Changing Scene of Indian Tourism

• Arrivals show upward travel since 2003 and average growth of 15% year on basis.
• Infact India’s growth is much better than global growth which is around 5%.
• Last year 2006 as per provisional estimates global tourist arrival was 842 million an increase from 808 million in 2005. (+5%).
• India achieved 4.43 million figure with 14.2 % growth in 2006.
• Foreign Exchange earnings showed better growth -+14.6% US$-6 billion. In rupee terms it is Rs. 29603.56 crores (+ 17.6%).
• Domestic Tourism has shown better progress – 368 million in 2005 -may reach 500 million in 2006. About 150 million are from urban cities, so there is greater potential to increase.
• Out bound tourism is progressing much faster than international arrivals. It is estimated that in 2005 it reached 7 million & by 2010 it may cross 15 million. It will be second to China in this segment.
• Tourism contributed 5.90% to GDP in 2003-04 (both direct & indirect).
• Tourism accounts for 4.59% of total number of jobs in the country and if indirect jobs are also included it reaches 8.78% that means 38.6 million jobs are created through tourism related activities.
• Labour / capital ratio by per million rupees of investment at 1984-86 prices.
  Agriculture Sector     –   44.07
  Manufacturing           –   12.06
  Mining                      –   02.06
  Hotel & Transport      –   39.00
  Tourism                   –   47.00
  —————————————————–
  Total                       –    86.00
  
• Tourism is thus a major driver of economic growth and employment in India.
• Indian Industry is growing at close to 7.5% a year & services sector is moving ahead at 8% a year. It is tourism, however, which has recorded the highest level of growth – more than 15% per annum consecutively for the last three years.

For India, tourism most essential as it acts as:

• A major force for preservation of arts & crafts.
• Preservation of heritage monuments/wildlife.
• International understanding.
• Opening up backward & far-flung areas.
• Distribution of income from developed areas to under developed regions.
• Women empowerment.
• Rural Development through rural tourism steps.
• Over all infrastructural development as tourism is a multi dimensional activity. Waterways, Roads, Aviation.
• A sense of pride in peoples mind by having knowledge about unique qualities of the country.
• Steps for poverty elimination.
• National Integration.
• Source of Foreign Exchange earnings to help in balance of payments & international trade.

All these are not only essential for India but have opened up new challenges – specially to sustain the advantages which India wants to achieve through tourism.

• We have not been able to utilize our potentials in full. We lack positive mind set to do something big & that is also reflected in tourism field also. The biggest challenge for us to change our attitude.
• We have to understand our real problems and many of those are influenced by internal factors and external factors. Internal one includes a firm determination to formulate a clear-cut policy which should have tourism friendly directives. The Policy is totally inconsistent and policy is even changing with change of Government.
• Tourism is an easy prey to put loads of taxes by successive Governments – no tax incentive, no priority to tourism, no human resource development incentives – with taxes the destination has become an overpriced product – we can’t give the matching price which our competitors are offering. We are loosing business to our competitors on this account.
• In external terrorism is a big challenge. This is going to continue which has further been aggravated by rising energy prices, inflation, interest rates, upward insurance fees, spread of avian flue- these are serious threat for tourism sector and we need to put in place crisis management programme. We are yet to do our homework united.
• We are too dependent on cash rich long distance European/USA Canada Region for our international tourist arrivals. Anything negative happens in India, tourism becomes the first casualty and these tourists avoid India – these countries are over smart in issuing advisories and we do not response to fast first. To counter attack we have to work out strategies to attract middle budget tourist’s form the neighboring countries. Inter-regional-SARC region, middle east, which are with in 3 to 4 hrs flying time & can give us traffic through out the year.
• We have many things to offer, many unique products – it is hard to communicate all that to all visitors and now it stand as a challenge to properly position these products in these neighboring markets. All these products are acceptable to them.
• We have failed to reach new markets as we lack funds to do market research. We are now quite late to know about the Chinese market. They are moving to many unexplored destinations and they are quite high spenders, spending $ 175-200 per day per person. When going abroad like Indians spend lot of their savings in shopping. We have to reach this lucrative market. Business to business provide essential links & India should make right platform for reaching this new market. This is going to give real volume to our arrivals.
• New communications technologies are changing fast with visible impact on our way of life. The internet today has dramatically changed the world. What could not be ascertained by personal visits now can be known with comfort and authenticity with a button click. Our tour operators have to meet this challenge by updating their system.
• Concept of Border free world is in fashion & there is new grouping – E.U., Middle East, African Union, COTAL and Visa free and easy movements with in the region. We have to ensure we follow a visa free or liberal visa policy. We have still a very rigid entry formality – visa, RAP, PAP, Inner line permit and photography restrictions, high fees which are very annoying for tourists.

