whitepaperontourism-100829124227-phpapp02

8/22/2019 whitepaperontourism-100829124227-phpapp02

1/109

WHITE PAPER ON

AN INTEGRATED APPROACH FOR PROMOTION AN INTEGRATED APPROACH FORPROMOTION OF INDIAN TOURISM OF INDIAN TOURISM

Prepared for THE BOMBAY CHAMBER FOR COMMERCE & INDUSTRY BUSINESSCONSULTING GROUP

309/310 Mhatre Pen Bldg, Senapati Bapat Marg, Dadar (West) Bombay 400 028Phone : (22) 430 1745, 437 1823, 431 3914 Fax : (22) 430 1655 E-Mail :[email protected] Website : www.businessconsultinggrp.com


2/109

About Bombay Chamber

The Bombay Chamber of Commerce & Industry is one of the oldest Chambers ofCommerce in the Country. The Bombay Chamber for over 165 years of its existence,since its inception in 1836, has been serving Trade & Industry. It is well respected

for its balanced and studied approach to matters pertaining to development of tradeand industry, promotion of government industry inter-linkages and for pursuingradical trade policies. Bombay Chambers membership comprises predominantlythe most of large and medium size companies from manufacturing and servicesectors, leading banks and financial institutions and the multinationals having theircorporate headquarters in Mumbai. The Chambers membership, therefore,contributes almost a quarter of Indias Gross Domestic Produce in manufacturingand service industries.

Bombay Chamber of Commerce & Industry 1 An Integrated Approach for Promotionof Indian Tourism


3/109

INTRODUCTION

The Bombay Chamber seeks to reflect the views, perceptions and interests of theirconstituents in a proactive and constructive manner. In recognition of its changingrole, the Chamber initiated debate on various important issues, such as future

direction of economic reforms and integrated approach for promoting of IndianTourism. The Tourism Committee of the Bombay Chamber of Commerce andIndustry therefore, engaged the services of Business Consulting Group to develop aWhite Paper on Indian Tourism The objective of the White Paper is to generateaction in the Government and the Industry in terms of policy and operationalinitiatives that will help promote the growth of Indian tourism - inbound as well asdomestic tourism. Several reports have lamented the low share of India in worldtourism and have made meaningful suggestions. Nothing much has changed on theground despite all that. It is expected that the Bombay Chambers White Paperwhich that offers practical direction for change will spur action for change andgrowth.

Bombay Chamber of Commerce & Industry

2

An Integrated Approach for Promotion of Indian Tourism


4/109

ACKNOWLEDGEMENT

. Bombay Chamber would like to express its gratitude and sincere thanks to theSponsors of this White paper:

The Indian Hotels Co. Ltd. Thomas Cook (India) Ltd Kuoni Travel (India) Ltd. BCC&ITrust for Economic & Management Studies

Secretariat: Bombay Chamber of Commerce & Industry Mr. L.A.DSouza, ExecutiveDirector Ms. Kavita Sharma, Deputy Director Bombay Chamber of Commerce &Industry Oficial Travel Agents Jet Airways India Pvt. Ltd. Consultants: BusinessConsulting Group Mr. Raj Nair, Chairman Mr. Utpal Ashar, Consultant

3



5/109

ADVISORY COMMITTEE

Mr. R. K. Krishna Kumar, Managing Director, The Indian Hotels Co. Ltd. Mr. RanjitMalkani, CMD, Kuoni Travel India Ltd. Mr. Adi Katgara, Chairman, Travel Corporationof India Mr. Ashwini Kakkar, MD, Thomas Cook India Ltd., Mr. Lalit Sheth, CMD,

Shree Raj Travels, Mr. Reyaz Mama, Director, Ratan Mama Consultants Mr.Vishambher Shewakramani, Managing Director, Ras Resorts, Mr. Anil Kaul, GeneralManager, The Oberoi Hotels, Mr. Yogesh Dhawan, General Manager, The RegentMumbai. Mr. Rajan Divekar, Director, A.F. Ferguson & Co., Mr. P.J. Crasta, Sr.General Manager, Jet Airways India Pvt. Ltd. Mr.Ajoy Misra, Sr. Vice President TheIndian Hotels Co. Ltd. ( Chairman, Tourism Committee) Mr. Zubin Karkaria, Sr. VicePresident & COO, Kuoni Travel India Ltd. ( Co-Chairman, Tourism Committee) Mr.U.K. Mukhopadhyay, Secretary,Department of Tourism, Maharashtra Mr. AshishKumar Singh, Managiong Director, MTDC Mr. M.M. Jain, Asst. Director, Govt. of India

Tourism Office Mr. B.B. Gomre, Asst. Director Govt. of India Tourism Office, Mr. AlokAwasthi, Jt. Director, MP Tourism Development Corporation Mr. Bimlesh Kumar,

Regional Manager, UP State Tourism Development Corporation


4



6/109

CONTENTS

Executive Summary Action Plan - Government Action Plan - Industry Why IndiaNeeds Tourism Indian Tourism Industry - Growth Analysis An Integrated Strategy -Strategic & Operational Initiatives - Influence & Facilitate Tourist Decisions -

Branding & Marketing Strategy - Facilitate Tourist Arrival, Stay & Movement -Tourism Infrastructure - Pricing & Taxation Organisational Mechanism forDevelopment of Tourism

Bombay Chamber of Commerce & Industry 5

1 11 15 18 26 37 38 43 49 56 59 61



7/109

EXECUTIVE SUMMARY

Why India Needs Tourism Indian Tourism Industry - Growth Analysis - FactorsAffecting Tourism Industry in India An Integrated Strategy : Strategic & OperationalInitiatives Influence & Facilitate Tourism Decisions Branding and Marketing Strategy

Facilitate Tourist Arrival, Stay & Movement Tourism Infrastructure Pricing & Taxation1 2 4 5 6 7 8 9 10

Operational Mechanism for Development of Tourism


6



8/109

EXECUTIVE SUMMARY

Why India Needs Tourism

Tourism is the largest sector in the worldwide exports of goods & services. Atover $ 500 billion, it is larger than automotive, chemicals, fuels and every othersector. Recognise Enormous potential of the Hotel, Travel, Entertainment, Transportand other allied industries. As per WTTC, the travel and Tourism economy in Indiawhich includes all the above stated industries as well as supporting industriescurrently account for 17.4 million jobs in India or 5.8% of total employment. Thishas a potential to rise to 25 million jobs or 6.8% of total employment by 2010.Developing economies are benefiting more than developed economies becauseinbound travel dollars exceed outbound travel dollars for them, but in Indias casethe travel account balance per year has declined from $ 1.5 billion in 1997-98 to $0.9 billion in 1999-2000 because the increase in forex outflow due to outboundtravel is much higher than the increase in forex inflow on account of inbound travel.

The total world tourist arrivals is 664 million tourists and the dominant destinationsare Europe & America. South Asia gets a very small share. Only some part of it canbe addressed by India because it is a long haul destination for the key countries andlong haul tourism has only 18% share of the world tourism pie. International arrivalsinto any country depends upon the level of its International trade. Indias low levelof international trade limits its inbound tourism potential further. But its ability tofully exploit the tourism potential will depend upon its ability to develop customersegment focussed strategies through co-ordinated approach by the government,hotel, airlines, tour operators etc. Other countries like Thailand, Brazil, Turkey, etc.

demonstrated this. Tourism industry can boost Indias GDP and forex earningssignificantly 7 An Integrated Approach for Promotion of Indian Tourism


9/109



10/109

EXECUTIVE SUMMARY

Indian Tourism Industry - Growth Analysis

International tourists arrival in India was 2.66 mn according to published statistics,growing at 4% CAGR over the past decade but stagnated somewhat over the last 4years. Though Indias earnings from inbound travel have shown a growth in rupeeterms, they have stagnated in absolute dollar terms during the past 4 years. InIndia, growing income over the years has led to an increase in consumptionexpenditure on recreation, education and cultural services, transport andcommunication increasing from 24% to 28%. This and the growth in disposableincome has resulted in the total domestic tourist movement in India to more thandouble over a period of 7 years. Growth in disposable incomes is also one of themajor factors responsible for increase in the number of outbound tourists fromIndia. The number of outbound tourists will increase further, especially due to lackof availability of well developed and reasonably priced tourist destinations withinthe country. Tertiary benefits of tourism are huge. The trickle down benefits of thetravel & tourism industry on the economy go beyond what is apparent. The SatelliteAccounting figures of WTTC suggest that the $ 11.33 bn Travel &Tourism industry inIndia (2000) supported a $ 23.8 bn Travel & Tourism related economy. Unless theGovernment and Private sector come together and develop a clear strategy, Indiawill continue to be ignored as an interesting long haul destination by leisure andbusiness travelers and India will become, gradually one of the few developingcountries with a negative travel account balance.


