Travel and Tourism in India

Euromonitor April 2005

Travel and Tourism

India

List of Contents and Tables
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EXECUTIVE SUMMARY ......................................................................................................... 1 OPERATING ENVIRONMENT................................................................................................ 2 2.1 GDP ............................................................................................................................... 2 GDP 1999-2004................................................................................... 2 Table 1 2.2 Disposable Income......................................................................................................... 2 Disposable Income 1999-2004 ............................................................ 3 Table 2 2.3 Leisure Expenditure ....................................................................................................... 3 Consumer Expenditure on Leisure 1999-2004..................................... 3 Table 3 INDUSTRY ISSUES.................................................................................................................... 3 Political and Legislative Environment........................................................................... 3 3.1 3.2 Terrorism and Security .................................................................................................. 5 3.3 Sustainable Tourism....................................................................................................... 5 3.4 Positive Growth Factors ................................................................................................ 5 Summary 1 Positive Growth Factors....................................................................... 5 3.5 Negative Growth Factors............................................................................................... 6 Summary 2 Negative Growth Factors ..................................................................... 6 DEMAND FACTORS ................................................................................................................. 6 4.1 Leave Entitlement .......................................................................................................... 6 Table 4 Paid Holiday and Public Holidays 2004 .............................................. 7 4.2 Holiday Taking .............................................................................................................. 7 Table 5 Levels of Holiday Taking 1999-2004 .................................................. 7 4.3 Holiday Taking – Demographics ................................................................................... 7 Table 6 Holiday Taking by Demographic Groupings 1999-2004..................... 8 4.4 Holiday Taking – Length of Trip.................................................................................... 8 Table 7 Holiday Taking by Length of Trip 1999-2004..................................... 8 4.5 Holiday Taking – Seasonality ........................................................................................ 9 Table 8 Month in which Holidays are Taken 2004........................................... 9 TOURISM PARAMETERS ....................................................................................................... 9 5.1 Incoming Tourism Receipts............................................................................................ 9 Table 9 Incoming Tourism Receipts: 1999-2004............................................ 10 Table 10 Incoming Tourism Receipts % Growth: 2000-2004 .......................... 10 5.2 Outgoing Tourism Expenditure.................................................................................... 10 Table 11 Outgoing Tourism Expenditure: 1999-2004 ...................................... 10 Table 12 Outgoing Tourism Expenditure % Growth: 2000-2004..................... 11 5.3 Balance of Tourism Payments...................................................................................... 11 Table 13 Balance of Tourism Payments: Value 1999-2004.............................. 11 5.4 Incoming – Number of Arrivals.................................................................................... 11 Table 14 Total Arrivals: 1999-2004 ................................................................. 12 5.5 Incoming – Mode of Transport .................................................................................... 12 Table 15 Arrivals by Mode of Transport: 1999-2004 ....................................... 12 Table 16 Arrivals by Mode of Transport: % Breakdown 1999-2004................ 13 5.6 Incoming – Purpose of Visit......................................................................................... 13 Table 17 Arrivals by Purpose of Visit: 1999-2004 ........................................... 13 Table 18 Arrivals by Purpose of Visit: % Breakdown 1999-2004.................... 14 5.7 Incoming – Country of Origin...................................................................................... 14 Table 19 Arrivals by Country of Origin: 1999-2004 ........................................ 14 Table 20 Arrivals by Country of Origin: % Breakdown 1999-2004................. 15 5.8 Incoming – Per Capita Expenditure............................................................................. 15 Table 21 Per Capita Expenditure per Arrival: 1999-2004 ................................ 15 5.9 Outgoing – Number of Departures............................................................................... 15 Table 22 Total Departures: 1999-2004 ............................................................. 16

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Outgoing – Mode of Transport .................................................................................... 16 Table 23 Departures by Mode of Transport: 1999-2004................................... 16 Table 24 Departures by Mode of Transport: % Breakdown 1999-2004 ........... 16 Outgoing – Purpose of Visit......................................................................................... 17 Table 25 Departures by Purpose of Visit: 1999-2004....................................... 17 Table 26 Departures by Purpose of Visit: % Breakdown 1999-2004 ............... 17 Outgoing – Destination................................................................................................ 18 Table 27 Departures by Destination: 1999-2004 .............................................. 18 Table 28 Departures by Destination: % Breakdown 1999-2004....................... 19 Outgoing – Per Capita Expenditure............................................................................. 19 Table 29 Per Capita Expenditure per Departure: 1999-2004 ............................ 20 Domestic – Number of Trips and Expenditure ............................................................. 20 Table 30 Total Number of Domestic Trips: 1999-2004.................................... 20 Table 31 Domestic Tourist Expenditure: 1999-2004........................................ 21 Domestic – Trips by Mode of Transport ...................................................................... 21 Table 32 Domestic Trips by Mode of Transport: 1999-2004............................ 21 Table 33 Domestic Trips by Mode of Transport: % Breakdown 19992004 ................................................................................................... 22 Domestic – Trips by Destination.................................................................................. 22 Table 34 Domestic Trips by Destination 1999-2004 ........................................ 22 Table 35 Domestic Trips by Destination: % Analysis 1999-2004 .................... 23 Domestic – Per Capita Expenditure............................................................................. 23 Table 36 Per Capita Expenditure Per Domestic Trip 1999-2004...................... 24 Tourism Spending ........................................................................................................ 24 Table 37 Spending on Tourism 1999-2004....................................................... 24 Table 38 Spending on Tourism: % Breakdown 1999-2004 .............................. 24 Tourism Spending – Method of Payment ..................................................................... 25 Table 39 Method of Payment for Tourism Spending: % Breakdown 2003 ................................................................................................... 25

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TRAVEL ACCOMMODATION.............................................................................................. 25 6.1 Market Size .................................................................................................................. 25 Table 40 Travel Accommodation Market 1999-2004....................................... 26 Table 41 Travel Accommodation Market: % Growth 1999-2004 .................... 26 6.2 Sales by Sector ............................................................................................................. 26 Table 42 Travel Accommodation Value Sales by Sector: Value 19992004 ................................................................................................... 26 Table 43 Travel Accommodation Value Sales by Sector: % Value Breakdown 1999-2004....................................................................... 27 6.3 Outlets by Sector.......................................................................................................... 27 Table 44 Travel Accommodation Outlets by Sector: Units 1999-2004 ............ 28 Table 45 Travel Accommodation Outlets by Sector: % Volume Breakdown 1999-2004....................................................................... 28 6.4 Hotels by Region.......................................................................................................... 28 Table 46 Hotels, Rooms and Beds by Region 2003.......................................... 29 6.5 Hotels by Star Ratings ................................................................................................. 29 Table 47 Number of Star Rated Hotels by Region 2003................................... 29 6.6 Hotels by Ownership.................................................................................................... 30 Table 48 Hotel Sales by Independent vs Chained Outlets: Value 19992004 ................................................................................................... 30 6.7 Internet Transaction Trends......................................................................................... 30 Table 49 Travel Accommodation Internet Transactions Sales: Internet Transaction Value 1999-2004............................................................ 31 6.8 Emerging Products ...................................................................................................... 31 6.9 Key Players – Mergers and Acquisitions ..................................................................... 31 Summary 3 List of Mergers and Acquisitions 2002-2004..................................... 32 6.10 Key Players – Revenue Rankings................................................................................. 32 Table 50 Key Players by Revenue 2003/2004 .................................................. 32 6.11 Key Hotel Players – Market Share............................................................................... 33

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.................................. 46 Table 77 Car Rental Sales: Internet Transaction Value 1999-2004 .......7 Key Players – Mergers and Acquisitions .............................................9 Key Players – Revenue Rankings............................. 37 Table 58 Transportation Sales by Sector: % Value Breakdown 19992004 ............ 35 7..................3 Airline Capacity and Utilisation ....................................... 35 Market Size ..................................... 42 7... 43 CAR RENTAL .......................................... 39 7...................................................................................................................... 38 Table 60 Airline Utilisation by Type 1999-2004 ...................... 44 8............................5 Time of Booking ........... 43 Table 69 Car Rental Market: 1999-2004 .........................................................1 Market Size ............................. 36 Transportation Market: % Growth 1999-2004............................................................................................................................... 37 Table 59 Airline Capacity by Type 1999-2004.........................4 Airline Sales by Seat Class...........................................................................................................6 Internet Transaction Trends...................................... TRANSPORTATION...........................Travel and Tourism India 6....................................................................................................................................................... 42 7.....................2 Fleet Size and Number of Operators............................ 43 Table 70 Car Rental Market % Growth: 1999-2004 .............. 38 Table 61 Airline Utilisation by Type : % Breakdown 1999-2004 ......................... 37 7........................ 47 8................................................................................................... 41 7..............................................10 Key Players – Passengers Carried .............................. 47 8.......................................................................... 39 Table 65 Transportation Sales: Internet Transaction Value 1999-2004...........................................................8 Key Players – Mergers and Acquisitions ...........................................................................................................................2 Sales by Sector ......................................... 36 7. 45 8...........................7 Emerging Products ......................................................................................... Euromonitor Page iii ............6 Internet Transaction Trends.................... 44 Table 71 Structure of Car Rental Market 1999-2004..........................................................5 Airline Sales by Distance . 44 8............................................................................................... 33 Table 52 Key Hotel Players by RevPAR 2003/2004 ................................................................................................................................................ 34 Forecast Outlets by Sector........... 46 8.............12 Forecast Sales by Sector ...................................................................1 Table 55 Transportation Market 1999-2004 ........... 36 Table 56 7....... 42 Table 68 Forecast Transportation Sales by Sector: Value 2004-2009 . 41 Table 66 Key Players by Revenue 2003/2004 .. 38 Table 62 Airline Volume Sales by Seat Class 1999-2004 ...................................... 46 Table 76 Time of Booking: % Breakdown 2004 .......................................................................................................................................................... 41 Table 67 Key Players by Numbers of Passengers Carried 2003/2004 ............. 39 Table 64 Airline Volume Sales by Distance: % Breakdown 1999-2004 ......................... 45 Table 74 Car Rental Average Duration by Sector 1999/2004.................... 45 Table 75 Average Car Rental Duration: % Breakdown 1999/2004 .......4 Rental Duration . 40 7........14 Table 51 Hotel Companies by Market Share 2001-2004 ...............................13 6........ 39 Table 63 Airline Volume Sales by Seat Class: % Breakdown 19992004 ............................................................................................... 35 Table 54 Forecast Travel Accommodation Outlets by Sector: Units 2004-2009.......................... 34 Table 53 Forecast Travel Accommodation Sales by Sector: Value 2004-2009.............. 40 7....................... 41 7................. 33 Forecast Sales by Sector ........................ 39 7............12 6.......................... 33 Key Hotel Players – RevPAR .....................................................................................................................3 Sales by Sector and Location ..... 43 8............................................................................................................................................................................. 46 8.............................. 36 Table 57 Transportation Sales by Sector: Value 1999-2004...........................................................................................................................................................................................................................................11 Key Airline Players – Market Share ............ 44 Table 72 Car Rental Sales by Sector and Location: Value 1999-2004 ........................................................................... 38 7........ 45 Table 73 Car Rental Sales by Sector and Location: % Value Breakdown 1999-2004.............................................................

................................. 53 9.................... 59 Table 99 Travel Agencies: Market Share 2001-2004 ................................................................................7 Tour Operators – Type of Holiday and Destinations ....................................................................................................11 Key Players – Mergers and Acquisitions ..................11 8................................................................................................................ 49 9................. 59 9........................................................................................ 60 Table 101 Tour Operators: Market Share 2001-2004 ... 55 Table 93 Tour Operator Value Sales by Type of Holiday: % Breakdown 1999-2004.. 61 Table 104 Forecast Travel Retail Value Sales: 2004-2009.................................................... 58 9................................................. 54 9................................................................... 56 Table 95 Exchange Service Value Sales by Outlet: % Breakdown 2003.....9 Online Travel Agencies............................................ 48 Table 82 Forecast Car Rental Sales by Sector: Value 2004-2009........................................ 52 Table 88 Travel Agency Value Sales by Service: % Breakdown 19992004 ................ 54 9................................................. 62 Table 105 Forecast Travel Retail Outlets by Sector: Units 2004-2009.............................................10 8...............13 Key Tour Operators – Revenue and Market Share ..................................................... 52 9.......10 Emerging Products ...................................................................................................................................................................................................... 47 Table 78 Key Players by Revenue 2003/2004 ........................................................................................4 Travel Agencies – Type of Holiday and Destinations ........................6 Tour Operators – Source of Sale ........................................................ 52 Table 89 Travel Agency Value Sales by Type of Holiday: % Breakdown 1999-2004.....3 Travel Agencies – Services .......................... 47 Key Players – Fleet Size........... 50 9............. 48 Forecast Sales by Sector and Fleet Size.. 53 Table 90 Travel Agency Value Sales by Destination: % Breakdown 1999-2004..................................... 57 Table 97 Travel Retail Sales: Internet Transaction Value 1999-2004 .......12 Key Travel Agencies – Revenue and Market Share.......... 57 9..............................................1 Table 84 Travel Retail Market: 1999-2004. 56 9. 47 Table 79 Key Players by Size of Fleet 2001-2004..................................................... 61 9.....................................................................................................................................................................8 8............... 47 Key Players – Average Daily Rate............................... 57 9............................. 59 Table 100 Tour Operators: Revenue Rankings 2003/2004 ............... 56 Table 94 Tour Operator Value Sales by Destination: % Breakdown 1999-2004................................................................................................................................Travel and Tourism India 8....... 50 Table 85 Travel Retail Sales % Growth: 2000-2004 ..................................................2 Outlets by Sector......................................... 58 9................................. 60 Table 102 Exchange Services: Revenue Rankings 2003/2004 ............... 58 Summary 4 List of Mergers and Acquisitions 2002-2004........ 58 Table 98 Travel Agents: Revenue Rankings 2003/2004....................................................................................................................................................................................................... 54 Table 92 Tour Operator Value Sales by Source of Sale: % Breakdown 1999-2004.................................................15 Forecast Sales and Outlets ...........................14 Key Exchange Services – Revenue and Market Share ................................................................................ 48 Table 81 Key Players by Market Share 2001-2004 ..................................... 57 Table 96 Exchange Services Value Sales by Currency vs Traveller’s Cheques: % Breakdown 2003.........................5 Travel Agencies – Exchange Services .................. 50 Table 86 Travel Retail Outlets by Sector: Units 1999-2004 .............................................................................................................. 49 Table 83 Forecast Car Rental Fleet Size 2004-2009.. 48 Table 80 Key Players by Average Daily Rate for Car Hire 2003 ................................... 51 Table 87 Travel Retail Outlets by Sector: % Volume Breakdown 19992004 ............................................................... 60 Table 103 Exchange Services: Market Share 2001-2004 ..........................8 Exchange Services – Sales by Outlet and Type .... TRAVEL RETAIL ...................................................... 54 Table 91 Travel Agencies Offering Exchange Services 1999-2004 ......................................................................... 51 9..... 49 9.......................................... 48 Key Players – Market Share .............................................. 62 Euromonitor Page iv ........9 8.............12 Key Players – Revenue Rankings........... 49 Market Size ........................................................................... 60 9.........

