TOURISM INDUSTRY IN INDIA

Compiled by

LIVIN RICHARD.P MUKESH PREETHA.D ROOPAL.S.SHAH SHAIMA.K SUMATHI.T

INTRODUCTION TO THE TOURISM INDUSTRY

VIEW OF MINISTER OF TRAVEL & TOURISM MS AMBIKA SONI

Future prospects of tourist influx in India:Development of Infrastructure (Concessions in taxes) Clean accommodationNew airports are coming up.Railways have increased the services. Road transport is better. National highways are being constructed.

Government’s support to the private players

• Ministry have a budget of 1000 crore for this year (half of this budget is scheduled for the infrastructural support to the states)

• Now the Ministry has proposed for tax holiday for hotel business for those who would be investing in rural and hinterlands.

TOURISM

Tourism is the temporary, short-term movement of people

to destination outside the places where they normally live and

work and their activities during the stay at each destination. It

includes movements for all purposes.

The tourism business in India can be broadly classified into

Inbound tourism(5.1 million in 2009)

Domestic tourism(650 million in 2009)

Outbound tourism(11.1 million in 2009)

OPERATING SECTORS OF THE TOURISM INDUSTRY

Travel trade sector Accommodation sector Tourism services Transportation sector Entertainment sectorFood services sectorAdventure & outdoor

recreationFood services sectorAttraction sectorEvents sector

DIFFERENT FORMS OF TOURISM

BASED ON PURPOSE

Business Tourism

Leisure Tourism

GENERAL TOURISM

Spiritual Tourism

Eco Tourism

Rural Tourism

Adventurous Tourism

Dark Tourism

Medical Tourism

COST COMPARISONS TREATMENT

PROCEDURE COST (US$)

UNITED STATES INDIA

Bone Marrow Transplant

2,50,000 69,000

Liver Transplant 3,00,000 69,000

Heart Surgery 30,000 8,000

Orthopedic Surgery 20,000 6,000

Cataract Surgery 2,000 1,250

TOURISM INDUSTRY Vs FEE

Foreign exchange earnings(FEE) • US$ 3.1 bn in 2002• US$ 11.7 bn in 2008• US$ 11.39 bn in 2009.

FOREIGN EXCHANGE EARNINGS FROM TOURISM IN INDIA DURING DECEMBER 2008 AND COMPARATIVE FIGURES OF 2006 AND 2007

MONTHS FOREIGN EXCHANGE EARNINGS (In Rs. Crores)

PERCENTAGE CHANGE

2006* 2007* 2008# 2007/06 2008/07

January 3970 4698 5438 18.3% 15.8%

February 3793 4401 5182 16.0% 17.7%

March 3378 4144 5035 22.7% 21.5%

April 2850 3218 3773 12.9% 17.2%

May 2350 2543 2988 8.2% 17.5%

June 2566 2849 3409 11.0% 19.7%

July 2990 3436 3870 14.9% 12.6%

August 2698 3080 3626 14.2% 17.7%

September 2640 2594 3143 -1.7% 21.2%

October 3355 3785 4248 12.8% 12.2%

November 3793 4533 4935 19.5% 8.9%

December 4642 5079 5083 9.4% 0.1%

Total 39025 44360 50730 13.7% 14.4%

TRAVELLER ANNUAL READERS SURVEY

SUMMER DESTINATIONS• Himachal pradesh 23%• Kashmir 17%• Darjeeling 14%• Lakakh 12%• Munnar 10%• Coorg 9%

WINTER DESTINATIONS• Goa 25%• Kerela 20%• Andaman 16%• Rajasthan andamans9%• Jammu & kashmir 7%• Karnataka 7%• Lakshadweep 5%• Madya pradesh 4%• Tamilnadu 4%

Cont..

HILL STATIONSMANALI 17%DARJEELING 11%KODAIKANAL 10%GANGTOK 9%NAINTAL 9%OOTY 9%GULMARG 8%MUNNAR 8%MUSSOORIE 6%COORG 5%SHIMLA 4%SHILONG 2%

COASTAL STATESGoa 35%Andamans 14%Kerela 13%Lakshaweep 10%Andhrapradesh 6%Maharashtra 6%Orissa 6%Karnataka 5%Gujarat 3%Tamilnadu1%

REGULATIONS FOR THE INDUSTRY

GOVERNMENT POLICIES, GOALS AND OBJECTIVES

Active participation and investment from private sector in tourism industry.