8



11/109

EXECUTIVE SUMMARY

Factors Affecting Tourism Industry in India

Leisure Tourists : Indias low leisure tourist numbers (inbound as well as domestic)could be attributed to: Inadequate Promotion & Marketing Poor InfrastructureRestrictive Policies Other Obstacles

Business Tourists: Indias low business tourist numbers (inbound as well asdomestic) could be attributed to: Inadequate Magnets to attract business groupsand facilities for business conventions Attitude towards potential business investorsInadequate Promotion & Marketing Poor Infrastructure Restrictive Policies


9



12/109

EXECUTIVE SUMMARY

An Integrated Strategy : Strategic & Operational Initiatives

Put Tourism on the Concurrent List of the Constitution of India Governmentshould declare Tourism as a Priority Industry like Information Technology Government should increase outlay on Tourism - India spends only 0.9% of GDP on

Tourism compared to 4-9% in most other countries. Lay down a master plan toimplement planned and phased development/ upgradation of infrastructure andareas of tourism potential with private sector participation Policy initiatives for thesame Aimed at improving the operational efficiency by focussing on infrastructuralconstraints and optimising existing infrastructure with the available resources.


10



13/109

EXECUTIVE SUMMARY

An Integrated Strategy : Influence & Facilitate Tourist Decisions

Focus on select target countries, which account for most of the outboundtourists and most of the world tourism expenditure e.g. UK, USA, Germany, Japan,France, & Italy Need to have detailed market research data to identify socio-economic profile, their tourism needs, etc. For these countries deploy a countryspecific Push-Pull Strategy to influence their choice of holiday destination TargetNon Resident Indians (NRIs) too because they are large in number and they caninfluence nonIndians to visit India Promotion through multiple channels. Severalsuggestions have been made in the report, ranging from Indian restaurants, airlinesto creation of an interactive website for Indian tourism


11



14/109

EXECUTIVE SUMMARY

An Integrated Strategy : Branding & Marketing Strategy

Indian Tourism needs Branding - Several countries have specific themes to attracttourists and their entire marketing strategy and offerings are in sync with thetheme. e.g. Land of Smiles (Thailand), 1% water, 99% fun (Mauritius), etc. TheExperience India project is a step in the right direction. A theme could emerge outof it. Develop National Tourism Logo that can be used by industry players in theircommunication and publicity materials. Introduce the concept of Debit Cards likeprepaid Phone cards to facilitate tourist spending. Interactive website which couldbe made to pay for itself through fees from industry participants Quality informationdissemination through contemporary & innovative means using multiple channelse.g. Select Indian restaurants in target markets, airlines and other channels. Co-marketing/ Co-Selling with key travel operators Outsourcing promotion andmarketing activities to private players based on target fulfillment criteria Theproduct on offer need to be packaged for relevant customer segment in the targetcountries and the various industry participants in the value chain must co-ordinatetheir efforts to provide a seamless and consistent experience which is congruentwith the theme.


12



15/109

EXECUTIVE SUMMARY

An Integrated Strategy : Facilitate Tourist Arrival, Stay & Movement

Visa procedures are seen as a hindrance. Countries competing with India fortourists provide visa on arrival (SriLanka, Maldives, Thailand, Nepal, Seychelles,etc.). India too should provide visa on arrival for certain categories of tourists/ forspecific duration. Reputed inbound travel operators to be permitted to bring ingroup of tourists without any visa, subject to submission of guarantee by concernedoperator By categorising the countries, India could do away/ facilitate visarequirements for certain countries Upgrade Tourism Infrastructure and addressareas of prime concern (e.g. safety, security, language, cleanliness, hygiene qualityof tour guides, etc.) in order to make the tourists experience memorable Eliminatevarious irritants eg. discriminatory monument entry fee for foreign tourists


13



16/109

EXECUTIVE SUMMARY

An Integrated Strategy : Tourism Infrastructure

The Government does not have adequate finance for the upkeep of the 3700protected monuments and 10,000 unprotected monuments. The annual budget ofRs.156 crores amounts to a paltry sum of Rs.7600 per year per monument.Suggestions: - involve the private sector for upgrading and maintaining the keymonuments of tourist interest. 38 have been identified. The Government need notspend money at all on these, e.g. The Indian Hotels Group has adopted the TajMahal - use Government funds to upgrade other protected monuments Removeprocedural bottlenecks for creation of tourism infrastructure. This has restricted thesupply of facilities, reduced competition and made India a more expensive touristdestination than several places in S. E. Asia which offer superior facilities Since theinfrastructure in the whole country cannot be upgraded simultaneously, identify anddevelop certain areas as Special Tourism Circles which can be tendered to biddersfrom the private sector just like other infrastructure is, e.g. Telecom


14



17/109

EXECUTIVE SUMMARY

An Integrated Strategy : Pricing & Taxation

It will help if the State and Central taxes are rationalised taking into account thefact that wide difference between states create operational problems and hightaxation which pushes up the pricing dampens the the growth of tourism. Tourism isprice elastic. Tourism earnings could be deemed as Exports to the extent of the NetForeign exchange earned Tax Deferment in case of Currency Fluctuation Reserveto the extent of Net Foreign Exchange (NFE) earned can be provided to encourageinvestment in tourism.


15



18/109

EXECUTIVE SUMMARY

Organisational Mechanism for Development of Tourism

Create an apex professional body modeled along the lines of NASSCOM could becalled National Association for Tourism Promotion (NATPRO) or whatever. TheCouncil of the NATPRO could include senior representatives of associations of allthe tourism related industries. NATPRO, can co-ordinate and act as prime catalystto promote the interest of the tourism and related industry. NATPRO would act asthe advisory, consultative and co-ordination body for the tourism industry throughrepresentatives in various committees of the Government of India including variousMinistries like Ministry of Tourism, Ministry of Finance, Ministry of External Affairsetc. NATPRO will be a private sector initiative with Government support.


16



19/109

ACTION PLAN

Action Plan - Government Action Plan - Industry 11 15


17



20/109

ACTION PLAN - GOVERNMENT

A. Strategic Initiatives by the Government

1. Recognise Tourism as Priority Industry for the Country

Government should declare Tourism as Priority Industry like InformationTechnology

2. Put Tourism on the Concurrent List of the Constitution of India

3. Give Tourism the desired importance in economic and budgetary planning

process

Government should increase outlay on Tourism - currently, India spends 0.9% ofGDP on Tourism Government Travel & Tourism Expenditure (%of the total GDP)

India China Spain Singapore China Malaysia 0.9 3.8 9.5 9.1 7.4 5.1 France Sri LankaUSA UK Thailand Germany 4.7 4.0 3.9 2.9 2.6 3.3

4. Recognise Enormous Employment Potential of the Hotel, Travel, Entertainment,

As per WTTC, the Travel & Tourism economy in India which includes all the abovestated industries as well as supporting industries currently account for 17.4 mn jobsin India or 5.8% of total employment. This has a potential to rise to 25 million jobsor 6.8% of total employment by 2010. Bombay Chamber of Commerce & Industry18 An Integrated Approach for Promotion of Indian Tourism

Transport and other Allied Industries.


21/109


5. Lay Down a Master Plan to implement planned and phasedDevelopment/Upgradation of Infrastructure and Areas of Tourism potential with

Private sector Participation Develop Special Tourism Circuits (like Telecom circles)

Identify and create Special Tourism Circles based on categorisation of regionsdepending upon selected parameters of infrastructure development index andpotential. These areas could be tendered for infrastructural development tobidders from private sector, on similar basis as Telecom circles Develop amaster plan through a Special Area Development Authority constituted for theregion identifying boundaries for notification and development Provide basicinfrastructure in terms of roads, transport network, electrical grids, water supplyetc. Facilitate private investments through fiscal incentives, removal ofrestrictions preventing foreign ownership and leasing of infrastructure throughspecial legislation in these areas.