.................................2 Sales by Sector .................................. 81 11.......................................................................... 67 Table 114 Forecast Tourist Attractions Visitors by Sector: 2004-2009 ......................................................................................... 73 Summary 11 Air Deccan: Key Facts..................................................................................................................................... 70 Summary 8 Jet Airways: Summary of Key Events 1999-2004 ..............................................4 Air Deccan ............. 80 13........... 63 Table 108 Tourist Attractions Sales by Sector: Value 1999-2004 .............................................6 Key Players – Mergers and Acquisitions ............... 69 Table 115 Kuoni India: Financial Summary 1999-2004...............................6 Number of Departures ................................. 66 10.............................................................. 68 11. Euromonitor Page v .....7 Key Players – Visits .....................................................................1 Kuoni Travel (India) ........ 66 Table 113 Forecast Tourist Attractions Sales by Sector: Value 20042009 ...................3 Visitors by Sector .......................... 63 10................................................... 76 13................. 65 10.........................................................................................................................................................................................1 Trends .................4 Balance of Payments.......................................................................................... 72 Summary 10 ITC Hotels: Summary of Key Events 1999-2004 ........ 12......... 64 Table 110 Tourist Attractions Visitors by Sector: 1999-2004 .............................. 75 Summary 13 Air Sahara: Key Facts . 78 Table 120 Forecast Incoming Tourism Receipts: 2004-2009 ..................................................................................................... 73 Table 117 ITC Hotels: Financial Summary 1999-2004 ............................................................................................ 63 Table 109 Tourist Attractions Sales by Sector: % Value Breakdown 1999-2004........................................................................................................................................................................................................................ 75 Summary 14 Air Sahara: Summary of Key Events 1999-2004..........................1 Market Size ............................................................................................ 81 13..................3 Tourism Receipts and Expenditure .... 79 Table 122 Forecast Domestic Tourism Expenditure 2004-2009..4 Internet Booking Trends...5 Number of Arrivals ................................. 76 Table 119 Air Sahara: Financial Summary 1999-2004.................................................................... 72 Summary 9 ITC Ltd: Key Facts .................................................. 66 Table 112 Major Tourist Attractions by Visitors 2002-2004........................................ 71 12............................................ 77 Summary 15 Opportunities for Growth and Investment ................................5 Air Sahara........................ 65 Table 111 Tourist Attractions Visitors by Sector: % Breakdown 19992004 ................................................................................... 71 Table 116 Jet Airways: Financial Summary 1999-2004.............................................. 73 12................................................................................................................................................................................................................................................................................................Travel and Tourism India 10.................... 76 13............... 74 Summary 12 Air Deccan: Summary of Key Events 2003-2004............ 68 Summary 5 Kuoni Travel India: Key Facts.....................................................2 Jet Airways....... 65 10...........8 Forecast Sales and Visitors by Sector............................................................. 67 KEY STRATEGIC ALLIANCES .......... 13.............................................................................. 79 13............................................................................... 78 13........ 76 FUTURE OUTLOOK ........................................................... 75 12.............................. 70 12........................ 70 Summary 7 Jet Airways: Key Facts ............................. 64 10........................................................................................1 Indian Ocean Earthquake ..... 68 12....3 ITC ............................................................................................ 62 10................. 66 10............ 74 Table 118 Air Deccan: Financial Summary 1999-2004............................. 80 Table 124 Forecast Visitor Arrivals: 2004-2009 ....................................................... 80 Table 123 Forecast Balance of Tourism Payments: Value 2004-2009 ........................................................... 62 Table 107 Tourist Attractions Market % Growth: 1999-2004 ............................................................................................................ 65 10...........2 Market Opportunities.... 68 Summary 6 Kuoni India: Summary of Key Events 1999-2004........................................................................................................................................................................................................................ TOURIST ATTRACTIONS ................. 79 Table 121 Forecast Outgoing Tourism Expenditure: 2004-2009........ 68 GROWTH COMPANY PROFILES..................................................................................5 Emerging Products .. 62 Table 106 Tourist Attractions Market: 1999-2004 ..................................................

.............................. DEFINITIONS.............. 83 Table 127 Forecast Sales in Travel and Tourism Markets: Internet Transaction Value 2004-2009.........................................................7 13...............................................................................8 Table 125 Forecast Visitor Departures: 2004-2009 .............................................................. 82 Table 126 Forecast Sales by Travel and Tourism Markets: Value 20042009 ....................................................................... 83 Euromonitor Page vi ...................... 82 Developments in Internet Transaction Sales................................ 83 14........................................................ 82 Travel and Tourism Markets..............................................Travel and Tourism India 13.............

There was also a major improvement in the tourist infrastructure through both private and government initiatives.Travel and Tourism India TRAVEL AND TOURISM IN INDIA 1. The top Indian hotel companies concentrate on luxury hotels but there is growing realisation of the potential of budget hotels. Local holiday spirits Domestic tourism is also expected to grow robustly in 2004 though not to the same extent as international arrivals and departures. the number of hotels in the south rose and is now close to the number in western India which was traditionally the leader. due to the surge in arrivals and domestic travel towards the end of the review period. Not surprisingly. this decline will be more than compensated for by trends during 2004. departures declined by 9%. competition increased for other carriers. This will undoubtedly provide a further impetus to the growth of tourism in India. Resurgence in departures During 2003. when departures are expected to rise by 20%. There was a surge in arrivals and departures as well as robust expansion in domestic tourism. Growing incomes as well as improvements in tourist facilities contributed to the expansion in domestic tourism. as well as the Severe Acute Respiratory Syndrome (SARS) crisis which adversely affected travel to South East Asian countries. A major development was the commencement of operations of India’s first low-cost no-frills airlines company. incoming tourism receipts also rose sharply by about 16% in 2003 and 32% during 2004. With rapidly growing business potential in south Indian cities. After growing by 15% in 2003. In particular. the number of incoming arrivals rose by a hefty 22% in 2004 over 2003. However. With Air Deccan expanding its network to a national footprint in 2004 and offering very low fares. mainly because of the troubled situation in the Middle East. EXECUTIVE SUMMARY Booming industry Indian travel and tourism experienced a boom during 2004. Forced diversification Euromonitor Page 1 . Strong government support The strong support provided by the government played an important role in boosting tourist arrivals. which drove up occupancy rates in popular hotels in India. Intense competition between private and government-owned carriers took the form of cuts in air fares. in 2003. which is the main destination for Indians. Air Deccan. Upbeat hoteliers Hoteliers are currently upbeat. The rising incomes of affluent and upper-middle-income consumers led to the increasing popularity of holidays abroad and contributed to growth in departures. the Incredible India publicity campaign implemented by the government during 2002-2004 proved successful in attracting tourists by highlighting the diverse attractions of India. Sky wars The major changes in the airlines industry had a strong influence on transportation.

while industry and service remain buoyant. many travel agents. Hence.2 8. During the review period. In addition.0 22. a number of them feel threatened due to cuts in commissions from international airlines.2 12. with normal monsoons in most parts of the country.0 30.9 9.0 24. annual growth in GDP in current prices averaged almost 10%. which is slightly lower than GDP growth in 2003. there is little doubt that future prospects for Indian tourism are bright.368. In recent years. government policies also made a direct contribution. foreign investment.418. aided by the government’s ongoing economic reforms and liberalisation policies.1 OPERATING ENVIRONMENT GDP The GDP growth performance of the Indian economy over the review period needs to be understood in the context of the major changes in government policies during the 1990s.895. In particular. During the 1999-2004 period. annual growth in disposable income in current prices averaged 7%. especially industry and services.695.0 27.2 Disposable Income Robust economic growth over the review period meant that disposable income also rose rapidly.821.Travel and Tourism India While travel agents are profiting from the tourist boom. Table 1 Rs million Current 1999 2000 2001 2002 2003 2004 Source: Euromonitor from National Statistics GDP 1999-2004 % growth 7. are attempting to diversify their operations by providing other travel services. Euromonitor Page 2 . Hence. The fundamental driving force for rising disposable incomes was strong growth in the various economic sectors. Given the strong emphasis of the government on the promotion of tourism and improvement of the tourist infrastructure and the vast untapped potential of India as a destination. in 2003. 2. deficient monsoon rains adversely affected agriculture and hurt economic growth. During 2002. there was a strong revival in economic growth with GDP growth of 12% in current prices or 8% in constant terms.900. However. unduly dependent on such commissions. which still plays an important role in the Indian economy.721. The 1990s represented a watershed for the Indian economy as Indian policy makers seriously embraced economic reforms.3 11.600. India emerged as one of the fastest growing economies in the world.4 2. As regards recent trends.300. these were influenced by agriculture. imports. These cuts were motivated by airline companies seeking to cut costs and encourage travellers to book directly. especially through the internet. Bright prospects The Tenth 5-year plan (2002-2007) of the government treats tourism as a major engine of economic growth and employment generation. the government implemented wide-ranging liberalisation policies relating to industry. During 2004. total resources of Rs29 billion were allocated towards tourism. This played a major role in driving the Indian economy on to a higher growth path.000.882. 2.400.0 20. GDP growth for 2004 is estimated at 11% in current prices.4 19. Under the Plan. agricultural output is expected to be about the same or marginally lower than last year. finance and other areas.

120.423. with the private sector providing the quality product and the community providing active support.0 204.637.0 229.2 18.4 181. India's population grew at the annual rate of nearly 2% during the review period. including leisure expenditure. Naturally.605. The overall vision of the development of tourism embodied in the new policy is proposed to be achieved through five key strategic objectives: • • • Positioning tourism as a national priority Enhancing India’s competitiveness as a tourist destination Improving and expanding product development Euromonitor Page 3 .778.230. led to an average growth of leisure expenditure of 12% per annum in current prices over the review period. A growing population.Travel and Tourism India In particular.622.605.148.6 246.538.3 Leisure Expenditure GDP and disposable incomes grew much faster than population growth during the review period.1 14.4 164.457. The policy is based on the government creating the legislative framework and basic infrastructure for tourism development.068. This policy envisages a framework which is government-led.6 142.501. private-sector-driven and oriented towards community welfare. this resulted in increased expenditure on a variety of leisure activities. coupled with increasing per capita incomes.735.0 8.4 171.237.813.1 10. the reduction in various types of taxes boosted the extent of household income available for consumption or saving.546. Table 3 Rs million Current 1999 2000 2001 2002 2003 2004 Source: Euromonitor from National Statistics Consumer Expenditure on Leisure 1999-2004 Constant 142.1 5.6 196.109. Table 2 Rs million Current 1999-2004 % growth 1999 2000 2001 2002 2003 2004 Source: Euromonitor from National Statistics Disposable Income 1999-2004 14.5 173.2 15.0 187.0 17.637.1 INDUSTRY ISSUES Political and Legislative Environment A new National Tourism Policy was announced by the government in 2002.898.0 3. With a huge population of over 1 billion.2 201.710.293.1 2. 3.6 20. especially travel both within the country and overseas. this meant an addition of about 20 million people every year.5 5.5 8.965.393. This led to a rise in per capita incomes which spurred consumer spending.

which will improve quality standards and occupancy rates. Harness the direct and multiplier effects of tourism for employment generation and economic development. total resources of Rs29 billion were allocated towards tourism. the Plan attempts to: • • • • • Position tourism as a major engine of economic growth. The 2003-2004 Union Budget also announced a number of measures to promote Indian tourism. This is expected to largely benefit the 5-star and 5-star deluxe hotel categories. This allows a company to carry forward accumulated losses and unabsorbed depreciation to the company with which it is merging or divesting. another bonus for hotel operators. private sector and other agencies. Position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination. Major policy announcements made in the budget speech are outlined below. Infrastructure Euromonitor Page 4 . Investment The hotel industry was given Infrastructure status. which were previously reserved for manufacturing industries only. Infrastructure funding attracts a lower rate of interest as compared to prime funding rate for non-infrastructure industries. This will increase the funds available to hotels in the 3-star and above category.Travel and Tourism India • • Creation of world class infrastructure Effective marketing plans and programmes The tenth 5-year plan (2002-2007) of the government also places considerable emphasis on tourism. During 2003-2004. Create and develop integrated tourism circuits based on India’s unique civilisation. Under the Tenth Plan. to which this legislation applies specifically. were made exempt from the service tax of 8%. Tax structure rationalisation Expenditure tax on hotels was abolished. an allocation of Rs3 billion was made for tourism. which will act as a spring board for the growth and expansion of international tourism. is the benefit under section 72 (A) of the Income Tax Act. the finance minister also appealed to the state governments to withdraw the luxury tax. Customs duty on imported liquor was reduced from 182% to 166%. Rs3 billion was spent during 2002-2003. where a substantial meal is served. In addition. Among other things. Mergers and acquisitions In addition to receiving Infrastructure status. Out of this. financial institutions receive tax breaks on the income from the interest on hotel project loans. Along with this. This will encourage consolidation in the hospitality industry. Certain functions such as conferences and banquets. Provide a major thrust to domestic tourism. heritage and culture in partnership with states. help loss-making hotel companies release resources blocked in loss-making assets and encourage smaller hotel units to enter franchisee agreements with established hotel groups.

