by Ravi Nandan Sinha
Director – Strategic Investments & Economic Partnerships,
MSME Business Forum India
Untapped Opportunities & the Awareness Gap Micro, Small, and Medium Enterprises (MSMEs) have long served as the lifeblood of the tourism sector — quietly fueling local economies,
preserving culture, and creating jobs. From homestays nestled in remote Himalayan villages to family-run food joints along sun-kissed coastlines, MSMEs bring authenticity to the travel experience that no global chain can replicate. Yet, despite their importance, a large number of tourism-focused MSMEs remain on the margins, under-supported, under-represented, and often unaware of the tools available to help them grow.
The Critical Role of MSMEs in Tourism
According to the World Travel and Tourism Council (WTTC), tourism accounted for over 9% of global employment in 2023. A significant chunk of that comes from MSMEs. In developing countries, they constitute more than 80% of tourism-related businesses, covering accommodation, food services, guiding, transport, handicrafts, and more.
Their unique value lies in how they anchor tourism to the local economy. While big hotel chains often repatriate profits, MSMEs recirculate money within their communities, supporting farmers, artisans, transporters, and service workers.
Additionally, MSMEs contribute to cultural preservation. A tribal art cooperative, for example, doesn’t just offer tourists a souvenir — it tells a story, sustains an identity, and keeps ancestral traditions alive. Yet despite this, MSMEs often operate informally, lack access to finance, and miss out on government schemes designed to support them.
Tremendous Opportunities of Growth for MSME
Post-pandemic recovery has brought new energy to tourism. With travelers increasingly seeking authentic, sustainable, and community-based experiences, MSMEs are uniquely positioned to deliver. Trends such as eco-tourism, agri-tourism, and heritage tourism provide enormous potential for small businesses to grow provided they are ready to innovate and adapt.
Digital transformation is one such gateway. A rural homestay with a basic website and listings on popular travel platforms can now reach global tourists directly. Similarly, artisans can use ecommerce and social media to tell their stories and sell their products globally.
In India, for instance, the Incredible India 2.0 campaign and the Dekho Apna Desh initiative have emphasized the role of local tourism operators in driving domestic travel. Yet awareness and
accessibility of these programs remain limited at the grassroots level.
The Awareness Gap: A Silent Barrier
One of the biggest roadblocks facing MSMEs in the tourism sector is lack of awareness about existing support structures. Governments, international organizations, and financial institu
tions have launched numerous schemes — offering everything from financial aid and skill training to digitalization support and market access. But if the intended beneficiaries don’t know about
them, impact remains minimal.
In India, for example, schemes like:
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- PMEGP (Prime Minister’s Employment Generation Programme)
- Udyam Registration portal for MSME classification and benefits
- Tourism Ministry’s Capacity Building for Service Providers (CBSP)
…are all designed to help entrepreneurs grow. Yet in rural areas and small towns, awareness remains patchy. Many don’t know how to apply, or worse they don’t even know these schemes
exist.
This information gap is particularly severe among women-led and tribal tourism enterprises, which face additional barriers related to literacy, digital access, and institutional reach.
Bridging the Gap
If tourism MSMEs are to realize their full potential, a multipronged approach is necessary:
1. Grassroots Awareness Campaigns
Government departments and industry associations must proactively reach out to MSMEs where they are — through local panchayats, trade fairs, tourism offices, and NGOs. Training programs should be offered in local languages, using both online and offline modes.
2. Simplify Access to Support
Application processes for schemes need to be more user-friendly. One-stop digital portals, mobile apps, and help centers can reduce bureaucratic hurdles and bring transparency.
3. Digital Literacy and Tech Access
MSMEs must be empowered with the tools to go digital, from setting up websites to managing online payments and reviews. Partnerships with private tech companies could be key here.
4. Public-Private Partnerships (PPP)
Larger tourism operators and platforms can mentor and support small businesses by including them in supply chains or offering marketing and distribution help.
5. Recognizing & Celebrating MSME
Award programs and success stories can act as powerful motivators for others, showing what’s possible when MSMEs are supported and seen.
Conclusion: A Missed Opportunity No More
Tourism isn’t just about destinations; it’s about people. And MSMEs are the face of that human connection. Supporting them is not charity — it’s good economics, good policy, and good strategy. With the right support and awareness, tourism MSMEs can help transform local communities, reduce migration, generate inclusive growth, and build resilience into regional economies.
The time to act is now. The world is ready to travel again — butwill our MSMEs be ready to receive them?