6. Taxation Policy

Introduce uniform taxation across the States and do away with multipletaxation. Tourism Industry be deemed as Exports to the extent of the Net Foreignexchange earned Tax Deferment in case of Currency Fluctuation Reserve to theextent of Net Foreign Exchange (NFE) earned. A fixed percentage of each yearsprofit can be transferred to this reserve account, subject to a monetary limit on the

aggregate amount of such reserve not exceeding the Foreign Exchange exposure.The annual contribution to such reserve should be tax deductible at the time oftransfer of amount to reserve account. After a period of, say, 5 or 8 years, suchamount transferred to reserve account can be released on payment of tax. BombayChamber of Commerce & Industry 19 An Integrated Approach for Promotion ofIndian Tourism


22/109


B. Operational Measures as Components of the Strategy

1. Brand Indian Tourism Through Development of National Tourism Logo

Tourism needs Branding. There has to be a promise that appeals to the relevantpopulation. Therefore, Indias National Tourism Logo need to be developed whichrepresents tourist interest in India.

2. Develop an integrated long- term strategy for Marketing

2.

Idetifying countries for targeting, Promoting India in the target marketsidentified based on a concept of promotion for India aimed at creating an Indian

Tourism Brand, through Theme promotion Develop National Tourism Logo Adopt innovative marketing strategy : co-selling and co-marketing with key traveloperators Introduce the concept of Dollar Tourism Debit Cards, similar to pre-paid telephone cards Facilitate tourist arrivals, movement & stay as well askeeping the tourist occupied and interest. Strategically plan to attract

investments in infrastructure

Bombay Chamber of Commerce & Industry 20 An Integrated Approach forPromotion of Indian Tourism


23/109


3. Recognise the Need for an Organisational Mechanism - NATPRO

Support the formation of NATPRO (National Association for Tourism Promotion),a tourism industry initiative based on the NASSCOM. Recognise NATPRO as thesingle united voice of the tourism industry Recognise NATPRO in the role of anadvisory, consultative and coordinating body representing the tourism industry byincluding representatives of NATPRO on the committees of various Ministriesconcerning the tourism industry

4. Relax Visa Requiremnts

Relax visa requirements and facilitate unrestricted tourist movement (domesticas well as inbound) involving removal of obsolete laws, restrictions and licencepermits

5. Other Initiatives

Address basic areas of concern of tourist like security, language, safety, hygieneconditions in the promotions as well as on the ground. Involve the private sectorin the upgradation and maintenance of heritage sites. Bombay Chamber ofCommerce & Industry 21 An Integrated Approach for Promotion of Indian Tourism


24/109

ACTION PLAN - INDUSTRY

Lobby with the Government for Tourism to be given a Priority Status

Tourism is worlds largest Export Industry but South Asia, & India in particular,gets a very low share. Indias dismal performance is due to variety of reasons. Itneeds examination and analysis why the implementation has been elusive and increating an enabling mechanism for proactively implementing the solutions.

Promote Establishing NATPRO (National Association for Tourism Promotion)

NATPRO will be a tourism industry body, modeled on the lines of NASSCOM, as perthe steps listed below: - Draw up charter for NATPRO, complete all the legal and

procedural formalities, develop the organisational framework required and preparea Business Plan - A few visionaries from the travel and tourism industry should forman Interim Council - Recruit top flight professionals and set up the elected /nominated Executive Council which replaces the Interim Council - Draw up adetailed long term action plan - Present Bombay Chambers White Paper on Tourismto the PMO and if possible to a group of key functionaries including Ministers fromall the relevant ministries. - Through NATPRO, work in close interaction with thegovernment in the role of an advisory, consultative & coordinating body for thetourism industry. This could be through various activities aimed at fulfillingobjectives laid down. Bombay Chamber of Commerce & Industry 22 An IntegratedApproach for Promotion of Indian Tourism


25/109


Creation of Special Tourism Circles

Since it is impractical to raise the quality of infrastructure across the entire country,this paper suggests the creation of Special Tourism Circles around anchordestinations. The Special Tourism Area would have to be identified fordevelopment by evaluating & categorising various regions based on laid downparameters indicating extent of infrastructure development and potential for furtherdevelopment. Private sector may bid for infrastructural development, on a similarbasis as Telecom Circles.

Develop Interactive Web-site for information

To help tourists select India as an attractive destination, decide on itinerary, cityspecific details to decide on

specific activities, hotels to stay, the transport to book, etc. Interactive facility toquery and get information and action such as reservation etc. To be madeavailable in different languages of target countries. Such an initiative to pay foritself by subscription fees from industry participants (similar to the concept of Tatayellow pages).

Maintenance & Development of Tourism Infrastructure

Actively participate in the maintenance & development of tourism infrastructurethrough investments in tourism infrastructure, preservation of heritage sites byadoption etc.


23



26/109


27/109


Theme Promotion - Experience India & India Tourism Logo

Prepare a promotion campaign based on the theme and provide support to thegovernment for its promotion in target countries

Promotion of Tourism Debit Cards

Private sector may bid for exclusive rights similar to the concept of pre-paidtelephone cards and credit cards Participants may give token discounts Cost maybe recovered by way of advertisements


24



28/109

WHY INDIA NEEDS TOURISM

Tourism & World Trade Travel Account Balance Indias Travel Balance WorldTourism India: Long Haul Destination Tourism Arrival vs. International Trade TouristArrival vs Country Size 18 19 20 21 23 24 25


25



29/109

WHY INDIA NEEDS TOURISM Tourism & World Trade

Tourism has the largest share in the worldwide exports of goods and services

Worldwide exports of goods and services ($ bn)

600 500 400 300 200 100 0 Food Computer & Office eqpt. Automotive productsTextiles & Clothing Telecommunication eqpt. Tourism Mining products other thanfuels Iron & steel Chemicals Fuels 9 503 7.5 443 399 6.6 5.9 344 5.1 331 283 4.94.2 8 7 6 5 4 158 2.3 141 2.1 3 2 1 0

% of total worldwide exports of goods and services

532 7.9

525 7.8

Tourism is one of the five top export categories for 83 % of countries worldwideand the main source of foreign currency for at least 38% of them. For India,tourism earns over $ 3 bn but is the 4th largest forex earner after gems & jewellery,

garments, software.

Source : World Tourism Organisation

India should take a holistic view to encourage the growth of Tourism rather thanview it as separate pieces like aviation, hotels, airports, entertainment complexes,etc.



30/109

WHY INDIA NEEDS TOURISM Travel Account Balance

Developing economies are benefiting more than developed economies becauseinbound travel dollars exceed outbound travel dollars for them.

Increasing Travel Account Balance for developing countries

Declining Travel Account balance for India 1477 1250 $ million 897

1997-98

1998-99

1999-00

Source : Reserve Bank of India

India has not been able to benefit from this trend



31/109

WHY INDIA NEEDS TOURISM Indias Travel Balance

Increase in the level of outbound travel has resulted in corresponding increase inthe forex outflow, the rate of which is much higher than the forex inflow due to

inbound travel.

1991 Total forex inflow (inbound tourism) $1842 mn. 2000 $3036 mn. % change65%

Forex outflow (outbound tourism)

$434 mn.

$2138 mn.

393%

Net forex earned by travel industry

$1408 mn.

$897 mn.

(36%)

Indias Net Foreign Exchange Earnings from Travellers K Industry experts estimatethat the travel account will become negative by 2002 if no concrete steps are takenby the government to arrest this slide.

Source : Data Reserve Bank of India


32/109

If proper steps are not taken, the travel account balance may soon becomenegative, thereby becoming a drain of source of precious foreign exchange.

Bombay Chamber of Commerce & Industry 28 An Integrated Approach for

Promotion of Indian Tourism


33/109

WHY INDIA NEEDS TOURISM World Tourism

There is a slight shift from Europe & America ( developed countries) as a primetravel destination towards developing countries, but ..