This had an adverse impact on tourist flows to Kashmir. which proved successful in highlighting the diverse attractions of India. Conde Nast Traveller. 3. the travel publications company. there were more positive reasons for the influx. Resources were also allocated for the modernisation of the airports at Delhi and Mumbai. The government’s marketing efforts also proved successful. hotels and guest houses.4 Positive Growth Factors Currently. India was among the top five favourite international destinations in a survey conducted by Lonely Planet. The UNDP also agreed to provide US$2 million to the Department of Tourism for implementation of the Endogenous Tourism initiative. where Pakistan provides support to insurgents and terrorist activities.3 Sustainable Tourism The National Tourism Policy 2002 places considerable emphasis on promotion of eco-tourism. upmarket destination with a wide variety of attractions. which are proposed to be built with the help of the private sector. One was a major improvement in tourist infrastructure through both private and government initiatives. These are to be located in Delhi. A number of factors contributed to these positive trends. Indian tourism is booming with a rapid growth in tourist arrivals during 2003 and 2004 and the continuing rise in domestic tourism. Four global standard international convention centres are also proposed to be established through private-public partnership. In the readers’ awards for 2003. Goa and Rajasthan. 3. it was only to be expected that there would be a revival in inflows. Mumbai. with periodic flareups into armed conflicts. selected India as one of its top ten preferred global destinations. The Department of Tourism launched the Incredible India publicity campaign during 2002-2004. forests. the government adopted a policy framework that strongly favours promotion of the tourism industry in coming years. 3. In January 2004. the government implemented a package to help affected operators such as houseboat owners. which in the past was a major tourist destination because of its diverse attractions such as snow-capped mountains. However. As elaborated above.2 Terrorism and Security India’s relationship with neighbouring Pakistan has been tense for many years. Rising household incomes with sustained economic growth also led Indians to allocate more resources to leisure travel. Rs49 million was sanctioned for setting up the Indian Himalayan Centre for Adventure and Eco-Tourism in Sikkim.Travel and Tourism India Funds and incentives are being provided for the airports at Bangalore and Hyderabad. The main bone of contention was Kashmir. lakes and houseboats. In order to revive tourism in this area. The project seeks to promote local culture and craft based eco-tourism for sustainable livelihoods and integrated rural development during the tenth 5-year plan. After the decline in arrivals during 2001 and 2002. The government also set up a National Committee on Eco-Tourism and Mountains to work out details for managing the fragile eco-system and to consider projects and programmes for development of eco-tourism in India. A major objective was to brand the country and position it as a high-value. The National Tourism Policy announced by the government in 2002 and the tenth 5-year plan (2002-2007) contain elaborate measures to remove constraints and boost the tourism industry in collaboration with the private sector. the international travel magazine. Summary 1 Positive factors: Positive Growth Factors Boom in tourist arrivals during 2003 and 2004 Strong growth in domestic tourism Euromonitor Page 5 . During 2003-2004.

many airports are in poor shape and present a poor image of India for tourists when they arrive in the country. Another problem is that there is a large unorganised force involved in providing various types of tourism services. Summary 2 Negative Growth Factors Poor infrastructure (such as airports.5 Negative Growth Factors Poor infrastructure was traditionally a major constraint to the growth of Indian tourism. employees in organised employment are entitled to about 30 days of paid leave. promoted and marketed.Travel and Tourism India Tenth 5-year plan (2002-2007) recognises tourism as a major engine of economic growth New National Tourism Policy announced by the government in 2002 The Incredible India campaign undertaken by the Department of Tourism during 2002-2004 provides lot of publicity and marketing for Indian tourism. 10th Plan document. The quality of their services if often very poor because of inadequate regulation by the authorities. Moreover. There is also the problem of inadequate hotel supply in a number of tourist areas. were lukewarm in allocating enough resources to the development of tourism because of an inadequate appreciation of the benefits.1 DEMAND FACTORS Leave Entitlement Leave entitlement differs between the private and public sectors. trade press 3. On average. roads etc. 4. many tourist attractions are poorly maintained. The Union Budget for 2003-2004 provides a host of incentives for tourism Burgeoning institutes and programmes for HR development in tourism industry Source: Euromonitor from Department of Tourism annual report. under whose jurisdiction most tourist centres fall.) Inadequate hotel supply in many tourist areas Security issues Poor maintenance of tourist sights Inadequate marketing of many tourist attractions Many unorganised operators offering poorquality services High cost of air travel within the country Source: Euromonitor from 10th Plan document. Being such a culturally and Euromonitor Page 6 . The quality of roads in many tourist centres leaves much to be desired. trade press Negative factors: 4. Air travel within the country is meanwhile expensive because of the high cost of aviation turbine fuel and constrains domestic travel. A number of them were inadequately developed. Many state governments. For instance.

Table 5 % population Holiday takers 1999 2000 2001 2002 2003 2004 Source: Note: Euromonitor from Department of Tourism. males outnumber females.0 17.0 19.2 2. in urban Rajasthan and Madhya Pradesh only 1-2% of all overnight stay trips are estimated to be for leisure. by journey of purpose. Indian society is a maledominated one. Most Indians going abroad are male. Table 4 Days 2004 Days Paid holiday Public holidays Public holidays (on working days) Source: Note: Euromonitor from Government of India data and trade sources State-specific holidays are not included Paid Holiday and Public Holidays 2004 49. are undertaken for leisure purposes. it is not popular with females travelling alone. only about 3% of the population travel for leisure. found that only 9% of trips by the rural population and 14% of trips by urban inhabitants. constituting 82% of the traffic. About 29% of Indians travelling abroad do so for business purposes. This share is expected to fall marginally in 2004. the rural population and lower-middle income consumers are for the most part unable to afford leisure holidays. local tradition may require female tourists to dress more conservatively than they are used to. 30% in urban West Bengal and 27% in urban Kerela.3 Holiday Taking – Demographics Of the total number of foreign tourists that visit India.Travel and Tourism India religiously diverse country. travel for social purposes such as attending functions hosted by relatives and friends and for religious reasons or pilgrimage is much higher.6 2. Holiday taking is mainly the domain of the affluent in India.2 3. many of the public holidays are related to religious occasions. an estimated 64% of tourists were males. During 2003.4 4.8 96.8 97.5 2. there are state government declared holidays specific to each state. There is also a great deal of variation in the extent of leisure travel of inhabitants residing in various states. In addition.9 3. The national Travel Survey conducted by the National Sample Survey Organisation in 1998. Since the Hindu calendar is not fixed. Although India has a lot to offer to the foreign tourist. NCAER Only domestic leisure travellers were considered as holiday takers Levels of Holiday Taking 1999-2004 Non-holiday takers 97. the holidays fall on different days each year.4 97. Other than about 19 national public holidays in the year observed by central government offices in Delhi. Given India’s low per capita income.0 30. For instance. These are Euromonitor Page 7 . The reason for this is the fear of harassment.2 Holiday Taking Of the country’s population.0 4. In comparison.1 96.6 2.5 97. compared to 39% in urban Orissa.

1 10.8 1.862.342.365.7 37.0 1.194.6 22.3 31.5 15.146. India is a popular budget holiday destination among individuals in their twenties and thirties. to avoid losing the additional two days of leave. As such.463.130.246.Travel and Tourism India mainly male travellers.0 4.3 2002 64. there are also many other foreign tourists to India who are serious travellers and explore many parts of India rather than just visiting a few tourist centres. Indian nationals are more likely to either start their trips on a Saturday or to end on a Sunday.7 11.088.6 7.4 2.8 3.8 1. which is high when compared to the international average. Furthermore. Table 6 % population 1999 Male Female Age Over 65 50-64 35-49 25-34 15-24 0-14 Source: Note: Holiday Taking by Demographic Groupings 1999-2004 2000 61.8 1.5 25.0 2003 4. The percentage of women among domestic tourists is meanwhile estimated at around 30% but is slightly higher in the urban areas than in the rural areas.4 2003 64.6 19.972.5 22.217. Many NRIs regularly visit India for extended stays with their relatives.0 8.0 2004 63.751.317.5 11. However.7 21. Business travellers are also generally aged below 50.0 1.8 Euromonitor from trade sources Indian leisure domestic travellers only 8.5 11.8 20. the estimated average length of stay of tourists in India is 20 days.009.0 35.7 2004 4. However.5 36.0 8.823. ’000 1999 Over 7 days 4-7 days 1-3 days TOTAL Source: Note: Holiday Taking by Length of Trip 1999-2004 2000 2.0 4.1 2001 62.3 9.768.8 2001 2.9 38.8 2002 3.9 6.0 5.823.100.1 21.4 3.0 880. few women travel alone without their spouses.501.487.5 65.9 Euromonitor from Department of Tourism Inbound tourists only 2.0 2.5 19.6 35.1 7. This means that the employee loses two more days of leave.0 1.235.0 22.8 6.2 8.5 31.0 19.0 31.7 10.0 2.5 31.650.6 2.2 7. representing the dominance of males in employment.0 36.0 11. An important reason for this is that if leave is taken on both sides of a weekend.0 1. this figure is somewhat misleading because arrivals also include non-resident Indians (NRIs) settled abroad.764.8 1.9 2. Nearly half of the total domestic leisure trips are weekend trips.4 Holiday Taking – Length of Trip According to official sources. These age groups account for about half of total arrivals. Table 7 Trips.6 43.9 22.0 8.4 38. then the weekend is also counted as leave by most companies.5 Euromonitor Page 8 .6 11.

The lean months are April.3 218.7 6.355. For the full calendar year 2004.1 TOURISM PARAMETERS Incoming Tourism Receipts Indian tourism is booming with a rapidly growing influx of tourists since 2003. During January-August 2004.9 223. the annual growth in receipts during 1999-2004 was 11%. allowing them to travel with their parents.4 6.9 206. Foreigners avoid visiting India during the summer but prefer to make trips during their vacations and when the weather is more tolerable. The peak seasons for domestic travel correspond with the school calendar. As a result. Table 8 Month of holiday Travellers ’000 January February March April May June July August September October November December TOTAL Source: Note: Euromonitor from Department of Tourism publication Inbound tourists only Month in which Holidays are Taken 2004 Travellers (%) 9.6 8. January and February. A fall in tourist arrivals during 2001 and 2002 affected the growth of incoming tourist receipts during the review period. Total foreign exchange earnings for 2004 are estimated to be about Rs217 billion. from April to June.0 288. foreign exchange receipts from incoming tourists rose by nearly 16% in current value terms in 2003. During this time. especially since students also have summer holidays.Travel and Tourism India 4.6 6. as does a break from school in the form of Dusserah holidays. Since April is the beginning of the fiscal year. since Europe is the most favoured destination among Indians. As a result. business is slow and generally picks up in the second quarter. 5. December. working adults are able to take time off. This boom continued in 2004.4 420. May and June. Euromonitor Page 9 .0 322.8 12.1 258.5 Holiday Taking – Seasonality The peak season for inbound tourism encompasses the months of November.4 5. A number of religious holidays fall during this time. There is no primary collection of data regarding the seasonality of holiday taking in outbound and domestic travel.5 5. the estimated full-year growth is 32%. September and October also see an increase in domestic travel.5 100.6 9. the summer months are ideal for getting away from the Indian heat and enjoying continental weather. The fundamental determinant of incoming tourist receipts in India is the number of tourist arrivals rather than any major change in spending patterns.6 10. receipts grew by a hefty 36% compared with the corresponding period of 2003.2 7.0 274.2 8.4 282.4 341. The summer sees students off for more than a month.2 3. Furthermore.8 330. which is much less than during 2003 and 2004. A popular time for outbound travel is the summer months.1 8.7 188.

