand, conscious effort from the government and an obvious tech ecosystem in the country that has fundamentally changed the dynamics of the industry. The Demand Story: A Multichannel Push What often remains under the radar in most external analyses is the significant impact of the "New Indian Traveler." Domestic tourism is no longer merely a contributor; it has become the primary contributor, accounting for a substantial 50% of incremental revenue in the hospitality sector. This internal demand base provides a strong resilience, protecting the industry from the volatility of global economic or geopolitical upheavals (wars, sanctions, pandemics, etc.). While international tourist arrivals have also shown a strong recovery, reaching 9.24 million in 2023 (per the latest government data available), the sheer scale of domestic engagement has been the key highlight. Also, the industry's thoughtful diversification into other high-value segments—meetings, incentives, conferences, and exhibitions (MICE), spiritual tourism, and medical travel—has also played a critical role. The MICE sector alone is projected to more than double from $49.4 billion in 2024 to $103.7 billion by 2030. Additionally, India's Medical Value Travel sector, valued at $7.69 billion in 2024, is also attracting millions of foreign patients, with projections indicating a market size of $16.21 billion by 2030. This multi-segment approach ensures the market remains attractive for investments and revenue channels remain fairly stable. 'Ease Of Doing Business' Dividend: The Sovereign Push As I mentioned earlier, the government has consciously tried to create favorable policies. From an investor's perspective, the Indian government's role is no longer just limited to regulation; the industry now sees it as a proactive strategic partner. Over the years, they have cultivated an environment conducive to investment and growth. The policy permitting 100% foreign direct investment (FDI) under the automatic route in the hotel and tourism sector is a clear signal of intent to create a conducive environment for businesses in the industry. The move eases the investment process by removing the requirement for prior government approval, given investments adhere to established regulatory norms. It has been instrumental in attracting capital for infrastructure development and improving service standards to meet global expectations. The Digital Backdrop: The Role Of B2B Solutions And OTAs One part of this growth story that cannot be undermined is the country's sophisticated digital ecosystem that supports the operational efficiency and expansive market reach of India's hotel industry. B2B solutions—including global distribution systems (GDSs), bedbanks, central reservation systems (CRSs), channel managers and mapping solutions—all have played a significant role. These technology players support travel agents, aggregators and tour operators with the centralization of travel content distribution, management of real-time pricing, and automation of complex domestic and cross-border transactions. This digital infrastructure is critical for hotels to manage complex distribution networks and revenue streams. Online travel agencies (OTAs), while often seen through the lens of commission structures, play an undeniable and extremely crucial role in distribution. Without them, this demand can't be realized. Platforms like MakeMyTrip, EaseMyTrip, Cleartrip and Yatra dominate the Indian OTA market. They function as primary "discovery engines" within the travel ecosystem. Obviously, their substantial marketing budgets, which are usually much larger than those of individual hotels, ensure exceptional visibility for hotels on major search engines. The Next Phase: AI, LLMs And Depth The current growth trajectory is definitely impressive, but in my opinion, it is merely a warmup to the next phase, which will be bigger and better and will be defined by intelligent automation and a prominent shift toward conscious travel. While the adoption of advanced AI in the Indian hotel industry remains limited to foundational systems, its transformative potential is yet to emerge. Over the next five years, as I see it today, the industry is poised for a significant deepening of technological integration, with large language models (LLMs) at the center of everything. You can foresee LLM-powered concierge services that predict guest needs, customizing everything from room temperature to dining recommendations based on deeper analysis of past preferences and their real-time behavior. Generative AI will facilitate dynamic content creation at scale for marketing and guest communication, enabling highly customized, personalized guest interactions. All of it together will lay the foundation for the next generation of growth, which will be massive. Conclusion India's hotel industry's growth story thus far is more than a numerical milestone; it is rooted in execution and a well-thought-out strategy to generate sustainable demand. The INR 1 trillion valuation is a telling testament to the effort that has gone into generating robust domestic demand, a strategically enabling and supporting government, and a rapidly evolving technological ecosystem in the country, along with the technology entrepreneurs who have dared to see the big picture. As AI, particularly LLMs, becomes more deeply embedded in the ecosystem, the industry will be open to the next levels of personalization, operational efficiency and sustainability. India is not just a market; it is a compelling case study of how strategic foresight, policy alignment and technological adoption can come together to create magic in terms of demand and growth in any industry. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
Forbes
21-05-2025
- Business
- Forbes
The Network Effect And How Trade Shows Help Businesses Achieve Sustainable Growth
Sanjay Ghare is a technologist and founder of Vervotech, a SaaS-based accommodation data provider. He also founded Techspian. The network effect occurs when the value of a product or service increases as more people use it. As per a study by James Currier, a four-time CEO and Silicon Valley VC, network effects alone have contributed to about 70% of all value (in USD) created by technology firms since 1994. If I were to oversimplify it, network effects are one of the most critical levers of value creation in today's digital world. The phenomenon works and helps other industries, such as travel, media and communications. As someone who works at the intersection of travel and technology, I have seen how trade shows have become a unique amplifier of the network effect, and it's very democratic. Businesses of all sizes and segments benefit from it. I will attempt to argue why this is the case in this article, as well as cite some examples from my industry that support this line of thought. To put it simply, networks are interconnected systems of people or things. Networks are an integral part of our lives, and around you, everywhere, from your internet fiber and highways to social media, it's the internet of human brains. Network effects emerge when the value of a business or product grows with each additional user or increased usage. For instance, when another customer joins, they enhance the experience for existing customers. To illustrate it further, consider a marketplace like Amazon: It has more value if it has 1 million sellers as opposed to 10,000 sellers; the end users will have more options, and sellers will have more customers. Trade shows, per se, are living examples of network effects. A trade show is essentially a temporary network or community: It brings together exhibitors, buyers, industry experts, thought leaders and media under one roof. The value of a trade show to any one participant increases as more participants join. Each additional exhibitor means attendees have more to see and learn; each additional attendee or buyer is a new potential customer or partner for exhibitors. This mutual gain encourages even more people to participate, creating a virtuous cycle like an online but face-to-face platform. For example, at the Consumer Electronics Show, major technology companies showcase their offerings while connecting with potential partners and investors. A budding startup might meet a significant electronics manufacturer interested in integrating technology into existing products. In my industry, events like the Arabian Travel Market in Dubai and the World Travel Market in London use network effects to fuel the travel industry's growth. WTM, for example, promotes the expansion of the global travel industry with events across multiple continents. Nearly 50,000 travel professionals, government officials and journalists attend WTM London each year, resulting in over £3.71 billion in travel industry contracts being signed during the event. The connections formed at trade shows form a unique quartet or loop that drives sustainable growth for businesses. • More Eyeballs: Businesses gain new contacts at every event they attend and strengthen existing relationships. • Increased Participation: As networks grow in size and value, more businesses look to participate in future trade shows. • Market Leadership: Companies that consistently use trade shows to position themselves are able to market themselves as industry leaders. • Sustained Growth: The net effect of all these interactions translates into long-term business growth. Businesses can use the incredible proposition of the network effect, which works for everyone individually and as part of a larger, interconnected ecosystem. It's not a game where only the big fish win. Trade shows, in particular, are one of the rare arenas where the playing field is level. Here, a small startup with a bold idea can stand alongside industry leaders, share its vision, build relations and create value for their businesses that might otherwise take years to develop. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?