America 100% Tourist arrival (% of total) 80% 60%

61.84 40.4 60.03 60.29 59.31

Europe

EAP

0.74 2.18 14.39

Middle East

3.75 0.78 2.31 14.28

South Asia

3.92 0.82 2.4 13.73

Africa

4.05 0.85 2.58 14.62

3.27 0.69 1.96 11.94

3.56

No. of Tourists (000) 90 14959 Africa 95 20155 4200 12353 81355 97 232054834 14258 88254 98 24937 5219 15281 87428 99 26878 5655 17157 97158


34/109

South Asia 3158 Middle East 8959 EAP 54598 America

40% 20%

20.3 19.27 18.85 18.84 18.5

Europe 282744 228382 371104 383777 394115

92799 108939 116558 119939 122874

East Asia Pacific has almost doubled the number of tourists and taken 75% of theloss suffered by Europe & USA

Source Data : World Tourism Organisation

0% 1990

1995

1997

1998

1999

Europe & USA have dropped from 82% to 78%


35/109

East Asia Pacific region is the biggest gainer of this trend, largely because SouthAsia (India in particular ) has not been proactive.



36/109

WHY INDIA NEEDS TOURISM World Tourism

The total world tourist arrivals is 664 million and the dominant destinations areEurope and America. South Asia gets a very small share.

International Tourist Arrivals 1999

400 350 Million 300 250 200 150 100 50 0

Europe Americas EAP Africa Middle East South Asia

International Tourist Arrivals Share of World Trade (%) -1999

Americas 18.5%

Europe 59.3%

EAP 14.6% Africa 4.0% South Asia Middle East 2.7% 0.9%

Source : Data WTTC

International tourist arrivals cover the number of arrivals of visitors and not thenumber of persons

Why does this happen to South Asia and India in particular ? There are 2 majorreasons




37/109

WHY INDIA NEEDS TOURISM India : Long Haul Destination

Firstly, India is a long haul destination for the key countries and long haul tourismhas only 18% share of the world tourism pie

Distance in km from India Share of long haul travellers in total international travellernumbers

Long haul 18%

USA Japan Germany UK 0 5000 6,758 6,306 7,193 10000

12,565

15000

Short haul 82%

Source : Data: World Trade Organisation / World Tourism Organisation/ WWW

Does this mean that India cannot become a tourism major ?



38/109

WHY INDIA NEEDS TOURISM Tourist Arrivals vs. International Trade

Secondly, international arrivals depend upon the level of international trade. Abilityto fully exploit the tourism potential will depend upon Indias ability to develop

customer segment focussed strategies

International trade ($ bn) (1999) 2500 2000 1500 1000 500 0

Japan Germany UK USA

Norway South Africa Brazil Turkey Indonesia Thailand India 0

4.481 6.253 5.107

International trade ($ bn) (1999) 117 64 116 93 94 8.651 128 114

6.893 4.7

Hong Kong Korea Singapore Thailand India

China

2.48 2 4 6 8 10 Tourist arrivals (1999) (mn nos.)

0 20 40 60 Inbound international traveller (mn nos.) (1999)

Source : Business Consulting Group Analysis data from World Trade Organisation/World Tourism Organisation


39/109

*India needs to step up the pace of reforms to encourage global trade andinternational investment in India Smaller countries with high international tradehave much high tourist traffic Bombay Chamber of Commerce & Industry 32

Countries with similar international trade level have implemented focussedintegrated tourism strategies to exploit the potential offered by international trade India has not done that An Integrated Approach for Promotion of Indian Tourism


40/109

WHY INDIA NEEDS TOURISM Tourist Arrivals vs. Country Size

The level of international trade and not size of the country is important. That iswhy smaller developed get more tourist arrivals than larger developing countrieslike India, Brazil, South Africa, etc. 80

70

France

Source : Data : World Tourism Organisation / WWW Analysis : Business ConsultingGroup

Tourist Arrivals (in mns.)

60

Spain

The number of travellers coming to India is far lower than for many other countriesmuch smaller in size than that of India. Therefore it is argued that India remainssignificantly under exploited as far as its carrying capacity is concerned.

50

Developed countries

USA

40

30


41/109

UK

China

20

Germany

Developing Countries

Australia India Brazil

Australia, China & South Africa have recognised this & have become veryaggressive in tourism. Others like HK, Thailand, Malaysia have initiated specialefforts to woo tourists Dubai has gone further and has a single organisation calledDubai Tourism & Commerce Marketing

HongKong 10 Thailand Malaysia South Africa Singapore Japan Indonesia Dubai 0Bahamas 0 2000000

4000000

6000000

8000000

10000000

12000000


42/109

Total country area (sq.kms)

Indias tourism strategy should recognise the importance of co-promoting leisureand business tourism



43/109

INDIAN TOURISM INDUSTRY

GROWTH ANALYSIS

Inbound Arrivals Indian Tourism (Value Growth) World Tourism - Tourist Density vsAverage Daily Spend Tourism Statistics Need for Strategy Changing Pattern of

Consumer Spend Domestic Tourism Indian Outbound Tourism Satellite AccountingFactors Affecting Tourists - Leisure & Business 26 27 28 29 30 31 32 33 34 35


34



44/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS Inbound Arrivals - India

The total tourist arrivals in India was 2.66 mn according to published statistics,growing at 4% CAGR over the past decade but stagnated somewhat over the last 4

years

3000 Tourist Arrivals (000. nos) 2500 2000 1500 1000 500 0

-9 2 -9 3 -9 5 -9 6 -9 7 -9 8 -9 9 -9 4 -2 0 91 92 93 94 95 96 97 98 00 -0 1 00

CAGR 4.11%

Tourist arrivals actually refer to all visitors to India. This number is way below thetargeted number of arrivals of 5 mn. tourists by 2000-2001.

19

19

19

19

19

19


45/109

19

19

19

99

20

Source : CMIE


35



46/109

INDIAN TOURISM INDUSTRY- GROWTH ANALYSIS Indian tourism (Value Growth)

Though Indias earnings from inbound travel have shown a growth in rupee terms,they have stagnated in absolute dollar terms during the past 4 years

14000 12000 10000 8000 6000 1.50 4000 2000 0 1991 1992 1993 1994 1995 19961997 1998 1999 0.75

Rs. Crore

3.75

$ billion Tourist earnings ($ bn)

3.00

Tourist earnings (Rs. Crores)

This stagnation is partly due to business travel not growing political andbusiness environment has not been condusive and , there have been events like

riots, earthquakes, insurgency in parts of India which tarnishes the image of Indiafrom the leisure tourists perspective

2.25

0.00

Source : CMIE /GOI Department of Tourism



47/109

36



48/109

INDIAN TOURISM INDUSTRY- GROWTH ANALYSIS World tourism : Tourist Density vs.Average Daily Spend

In addition to increasing inbound tourist traffic, there is also a need to increase the

average tourist spending

120

Average spend per tourist per day ($) High ( $ 100 )

Singapore

Thailand USA UK

C

Country

Tourist density (no Average spend of tourists per sq per tourist per km of totalcountry day ($) area)

100 80

India China Thailand USA UK South Africa (1998) Brazil Malaysia Singapore AustraliaDubai

41.89 N. A 101.65 98.42 81.23 26.68 57.93 N. A 288.13 64.91 N. A

0.75 2.82 5.04 5.04 105.14 4.83 0.60 24.05 9664.86 0.58 24.02

Medium ($ 50 to $ 100 )


49/109

Australia Brazil

B

60

India

40 20

Low (< $50)

A

South Africa (1998)

0

Low ( 5) Tourist density (no of tourists per square km oftotal country area)

Source : Data : World Tourism Organisation/ country tourism body site

India gradually needs to move from A to B diagonally on the graph to tourismrevenues



50/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS Indian Tourism Statistics

Industry experts opine that Indias tourism strategy is based on unreliable andmisleading

Inbound

Outbound

Of the 2.65 million arrivals the tourists are about 1.2 million (45% of which areleisure tourist, numbering around 0.7 million) One estimate is that the 2.65 millionincludes the following categories Million Leisure tourists Non-tourist arrivals from Pakistan, Bangladesh & Nepal NRI returning to meet family Airline staff

Business visitors on tourist visas, backpackers, etc. 0.7 0.5 0.7 0.25 0.5 2.65

38

Of the 3.9 million tourist departures, genuine tourists are probably 0.4 million only.