2004 Euromonitor estimates 5.8 1999-2003 Reserve Bank of India.4 133.2 129.891.0 143. although this was more than made up for by a 54% rise in 2002 from 2001.0 164. with economic liberalisation and industrial growth.950. Table 11 Outgoing Tourism Expenditure: 1999-2004 Euromonitor Page 10 . Indians are able to convert unaccounted income into foreign exchange without going through government channels. Department of Tourism.7 32.0 142. growing numbers of Indians are holidaying abroad.7 -2.2 Outgoing Tourism Expenditure Outgoing tourism expenditure increased rapidly over the review period at an annual rate of 17%.510. With economic growth and a rise in disposable incomes. There was a decline in 2001 from 2000. which saw various Western nations coming down hard on visa applications from overseas. this should again be seen in the context of a small decline of 4% in expenditure in 2003 from 2002.6 9.9 0.862.4 126. Many visa applications from Indian nationals were either delayed or turned down outright.440. In 2004.0 136. the increasing globalisation of the Indian economy.0 15.0 216.2 11.290.009. The actual spending of Indians going abroad may be even higher than official figures indicate. it is estimated that outgoing tourism expenditure will rise by 26% compared to the previous year.089.7 -1. Department of Tourism. There are several reasons for the rapid growth in outgoing tourism expenditure.2 177. The estimated outgoing tourism expenditure of Rs203 billion in 2004 represented a 119% total increase over the review period.380. made it imperative for Indian businessmen to travel abroad frequently. Moreover.5 26.510.0 1999-2003 Reserve Bank of India. The growth in outbound tourism expenditure might have been even greater if not for the terrorist attacks of September 2001. However.919.0 141.Travel and Tourism India Table 9 Rs million Incoming Tourism Receipts: 1999-2004 Current 1999 2000 2001 2002 2003 2004 Source: Note: Constant 129.8 -5. 2004 Euromonitor estimates 2004 data is the estimated figure Table 10 % growth Incoming Tourism Receipts % Growth: 2000-2004 Current 2000 2001 2002 2003 2004 Source: Constant 5. due to the existence of a thriving black market for foreign exchange.7 140.583.

0 167. The first Euromonitor Page 11 .0 13.2 47. The shrinking surplus in the balance of tourism payments during 1999-2003 did not worried the government because of the comfortable overall balance of payments position.876.0 167.510.0 161.690.690.3 54.0 1999-2003 Reserve Bank of India.0 142.290. Table 13 Rs million Receipts 1999 2000 2001 2002 2003 2004 Source: Balance of Tourism Payments: Value 1999-2004 Expenditure 92.786.5 166. Department of Tourism.0 11.0 141.610.0 143.0 131.610.3 -20.882.0 108.Travel and Tourism India Rs million Current 1999 2000 2001 2002 2003 2004 Source: Note: Constant 92.380.2 -3.020.0 Balance 36.534. the Reserve Bank of India liberalised its policies relating to the annual quantum of foreign exchange that Indian tourists are permitted to utilise for trips abroad.0 3.100.2 100.000 in 2002.6 137.7 -7.4 92.660. during the review period.853.680.862.4 148.0 126.950.4 20.9 26. This was raised from US$3. the balance shrank.190. the high expected growth in receipts in 2004 will result in a substantial surplus again.440. During 2003.750.8 1999-2003 Reserve Bank of India.360.3 Balance of Tourism Payments Incoming tourism receipts normally exceeded outgoing tourism expenditure over the review period.0 108. 2004 Euromonitor estimates 2004 data is the estimated figure Table 12 % growth Outgoing Tourism Expenditure % Growth: 2000-2004 Current 2000 2001 2002 2003 2004 Source: Constant 36.0 202.000 in 2000 and again increased to US$10. During 1999-2003. the number of incoming tourists grew by 15% compared with the previous year.000 to US$5.830. 2004 Euromonitor estimates 5.0 -25.0 202.8 41.680.0 216.986. which is still the limit prevailing in 2004.4 Incoming – Number of Arrivals The current boom in the Indian tourism is strikingly reflected in trends in incoming arrivals. Department of Tourism. 2004 Euromonitor estimates 5. In fact.296.360.0 131.0 161.8 129.0 34. because outgoing tourism expenditure rose more rapidly than incoming tourism receipts.680.986.0 164.7 -17.0 1999-2003 Reserve Bank of India. However. because of the decline in tourism receipts coupled with a hefty rise in expenditure. Department of Tourism. The only exception was 2002.100.

3 3. Tourists from Nepal also add considerably to this.0 15. This is because most Bangladeshis.2 2. 2000 saw the tourists coming back again.355. with almost all inbound tourists in India arriving by air. In the earlier part of the review period. This is due largely to geographic and political reasons. India was an attractive destination in the Asian region. Apart from the global economic slowdown and people refusing to board flight.Travel and Tourism India eight months of 2004 saw a further surge in arrivals with number of tourists increasing by 26% during January-August 2004 compared with the corresponding period of 2003. Table 15 Arrivals by Mode of Transport: 1999-2004 Euromonitor Page 12 . The mountain ranges of the north make road travel difficult and India does not have strong relations with either neighbouring China or Afghanistan. has a coast within close proximity of the Indian peninsula. except Sri Lanka and Pakistan. One was a major improvement in tourist infrastructure such as airports and highways through both private and government initiatives.384. 84% of all inbound tourists arriving in India are expected to do so via air.537. However. Moreover.481. tourist numbers are negligible.641. there were more positive reasons for the influx.4 2.4 6.0 5. India receives a negligible number of seafaring tourists as no country. road travel is the second largest mode of arrival. The government also launched the Incredible India publicity campaign in 2002.750. After the decline in arrivals during 2001 and 2002. Table 14 '000 people % growth 1999 2000 2001 2002 2003 2004 Source: 1999-2003 Department of Tourism. For the full calendar year 2004. This effectively rules out commercial sea travel.4 2. who form one of the most significant groups of inbound tourists by nationality.3 22. come into India via road. A number of factors contributed to the rapid growth of tourist arrivals since 2003. Unfortunately. which saw a 6% decrease in arrivals over 2001. Indian tourism was hit hard by various national and international events. the events of 11 September 2001 in the US followed by the security crisis in the wake of the terrorist attack on the Indian parliament put paid to the Indian tourism industry’s hopes in 2002. it was only to be expected that there would be a revival in inflows.9 2.4 -3. Though a relatively quiet year. These numbers would be much larger except for India’s tense relations with Pakistan.9 -6. which proved successful in highlighting the diverse attractions of India. the estimated growth is 22%. India has a few other smaller neighbours but due to their economic conditions and small populations. as a SARS-free country. 2002 saw domestic problems like the Gujarat riots and terrorist attacks in Jammu. as it would be very costly and time consuming. However. which also hurt Indian tourism.5 Incoming – Mode of Transport In 2004. accounting for an estimated 15% of all arrivals in 2004. since most Pakistanis who visit the country do so via road. The Kargil war of 1999 obviously cut deep into the inbound tourist numbers. Though India has a very long coastline. 2004 Euromonitor estimates Total Arrivals: 1999-2004 2.

0 405.2 2001 608.5 14.3 211.0 2004 84.3 2. social and religious functions.9 213.8 1.037.210.9 1999-2004 Euromonitor from Department of Tourism data Others includes pilgrimage.641.4 505.9 1.3 250.Travel and Tourism India '000 people 1999 Air Land Rail Sea Arrivals by mode of transport Source: 2000 2.0 2003 84. since these cities attracted a great deal of foreign investment during the review period.355.2 626.214. the share of business travellers increased.4 1. Chennai and Hyderabad.7 20.6 Incoming – Purpose of Visit Business and leisure tourists form the two most significant groups.4 2.1 304.384. In particular. which are the traditional destinations for such visitors. Since 2001.1 12.6 100.0 0. study and health.750.0 377.162.3 14. many visit the southern cities of Bangalore.8 0.2 210. away from their homeland. This could be due to the communal violence in Gujarat.1 0.537.952.8 506.8 1.210. The other notable aspect is that arrivals visiting relatives/friends saw a sharp drop in 2002.9 318.481.9 17.8 417.829. who probably form the largest Indian expatriate community.6 100.324.3 2.436.2 3.0 100.4 2002 1.7 100.6 1.004.355.2 2001 2.0 2001 87.537.1 422.1 0.5 0.3 2004 2.9 1999-2002 Department of Tourism. In 2004.6 2. which kept away the Gujarati NRIs (NonResident Indians).384.2 446.8 100.4 426.0 1999-2002 Department of Tourism.8 45.3 2004 1.7 2.2 1.6 19.481.1 2. Inbound NRIs also included Euromonitor Page 13 .9 100. another interesting trend is that growing numbers of such travellers are destined to cities other than Mumbai and Delhi.435.750.0 98.641.4 612.0 3.3 15.8 2.1 1.6 264.4 2. Table 17 '000 people 1999 Business Leisure Visiting friends/ relatives Others Arrivals by purpose of visit Source: Note: Arrivals by Purpose of Visit: 1999-2004 2000 792.4 2002 755.4 0.5 22. business travellers were estimated to account for 32% of total arrivals while the share of leisure tourists was 43%. 2003-2004 Euromonitor estimates 5.2 2.1 2.083. 2003-2004 Euromonitor estimates Table 16 % Arrivals by Mode of Transport: % Breakdown 1999-2004 1999 Air Land Rail Sea Arrivals by mode of transport Source: 2000 83.8 16. This reflects the growing globalisation of the Indian economy.7 2.4 2003 2.4 2003 882.7 674.0 2002 81. Besides the rising share of business travellers.044.

8 348.6 23.8 41.7 431.4 73.3 42.1 55. social and religious functions.3 106.0 124.4 29.0 100.4 55.7 6.9 100.2 103.6 9.5 35.0 117.0 28.4 2002 50.7 43.0 10.4 108.6 348.4 52.0 20.0 90.9 46.7 23.8 27.9 2.6 57.6 102.9 93.4 46.2 60.0 100.1 51.3 16.0 2003 32.0 414.2 457.2 7. as expected.8 9. which accounted for an estimated 17% of all arrivals in 2004 followed by UK and US which had shares of 16% and 13% respectively.6 3.7 435. However.6 432.4 555.4 2.2 64.8 18.7 2.1 59.4 129.9 1999-2002 Department of Tourism.1 498.4 73.2 2.2 112.5 329.1 60. most Bangladeshis come to India to look for employment.0 1999-2004 Euromonitor from Department of Tourism data Others includes pilgrimage.3 2004 75.4 54.1 19.0 83.Travel and Tourism India Table 18 % Arrivals by Purpose of Visit: % Breakdown 1999-2004 1999 Business Leisure Visiting friends/ relatives Others Arrivals by purpose of visit Source: Note: 2000 30.2 106. Inbound NRIs also included 5.3 437.4 84.384.1 31.481.5 96.4 49. which is probably because India was the principal colony of the erstwhile British colonial empire and over 350 years’ association is still reflected by the number of Britons and ethnic Indians now settled in the UK coming to the subcontinent.8 621.3 694.5 26.5 37.2 400.5 38.1 55.4 54.8 74.2 22.2 78. is from south Asia.9 44.4 98.9 41.8 21.7 12.2 531.5 405. study and health.6 50.4 34.9 34.0 16.3 88.0 44.5 2.0 2002 31.6 54. accounting for almost a quarter of all international arrivals in 2004.5 15.7 45.537.3 37.4 2003 56.1 540.4 67.1 42.641.2 2001 52.3 29.9 25.9 44.1 24.4 80.8 42.1 491.8 100.0 387.3 527.4 42.7 100.2 76.6 96. Table 19 '000 people 1999 Australia Bangladesh Canada France Germany Israel Italy Japan Malaysia Nepal Netherlands Pakistan Singapore South Korea Sri Lanka United Arab Emirates United Kingdom USA Others Arrivals by country of origin Source: Arrivals by Country of Origin: 1999-2004 2000 54.0 22.3 100.0 427.0 16.0 151.7 48. The largest number of tourists by region. UK citizens account for the largest group.1 44. although this data is not well differentiated and therefore the total figure is counted as tourists.0 2001 24.6 90.8 372.5 244.7 63.7 2.0 344.6 26.4 34.1 106.3 29.0 100.5 61.750.0 2004 32.4 80.9 25. 2003-2004 Euromonitor estimates Euromonitor Page 14 .7 43.0 39.7 Incoming – Country of Origin The largest number of arrivals from a single country is from Bangladesh.2 119.3 42. Outside South Asia.355.6 78.8 46.

with the boom in tourism. Table 21 Rs 1999 2000 2001 2002 2003 2004 Source: 1999-2004 Euromonitor from Department of Tourism data Per Capita Expenditure per Arrival: 1999-2004 52. this decline will be more than compensated for by trends during 2004 when departures are expected to rise by 20%.5 3. which adversely affected travel to South East Asian countries.5 1.5 2.5 1.0 2.6 19.9 25.9 4.8 13.530.9 3.9 3.0 2002 2.3 14.8 Incoming – Per Capita Expenditure Incoming per capita expenditure grew steadily over the review period at 24%.8 1.0 3.181.0 17.0 13.1 17.2 0.2 1.6 2.1 1.7 1.630.9 15.1 15. However.30 64. as well as the SARS crisis. An important factor which contributed to this rise during 1999-2002 was the weakening of the rupee against the US dollar.6 1.7 1.8 2.2 3.7 3.7 2. During 2003.0 2003 2.1 4.9 3.2 1.6 1.8 0.2 1.Travel and Tourism India Table 20 % Arrivals by Country of Origin: % Breakdown 1999-2004 1999 Australia Bangladesh Canada France Germany Israel Italy Japan Malaysia Nepal Netherlands Pakistan Singapore South Korea Sri Lanka United Arab Emirates United Kingdom USA Others Arrivals by country of origin Source: 2000 2.7 1.1 100. a substantial increase is expected.5 0. which is the main destination for Indians. However.5 0.0 4.9 2.0 9.8 1.4 0.0 20.2 3.2 2.735.7 1.9 13.0 1999-2002 Department of Tourism.9 3.5 19.7 15.9 1.0 3.9 1.7 3.3 1. rising at an annual rate of 5%.3 1.31 59.8 4.0 1.8 2.9 1.6 1.2 2.0 2001 2.0 1.80 53.3 0. departures declined by 9%.2 1.6 3.9 Outgoing – Number of Departures With the exception of 2003.907. mainly because of the troubled situation in the Middle East.98 5.5 3.31 56.3 3.8 0.8 1.5 4. during 2004.6 100.2 3.3 2.8 3.7 100.9 0.532.0 19.5 1.80 59. With the rupee gaining ground in 2003.9 16.6 1.6 100.2 4.0 1. 2003-2004 Euromonitor estimates 5.7 2.9 3. the growth in incoming per capita expenditure was marginal. This trend growth was thought to be in part due to the strong underlying economic growth of the country as well as loosened controls over the scope and extent of travel restrictions on Indian nationals.2 100.4 13.1 1. the total number of departures grew year after year during the review period.5 14. The rising incomes of affluent and Euromonitor Page 15 .5 2.8 16.1 1.1 1.0 15.2 20.1 18.6 1.8 2.0 2004 2.5 2.1 1.9 16.3 1.7 2.7 0.2 16.0 100.7 1.9 3.8 3.0 3.1 1.

