Gujarat followed by Maharashtra and Karnataka are leading states attracting significant investments in India’s hotels and tourism industry together accounting for about 61% share, noted an Assocham study.

''Attracting highest amount of outstanding investments worth over Rs 348 billion in India's hotels and tourism industry, Gujarat has emerged on top with lion's share of about 29% amid top 20 major states attracting combined investments worth over Rs one lakh crore in the sector as of financial year 2012-13, thereby reflecting upon successful campaign of Gujarat government to attract investors in its tourism sector,'' according to a study titled 'Indian Tourism Industry: The way forward,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

While Maharashtra has ranked second with about 18% share in total outstanding investments attracted by tourism sector across top 20 states in India followed by Karnataka (about 14% share), Odisha and Andhra Pradesh (6% each) amid top five states, highlighted the study prepared by the Assocham Economic Research Bureau (AERB).

''Clocking compounded annual growth rate (CAGR) of over 100%, Gujarat has recorded significant surge in domestic tourist arrival in the state which crossed 24 million mark in 2012 from a level of 11 million in 2006,'' further noted the Assocham study.

Garnering a share of about 2.4% in over 1.03 billion domestic tourist visits across India in 2012, Gujarat is emerging as ninth most-sought after tourist attractions for domestic travelers, the study added.

However, Gujarat ranks 15th in foreign tourist arrival in India as the state attracted about 1.7 lakh foreign tourists in 2012 which had increased from 1.6 lakh a year ago thereby registering an annual growth rate of about five per cent.

''Building its tourism sector on the its core natural strengths, the Government of Gujarat should hold tourism fairs and festivals in foreign countries on a regular interval for showcasing its rich cultural heritage to lure foreign tourists in large numbers,'' said D.S. Rawat, national secretary general of Assocham while releasing the findings of the chamber's study.

''The state government should develop tourism circuits through conjunction of sites as a package in order to offer the tourists a more complete experience,'' said Mr Rawat.

''Nurturing trained manpower possessing requisite soft skills is also very essential for Gujarat to emerge as one of the leading tourist destination for both domestic and foreign tourists and the same can be done by conducting short-term training programs with focused skill development catering to people engaged in hotels, travel agencies, staff at railway stations, bus stands, staff and guides at monuments,'' he added.

The Government of Gujarat should provide clear land bank policies to further improve physical infrastructure in order to attract more private sector based investors in Gujarat's hospitality sector, suggested the Assocham study.

''There is tremendous scope to develop star-rated hotels across tier II, III towns in Gujarat to offer quality experiences, more so as second tier cities in the country hold huge potential to drive the hotel and tourism industry.''

Public-private partnership (PPP) framework must be adopted to build and manage tourist facilities by laying down industry standards, ethics and practices, ensuring preservation and protection of tourist attractions, recommended the Assocham study.

''Driven by the growing middle class with rising disposable incomes and ever-evolving lifestyles, domestic tourism offers tremendous growth potential for growth and development of India’s overall tourism industry,'' it added.

''There is a need to promote domestic tourism as it spurs job creation especially in the marginal, small and medium enterprises (MSMEs), promotes entrepreneurship and accentuates demand for different categories of hotels.''

Andhra Pradesh, Tamil Nadu, Uttar Pradesh, Karnataka and Maharashtra are top five states with highest share in domestic tourist arrival. While Maharashtra, Tamil Nadu, Delhi, Uttar Pradesh and Rajasthan are amid top five states with highest share in attracting foreign tourist arrivals.