Of this group tours are probably as low as 50,000 Nearly 2 million are travelling outfor their jobs in the Gulf, etc. Government & business travellers classified astourists, Haj pilgrims, etc. probably account for 1.6 million Actual forex outgo underBTQ in 2000 was $ 379 m (RBI). If tourist departures were indeed 3.9 million, theaverage tourist spend would have been less than $ 100 per head per trip ! RBIstatistics of $ 2139 million forex outgo on outbound travel (often quoted by tourismrelated publications as outbound tourism dollars) actually shows a breakdown bycategory of travel. Business accounts for 60%



51/109

Source : Data : Field Interviews, RBI Publications,



52/109

INDIAN TOURISM INDUSTRY- GROWTH ANALYSIS India : Need for Strategy

Domestic tourism is essential to balance seasonality of inbound tourism

Being a long haul destination, the flow of inbound tourists is seasonal for India. Onlydomestic tourism can balance that to make investment in infrastructure viableFortunately Indias domestic tourism is rising for reasons explained in the next twoslides


39



53/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS India : Changing Pattern ofConsumer Spend

In India, growing disposable income over the years has led to an increase in

consumption expenditure on recreation, education and cultural services, transport& communication increasing from 24% to 28%* of consumption expenditure

6.32 3.05 11.26 80% 3.38 3.05 12.27 60% 6.06

Private final consumption expenditure (% of total)

6.51 3.15 11.60 3.86 3.00 11.84 6.20

6.75 3.23 11.69 3.98 3.20 11.15 6.48

6.51 3.07 12.18 3.85 3.02 10.34 5.86

6.82 3.40 13.30 4.26 3.04 10.34 6.05

6.69 3.53 13.66 4.39 2.97 10.18 5.23

increasing

100%

Item Misc. Goods & services Recreation, education & cultural services Transport &Communication Medical & Healthcare


54/109

Increase / decrease (1998-99 to 93-94) + 0.37 +0.48 +2.4 +1.01 -0.08 -2.09 -0.83-1.26

40% 54.61 20% 53.84 53.52 55.17 52.79 53.35

declining

Furniture, fuel and power Gross rent, fuel & power Clothing and footwear

Although these activities, conventionally considered the preserve of the classes, cannow be afforded by the masses, the governments policy initiatives have notchanged. * In the case of middle and upper income groups this presents a muchhigher share

0% 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99

Food, beverages & tobacco

Source: Data : CMIE

There are huge implications of this shift in consumption for the tourism industry



55/109

INDIAN TOURISM INDUSTRY- GROWTH ANALYSIS Indian Domestic Tourism

The growth in disposable income has resulted in the total domestic touristmovement in India to more than double over a period of 7 years.

Drivers of domestic tourism

Tourist (mn. nos)

Growing size of the Indian middle class with increasing levels of disposable incomes.

Increasing chunk of the salaried class eligible for LTC (a tax free component)Stressful professional life and frequent need for breaks Pilgrimage Migration foremployment

180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 1993 90.00

CAGR 11.83% 139.13 141.78

159.88

168.20

176.08

*

127.12


56/109

1994

1995

1996

1997

1998

1999

(* Figures are unreliable, but the trend is not questionable)

Source : Data : GOI - Department of Tourism


41



57/109


58/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS Indian Outbound Tourism

Growth in disposable incomes is also one of the major factors responsible forincrease in the number of outbound tourists from India.

The number of outbound tourists from India will go up further, especially due to lackof availability of well developed and reasonably priced tourist destinations withinthe country.


Growing size of the Indian middle class with increasing levels of disposable incomes.Lack of good, developed domestic tourist destinations as well as high cost of qualitydomestic travel Indian psyche & the social prestige associated with foreign travelInfluence of the increasing number of movies shot overseas as also other channelsin the media Aggressive promotions by foreign tourist offices in India through road

shows and regular focussed trade promotions With outbound charter being allowedby the government, overseas travel will become affordable to many more Indians.Several good international destinations are cheaper than domestic holidays

CAGR 6.03% Outbound Tourist* (mn. nos)


59/109

5.00 4.00 3.00 2.00 1.00 0.00

93 94 95

2.73 2.73

3.06

3.81 3.88 3.46 3.73

96

97

98

19

19

19

19

19

19


60/109

(* These figures are unreliable as explained in Slide 18 but the real outbound touristnumbers have grown from a low base in 1993 to about 4,00,000 in 2000)

Source : Data : GOI - Department of Tourism

19

99


61/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS Satellite Accounting

Not only is tourism per se important for an economy but the trickle down benefits ofthe travel & tourism industry on the economy go beyond what is apparent . As a

whole, they are too vast to be ignored

Multiplier effect of tourism: K Transport Accommodation Catering EntertainmentRecreation and other travel related service The secondary & tertiary effects oftourism in the form of increased purchases of Indian goods, benefits to the transportindustry etc, which in turn drives the demand in the manufacturing sector & createsemployment. Increased employment further drives demand due to higherdisposable incomes.

Travel & Tourism industry

T&T Economy

Food/ beverage supply, Laundry Services, Oil/ Gas supply, Wholesalers, Printing/Publishing, Utilities, Financial Services, Sanitation Services, Furnishings &Equipment Suppliers, Security Services, Rental car, manufacturing, TransportationAdministration, Tourism Promotion, Ship Building, Aircraft Manufacturing, Resort

Development, Glass Products, Iron & Steel, Computers, Utilities, Concrete, Mining,Plastics, Chemicals, Textiles, Metal Products, Wood

Source: WTTC

The satellite accounting figures suggest that the $ 11.33 bn. T&T industry in India(2000) supported a $ 23.8 bn. T&T economy




62/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS Factors Affecting Indian Tourism -Leisure Tourists

Indias low leisure tourist numbers (inbound as well as domestic) could be attributed

to 4 major reasons

Inadequate Promotion & Marketing

Poor image Inadequate targetting (country & type of tourist) Concept(diffused & no continuity) Poor co-ordination between various marketeers andGovernment Inadequate information on several tourist destinations Potentialmarketing channels not exploited Major fun magnets for tourists (e.g. Disney etc.in USA, France, Japan, etc. which draw tourists by the thousands) have not beencreated in India

Poor infrastructure

Inadequate in quantity due to low investment by Government and privatesector, cumbersome procedures for creating infrastructure, etc. Inadequatequality due to lack of focus on customer and poor co-ordination Poor VFM due tohigh taxation and high price caused by low competition Poor functioning ofRailways, Government owned airlines, etc. Lack of well co-ordinated top qualitytour packages (intra & intercity) with door-to-door service

Restrictive Policies

Cumbersome visa procedures Interstate movement of tourist vehicles Bureaucraticprocesses for getting clearances to set up infrastructure Hurdles for foreignownership of tourism infrastructure Hurdles in private sector management ofheritage sites (Taj Mahal is an exception) Prohibition laws in certain states

Other Obstacles

Perceived low safety, cleanliness, reliability Obstacles for tourists (visas,bookings, language, etc) Inadequate entertainment and shopping opportunities Poor upkeep of tourist attractions Discriminatory pricing of historical sites forforeigners Exploitative attitude of some service providers Poorly trained guides,lack of signages/ information disseminating mechanism Sudden changes in tariffand taxes affecting even pre sold tours


63/109

Source: A listing of issues that came out in Focussed Group Discussions with expertsin the tourism industry Bombay Chamber of Commerce & Industry 44 An IntegratedApproach for Promotion of Indian Tourism


64/109

INDIAN TOURISM INDUSTRY - GROWTH ANALYSIS Factors Affecting Indian Tourism :Business Tourists

Indias low business tourists numbers (in bound and domestic) could be attributed

to

Inadequate magnets to attract business groups

Very few Trade Fairs to attract business tourists (except a few at Pragati Maidan)unlike, say for example, Germany which holds 2/3rd of all major international tradefairs & attracts 1.8 mn tourists from outside Germany alone. Lack of nightlife &entertainment Since India remains largely isolated from global trade(nonconvertible currency, low foreign trade, severe restrictions even for transit ofgoods, etc.) international business tourists do not need to visit India

