Why Is Tourism Footfall in India So Low Compared to Europe—and Why Aren’t Indian Hotels Growing Faster?

India’s international tourism, particularly from long-haul Western leisure travelers often referred to as “white tourism,” remains significantly lower than that of top European destinations like France or Greece. Despite India’s immense cultural heritage, diversity, and natural beauty, the number of foreign tourist arrivals stood at only around 9.2 to 9.5 million in 2023. In contrast, France welcomed over 80 million tourists and Greece over 30 million in the same period. This disparity is driven by multiple factors, including differences in infrastructure, ease of travel, tourism policy, and global perception. European countries benefit from streamlined travel within the Schengen zone, well-developed urban and rural transport networks, and strong destination branding. These features make travel within Europe convenient and appealing, encouraging intra-European as well as long-haul international tourism. India, while rich in attractions, faces challenges in terms of travel convenience, safety perception, and promotion in key outbound markets.

The relatively slow growth of India’s hotel industry reflects these limitations. India had approximately 183,000 hotel rooms in 2023 and is projected to reach only 250,000 rooms by 2027, which is still inadequate given the population size and tourism potential. For comparison, China, with a similar population size, added over 100,000 new hotel rooms in a single year. A significant deterrent for hotel development in India is the high cost of capital. Hotel projects require large investments with long gestation periods and uncertain returns, making them less attractive to investors. Moreover, the regulatory environment in India presents substantial hurdles. The process of land acquisition, obtaining clearances, and securing construction permits can take 36 to 48 months, which is far longer than the average in Europe. These delays increase project costs and deter new entrants into the hospitality space.

India’s physical infrastructure also lags behind global expectations for high-value tourism. Poor road conditions, congestion, limited regional airport connectivity, and inconsistent public services like electricity and sanitation impact both the tourist experience and operational efficiency for hotel operators. High real estate prices in urban centers further complicate hotel development, reducing profit margins and making projects viable only for the top-end luxury or budget segments. Another factor slowing hotel growth is the domestic market orientation of Indian tourism. India witnessed over 2 billion domestic trips in 2019, pre-pandemic. While this ensures occupancy for budget and mid-tier hotels, international tourism—which supports luxury and upscale development—is still a small slice of the market.

That said, the industry is not without promise. India’s projected GDP growth of 6.8% in 2024, combined with a rising middle class and digital adoption, is boosting overall demand for travel and hospitality. Government initiatives like the "Incredible India" campaign, eased visa policies including e-visas and visa-on-arrival options, and increased foreign direct investment in tourism infrastructure are helping to change perceptions and drive growth. There are also improvements in transportation infrastructure, such as new expressways, regional airports, and improved rail networks, which aim to enhance connectivity to second-tier tourist destinations.

In summary, while India holds tremendous tourism potential, its low foreign tourist footfall compared to European countries like France or Greece is primarily due to structural constraints, including underdeveloped infrastructure, complex regulations, high investment costs, and limited international positioning. The hotel industry’s slow growth mirrors these systemic issues. However, with the right investments, regulatory reforms, and sustained international promotion, India can significantly improve its share of global tourism and expand its hospitality sector in a meaningful way.