7 0.3 42.4 30.940. road and rail routes were not developed.5 2002 4.564.9 20.Travel and Tourism India upper-middle-income consumers led to the increasing popularity of holidays abroad and contributed to a growth in departures.400.114.6 1. India had strained relations with two of its biggest neighbours.415. Periodically.338.083.5 4. constituting roughly 80% of the traffic.4 1.483.415.2 4. The steep up and down movement in outbound rail travel is caused by the fact that most of the outbound rail traffic is for Pakistan and Indo-Pak relations have blown hot and cold for some time. According to the last International Passenger Survey of 1996-1997.6 4.114.4 4. the rail and bus routes to Pakistan were shut due to strain on diplomatic ties.4 8.5 2001 4.6 29.3 34. Road travel comes in a distant second at less than 1%.349.2 -8.3 3.5 37. Table 23 '000 people 1999 Air Land Rail Sea Departures by mode of transport Source: Note: Departures by Mode of Transport: 1999-2004 2000 4.3 4. with whom diplomatic relations are more cordial.6 35.10 Outgoing – Mode of Transport Most of the outbound tourism from India is air bound.9 5.0 1.1 0. 2003-2004 Euromonitor estimates 7.500. Indians going abroad are predominantly male.893.3 4.3 2.1 45.564. Table 22 '000 people % growth 1999 2000 2001 2002 2003 2004 Source: Total Departures: 1999-2004 4.0 16. Most of the road passenger traffic outbound is to Nepal and Bangladesh. constituting 99% of the total.0 2004 5.500. 72% were in the age group of 25 to 44 years and only 1% was above 65 years.0 5.8 1999-2004 Euromonitor from Department of Tourism data No international departures take place by river Table 24 Departures by Mode of Transport: % Breakdown 1999-2004 Euromonitor Page 16 . China and Pakistan.400.2 2003 4.8 4.5 4. Therefore.0 4. Historically.0 1999-2002 Department of Tourism.463.0 5.5 4.4 43.7 1.940.

0 2004 1. accounting for an estimated 28% of total departures in 2004.7 0.179. business departures grew at an annual rate of 6%.400.4 823.0 100.9 0.0 100. meeting.500. Although this share declined after the events of 11 September 2001 in the US.0 2003 99. there are many other purposes of travel.0 750. as well as pilgrim travellers to Mecca Table 26 Departures by Purpose of Visit: % Breakdown 1999-2004 Euromonitor Page 17 .0 1. Finally.0 2004 98.0 0.357. There is a large Indian diaspora spread worldwide.8 679.154.2 2003 1. visiting friends/relatives is the second largest purpose of travel.126.019.5 0.8 1999-2004 Euromonitor from Department of Tourism data Others includes students.940.2 0. For instance.0 100.1 776.0 99. Australia and Europe for higher studies.7 0.8 0.8 0. representing an estimated 20% of departures in 2004.Travel and Tourism India % 1999 Air Land Rail Sea Departures by mode of transport Source: Note: 2000 98.870.4 691.2 0.5 1. incentive and convention travellers.114. Over the entire review period.5 2001 1.3 4.9 0.9 807.0 100. Departures in this grew at an annual rate of almost 8% over the review period.0 2002 99. especially to Mecca.1 1.355. Table 25 '000 people 1999 Business Leisure Visiting friends/ relatives Other departures Departures by purpose of visit Source: Note: Departures by Purpose of Visit: 1999-2004 2000 1.082.552.1 1.969.3 0. especially with relaxations of visa regulations in the US.5 4.1 1.4 5.8 0.5 2002 1. the share of business travel peaked at 30%.1 4.1 100.8 1.4 853. There are also many pilgrim travellers.340. An important component of this consists of Indian students going to North America.0 100.0 1.5 959. not surprisingly.0 0. when GDP grew at an unusually high rate.415.4 1.0 1999-2004 Euromonitor from Department of Tourism data No international departures take place by river 5.2 767.773.890.6 1.6 4.564. depending on the health of business in the country.8 0.495. This share fluctuated over the review period. Hence.9 0. Leisure travel accounted for about 16% of departures in 2004. which are estimated to have represented as much as 37% of departures in 2004.0 660.2 0. in 2003.0 2001 98. it picked up subsequently.8 4.11 Outgoing – Purpose of Visit Travel for business purposes constitutes the most important reason for departures.

1 17.12 Outgoing – Destination The Middle East continues to be the top destination for Indians going abroad accounting an estimated share of 8% of the total departures in 2004.2 15. Table 27 Departures by Destination: 1999-2004 Euromonitor Page 18 .0 1999-2004 Euromonitor from Department of Tourism data Others includes students. especially Thailand and Malaysia. the US and UK continue to be major destinations for Indian travellers.0 36. which is an important attraction for the Indian tourist.0 41.2 100. incentive and convention travellers.1 15. This is largely due to the number of expatriate Indians working there.7 15.5 100. However. following the Iraq conflict.7 30.0 2002 27. Not surprisingly. Another interesting trend is the healthy growth in numbers to Southeast Asian countries over the review period.8 15. This is largely due to the number of Indian expatriates in these countries.0 27.Travel and Tourism India % 1999 Business Leisure Visiting friends/ relatives Other departures Departures by purpose of visit Source: Note: 2000 26. as well as pilgrim travellers to Mecca 5. The trend is no different in Dubai.1 18. These countries aggressively marketed themselves as tourist destinations in the review period and targeted Indians probably due to a slump in recent times in the number of western tourists.4 18. accounting for estimated shares of 6% and 5% of departures in 2004.4 38. as this region offers excellent opportunities for shopping.2 100.3 100.0 2003 30. meeting. The Indians were obliging too.4 16.1 22.0 18.0 2004 27. with the troubled situation in the Middle East. when considered separately. as it attracts many Indians during its world famous shopping festival and even otherwise because of its large Indian community and its geographic proximity to India.7 100.0 2001 25. its share in departures declined over the review period.0 100.3 40.2 19.9 37. though there was a dip in shares in 2003 following the SARS crisis.8 20.

1 35.7 4.0 0.0 0.7 2.0 13.4 4.5 207.4 34.5 5.0 49.1 7.7 189.1 40.9 240.0 2003 1.4 254.114.3 296.9 100.0 1.6 4.9 202.5 5.0 339.0 84.2 15.6 0.4 1.3 3.3 8.9 1.2 5.2 0.4 66.0 15.Travel and Tourism India '000 people 1999 Australia Belgium China Dubai France Hong Kong Indonesia Italy Japan Malaysia Middle East Nepal New Zealand Singapore South Korea Sri Lanka Switzerland Thailand United Kingdom USA Others Departures by destination Source: 2000 41.2 6.1 2.3 7.5 257.2 308.1 8.9 1.5 120.0 51.0 2001 1.4 5.3 2.5 400.0 72.5 14.0 1999-2001 World Tourism Organisation.5 164.4 0.6 38.0 89.7 0.0 8.9 42.1 5.0 15.6 4.792.7 163.0 183.9 5.0 100.0 41.2 3.8 80.0 0.3 1.2 2003 45.3 64.3 449.8 1999-2001 World Tourism Organisation.5 27.6 2.8 1. 2002-2004 Euromonitor estimates 5.7 107.5 2002 45.8 3.4 80.7 0.6 4.0 0.8 375.9 0.0 134.0 5.0 270.8 2.1 1.0 33.3 100.2 0.5 3.7 33.2 36.0 159.4 51.4 0.6 5.4 431.144.3 3.9 12.1 0.0 288.7 1.1 57.8 1.5 111.0 4.0 5.4 31.0 0.5 2.564.7 140.0 1.7 1.5 0.1 440.7 129.940.6 100.0 226.8 1.5 44.7 13.4 0.5 1.3 47.0 52.2 37.400.9 2.0 2.3 3.5 0.415.8 1.500.7 3.9 3.9 90.0 1.3 7.4 270.6 5.2 60.8 4.7 1.7 0.9 0.9 0.0 76.8 3.1 1.5 39.4 0.9 46.6 4.1 0.8 1.0 12.0 0.9 3.7 2.2 7.4 43.2 2.7 100.0 100.3 4.0 1.8 42.3 99.6 2.855.8 0.5 237.5 418.8 33.0 228.6 222.9 3.4 146.1 173.6 127.5 43.4 199.0 35.0 2002 0.1 170.4 24.0 2004 54.4 280.9 71.7 1.3 2.3 143.3 229.3 2.5 131.0 4.9 254.4 46.7 4.2 0.1 1.0 54.6 2.7 1.0 0.9 72.0 1.1 532.810.8 74.4 1.3 1.7 8.8 246.7 4.0 346.6 14.5 3.9 235.7 3.9 40.114.3 155.0 2004 1.6 5.9 1.6 4.7 6. 2002-2004 Euromonitor estimates Table 28 % Departures by Destination: % Breakdown 1999-2004 1999 Australia Belgium China Dubai France Hong Kong Indonesia Italy Japan Malaysia Middle East Nepal New Zealand Singapore South Korea Sri Lanka Switzerland Thailand United Kingdom USA Others Departures by destination Source: 2000 0.7 120.4 5.13 Outgoing – Per Capita Expenditure Two major factors contributed to this increasing trend.8 87.2 1.6 4.2 97.3 1.9 206.9 183.0 274.7 337.2 7.3 4.0 32.6 1.4 314.5 2001 48.2 0.1 10.3 2.3 5.2 108.7 17.6 1.8 47.0 5.672.8 132.0 8.9 135.2 216.7 5.9 161.0 84.5 85.6 13.8 113. One was a relaxation in foreign exchange controls by the Reserve Bank of India (the Indian Central Bank) with the improvement in India’s Euromonitor Page 19 .

which is the limit prevailing in 2004. The volume of business travel within the country for conferences.Travel and Tourism India balance of payments position since 2000. the government identified six new tourism circuits for development. the number of domestic trips grew at a CAGR of nearly 14%. State governments are being encouraged to promote state tourism more vehemently. with economic growth. This enabled Indian travellers to carry more money with them abroad. the rising costs of domestic travel in the form of accommodation and transport also contributed to this rise.523. especially among middle. this reflects the strong growth in domestic trips. A number of them adopted a strong marketing approach in projecting themselves as attractive tourist destinations.000 in 2000 and to US$10.590. Table 29 Rs 1999 2000 2001 2002 2003 2004 Source: Note: Per Capita Expenditure per Departure: 1999-2004 22. Secondly. In 2004. Many rural trips are not recorded.and higher-income consumers. In addition.590 in total per departure in 2004. The limit on the annual quantum of foreign exchange that Indian tourists are permitted to utilise for trips abroad was raised from US$3.78 35.00 37. Table 30 Total Number of Domestic Trips: 1999-2004 Euromonitor Page 20 . Domestic Spending Domestic tourist expenditure grew rapidly at an annual rate of nearly 19% over the review period.14 Trips Domestic – Number of Trips and Expenditure Since 1999.03 33.000 to US$5. auto rickshaws or owned or hired animals that cannot be kept track of. eco-tourism destinations and heritage destinations. disposable incomes increased. it is estimate that domestic spending amounted to Rs539 billion. however. However.000 in 2002.00 1999-2004 Euromonitor from Department of Tourism data Does not include international travel.927. To a large extent. During 2004. These circuits include major pilgrim destinations. registering a growth of 10% over 2003.800. meetings and business group holidays is also increasing. This induced greater expenditure on overseas trips registering Rs37.749. representing an increase of 18% over 2003. it is estimated that domestic trips numbered 346 million.812.75 23. as this is paid for in local currency 5. as they are made on bicycle.57 29.