Inadequate facilities for business conventions

India is not equipped to handle very large international business conventionsunlike destinations in USA, Europe & East Asia Pacific Even for smallerconventions, facilities exist only at a few 5 Star hotels in a few locations Othercompeting countries in Asia are able to offer better value packages

Attitude towards potential business investors

Barring a few notable exceptions, the business traveller to most parts of Indiafaces a disinterested bureaucracy, inadequate information, an attitude that smacksof being given permits as a favour and not as a welcome guest

The 4 reasons listed for leisure tourists

Same as for leisure tourists

Source: A listing of issues that came out in Focussed Group Discussions with expertsin the tourism industry 45 An Integrated Approach for Promotion of Indian Tourism



65/109


66/109

AN INTEGRATED STRATEGY

Strategic & Operational Initiatives Influence & Facilitate Tourist Decisions Branding& Marketing Strategy Facilitate Tourist Arrival, Stay & Movement TourismInfrastructure Pricing & Taxation 37 38 43 49 56 59


46



67/109

AN INTEGRATED STRATEGY: STRATEGIC AND OPERATIONAL INITIATIVES Tourism asa Priority Industry

Strategic & Operational Initiatives

Operational initiatives

Strategic initiatives

Operational measures aimed at improving the operational efficiency by focussing oninfrastructural constraints & how best can the existing infrastructure be betterutilised with the available resources Tours to be packaged for relevant customers asone complete experience Brand Indian Tourism through development of National

Tourism Logo

Government should declare Tourism as a Priority Industry as Software industry PutTourism on the Concurrent list of the Constitution of India Government should

increase outlay on Tourism: India spends only 0.9% of GDP on Tourism as comparedto 49% in most other countries Lay down a master plan to implement planned &phased development / upgradation of infrastructure & areas of tourism potentialwith private sector participation Policy initiatives for the same aimed at improvingthe operational efficiency by focussing on infrastructural constraints and optimisingexisting infrastructure with the available resources

47 An Integrated Approach for Promotion of Indian Tourism


68/109



69/109

AN INTEGRATED STRATEGY : INFLUENCE & FACILITATE TOURIST DECISIONS TargetCountries & Needs

India should focus marketing efforts on just six countries

Country target

International tourism expenditure % (1998)

USA 12.7% Germany 10.6% Others 50.0% Japan 6.5% UK 7.3% France Canada Italy4.0% 2.4% 4.0% Netherlands 2.5%

There is a clear need for focus on a limited number of countries because Indiasfinancial resources for marketing are limited. India should focus on just six countries(USA, UK, Germany, Japan, France and Italy) which account for 53% of the outboundtourists and 45% of the world tourism expenditure. That will be all long haultourists. To counter balance their traffic seasonality India needs to look for loadfrom some special segments of those countries and other source countries. In thetarget countries, India needs to have a push-pull strategy which will pull potentialtourists to travel agents and tour operators and incentivise the travel trade to pushfor India since they play a big role in helping a tourist to decide on the destination,

itinerary, planning, etc.

45%

International tourism supply % (1998)

USA 14.8% Others 41.6% Germany 12.4% Japan 7.6% UK 8.5% France 4.7%

Push-Pull Strategy


70/109

Canada 2.8% Netherlands 2.9% Italy 4.7%

53%

Source Data : World Tourism Organisation


48



71/109


We need a clear and distinct strategy for each country

In those few countries there is a clear need to have detailed market research datawhich identifies the consumer segments for which a long haul travel will berelevant, understand the socio-economic profile, demographic profile and tourisminterests and habits of each segment. Without that marketing efforts could go awry.For instance: USA

East Asia 29%

American outbound tourists American outbound tourists

Govt./Military 2% Craftsmen/ factory 3% Clerical/ sales 4% Homemaker 5% Others2% Manager/ Executive 31%

Religion/ pilgrimage 2% Study/ teaching 2% Convention conference 2%

Asia 2% Middle East 5% Africa 2%

VFR 39%

Central America 3% South America 8%

Europe 51%


72/109

Student 6%

Professional/ technical 38% Retired 9%

Business 28% Leisure/ recreation/ holiday 27% Purpose

Destination Country

Source : Data : Travel Industry Association of America

Occupation

These statistics suggest that 36% visit East Asia Pacific, South Asia and the MiddleEast but only 2% head for South Asia. Would it be possible to club India with a tripto East Asia (29%) through suitable incentives and marketing? Many of them travelin Aug / September when it rains heavily in many parts in India. Which destinations

should India market in August / Sept? Others travel around Christmas, New Year.




73/109


Each of Indias target countries will have its own characteristics and each relevant

segment within it will have its own idiosyncrasies. Example : Japan

Japanese outbound tourists Japanese outbound tourists

Other New Zealand 23% 1% Australia 5% Europe 13% Hong Kong 5% 50-59 years16% Korea 10% China 6% Taiwan 5% USA 32% over 60 years 12% 0-4 years 3% 10-19 years 5% 40-49 years 17% Individually Arranged 29% Group Travel 11% Others7% 20-29 years 28% Package Tours 53%

30-39 years 19%

Destination Country Source Data : www.tradeport.org

Age Profile of Outbound tourist

Type of Travel

Most Japanese travel around end Dec - early Jan, the Summer OBON (around August15) and the Golden week (April - May). They take short vacations and head largelyto Korea, Taiwan, Hong Kong, China and USA (where Hawai is the key destination).

The rest of America and Europe have a good mix of leisure, student and businesstravel. India neither fits in as a leisure spot nor a business magnet. The Japanesetraveller is not as religious as he is made out to be. If India has a Buddhist trail to

offer, the target is probably the over 60 year old Japanese who account for 12% ofthe Japanese outbound tourist. What are this segments specific needs for mode oftravel, type of experience, food requirements, cleanliness requirements, tour guideand other facilities? Unless this is known, marketing India to Japan may be a wasteof money 50 An Integrated Approach for Promotion of Indian Tourism


74/109



75/109


A clear strategy is required for the other target countries as well

The Germans, French and Italians are known to be travel-friendly and may seekwarm destinations in July-August. Neighbouring countries like Maldives and SriLanka have exploited their beaches to lure tourists from these destinations with wellco-ordinated strategies. India for some reason, has restricted tourist arrivals in theLakshadweep which is next door. Barring Goa, the much talked about beautifulcoast line brings in more drift wood than tourists. The beaches of Thailand, Malaysia

and Indonesia take in tourists by the millions, whereas the Andamans and Nicobarremain largely ignored . and probably intentionally, due to the Governmentsperceived security threat. We need to realistically assess whether islands aroundIndia are particularly vulnerable, whereas it is not so for the rest of the world.

India should focus on relevant consumer segments in a few focussed countries andoffer all the attractions that are relevant to them based on serious market research



76/109

AN INTEGRATED STRATEGY : INFLUENCE & FACILITATE TOURIST DECISIONS TargetNRIs

Persons of Indian Origin should be targeted

It is estimated that there are over 20 million NRIs the world over . Only 3.5%travelled to India last year, even if it is wrongly assumed that there are no multipletrips. The 1987 statistics reveal that of the 12.5 million Indians living abroad, twothirds were in other Asian Countries who would tour India without much prodding ifthere are interesting and economical tourist packages. It is significant that theremay be more than 3 million Indians living in the 6 target countries for world tourism.

They are known to travel like others living in the country of residence, to variousparts of the world. There is a case for motivating them to visit their roots through atargetted marketing strategy because anecdotal evidence suggests that the secondand third generation NRIs have little desire to travel to India due to loss of roots. Ifthey travel to India and have a good experience, they are likely to become betterbrand ambassadors for Indian tourism in their country of residence than manyothers. Location of Persons of Location of Persons of Indian Origin Indian Origin

Middle East 8.5% Africa 13.4% Oceania & Indonesia 3.7% America 13.1% Europe7.7%

Source Data : Statistical Outline of India 1992-93

Asia 53.5%

The opportunity exists.Bombay Chamber of Commerce & Industry 52 An Integrated Approach forPromotion of Indian Tourism


77/109

AN INTEGRATED STRATEGY : BRANDING & MARKETING STRATEGY ProductPackaging

Tours should be packaged for the relevant customers as one complete experience.

