Marketing Efforts

India achieved a significant growth in terms of foreign tourist arrivals during the year 2006 taking India’s International tourist arrivals from 3.92 million in 2005 to 4.43 million in 2006, showing an increase of 13.6%. Foreign exchange earnings from tourism also showed a phenomenal growth from US$ 5730. 86 million in 2005 to US$ 6569.34 million 2006 achieving an increase of 14.6%. In rupee terms it is Rs. 29, 609 cores (+ 14% over 2005).

Tourist arrivals since the start of January 2007 totalled 1.42 million against 1.24 million (+ 14.4% ) and foreign exchange earning of $ 2061 million (+ 16.2) in the same period till March end of the corresponding period in 2005. In Rupees term the foreign exchange earning +16.8 % growth with figure reaching Rs. 9102 crores for the period January-March 2007.

This upward trend is associated with increased business activities due to booming economy as well as increasing interest among the travelers in overseas countries for leisure travel. The travel is happening mostly between India and western world and between India and South Asian countries. Top ten traffic generating countries include, Uk, USA, Canada, France, Germany, Srilanka, Italy, Spain, Japan and Malaysia.

Indians are traveling like never before to explore the charms of their Incredible country. Estimated 420 million domestic tourists were recorded in 2006. This figure just include people who spent a night in hotel/guest house in a city where they went as tourist and do not include those who also travelled but stayed with relatives & friends. This figure is up from 390 million in 2005. This is a very positive trend and Ministry of Tourism, Govt. of India has earmarked Rs. 650 crores out of Rs. 1000 cores from this year’s fiscal budget allocation for development of sites with in the country. Govt. has identified six circuits for developments and 15 key destinations during the current financial year. The Ministry will give a maximum of Rs. 50 cores and Rs. 25 cores to State Governments to develop each circuit and destination respectively. Among the places identified include Hampi, Ajanta, Elephants, Ajmer, Jaisalmer, Varansasi Ghats, Badrinath, Kadernath. While the centre will finance the projects, and State Government to ensure completion of these projects with in the stipulated period. Among the selected circuits, Buddhist circuits is already in the priority sector which have Rajjai, Nalanda, Bodhgaya. ( In Bihar) Ajanta – Ellora ( in Mahrashtra).

There has been a remarkable growth in the recent years in foreign tourist arrivals to India due to the various efforts made including promoting India through the Incredible India campaign in overseas market. It has increased by about 65% from level of 2.38 million in 2002 to 3.92 million in 2005. While the foreign exchange earnings grown by about 96% during the same period. In the year 2006, the tourist arrivals have increased to 4.43 million registering an impressive increase of 14.2% over 2005.

The Tourist Satellite Accounting for India has brought out that contribution of tourism to GDP of the country has been 5.9% in 2003-2004. While employment in tourism sectors both direct & indirect has been 41.8 million, in the same year this accounting 8.78% of total employment in the country. It is estimated that by the end of 2006-2007 the employment generated in the tourism sector both direct or indirect would be 51.9% million. Thus tourism is an important engine of growth for the economy.

According to World Tourism Organization (WTO) the year 2006 saw more than 8.42 million international tourists arrivals. World Travel & Tourism Council (WTO) the year 2006 forecasts that travel & tourism will generate 234 million direct & indirect jobs World Wide accounting for 8.7% of the global employment and it will be contribute unto 10.3% of the global GDP. According to the same estimate the global travel & tourism actively expected to increase by 4.7% between 2007-2016.

The total outbound travelers from India is pegged at 7.2 million 2005-06 registering a 15% growth over 2004 (6.2 million 2004). With the increase in the number of flights to & from India coupled with the escalating propensity among middle class travelers to travel abroad. Indian Outbound market is expected to get a quantum jump in 2006-2007. The figure may reach 8 million mark with visible trend. It is estimated that year on 15% growth will be mainted. Among short have destinations Indians visit Dubai, Singapore, Thailand, Malaysia, Nepal, Srilanka, Hong Kong, Maccau, Maldives, Uzbekistan, Kazakhstan etc.

Among the long Haul destinations preferences are for USA, Canada, UK, Australia, New Zealand and France, Germany, Austria, Italy and Switzerland. Most of the holidayers use the packages tours offered by tour operators like SOTC, Raj Tours, Cox & Kings, TCI or by outbound specialists in the respective states.

Most national tourism organizations are confident that a vibrant market such as India will yield high growth, making its desirable target market for 2007-2008 or 2009.