830.106.7 15. This is expected to result in a 32% increase in the number of domestic tourists travelling by air in 2004 over the previous year. capacity constraints prevented growth in this share over the review period.263. it was estimated that land transportation accounted for 80% of domestic tourism. taxi.7 281.328.Travel and Tourism India '000 trips % growth 1999 2000 2001 2002 2003 2004 Source: Note: 190. roads are the main means of transport in the country largely because they are the cheapest mode of transport. Only a very small number of people travel by boat as it is more time consuming. 2003-2004 Euromonitor estimates Trip is defined as one visit from point A to point B. motorcycle and scooter. Table 32 Domestic Trips by Mode of Transport: 1999-2004 Euromonitor Page 21 .1 10.6 16.116. ship or boat is virtually non-existent in India.866. hired car. own car.484.9 234.2 346. as it is still undeveloped within domestic tourism.4 304. trawler. Keeping in mind the low income levels of many Indians.1 376. Rail forms the favoured option for long distance travel and accounted for an estimated 19% of domestic tourist traffic in 2004. However.15 Domestic – Trips by Mode of Transport The main mode of transport in India is by land.671. However. Leisure travel by yacht.2 8.914. The high cost of Aviation Turbine Fuel (ATF) keeps the price of airline tickets beyond the reach of most Indians.5 1999-2004 Euromonitor from Department of Tourism and NCAER data 5. River trips are nearly negligible.6 21.7 230. intense competition among domestic carriers and the emergence of low cost airlines resulted in major cuts in air tickets. Return from point B to point A is taken as another trip 15. during 2004.874. During 2004. Air travel is still too expensive for most Indians and represents only an estimated 1% of total domestic tourism in 2004.9 457.282. Land transportation takes diverse forms such as bus.4 23.781.5 538. auto rickshaw.6 1999-2002 Department of Tourism.0 Table 31 Rs million Domestic Tourist Expenditure: 1999-2004 Value 1999 2000 2001 2002 2003 2004 Source: % value growth 22.2 315.0 220.4 271.4 6.5 17.

Table 34 Domestic Trips by Destination 1999-2004 Euromonitor Page 22 . lost out on tourist numbers over the last decade due to terrorism. another important Hindu city and the venue for the Maha Kumbh mela in 2001.8 550. which.3 187.2 2.0 190.106.0 1999-2004 Euromonitor from Department of Tourism data River trips are included under sea 5. The first three account for most of domestic tourism.2 315.2 100.106.0 2003 0.9 0.0 0.5 0.2 100.2 43.Travel and Tourism India '000 trips 1999 Air Land Rail Sea Domestic tourism by mode of transport Source: Note: 2000 2001 2002 2003 2004 1.0 220.859.2 52.575. as they offer cultural and eco-tourism. The state of Bihar is home to some of the holiest Buddhist shrines but does not have a larger share of domestic tourism due to poor infrastructure and law and order situation. is one of the most important Muslim cities of north India.5 39.8 19.2 19.6 80.2 100.0 450.355. which is one of the holiest cities of the Hindus as well as Allahabad.183.4 1.3 277.8 19.234. States like Rajasthan and Kerala are more popular with foreign tourists than Indians. The capital of the state is Lucknow.9 234. one of the important pilgrimage destinations and Kashmir.2 346.7 20.671.2 100.5 1.0 0.5 0.5 80.048.3 411.0 2002 0.3 19.870.079. culturally and historically. It is also home to Varanasi (formerly Benares).116.5 0.2 100.995.382.0 2004 0.5 18.6 1. business and leisure tourism.6 78.0 45. home to the Vaishno Devi temple.6 253.16 Domestic – Trips by Destination The major purposes for domestic travel in India are pilgrimage.6 1999-2004 Euromonitor from Department of Tourism data River trips are included under sea Table 33 % Domestic Trips by Mode of Transport: % Breakdown 1999-2004 1999 Air Land Rail Sea Domestic tourism by mode of transport Source: Note: 2000 0.4 271.993. This is largely why Uttar Pradesh has the largest share since it has the biggest population of any Indian state.3 439.9 65.471.8 216.7 1.8 150.778.8 174. which was at one time considered to be the premier hill station of India.0 2001 0.484.781.247.104. visiting relatives.6 59.8 0.0 480.5 79.741. The southern states like Andhra Pradesh and Tamil Nadu are again important centres of Hindu pilgrimage as some of the oldest and most revered of Hindu temples are located in these states.5 79.6 514.328. which attracted millions of pilgrims.2 100.614.5 79. Jammu.

6 3.793.453 in 2003 and is expected to reach just Rs1.013.5 4.316.8 100.5 2.0 22.200.0 6.116.2 8.6 2.4 8.735.5 2.2 2.7 11.932.4 39.2 315.0 52.079.6 6.812. awareness of holiday options and the desire to travel increased.1 100.175. religious and social functions or meeting family/friends.7 22.374.3 6.8 4.8 3.984.0 8.328.1 2004 99.4 1.9 73.998.0 23.408.5 5.1 22.7 3.2 4.546.559.117.6 23.2 5.2 11.0 14.117.0 20.487.555 in 2004.3 8. with the proliferation of television channels. The major proportion of domestic trips is made for purposes of pilgrimage.982.6 1.570.2 346.520.627.6 3.678.6 3. There is a new trend of hosting business conferences at upmarket destinations like Goa.106.6 2.675.2 23.5 8.6 271.533.1 8.1 1.091. It is important to note that in India.2 2.4 2.5 3.3 1.932.0 2001 29.802.4 5.288.6 50.2 6.111.1 15.8 3.3 5.273.2 41. There is a wide gap between the amount spent by business and leisure travellers and rural and pilgrimage travellers.723.9 1999-2002 Department of Tourism.6 100.2 5.3 6.479. these trips are low budget trips and do not require large spending per person.0 60.0 11.436.Travel and Tourism India ‘000 trips 1999 Uttar Pradesh Andhra Pradesh Tamil Nadu Karnataka Gujarat Bihar Maharashtra Rajasthan Jammu and Kashmir Kerala Others TOTAL Source: 2000 64.3 2.7 7.2 8. However.000.7 4.568.300.0 4.4 10. It is these middle-income individuals who are taking more holidays within the country that are contributing to the rise in per capita spending.0 58.1 190.3 18.9 5.350.0 1999-2002 Department of Tourism.4 5.0 24.1 8.7 3.0 3. leading to higher spending for these business travellers who are able to go on a short break after their conferences.8 8.6 5.061.365.6 17.830. Only 3% of the population takes leisure holidays each year.567.675.9 7.2 4.8 10.7 5.297. Due to economies of scale and the fact that these trips are often made in groups.1 2.9 21.3 11.3 10.5 2002 73.393.6 2.5 21.8 100.246.0 2002 26.6 100.0 6.671.902.9 18.180.2 5.5 234.5 10.2 14.6 8.0 220. Euromonitor Page 23 .3 11.3 12.4 45.542.3 48.984.2 2.757.965.0 14.6 3.5 2.0 2003 28. a person travelling for business purposes is also called a domestic tourist.2 9.17 Domestic – Per Capita Expenditure Domestic per capita tourist expenditure rose at an annual rate of 5% over the review period.8 2001 68.2 10.1 17.166.5 3. 2003-2004 Euromonitor estimates 5.067.0 3.533.683.6 11.6 2.7 2.873.5 100.071.4 3.3 14.384.7 42. per capita spending is still at a lowly Rs1.2 7.0 2004 28.888.5 2.8 3.3 28.8 2003 88.240.6 12.642. 2003-2004 Euromonitor estimates Table 35 % trips Domestic Trips by Destination: % Analysis 1999-2004 1999 Uttar Pradesh Andhra Pradesh Tamil Nadu Karnataka Gujarat Bihar Maharashtra Rajasthan Jammu and Kashmir Kerala Others TOTAL Source: 2000 29.325.8 77.0 34.0 47.9 5.000.860. However.608.3 21.5 8.2 9.865.9 22.2 22.300.9 6.

277.7 319.207. estimated growth was 21%.4 5. reflecting the boom in tourism.4 448.90 1.341.356.383. Table 37 Spending on Tourism 1999-2004 Rs million.120.2 8.224.2 13. current prices Per Capita Expenditure Per Domestic Trip 1999-2004 Per capita expenditure 1999 2000 2001 2002 2003 2004 Source: 1999-2004 % growth 5.423.3 26.8 8.452.4 264.786.683. hair salons.556.3 10.3 2004 166.8 31.1 6.335.5 29. laundry.729.7 2002 127.8 12.18 Tourism Spending Spending on tourism by inbound and domestic tourists was estimated at Rs756 billion in 2004.80 1. which accounted for over 60% of spending in most years of the review period.291.443.7 15.317. The largest component of tourism spending was travel.2 8.707.60 1.9 622.0 11.476.529.1 5.5 493.202.667.6 14.Travel and Tourism India Table 36 Rs.264.346.400.334.7 36.7 93.354.3 2003 146.355.20 1999-2004 Euromonitor from Department of Tourism and NCAER data 5.6 392. etc Table 38 Spending on Tourism: % Breakdown 1999-2004 Euromonitor Page 24 .729.824.294.708.1 13.2 10.389. The large share of travel is mainly because domestic tourists stay in cheap hotels and spend most of their travel budget on transport.171. as well as domestic tourist spending Entertainment includes attractions and evening entertainment.467. Food includes restaurants Other spending includes services like communication.5 9. This expenditure grew at a CAGR of 16% during the review period.9 7.343.322.5 755.662.00 1.70 1.171.9 7. Accommodation comes next with a share of 22-26% of spending.9 4.204. During 2004.3 Euromonitor from trade sources Figures include spending by incoming tourists.00 4.7 423.357.7 16.015.773. medical services.60 7.346.298.834.90 1.00 1.3 213.60 7.1 518.714.1 359.8 10.6 11.5 23.323.555.634. current prices 1999 Accommodation Entertainment Excursions Food Shopping Travel within country Others TOTAL Source: Note: 2000 105.5 2001 117.8 41.798.1 9.147.864.2 11.8 9.586.1 258.

However. only 21% of domestic tourist spending is through credit cards.9 1.2 2. medical services.0 1.1 1.0 2004 22.0 1.3 2.0 100. following the slump in international arrivals in India Euromonitor Page 25 .4 63.5 1.1 1.0 Euromonitor estimates based on Venture Infotek Research and trade interviews 6.4 2.6 58.Travel and Tourism India % 1999 Accommodation Entertainment Excursions Food Shopping Travel within country Others TOTAL Source: Note: 2000 24.9 2. All major shopping stores and restaurants also accept credit cards. etc 5.19 Tourism Spending – Method of Payment Credit cards are now becoming the standard means by which hotel bills are paid. Food includes restaurants Other spending includes services like communication. hair salons. in 2003.0 100.2 2. Trends during the review period clearly show the impact of events that affected tourism in India. Hence. many tourists exchange their travellers cheques with them itself to make payments. 6.0 2002 24.2 2.0 2003 23.5 2.1 TRAVEL ACCOMMODATION Market Size Sales of travel accommodation grew impressively at a current value CAGR of 12% over the review period.0 25.0 5.0 6. as well as domestic tourist spending Entertainment includes attractions and evening entertainment.6 59. Table 39 % Incoming Cash Credit card Traveller’s cheque TOTAL Source: Method of Payment for Tourism Spending: % Breakdown 2003 Domestic 74.3 100.0 21. Therefore.1 6. Neither incoming nor domestic tourists like to carry large amounts of cash with them while travelling.0 2001 26.2 2.0 Euromonitor from trade sources Figures include spending by incoming tourists. There is an increasing trend of domestic tourists also paying such bills with plastic.1 2.3 1. many lower.1 100.2 100. Hence.1 6.5 61.3 100.5 2.1 2. The major reason is the sharp rise in international tourist arrivals coupled with a robust expansion in domestic tourist traffic. it is expected to show a hefty growth of 14%. it must be noted that the penetration of credit cards in India is still very low.9 5.2 100. However. Annual growth in constant terms was also relatively high at 8%.5 2.2 100. all entertainment bills are paid for using cash.9 2.5 2.9 2.5 61.5 2. In particular. compared with half of incoming tourist expenditure.0 25.and middle-income tourists do not possess credit cards.0 50.0 6.0 25. All the major tour operators and travel agents are also authorised foreign exchange providers. it is estimated that. growth in 2002 was unusually low.2 65. The business traveller usually pays for his stay at hotels using a corporate account credit card. laundry.3 1.8 5. In 2004.