India no doubt, has several good hotels, at least one good domestic airline, onegood rail experience for tourists, many good beaches, several outstanding historicalmonuments, entertainment spots, several brilliant people in the travel & tourismindustry with good ideas, a well intentioned tourism ministry. But put these in thechain from travel booking to visit to return to home country & what you get is amixed experience, with service gaps, joy killers and some delightful movements.Even to connect these islands of excellence requires someone to co-ordinate all thelinkages. This need not be the case if a tour is understood to be a complete

experience and is served as a one single continuum. The Kerala package offered bya five star hotel group and a private airline is an outstanding example of what canbe done to create a great tourism experience for domestic or international tourists.


53



78/109

AN INTEGRATED STRATEGY : BRANDING & MARKETING STRATEGY Branding

Indian tourism needs Branding that will reflect the experience that the tourist canexpect

Tourism needs branding no less than any consumer product. There has to be apromise that appeals to the relevant population. There has to be a theme/ logo thatis relevant and one that can be actually experienced during the visit. Severalcountries have adopted certain themes and positioned tourism in their countries ina manner that attracts the target segments. See the box alongside. ExperienceIndia a joint initiative of the private sector and the Government appears to be a

step in the right direction. A theme for marketing India could emerge from it. TheMaharaja logo could represent the tourists experience in India. Variousorganisations in the tourism business should be allowed to use the Indian TourismLogo provided they adhere to certain norms and policies that are laid down.

Thailand - Land of Smiles Malaysia - Malaysia truly Asia Mauritius - 1% water,99% fun Maldives - The sunny side of life Dubai - Discover Dubai Srilanka - Aland like no other Seychelles - Seychelles magic


54



79/109

AN INTEGRATED STRATEGY : BRANDING & MARKETING STRATEGY Multi-ChannelApproach

Multi-channel approach to promotion of the concept of Indian tourism using a

unified theme for promotion

Channel Dollar Debit Cards Approach to promotion/ information dissemination Debitcards can be issued to Foreign tourists on payment in foreign exchange byapproved agencies e.g. Forex Dealers, select tour operators, etc. Debit Cards, tobe acceptable for all tourism related purposes - air, train, hotel and restaurants,monument entry, shopping etc. Companies who participate, will have to provide thenecessary infrastructure to handle debit cards, give token discounts/ facilities andportray the Tourism Logo at their company premises. A booklet giving names of allparticipant agencies will have to be provided to the tourists on purchase of DebitCards. The cost of this Debit Card should be recovered through advertisementsPopularity of Indian cuisine overseas is undisputed. At peak hours there isconsiderable waiting time at a majority of these restaurants. This waiting time couldbe utilised to promote India as a tourist destination by screening of theme videos &disseminating information through information kiosks. This also ensures that thepromotion is addressed to the right audience.

Select Indian restaurants in target markets should be tapped


55



80/109

AN INTEGRATED STRATEGY : BRANDING & MARKETING STRATEGY Multi-ChannelApproach Channel Concept of co selling / co marketing with key operators Approachto promotion/ information dissemination Underwriting the media costs of promotion.

This would not only incentivise the tour operators to promote India as a destinationamongst the tourists but also help depict India much more prominently in the media

(brochures, information booklets, billboards etc.) Identifying destinations of hightourist traffic in the same region as India and pursue tourists coming to thesedestinations to come to India through attractive fares, targeted promotions. Plan

joint charter flight with neighboring SAARC countries like Nepal, Sri Lanka, Maldiveson one leg of their journey and take Indian destinations like Goa, Agra, Jaipur on theother. Offer attractive fares for tourists visiting South East Asian countries (could beto visit Andaman & Nicobar islands) Plan joint promotional initiatives with Indian andother willing carriers & promote India as a tourist destination. Outsourcingpromotion and marketing activities in the target countries to private players withperiodic targets to be fulfilled by the agency. This would also help provide muchneeded accountability towards fulfillment of targets. It is not practical to expect theGovernment of Indias Tourism Department alone to get the required reach


Airline Schemes

Outsourcing promotion and marketing activities in the target countries



81/109

AN INTEGRATED STRATEGY : BRANDING & MARKETING STRATEGY Multi-ChannelApproach Channel Approach to promotion/ information dissemination

World Wide Web site for information and action

An interactive website that carries the India brand, conveys the proposed theme,and helps tourists with all kinds of information which will help a tourist from all therelevant segments in the target countries to know all that is relevant to select Indiaas a destination, decide on the itinerary, city specific details to decide on the

specific activities, the hotels to stay in, the transport to book, the shopping that canbe done, the entertainment available, etc. Interactive facilities to query and getinformation or action such as reservation, etc. There are websites in India whichpartially meet these requirements or deal with just one state. A comprehensiveeffort is called for, with hyperlinks to the service provider sites. It should beavailable in the languages of the target countries. Such an initiative could be madeto pay for itself by subscriptions fees from industry participants. PIOs/ NRIs canserve as goodwill ambassadors for the country. With the increasingly large numberof Indians overseas and their knowledge about the country, they can be a goodsource of promotion. The expatriate community is very strong overseas. They havea lot of community activities and celebrations during various Indian festivals. These

can be used to promote India as a tourist destination amongst the people interestedto know more about India and its culture.


PIOs/ NRIs in overseas countries



82/109

AN INTEGRATED STRATEGY : BRANDING & MARKETING STRATEGY Multi-ChannelApproach Channel Approach to promotion/ information dissemination

Expatriates in India (includes foreign consulates in India) Indian consulates abroad

Business Travelers visiting India Media/ sports celebrities Incentivising touroperators Mass media (TV, radio, movies etc)

Expatriates could be a very good source of promoting India as a tourist destinationto a large overseas destination. For this, the domestic tourist destinations should be

promoted aggressively within the expatriate community. Indian consulates abroadcould be used as a medium of information dissemination / promotion Businesstravelers, if provided with a good experience, could serve as an excellent word ofmouth publicity for India. India has always attracted celebrities from the west whoare in search of spiritual solace. These people could be not only targeted forpromotion but also they could be used as a channel to promote India as a touristdestination. Tour operators could be incentivised lucratively for selling packagedtours to India Establishing contacts with TV program producers, travel writers,adventure societies, religious groups, film producers (to encourage them shoot inIndia)


83/109


58



84/109

AN INTEGRATED STRATEGY : FACILITATE TOURIST ARRIVAL, STAY & MOVEMENTFacilitate Visa Issuance

Having identified target countries remove obstacles

Situation

Suggestions

Indian missions are located in a few cities in the overseas countries. Tourists willingto tour India need to get a visa for which either they have to personally travel to thecity where Indian mission is located or send their passport to the Indian missionthrough post or some other form of delivery. For example a tourist in Manchesterhas to either send his passport to Edinburgh or personally go there in order toobtain a visa. Individuals are not very comfortable parting with their passports.

Visa on arrival for certain categories of tourists/ countries at least for a limited

duration of stay. Facilitate entry of foreign tourists, visiting India in large groups, byallowing inbound travel operators to bring these tourists into India without any visarequirements on the guarantee of the tour operator. This facility can be extendedonly to reputed tour operators with an established track record.


59


85/109



86/109


Visitors/ tourists of all nationalities (except Nepal) require visas for visiting India

Nationality American Australians British Canadian European/ Other IndianBangladesh Nepal Singapore Sri Lankan Japanese Nepal Y Y Y Y Y No Y NA Y Y YIndia Y Y Y Y Y NA Y No Y Y Y Sri Lanka Maldives # Bangladesh @ No No No No NoNo No No Y No No No No No No Yes No No No NA No No No No No No No Y NA No No

Y Y Singapore No No No No No Y No No NA No No Japan No Y No No No Y Y Y No YNA Canada No No No NA No Y Y Y No Y No Greece No No No NA NA Y Y Y No Y No UKNo No NA No No Y Y Y Y Y No Australia * Y NA Y Y Y Y Y Y Y Y Y USA NA Y No No No Y

Y Y Y Y No

* Australia is ETA - Electronic Travel Authority # Visa on arrival on presentation ofhealth papers @ For items marked No visas are issued on arrival at ColomboAirport

Source : WWW

Visa on Arrival is available in countries like Bhutan, Sri Lanka, Nepal, Singapore,

Seychelles, Maldives, Macau, Thailand, Turkey, Taiwan, etc. who are competing withIndia for tourists



87/109


By categorising countries, India could do away/ facilitate visa requirements without

compromising security concerns

Country Category

Visa Criteria

Identified markets for promoting India as a tourist Category 1 destination in termsof tourists interest, disposable No visa requirements income, historical data e.g.USA, select European countries, Japan, etc. Category 2 Tourists from countries seenas a potential hazard from the point of health or some other factors e.g. Africancountries, Middle East, etc. Category 3 Tourist from countries seen as a potentialrisk in terms of illegal migrants, national security, e.g. Afghanistan, Pakistan,Bangladesh etc. Visa on arrival based on laid down criteria (presentation of requireddocuments, certificates, etc.) Stringent visa requirements in the interest of issueslike national security, illegal migration, etc.