SWOT Analysis made by Indian before selecting an outbound destination include

• Accessibility – (Better the connectivity more the choice).
• Variety of Products ( Niche Products).
• Economic status of the country.
• Political stability of the Govt. & safety in the country.
• Competitors – who can offer affordable prices as also easy availability of these packages.
• Shopping has big preference in selecting a destination
• Price – Indians are very sensitive about price as they move with family (5 to 6 members)
• Natural & manmade attractions – Very much considered. So better awareness is essential for educating about the destination.
• Spa Holidays – New in demand. As a symbol of aristocracy
• Sports – Golfing Skiing Water sports etc. (New executives prefers such oriented holidays.
• Adventure – for youth traffic ( 18 – 30 yrs )
• Hospitable people – Warmth of peoples/openness to receive Indians.
• Cultural programme -Indians very much like unique cultural heritage experience.
• Image – image should be very friendly & safe.
• Air connectivity (very essential ) for visiting near by places on road connectivity
• Availability of special packages at affordable price from metrocities.
• Value for money/ affordable image.
• New image that they are visiting & can talk to people.
• MICE – For business executives.
• Medical Tourism – for cheaper treatments plus leisure holidays.
• Cruise Tourism – New in demand (for South East Asia Region).
• Availability of publicity material for educative about the place.
• Workshops & seminars.
• Food festivals with prizes on offer ( while on holiday).
• More niche segments.
• Visit friendly & relations (VFR segment in also there).

If these are looked into while promoting the destinations, 80% success is guaranteed.

With 842 million tourists arrival and + 4.5% growth rate, 2006 exceeded expectations as the tourism sector continued to enjoy above average results, making it a new record years for the industry. The foreign exchange earning also shown a positive growth.

The UNWTO Tourism 2020 vision, forecasts, an average growth in international arrivals for the whole world of 4% per year. But it is interesting to note that the market share will change from 60% for Europe in to 46% in 2020, the main beneficiary of the shift being the East Asia Pacific Region ( from 14% to un expected 25%) Statistics on the mode of transport used in international tourism show that in Europe 55% of arrivals are by land (Road & Rail) where as they are only 40% in Asia and the pacific.

There is a change in the configuration of destinations and source markets. India and China are set to become new magnet of intra- regional and long haul travel. Russia and Central European countries will be important source markets. The ASEAN country the Middle East and Central America with overcrowding may need special measures to protect the environment. To enable ease of intra-regional travel, formalities similar to the common visa system used in the Schengen area need to be introduced.

Among determining factors and trend, UNWTO notes the increased security constraints with emphasis on air transport but people have learnt to live with it & will not mind strict security check at the airports. In some parts eg. The Mediterranean Central America and Asia higher tourist’s arrivals mean increased urbanization & problems with over crowding.

Despite the continuing demand for mass tourism there is a steady growth “Demand in tourism is driven by environmental, social at ethical considerations.

There will be demand for regional travel & this is a good sign for Asia Pacific. Most of the growth in outbound numbers is coming from within this region. Key sectors to monitor for the industry is to ensure that price is controled as region is price sensitive & look into safety issues. Asia Pacific countries will continue to be a bright spot for outbound travel growth. And this growth pattern will target towards China and India. Russia will be next big market on new destinations. Destination promoters must be in place looking into such changing consumer purchasing trends.

Global economy is expected to maintain the growth level. Since last two years the oil prices have shown tendency to remain less volatile & do not pose the risk to economic stability as it did a year ago. Still some uncertainty will remain on the global economic front & they could impact tourism forecasts. Increasing interest rates & regions diminish resources due to over use and lower savings may come as dampening force in the leisure holiday mood. A weak US dollar infact may effect foreign travel demand by Americans and on the other hand stronger Euro can boost European international travels. It appears that surge in global tourism as visible since last two years is to continue in 2007. With the given scenario in the economic scene, the international arrivals may reach 950 million figures. The latest UNWTO world Tourism Barometer figures suggest that 2007 will consolidate these positive performance started since last two years and turn into another year of sustained growth.

Though India has only 0.69% in the total arrival share, it will increase it share through progressive successful years of tourism. In fact it has shown better growth rate than the actual global trend (over 15% year on basis) as against 5% WTO global growth. Health scene in Asia with avian flue and terrorism activity in Indonesia etc. forced many holidayers to move to India, that made a sea change in the tourist arrivals in India. No doubt Incredible India campaign and better air connectivity also played a very important role in boosting tourism to India in the 2006.