A Study on Impact of FDI in Indian Hospitality Industry at Hyderabad

This survey is purely based out of Hyderabad and the data collected is through various sources the data has been analyzed and then the Impact of FDI on Indian hospitality has been concluded.

Objectives of the Study:

  • The Major objective of the study is to understand the concept of Foreign Direct Investment
  • The Impact of FDI in India and its economy
  • The Impact of FDI on the Hospitality Industry in India
  • The SWOT and PESTLE Factors of Hospitality and their impact through FDI
  • Industry Perception and the customer’s perception in terms of the increase in the facilities

Scope of the Study:

The scope of the study is based on the FDI, the policies, and procedures. The hospitality industry in India, The Impact of Foreign Direct Investment on the Hospitality Industry especially the Hospitality and the Tourism Industry. The Data is being collected from senior officials of private Hospitality and people from different hospitality backgrounds. The scope while collecting data with respect to Foreign Direct Investment etc., is across the pan India level and the data SWOT & PESTLE analysis is done based on the pan India scenario and the data.

Need of the Study:

Foreign Direct Investment is playing a key role in developing the economy and creating employment in host countries. When it comes to hospitality there are many aspects where the taste and the preferences of the people of the nation have to be taken care and there is a thin line that will have positive and negative aspects of FDI in the hospitality Industry. And that is the reason for considering the topic for my research study as a part of my academics.


  • Exact figures of FDI & Investments in the Hospitality Industry as there are many segments that come under this.
  • Duration of the project which is a time constraint.
  • Data Collected from Customers and the representatives of the Hospitality Industry
  • SWOT changes as per PESTLE which is a variable one and analysis is done based on the existing scenario.

Research Methodology:

The main objective of my study is to Identify the Impact either positive or negative which is been on the Hospitality sector due to Foreign Direct Investment.


  • Foreign Direct Investment is consistently Increasing in India.
  • The FDI with respect to Hospitality Industry is recording a growth of 5% every year.
  • The FDI in hospitality is Increasing competition and the small Players who could not cope are closing/ winding up their businesses.
  • The new properties are coming up across India in places like Bhiwandi, Ankleshwar, Chennai, Hyderabad, Bangalore, and Ahmedabad where 90% of the Hotels and resorts are being constructed by Foreign Investments and by foreign players.
  • The traditional Players like Taj, Oberoi, etc., could compete with foreign brands like west woods, Sheraton, etc.,
  • This competition is letting the prices go as low as possible which is in the budgets for Middle class and above middle-class people whereas the three-star category and 5 Star category of Indian Hospitality companies could not give.
  • Combos like Flights, Hotels, Cab, Tourism, etc., are being offered and it is a mix, this is the blend where the domestic hospitality players are suffering.
  • There are Players who are coming up with the concerts and they are mixing the modern with the Indian Tradition where the staff will be wearing the Rajasthani, Bengali, Gujarathi, etc., attires in their duties.
  • FDI is coming in Dollars and when it is compared with Indian Rupee the ratio is high, that is the reason there are more than 189 Properties where Foreign Investors are Investing in India.
  • The Values, Traditions, cultures, etc., fashion, lifestyles, food habits, and the changing tastes and preferences of Indian earning segments.


  • The Indian Hospitality companies have to cope with the changing tastes and the preferences of the Indian earning segment people.
  • The economy of India is growing and FDI has its own contribution to this, apart from Hospitality there are many other segments like service, IT, ITES, Manufacturing, etc., and Industries where there are inflows of FDI which is an Indirect driver for an Increase in Hospitality Industry.
  • Indian Hospitality has to adopt new technologies in attracting customers and even give them the best service at low prices.
  • The blend and the mix of offers like Flight/Train/Bus tour Packages, Hotels, Food, etc., should be there as a part of their Marketing Mix and the Marketing Plan or the Business Model.
  • The Themes and the concerts etc., to be organized, there is a need to keep up and retain the cultures and the traditions of India but it has to be aligned in line with the need of the hour of the customers.
  • tourism is another Industry that is consistently in India for the past 5 years where there are many foreign visitors coming to India and again there is a path and a way to showcase the customs and the values of India in Hospitality in a creative way to increase profitability.


The Impact Foreign Direct Investment is having two different types of effects in India. When it comes to Hospitality Industry it is creating turbulence and making small players wind up their Businesses. The other way is that it is forcing the competitors to decrease the prices and attract customers with offers, coupons, etc. When it comes to the business environment end of the day is competition and the business environment. When it comes to customer delight, the customer is getting the best service with the best standards at competitive prices.

The Major problem area observed here is that due to a lack of Market research and strategies, Indian Hospitality companies failed in estimating the growth in the Indian economy. There is a growth in IT, ITES, Pharma, etc., industries along with Tourism, this is the area where foreign Hospitality companies have identified and invested a huge amount in India in this industry. The financial strength of Indian Hospitality companies is another aspect. The aggressive Investments, Competitive prices, Corporate tie-ups, Offers, packages, etc.,
The Indian hospitality companies also failed in forecasting and estimate the changing preferences and tastes of Indians and foreigners who are visiting India.
The technical aspects like mobile applications, conferences, events, live telecasting, etc., Digital Marketing, online bookings with packages, etc., are the areas where Indian small and Medium hospitality companies have to work to sustain in this highly competitive environment created by Foreign Direct Investment in Indian Hospitality Industry.

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