9 409. There are also a large number of travel accommodation outlets that are not run commercially. though the term motel is not used in India.469. the boom in tourist traffic since 2003 meant that hotels prospered more so than most types of travel accommodation. Similarly.0 1999 2000 2001 2002 2003 2004 Source: 93.0 146.4 4. Table 40 Travel Accommodation Market 1999-2004 Rs million/'000 bed nights Current value Constant value Volume (bed nights) 364.0 403.4 108.2 166.2 105.9 Euromonitor from Central Statistical Organisation.343.147. hotel sales fell in 2001 and showed low growth in 2002. there are a huge number of unrecognised lodging establishments dotting the highways.8 14.4 136.9 9.4 489. the Afghan war and escalating tension between India and Pakistan in 2002.2 101.834.864. FHRAI. such lodging establishments accounted for 70% of travel accommodation sales.2 Sales by Sector Hotels accounted for 29% of travel accommodation sales in 2003.3 Volume 10. towns and cities. Most of them are small and offer very basic facilities.346.241.4 15. hotels were most affected by international events that influenced tourist arrivals.740.1 14.9 125.7 93. Table 42 Travel Accommodation Value Sales by Sector: Value 1999-2004 Euromonitor Page 26 .8 10. travel accommodation also grew rapidly.5 7.1 117.758.7 428. Since many of them are on the roadside. such as selfcatering apartments and campsites. given their low value. Given their mode of operations. besides these official hotels. Many of them are attached to pilgrimage centres.291. In 2003. These are hotels recognised by the government or which are members of the Federation of Hotel and Restaurant Associations of India (FHRAI). growth rates were high for some.343. these establishments were classified here as motels. a share that is expected to fall marginally to 28% in 2004. it is difficult to ascertain their true value.294.219. trade sources Table 41 % growth Travel Accommodation Market: % Growth 1999-2004 Current 2000 2001 2002 2003 2004 Source: Constant 8. This share is expected to rise marginally to 71% in 2004.4 8.053. However.0 12. Not surprisingly. As regards the others.3 127. with the boom in tourism since 2003.925.Travel and Tourism India after the terrorist attacks on 11 September 2001.8 11.9 1.9 112.0 12.0 Euromonitor from Central Statistical Organisation. which are becoming popular in Indian tourism. For instance.6 547. However.147. FHRAI.994. trade sources 6. their shares in travel accommodation sales are marginal and less than 2% in 2004. following the dip in tourist arrivals.4 3. Since foreign tourists are a major source of business for hotels.941.

0 213.2 36.905. FHRAI.0 100. which can be attributed to the proliferation of adventure tour operators in India.0 100.0 0.3 0.2 105.0 2.2 0.291.5 67.7 46.4 0.5 0.4 0.0 359.1 70.5 68.0 51. FHRAI.346.0 2002 0.6 0.7 0.029.4 3.477.0 245.0 66.3 Outlets by Sector Hotels and unorganised lodging There were nearly 1.6 36.2 115.940.8 185.9 102.0 146. This modest growth.Travel and Tourism India Rs million 1999 Campsites Chalets Guesthouses Hostels Hotels Motels Private accommodation Self-catering apartments Other travel accommodation Travel accommodation sales by sector Source: 2000 2001 2002 2003 2004 10. Not surprisingly.9 69.5 0.5 380.1 100.659.2 28.7 0.834.2 314.3 127.0 2003 0.9 325.0 2004 0.224.5 165.4 0. Unorganised lodging is accounted for under motels and guesthouses. trade sources Table 43 Travel Accommodation Value Sales by Sector: % Value Breakdown 19992004 % value 1999 Campsites Chalets Guesthouses Hostels Hotels Motels Private accommodation Self-catering apartments Other travel accommodation Travel accommodation sales by sector Source: 2000 0.0 100.7 Euromonitor from Central Statistical Organisation.632.0 Euromonitor from Central Statistical Organisation.1 62.343.3 814. Adventure sports are more popular among foreign tourists than domestic tourists.3 0. trade sources 6. is explained by the overcapacity that developed in hotels in 2001 and 2002. Euromonitor Page 27 .4 100.1 220.308.6 926.1 0.0 530.0 545. However.9 779.1 37. besides these recognised hotels.2 78.2 238.3 30.5 86.996. after a dip in tourist traffic during those two years.1 117.600 hotels recognised by the government in 2003.2 28.147.2 166.0 0.3 31. Guesthouses are considered by some as a way of running a hotel while evading paying the necessary taxes.1 0.0 336.5 34.294.779.0 995.7 42. occupancy levels in many hotels were higher since 2003.1 63.6 58.1 117.0 0. The number of hotels grew by only 2% in 2003 and is expected to rise by 3% in 2004.0 636. Other forms of travel accommodation There was a sprouting up of new campsites over the review period. both of which are growing at an increasing rate of between 6-7% in 2004.0 334.0 2001 0.9 93.1 0. despite the boom in tourist arrivals.2 37.1 0.3 38. there are many other lodging establishments.6 0.610.6 0.8 3.962.2 100.

295 17. Secondly. Euromonitor Page 28 . Kolkota and Chennai were introduced to the concept of self-catering apartments during the review period.3 5.906 Euromonitor from Department of Tourism.181 2003 200 1.1 79.558 2004 230 1. A significant proportion of business travellers to India will therefore visit Mumbai.6 0.100 204 1.3 100. Mumbai.620 23.7 77.5 87.5 0.044 2001 113 1. The main metros like Delhi. Mumbai.8 6.4 4.2 81.472 22.420 18. non-government organisations such as the Young Men’s Christians Association (YMCA).230 220 1.3 12.1 100.9 0.541 19.506 18. Elephanta caves off the coast of Mumbai.1 0.7 4.9 6. Ajanta Ellora caves.7 5.9 6.8 4. These extend to expatriates as well as those who express a keen interest in the arts.8 10.938 2.2 8.0 2004 0.0 2003 0. this region has many of India’s top tourist destinations like Goa. trade sources 6.958 20 27.0 Euromonitor from Department of Tourism.873 2002 174 1.4 87. trade sources Table 45 % Travel Accommodation Outlets by Sector: % Volume Breakdown 1999-2004 1999 Campsites Chalets Guesthouses Hostels Hotels Motels Private accommodation Self-catering apartments Other travel accommodation Travel accommodation sales by sector Source: 2000 0.160 212 1.2 0.800 28 30. Bangalore.0 2002 0. which cater to high-end tourists who stay for long periods.3 100.1 100. Firstly.4 76. India’s famed film-industry nestled in Mumbai.570 21.634 1.5 4. southern Rajasthan.Travel and Tourism India There are also a number of hostels including those run by non-profit.496 20.4 100.208 16 25. in the west is the financial capital of the country. Khajuraho Temples in Madhya Pradesh state and hill-stations like Mahabaleshwar. Young Women’s Christians Association (YWCA) and other more commercially run youth hostels.4 Hotels by Region West and Central the most developed West and Central India have a clear lead in accommodation for two reasons.209 16.0 2001 0. culture and history of India.7 0.0 0. This region is also home to Bollywood. Table 44 No of outlets 1999 Campsites Chalets Guesthouses Hostels Hotels Motels Private accommodation Self-catering apartments Other travel accommodation Travel accommodation sales by sector Source: Travel Accommodation Outlets by Sector: Units 1999-2004 2000 75 989 189 1.1 100. which attracts visitors from other Asian countries and from the West.0 6.7 4.4 0.128 50 960 181 1.1 1.8 5.5 6.038 196 1.438 2.000 3.8 0.

570 31. Bangalore attracts many business visitors to the south. The total number of hotels that are registered with the DOT but await classification are 81. 48 in west and central India and 7 in the east. The Department of Tourism also has a category of “heritage hotels” which includes old palaces and buildings converted into hotels. Hence. There is also a lot of business traffic to Chennai (in the state of Tamil Nadu) and Hyderabad (in the state of Andhra Pradesh) particularly in information technology and business process outsourcing (BPO).150 52. In 2003. hotel accommodation in southern India grew rapidly in recent times. The West shows a high proportion of hotels belonging to 4-star and above ratings. including wildlife sanctuaries. Other tourist attractions in the North. chiefly because it sees a larger proportion of domestic tourists. many tourists are attracted to other parts of southern India to savour the famous south Indian beaches.5 Hotels by Star Ratings Southern India clearly shows a stronger presence of hotels in the 4-Star and below category. hill stations and beaches.238 20. temples and palaces. A major reason for this is the importance of Delhi for both business and high-income leisure travellers. the Kerala tourist authorities branded the state as “God’s own country”.0 56. One of the reasons for this is Bangalore. Table 47 Number of Star Rated Hotels by Region 2003 Euromonitor Page 29 . there were 77 heritage hotels registered with the Department of which 12 are in the South. Rooms and Beds by Region 2003 Rooms (‘000) Beds (‘000) Occupancy rate (%) 57.993 85.0 55. capital of Karnataka.Travel and Tourism India North and East struggle The share of north went down since the mid-1990s due to the problems in Kashmir.427 161. which is indicative of more foreign tourists and business travellers. The state of Kerala was successfully marketing its many tourist attractions.644 13.018 6. the North has the second highest number of 5-star hotels in the country. In addition. FHRAI 6. In a marketing campaign.232 27.703 Euromonitor from Department of Tourism.482 35. While it is understandable that West and Central India have the highest number of hotels in almost all categories since the region has the highest number of hotels to begin with. 5 in the east. the number of hotels and rooms in these regions is far behind those of the other regions. are also popular among well-heeled tourists.481 60. especially monuments such as the Taj Mahal and the palaces and forts of Rajasthan. This is a reflection of the higher-income travel that is more prevalent in the North compared to the national average. The South looking up On the other hand. Table 46 Number Number of hotels West and Central South North East TOTAL Source: Hotels.0 60. More than half of these are in the south. 10 are in the north. which was a big draw at one time for foreign and Indian tourists. The east was a laggard in terms of tourist development and attracting business travellers.0 578 524 322 146 1. which is India’s answer to the famed Silicon Valley in the US.

A major reason was the large investments that it made in expanding its hotel network. For instance.9 70. other hotel companies such as ITC grew more dynamically. Euromonitor 5-star deluxe included in 5-star. Heritage and unclassified hotels are not included. Hence.1 37.8 27.7 69. eating into the share of independent hotels that largely comprise the three-star and lower categories.962.7 Trends Internet Transaction Trends Compared with other aspects of Indian tourism. the hotel chains register a much higher proportion of value sales.7 25. sales of hotel chains grew at a CAGR of 7%.6 36.779.0 Euromonitor based on FHRAI data and trade press 6.7 46. This trend is expected to continue into the forecast period. as hotels will be allowed to reap benefits accruing from mergers and acquisitions. This share fluctuated over the review period.6 22. While the top two hotel players.8 32.390. the share of hotel chains in hotel sales rose from 66% in 1999 to an estimated 70% in 2004.3 38.308. which will see a lot of independent hotels merge with chains to improve occupancy rates. 6.8 69. During the review period. Hence. the internet is a more important source of sales for hotels.6 Hotels by Ownership Though India is peppered with independent hotels.029. This is because the use of internet for hotel booking is greater for foreigners compared with domestic travellers.573.873.989.8 66.2 68. 9% of hotel sales were generated through the internet. Budget hotel chains also began to spring up in the country. it is not surprising that the share of internet sales in hotel sales dropped to 8% in 2001 with the drop in foreign arrivals in India.9 25.905. continued to be well ahead of the other chains in terms of revenues and the number of hotels. Table 48 Rs million 1999 Total hotel sales Hotel sales: hotel chains Chained outlets’ sales as a % of total sales Source: Hotel Sales by Independent vs Chained Outlets: Value 1999-2004 2000 2001 2002 2003 2004 34. The main reason for this fluctuating trend was the changing proportion of foreigners among hotel customers. which was significantly higher than the 6% annual growth for all hotels.5 29. Euromonitor Page 30 . the share was about 10%.Travel and Tourism India Number 5-star West and Central South North East TOTAL Source: Note: 4-star 33 33 31 23 120 3-star 157 166 96 53 472 2-star 171 156 108 41 476 1-star 83 78 25 6 192 59 35 48 10 152 Department of Tourism. ITC took a decision in 1998 to invest a huge amount of Rs15 billion over a period of five years to achieve a national rollout.7 42.911. In 2003.610. Indian Hotels Co and EIH Ltd. accounting for about 70% of all sales in 2004. Most of the 5-star and 5star deluxe hotels are part of hotel chains.996. In 1999.4 68.

rafting.696.294. Key players activity About half of internet hotel sales are through hotel websites.2 105. quickly sold it to Sahara India for a huge profit. The demand for adventure tourism led to the sprouting up of many campsites with excellent services. adventure tourism in India grew rapidly in recent years. EIH Ltd. India Tourism Development Corp Ltd (ITDC). beaches. the value of this was estimated at over Rs400 million.1 117.941. A number of states actively promote these activities.807.8 4. Hotel Corp of India (HCI). Not surprisingly. apart from its other non-accommodation investments such as 37 Duty Free shops at airports.685. During 2003.147. Batra Hospitality.343. rock climbing.401.138. Hence. During the review period.9 123. the buyers of Centaur Hotel Mumbai Airport.291. Interestingly. Self-Catering Apartments The metropolitan cities were introduced to the concept of self-catering apartments or.9 Key Players – Mergers and Acquisitions Hotel operations saw major changes in terms of ownership during the review period. Service Apartments. scuba diving and skiing.8 Emerging Products Campsites for Adventure Tourism India has enormous potential for adventure tourism because of its diverse terrain including mountains.952. most of which is used by local travellers with modest incomes.Travel and Tourism India Apart from hotels. with its 100% government share holding. There are also a large number of travel portals that provide hotel reservation services for hotels in India.605. there is a lot of scope for adventure tourism activities like trekking.4 162. a subsidiary of HCI and Centaur Hotel Mumbai Airport. Table 49 Travel Accommodation Internet Transactions Sales: Internet Transaction Value 1999-2004 Rs million 1999 Internet Others Total Source: Euromonitor from FHRAI 2000 2001 2002 2003 2004 2. These campsites may also be organised in collaboration with hotels.834. This is the high-end option of private accommodation/paying guest system in India and targets the longstay tourist or those tourists that are expected to make repeat visits in the near future.7 2.2 166.9 3. divested 18 of its hotel units leaving it with only eight hotels and seven joint-venture hotels.3 90. Hence.3 101. Hotel Leela Venture and ITC Hotels. These include the portals of internet travel companies such as MakeMyTrip. Euromonitor Page 31 .538.412.0 146.4 142. especially since 2000.4 114. Indo Hokke Hotels Ltd.7 6. 6. lush forests. rivers and lakes.346. as they are known in India.4 3. who are not particularly internet-savvy. divested from its properties Centaur Hotel Juhu Beach. The apartments are available on monthly or weekly rates.3 127.341. there is negligible use of the internet for bookings in other accommodation. These are based on the European concept of rent-an-apartment such as the apart’hotel concept. the key players are the large established hotel chains such as Indian Hotels Co.6 3. a wholly owned subsidiary of Air India. as well as those created by travel retail companies such as Thomas Cook.4 93.734.