Special attention for infrastructure development in North East India and Jammu & Kashmir.

Improvement and environmental up-gradation of the protected monuments.

Promotion of rural tourism (eliminating poverty and creating employment)

To impart a special thrust to eco tourism in all developmental activities.

Giving importance to domestic tourism, pilgrimage tourism .

To encourage Adventure Tourism for the new class of young tourists.

Encouraging special products like Yoga, Siddha , Ayurveda, Indian cuisine etc.

Training programs for capacity building of tourism service providers.

Training of State Police to act as Tourist Police.

To actively participate in activities of international organizations such as UN World Tourism Organisation and World Tourism and Travel Council.

TRAVEL REGULATIONS FOR INDIA

To travel India one need valid passport and Visas obtained and issued from the Indian Embassies or Indian High Commissions abroad.

The Passport of the person applying for the visa should be valid for a minimum of six months beyond the date of intended departure from India.

Foreigners holding nationality of any other country is required to submit proof of long-term (at least three years)/ permanent residence in the country from where they are applying.

EXEMPTION FROM REGISTRATION

If you are a foreign tourist and visiting India for 180

days or a shorter period, then you don't need to register

yourself with any authority in the country. You can freely

move about in the country, except to the prohibited places

and restricted and protected regions.

HEALTH REGULATIONS

Yellow Fever Vaccination Certificate

conforming to International Health Regulations.

SCHEME WISE GOVERNMENT EXPENDITURE ON TOURISM

REFORM MEASURE AND POLICY INITIATIVES

Central government runs the India Tourism Development

Corporation. In the year 2002, New Tourism Policy was launched. It was

built around 7 mantras:

Swagat (welcome)

Suchna (information)

Suvid ha (facilitation)

Surakhsha(security)

Sahyog(cooperation)

Sanrachna(infrastructure)

Safai (cleanliness)

Cont..

Some salient features of tourism policy:

It proposes the inclusion of tourism in both the

central and state governments sector.

No approval for foreign equity upto 51% in tourism

projects.

NRI investment up to 100% allowed.

Concession rates on customs duty of 25%.

50% of profits derived by hotels, travel agents and tour

operators in foreign exchange are exempt from income tax.

To obtain impetus for development of tourism through

public partnership, a National Tourism Advisory Council has

been constituted.

The public private partnership.

Several small schemes of 9th Plan have been merged to

create world class tourism infrastructure all over the

country.

TOURISTS-LIFE OF THE INDUSTRY

TOURISTSIt has become a challenge to please customers.

With extreme availability of information and variety of options, it has become even more difficult to please customers in tourism industry.

The customer satisfaction can be gauged on these parameters :

1. Infrastructural factors2. Services and Safety factors3. Necessities4. Cost related factors5. Natural or unique factors

6. Climate 7. Overall satisfaction

Foreign Tourist Arrivals (FTAs) from Tourism in India during December 2008 and comparative figures of 2006 and 2007