61



88/109

AN INTEGRATED STRATEGY : FACILITATE TOURIST ARRIVAL, STAY & MOVEMENTRemove Obsolete Laws Without Compromising Security

Obsolete laws & restrictions obstruct tourism.

Indian visitors have to procure permits to go to some parts of the North Easternregion due to the enforcement of Inner line permits (ILPs) in some hilly states.Restricted area permits for foreign tourists to be procured in addition to visarequirements. Restrictions like prohibition of photography on dams & installationslike All India Radio (AIR) stations could be done away with after proper assessmentof security & related issues. The recent rule requiring Indian citizens to report theirforeign visitors to the nearest police station if they stay more than a certain numberof hours is another case of unrealistic policy.


62



89/109

AN INTEGRATED STRATEGY : FACILITATE TOURIST ARRIVAL, STAY & MOVEMENTInfrastructure - Soft Issues

Need to address negative impressions about India

Security Language Quality of tour guide Safety standards Quality of lodging &boarding Cleanliness & hygiene conditions

It is very important for India to deal with problems and also address misinformationin their promotions too. Lack of information could result in the tourist decision beinginfluenced by adverse media reports which may talk about some trouble/ calamityin some state of India which may not even be of concern to the tourist since he maybe visiting some other state albeit within India. The fact that Indias cultural &geographical diversity is so vast that some trouble happening in Kashmir or somenatural calamity in Orissa does not in any way affect the tourist planning to visit

Rajasthan. The international image of India is that of a country that epitomiespoverty, poor hygiene & low safety standards. There is always a fear within thetourists that they would contract some disease when they visit India. This needs tobe countered. Stray experience of being taken for a ride gets blown out ofproportion. This needs to be curbed but that alone does not keep tourists away fromIndia. How does Italy with a similar reputation, get tourists?


90/109


63



91/109

AN INTEGRATED STRATEGY : FACILITATE TOURIST ARRIVAL, STAY & MOVEMENTMaintenance of Heritage Sites

Like Italy and Greece, India too, can attract tourists to our monuments / heritage

sites

Ground realities/ facts/ Issues :

The need

India has 3700 protected monuments and 10000 unprotected monuments.Archaeological Survey of India. Does conservation, illumination, penetration,creating public facilities, and publications/ promotions. ASIs annual budget is Rs.156 crores i.e. Rs. 7600/- per monument per year (after providing for salaries andexpenses of the ASI). This amount is not at all sufficient to fulfil even the basicpreservation and maintenance of monuments and sites.

Restoration and maintenance of world heritage structures and the surroundings likeapproach roads, non ticket areas etc. Ensure that people other than tourists(beggars, urchins, encroachers etc) do not get inside the monument premises.Provide a safe and secure environment to enable the tourists to have a memorableexperience inside the monument. No amount of increase in gate collections willsolve the problem 38 sites have been identified. Get the private sector toparticipate in funding (and managing the property if possible)


92/109

Source : Data : India Today 9th July, 2001 Bombay Chamber of Commerce &Industry 64 An Integrated Approach for Promotion of Indian Tourism


93/109

AN INTEGRATED STRATEGY : FACILITATE TOURIST ARRIVAL, STAY & MOVEMENTPreserving Heritage Sites

Preserving the participation.

heritage

of

India

closer

government

private

sector

Action Plan : List of 38 sites prepared, which are in need of fiscal support. Sitesinclude the likes of Ajanta/ Ellora, Fatehpur Sikri, Hampi, Red Fort, Alchi monasteryLadakh. Start action with private sector help quickly

Govt. benefits from increased tourist turnout : - Benefit to the local economy andthe country as a whole. An ideal way to solve out regional economic balance -Prevent heritage property from falling to pieces - Can avail of best possible adviceand services of experts in the fields of restoration and conservation


94/109

Private sector benefits : - Guarantee mileage at the site like signages, etc. - Use ofmonuments image in their advertisements - Private players have a say in themanagement of their money - Corporate and individual donations under Adopt aMonument scheme, eligible for full income-tax exemption as also other benefitswhich may be site or project specific

Source : Data : India Today 9th July, 2001


65



95/109

AN INTEGRATED STRATEGY : TOURISM INFRASTRUCTURE Strategic Measures -Special Tourism Circles

Since it is impractical to raise the quality of infrastructure across the whole country

Special tourism circles could be developed around anchor tourist destinations andpromoted under a unified theme of India.

Specific products, (represented by destinations) covering various interest areas tobe identified alongwith anchor destinations in a number of regions for development.

The anchor destinations and the surrounding destinations representing theproducts should be classified as Special Tourism Circles.

Special Tourism Circles should satisfy the needs of a variety of needs of targettourist interest groups by offering a mix of conventional & contemporarydestinations & activities. Personalization & individualization of itineraries whereinthe tourists should be able to pick & choose, to suit individual tastes, from a basketof offerings. Each designated area should be provided with full fledgedinfrastructure facilities. Package of monetary & financial assistance/ incentives for


96/109

private participants should be conceived to provide impetus to tourism. There is noneed to prevent foreign ownership or leasing of infrastructure. The anchor touristdestination for each Special tourism Area should be the focus of all promotions &should serve as as gateway city for that particular Special Tourism Circle. Special

Tourism Circle should specifically address basic areas of concern of inbound

tourists like safety, security, hygiene & cleanliness etc., should be kept clear ofbeggars Concept of Project in the Box wherein tourism & related projects arecleared subject to the parties agreeing to comply to a given set of regulatoryconditions.

The final objective for this is to be able to offer & deliver to the tourist, anExperience comparable to the best in the world & not a destination



97/109


Various regions within India need to be evaluated for potential of developing them

into Special Tourism Circles.

Special Tourism Circles should be selected after evaluating the regions in terms ofthe Infrastructure Development Index & Potential for Exploitation which should bebased on the following parameters: Carrying capacity of the region (in terms ofnumber of tourists) Connectivity/ infrastructure (tourist specific/ general) Extentof investment required for building/ upgrading the necessary infrastructure to worldclass levels. The attractiveness of returns in terms of return on capital employed,time for breakeven etc (tourist specific/ general infrastructure) Assessment of theregion (in terms of safety, manpower availability, tourist interests it can satisfy) Popularity amongst the domestic tourists Identify boundaries for these areas fornecessary notification Master plan for the area for the purpose of development

Develop & allot land for hotels & tourism related services at reasonable rates Toconstitute Special Area Development Authority

Facilitate private sector participation through fiscal incentives & by allowing privatecompanies to bid for development rights in various circuits/ areas which could covervarious tourism related infrastructure



98/109


Based on such evaluation we would have four categories of regions for

development. Some places in each cell need to be identified

High

Infrastructure Development Index

Regions already exploited like the Golden Triangle

1

2

Goa Kerala

There needs to be different strategies for each of the three categories. Policiesshould facilitate relevant action on the ground by hotels, airlines, tour operators,etc. The overall game plan is to move places in category 3 to 2, and then tocategory 1 over a period of time by planned development of domestic and inboundtourism. This paper does not seek to classify individual regions. That requires adetailed study. The places mentioned in the cells are merely illustrative

4

3

Low priority for tourism


99/109

North East Andaman & Nicobar

Low Low Potential for further exploitation High

Goa & Kerala, for instance, could provide the platform for the government to startpromoting tourism on the international scene

Bombay Chamber of Commerce & Industry 68 An Integr

whitepaperontourism-100829124227-phpapp02

Documents