• We are not moving with new trends.
• A new industry structure is emerging like acquisitions of Thomas Cook in the travel industry, Air Sahara in the travel industry which is new mantra of success i.e. look for global giants and net work with them but there will be smaller & faster moving players. These companies have their, own set of challenges.
• The giants will bring its own set of complexity along with an opportunity to exploit its size and scope as well as large number of professionals with durable competitive age.
• The smaller & faster moving players will depend on speed & their nimbleness to create a distinct advantage.
• Indian Tourism has to understand the unique value propositions and develop business support, incentives. Accordingly – This will ultimately bring the ultimate benefits to clients.

• The battle field for talent hunt is in operation. For a long time new travel & tourism industry facing scarcity in well-trained talent & this is going to intensify further. since the same talent pool is going to be targeted by new emerging industries – BPO’S to give an example.
• If the travel & tourism industry is to grow & increase its contribution to GDP, we need to generate a huge talent pool which can take the Indian Travel & Tourism Industry to the higher level.
• The talent issue needs to be at two levels. One at the grass root level here we need to create infrastructure by working with training institutes to revamp the curriculum that will meet the changing needs of the industry as it evolves to face the challenges of the new economy and more informed and demanding travelers.
• At the other end, we need to look at creating future leaders from the talent pool that exist with in the industry by training them regularly to upgrade their skills which will enable them to face new challenges with confidence and lead travel & tourism industry to higher levels.

The consumer landscape will expand significantly with new opportunities with 5 million domestic tourists by 2006. Vacationing will be the second largest spending category competing with eating out. It will be essential to understand consumer’s mind, and offer the end consumer value innovation, understand vacation spending habits which changes from community to community. Different communities are to be targeted with different propositions. Our Tour operators should understand the implications of these customer needs.

• Aviation: We should not go complacent with our four million arrivals. We are yet to be connect from traffic generating markets. We have no flights from Latin American countries. Even we do not use our full capacity because our national carriers do not use the capacity available under bilateral treaty because of lack of aircrafts.
• So air capacity is always remained a big problem. We must allow all those foreign airlines who are willing to fly to India without putting lot of conditions or privatize soon our national carriers so that it becomes competitive or we loose business. As potential clients are not going to wait. They have many more destinations to choose from.
• In the aviation field our problems are all the more complex with aviation related taxes. States should reduce ATF tax (which varies from 4% to 25% from State to State).
• Our Airports are outdated, they need total face lift to take more charters, new age aircrafts and up market business traffic.
• Airports forms first impression & we cannot create right image with present conditions of our airports.
• We need to relax the charter norms. This will help us to combat off seasonal problems. New airports can take away congestion from metropolitan cities & open up new tourist centers that can ensure balanced growth of tourism all over the country.

More Indian’s are traveling abroad than even before. Technology has transformed the way they make booking & the job opportunities it has opened. Business travel is increasing & India & China will have maximum business travelers. 70% will be business travelers for India as per an estimate given by Carlson Wagon Marketing Agency. Efforts to be made to ensure more Indians explore their own country rather than traveling abroad for leisure holidays.

It will need to improve our infrastructure. In infrastructure the budget accommodations should be the priority as people would like to move with their families and like to spend longer holidays. Such accommodations will be needed at island resorts, hill resorts, and wild life resorts. People would like to be nearer to the nature.

Rail travel also to be modernized with speedy train services and railways also should provide budget accommodations at their stations where they have enough lands to provide such facilities.

Safety and security will be the most important challenge for Indian Tourism. There will be regular socio religious events and terrorist activities throughout Region. So effective steps is to be placed at all the entry points.

Though appears to be of marginal importance India Tourism has to work out various entertainments for tourists specially for the evening part as tourist do not have any opportunity to enjoy evenings in India. Some sort of Delhi Hut type entertainment centers should be available in all the states where cultural platform to be established along with shopping arcades and discounted offers for tourists.

If all these areas are actiond properly then only India can be the right destination in the world. Otherwise, we will be quite far away from our competitive countries like, China, Thailand, Malaysia, Singapore even Mauritius.