MONTHS FOREIGN TOURIST ARRIVAL (Nos.) PERCENTAGE CHANGE

2006 2007 2008@ 2007/06 2008/07

January 459489 535631 591337 16.6% 10.4%

February 439090 501692 561393 14.3% 11.9%

March 391009 472494 541478 20.8% 14.6%

April 309208 350550 384203 13.4% 9.6%

May 255008 277017 300840 8.6% 8.6%

June 278370 310364 340159 11.5% 9.6%

July 337332 399866 429456 18.5% 7.4%

August 304387 358446 391423 17.8% 9.2%

September 297891 301892 330874 1.3% 9.6%

October 391399 444564 452566 13.6% 1.8%

November 442413 532428 521247 20.3% -2.1%

December 541571 596560 521990 10.2% -12.5%

Total 4447167 5081504 5366966 14.3% 5.6%

VARIABLES INFLUENCING ATTRACTIVENESS OF A TOURIST REGION

Natural beauty and climate

cultural and social character-istics

Accessability of the region

Attitudes towards tourists

Infrastructure of the region

Price levels

Shopping and commercial facilities

Sport, recreation and educa-tional facilities

GENERAL FACTORS

ATTRACTIVE SOCIAL & CULTURAL ELEMENTS

WorkDressArchitectureHandicraftsHistoryLanguage

ReligionEducationTraditionsLeisure activitiesArt/musicGastronomy

BEST TOUR OPERATORS IN INDIA

India focusPrime travelsTravelmartindiaIndiamapAtrip2india

AkshayaindiaMakemytripindiaTouroperatorindiaSeaindiaGreatindianoutdoors

SOME FACTORS AFFECTING INDIAN TOURISM

Poor transportation.Lack of basic hygienic amenities at halting points.Non-standardization of rates and fares.Lack of sound marketing and promotion strategies.Poor maintenance of heritages.Issues regarding security and harassment.Lack of passionate and trained professionals.

UNION BUDGET 2011• To promote tourism, the government has allocated Rs 1170 crores in

the General Budget for 2011-12, marking an increase of Rs 104

crores over last year.

• The budget, presented in the Lok Sabha has made provision of Rs

499 crores for development of tourist infrastructure, wayside

amenities, tourist reception centers, refurbishment and illumination

of monuments.

SWOT ANALYSIS

STRENGTHS

Rich culture heritage and colorful festivals.

Scenic beauty of the country.

Terrain is ideally suited for various adventure activities.

Well known Indian hospitality.

High life expectancy.

Excellent quality of life.

One of the ten paradise and top 50 places to be visited in lifetime by national geographic traveller.

Variety of products and services.

Highly reputable, bagged various national and international awards.

Eco tourism initiatives.

WEAKNESSES

Restrictive Airline Policy of the Government of India.Overcrowding of popular tourist centers.Inadequate marketing and information channels.Some places are inaccessible, especially in winter.Inadequate infrastructure to match the expectation.

Lack Innovative branding and positioning.Restrictive coastal regulation zone.Lack of effective waste management systemLack of regulatory mechanism for sustainable developmentShortage of funds for tourism expansionExploitation of tourists(Overcharging for services)

OPPORTUNITIES • GOI is giving special attention to certain regions like NE India.

• Asian Development Bank is preparing a Sub- Regional Plan for

development of tourism in India.

• Potential for private sector's investment in tourism projects.

• Availability of high quality human resource.

• Lot of unused prospective on heritage, medical and pilgrimage

tourism.

• Accessibility of quality human resource.

• Employability in tourism and related areas.

THREATS • Terrorism is a major setback of the region. • Disorganized tourism development. • Environmental factors also impose a threat• Strong Competition within states of India and

abroad. • Growth of tourism may lead to pollution

problem ,ecological hazards etc.• Over emphasis may lead to secession in the

period of downturn.

PORTER’S FIVE FORCE MODEL

Substitutes

• Media Entertainments

• Internet

• Amusement parks

New Entrants

• Upcoming destinations

and the issues they are

up against

Cont..

Rivalry among

Competitors

• Vietnam

• Philippines

• Indonesia

• Malaysia

• Singapore

Barriers to entry

• Infrastructure

• Cultural issues

• Global mindset

• Ease of access

• Language

• Security

TOP DESTINATIONS IN INDIA

CURRENT AFFAIRS IN TOURISM INDUSTRY IN INDIA

• Hyderabad in New York Times 2011 list of must see places

The New York Times (NYT) has featured the city of pearls in its

list of '41 places to go in 2011.'

• Kerala Tourism sweeps PATA Awards 2011

Kerala Tourism - four of the top honors at the Pacific Asia

Travel Association (PATA) - global campaign film ‘Your Moment is

Waiting’.

• Kerala Tourism Wins Prestigious Award at Fitur, Madrid

Kerala Tourism won the award for the best international stand

at FITUR (International Tourism Trade Fair) held in Madrid, Spain.

• on e-books, travel

Dorling-Kindersley-India a publishing subsidiary of Penguin Books, is

expanding its footprint in the Indian market with new digital and travel

titles in 2010-11.

• WTM (World Travel Market)

2010 expects to generate more travel industry business this year

• Gypsy travels: Caravan tourism arrives in India

It is operated between Orchha and Khajuraho in Madhya Pradesh.

CURRENT TOURISM STRATEGIES

• Turn around – Incredible India.

• Internet Strategy.

• Cost leadership in medical tourism.

• Developmental strategy(Ministry has spotted out 130

sites to be developed as the tourists destinations).

PROPOSED STRATEGIES

• Innovation strategies to capture new markets.

• Customer satisfaction is important.

• Optimum utilization of resources.

• Develop financial performance.

• For promotion of tourism, Rs 347.75 crores

has been earmarked in the budget.

• Social awareness campaigns also released to

sensitize the masses and tourism

stakeholders.

• The Ministry has got Rs 123 crores for its

training programmes.

• Training manpower is important for development, at

present there are 41 institutes of hotel management

and 5 food craft institutes.

• Keeping the special requirements of the northeast

region in mind, Rs 110 crores is being earmarked for

the NE region and Sikkim in the budget.

GLOBAL SCENARIO AND EMERGING TRENDS

GLOBAL SCENARIO: TOURISM SECTOR TOWARDS GLOBALIZATION

The Asian American Hotel Owners Association

(AAHOA) Promotes India as a tourist destination in

the US through its network of 22,000 member hotels.

Strategic tie-ups with such associations could be a

significant factor in the years to come, since over 40 %

of American hotels are owned and operated by

People of Indian Origin (PIO).

GLOBAL SCENARIOINTERNATIONAL RECOGNITION

India has been elected to head the UN World Tourism Organization (UNWTO). The world's leading travel and tourism journal, "Conde Nast Traveller", ranked India as the numerous travel destination in the world.The "Incredible India" campaign has been ranked as the Highest Recall Advertisement worldwide by "Travel and Leisure". India was adjudged Asia's leading destination at the regional World Travel Awards (WTA). India's Taj Mahal continues to figure in the seven wonders of the world.Bangalore-based Leela Palace Kempinski has been rated as the favorite business hotel in the world in a Readers' Choice Awards by Conde Nast Traveller.

NEW UP-COMING TOURISM PRODUCTS

Monsoon magic (April to October)

Rural & village tourism

Medical tourism

Spa tourism ( luxurious world class health spa’s are mushrooming across the country)

Luxury tourism( Palace on Wheels, Palaces Adventure tourism)

MICE–convention centers coming up in the metro cities

EMERGING TRENDS

Demand for niche and customized tourism products.

Lifestyle changes and higher disposable incomes have resulted in shifting travel preferences and travelers are looking for ‘out-of-the-box’ experiences.

wine tourism, pop-culture tourism, cruise tourism, wellness tourism, monsoon tourism etc.

Tour companies are also willing to customise products as per travelers’ choices/preferences.

COST BREAK-UP

Airline 27.2%Cruise 25.9%Hotel 8.4%Car rental 4.6%Tour packages 29.9%Other 4.0%

KEY FINDINGS

• India is expected to see an influx of 10 Million

international tourists by 2010(3.5 million –

commonwealth games), up from just 5 Million in 2007

• Health care tourism is expected to reach US $2 Billion

by 2012, representing a CAGR (Compounded annual

growth rate)of 60.69%

• Indian outbound tourist flow is expected to increase at

a CAGR of 13.30% from 2008 to 2012.

• It makes the 11% of the total GDP of the world and also makes the 8% of the employed population of the world.The Indian tourism industry is expected emerge as a second largest employer by 2019.

• Capital investment in the tourism sector is expected to increase by 8.8% from 2010 to 2019.

• India’s share in the global tourism is expected to

reach 1.5% by 2011.

• The growth in India’s tourism market is expected to

serve as a boon for hotel, medical tourism and

aviation industry

• Personal disposable income during 2007-2010 grew

at a CAGR of 14.16%, driving domestic as outbound

tourists.

• The ‘Incredible India’ Campaign.

REFERENCESWebsites

www.incredibleindia.orgwww.indiatourism.comwww.tourindia.com www.coxandkings.com www.makemytrip.com www.makemytrip.comwww.lonelyplanet.comwww.tourisminindia.comwww.keralatourism.com

THANK YOU!!!