As a result.102 million in 2003/2004. announced that it would be merging ITC Hotels with itself. business and budget.Travel and Tourism India In August 2004. as part of its privatisation strategy. Another big hotel company is ITC Hotels. Cumulatively. which owns 72% equity stake in ITC Hotels. these two hotel leaders raked in Rs11. whereas EIH owns the equally famous Oberoi brand. Two public sector companies. Table 50 Key Players by Revenue 2003/2004 Euromonitor Page 32 . the government decided to sell off most of their hotels to the private sector.10 Key Players – Revenue Rankings The two main players in the Indian hotel industry are the Indian Hotels Co and EIH Ltd (earlier known as East India Hotels). both ITDC and HCI are now only minor players. Euromonitor Takeover company Country Sector Acquired company Country Sector Year Takeover company Country Sector Acquired company Country Sector Year Takeover company Country Sector Acquired company Country Sector Year Source: 6. a part of the ubiquitous Tata Group of Companies. The Leela Hotels brand run by Hotel Leela Venture is a relatively new player but quietly increased its share during the review period. Summary 3 List of Mergers and Acquisitions 2002-2004 Sahara India India Private Centaur Hotel Mumbai Airport India Private 2002 Silverlink Holdings Ltd India Private Lodhi Hotel (ITDC) India Public 2002 Nehru Place Hotels Ltd India Private Hotel Kanishka (ITDC) India Private 2002 Department of Disinvestment. ITC. its parent company. owns the well-known Taj Hotels. ITC. In August 2004. Both these companies own properties that can be classified into various types such as luxury. used to be major players in hotels. ITC Hotels also has a tie up with the international chain Sheraton. heritage as well as beach and hill resorts. India Tourism Development Corp (ITDC) and Hotel Corp of India (HCI). the Indian business conglomerate. Indian Hotels Co. announced that it would be merging ITC Hotels with itself. However. trade press. This consolidation of ITC’s hotel business will result in economies of scale and cost reduction. which runs the ITCWelcomgroup chain of hotels.

RevPAR was lowest for ITC Hotels at an estimated Rs1.9 70. trade press 6. Table 51 % retail value rsp Company Indian Hotels Co Ltd EIH Ltd ITC Hotels Hotel Leela Venture Ltd Others Total Source: Hotel Companies by Market Share 2001-2004 2001 18.9 3.2 9.1 3.577 6. ITC Hotels and Hotel Leela Venture had much lower shares of about 3-4% each in 2003. they were more severely affected by this drop.450 2. Table 52 Key Hotel Players by RevPAR 2003/2004 Euromonitor Page 33 . had a combined value share of nearly 23% in 2003.0 2003 13.876 and Rs2. Moreover. RevPAR for the Leela group rose by 20% during 2003/2004. growth in RevPAR during 2003/2004 was the highest for ITC Hotels at nearly 30%.594 in 2003/2004. Indian Hotels Co and EIH Ltd.0 2004 14.3 3. the shares of these two companies fell since 2001. The major reason is again trends in tourist arrivals and their relatively higher dependence on foreign guests. with a fall in 2002 and a steady rise since then.Travel and Tourism India Rs million 2003/2004 Indian Hotels Co Ltd EIH Ltd Hotel Leela Venture Ltd ITC Hotels Source: Company reports. Euromonitor Year end March March March March 6. This was because of the relatively high room tariffs of the three luxurious hotels of the Leela group in Bangalore. which was estimated at Rs3. This is because ITC Hotels has a number of modestly-priced hotels catering to budget tourists in its fold.2 2. However.410 in 2003/2004.0 2002 15. Mumbai and Goa.7 2.4 68.0 9. followed by IHC (26%).0 Euromonitor from company reports. as younger players expanded their hotel networks. Trends in their shares were similar to those of Indian Hotels Co and EIH Ltd. the shares of these two companies significantly suffered in 2002 because of the fall in tourist arrivals. Since their hotels are more dependent on foreign guests compared with most other hotels.6 12.3 100. However.2 100.6 100.2 2.6 61.3 3.12 Key Hotel Players – RevPAR Hotel Leela Venture tops in Revenue Per Available Room (RevPAR). reflecting its dynamic revenue growth. FHRAI. which is expected to rise to about 24% in 2004.6 100.5 4. as well as a high occupancy rate.037 1. trade press. With the boom in the hotel industry.5 9.11 Key Hotel Players – Market Share The two top hotel players.287 during 2003/2004. Indian Hotels Co (IHC) and EIH followed with estimated RevPARs of Rs2.652 4.9 71.

trade press 6. It is also predicted that within hotels. in India. there are not enough budget hotels with good facilities in relation to potential demand. the number of budget hotels and their sales are expected to increase at a rapid pace. such as campsites. compared with annual growth of 8% over the review period. Hence. Some accommodation that showed very high growth of sales in the past five years because of a low base. during the forecast period. in June 2004. For instance. Hence.0 26.410 Euromonitor from company reports. Even the top Indian hotel companies. although in early-February. the Indian Ocean earthquake and its resultant tsunamis are not expected to cause any negative impact on the performance of travel accommodation in 2005 or later. Africa and India itself. Indian Hotels Co established its first low-cost hotel in Bangalore.6 year end March March March March 3.287 2. Some of the major reasons include better tourist infrastructure. budget hotels would grow at a faster rate. This would obviously imply more demand for travel accommodation. during the forecast period. improved marketing of tourist attractions and a greater capacity of Indians to travel because of enhanced disposable income.876 2.13 Forecast Sales by Sector Negligible impact of Indian Ocean earthquake In spite of the widespread devastation to lives in Asia. which traditionally concentrated on 5-star hotels. sales of travel accommodation are predicted to grow by nearly 9% per annum in constant value terms. is likely to grow more modestly during the next five years. Sales of hotels are predicted to grow at a much higher pace during the forecast period at 8% per year in constant value terms compared with a CAGR of 2% in constant prices over the review period. are realising this fact and a number of them are investing their resources in setting up budget hotels. reports emanating from India suggest that the government aid swiftly brought a sense of normalcy and is poised to help travel accommodation recoup its losses through various support measures including increased marketing and promotional efforts for the islands. This is because. Table 53 Forecast Travel Accommodation Sales by Sector: Value 2004-2009 Euromonitor Page 34 .0 16.1 29. The most affected areas in India in terms of travel accommodation were the Andaman and Nicobar islands. Strong growth all around Both foreign tourists to India and domestic tourism within India are expected to grow robustly over the forecast period.594 1.Travel and Tourism India Rs 2003/2004 Hotel Leela Venture Ltd Indian Hotels Co Ltd EIH Ltd ITC Hotels Source: % growth 20.

456 5.1 68.0 54.250.298 229 1.620 23.7 58.0 155.473.1 349.3 199.9 4.562 264 2.085.0 373.5 396. there is expected to be a shift to larger and better-equipped travel accommodation establishments in the forecast period.9 1.018.363 238 1.308 6.4 995.5 323.8 450.5 296.023.3 414. the number of budget hotels is expected to increase at a rapid pace during the review period.1 169. Such high growth is unlikely to be sustained.7 182. Also.8 636.996.2 432.887 2008 388 1.329.555 74 38.230 220 1.700 57 35.524 230 1.5 1.636.929 28.5 377.009 2006 302 1.962.5 166. Table 54 No of outlets 2004 Campsites Chalets Guesthouses Hostels Hotels Motels Private accommodation Self-catering apartments Other travel accommodation Travel accommodation sales by sector Source: Euromonitor Forecast Travel Accommodation Outlets by Sector: Units 2004-2009 2005 265 1.340.211 89 41.1 117.6 359.000 3.883.2 129.9 6.4 142.803 26.750 41 33.2 5. as hotel players realise the unfulfilled demand for low-cost hotels providing value for money. the number of hotels is forecast to grow at 7% per annum during the forecast period compared with 6% in the review period.4 6.3 216.6 50.352.0 712.171.670 2009 435 1. Moreover.395.299. with higher-income tourists demanding more facilities.1 1. The events of the Indian Ocean earthquake in late-2004 are not expected to cause any difference to outlet volume.253.145.14 Forecast Outlets by Sector The number of travel accommodation outlets is predicted to grow at a slightly lower pace of 8% per annum during the forecast period compared with the annual growth of 10% over the review period.9 1.Travel and Tourism India Rs million 2004 Campsites Chalets Guesthouses Hostels Hotels Motels Private accommodation Self-catering apartments Other travel accommodation Travel accommodation sales by sector Source: Euromonitor 2005 2006 2007 2008 2009 245.0 254. TRANSPORTATION Euromonitor Page 35 .7 7.2 1.335.7 948.919 2007 344 1.014.108.2 182.0 1.7 869. as the total number of travel accommodation outlets affected as a proportion of the total number of travel accommodation outlets in India is very small. This is because the high growth rates registered for some accommodation during the past five years was essentially because of the low base.128 7.834.800 28 30. In particular.1 235.0 269. such as for campsites.9 3.725 4.495 255 2.148 7.094.632.2 63.084 30.701 24.395.431 246 1.1 46.787 98 44.3 790.5 5.107 7.271 32.

value grew due to increased competition from private players. Euromonitor Page 36 .0 5. Table 55 Transportation Market 1999-2004 Rs million/000 seats sold Current value Constant value Volume (seats sold) 4.000 4. However. seats sold totalled an estimated 5. in constant terms.0 762.592.028.305.902.1 Market Size Transportation was valued at an estimated Rs1. In land transportation.056.510.2 10.057 billion in 2004.8 4.838.024.0 7.900 1999 2000 2001 2002 2003 2004 Source: 652.931. registering a 5% growth over the previous year.080. The railway networks are old and in need of upgrading.8 7.0 Volume 4. after the government liberalised its civil aviation policy.6 8.4 920.0 787. Transportation in India is in need of a high level of investment for infrastructure improvements.192.200. It was estimated that land transport represents 70% of the volume of all domestic trips.0 675.983.698. price rises were in line with inflation and increasing oil prices.3 3.0 652. the quality of many roads is poor. In rail. which is the largest in India’s transportation. Airports Authority of India (AAI).902.3 14. allowing for large numbers of customers. Bus travel offers the cheapest mode of transport in India.081 million in 2004.900 4.0 827.880. with an estimated share of 46% in 2004 in value terms.710. Airports also require to be modernised.2 Sales by Sector Bus travel is the most significant in transportation. Indian Railways and trade press Table 56 % growth Transportation Market: % Growth 1999-2004 Current 2000 2001 2002 2003 2004 Source: Euromonitor Constant 3.9 735. In air transport. Bus travel providers are at the same time pushing up ticket prices.940 5.6 867.6 Euromonitor from Director General of Civil Aviation (DGCA). The value of total transportation grew at an increasing CAGR of 10% over the review period.7 4. While the road network is large.919.Travel and Tourism India 7.4 4. representing growth of 15% over 2003.3 706.000 4.4 -0. price increases are below inflation and driven by political considerations.399. the CAGR was 6%. In volume terms.0 7.700 4.6 11.1 1.6 8. Another important reason for its healthy growth in the review period is the improvement in passenger comfort through the introduction of reclining seats and on-board movies.0 702. Value sales of bus/coach travel rose rapidly over the review period at a CAGR of nearly 15%. as the Indian middle class is becoming larger and richer.

The leading domestic carrier is Indian Airlines.151.0 1.0 2001 33.0 702.0 372.7 9.Travel and Tourism India Air travel is the second most significant in value sales.441.200.0 57.8 100.931.1 9.2 9.0 65. the share of air travel dropped because of reduced tourist traffic and air travel following the global economic slowdown. chartered air travel is still nascent and will take several years to develop.1 13.1 13.8 9. Air India.6 37.0 1.902.0 105. the share of air travel stabilised.550.0 103.0 91.708.578.0 139.0 244.0 85.224.964.142.1 13.1 13. However.892.0 Euromonitor from Director General of Civil Aviation (DGCA).415.0 125.7 100.50 domestic and 16 international. expanded its fleet from 26 aircraft in 1999 to 33 currently. Airports Authority of India (AAI). Airports Authority of India (AAI).0 281.1 100. with the revival of tourist traffic in India since 2003. The percentage share of rail transport in the total value of transport in India has not changed much over the review period and is estimated at 13% in 2004.528.0 1.0 483.1 13. India’s premier international airline.507.100.0 73.5 100.857.0 2003 31. the events relating to 11 September 2001 and other factors.0 827.808.1 416.0 900.0 2002 261.0 920.1 13. accounting for nearly a third of transportation in 2004.342.0 652. Capacity constraints.6 0. Cruises are meanwhile relatively new and account for a very tiny part of transportation. With rising business and leisure travel.0 265.6 45.8 40.0 2004 31. non-flexible schedules and slow trains saw the railways lose potential passengers.1 45.3 0.499.4 2003 285.400.2 100.718. Indian Airlines (together with its fully owned subsidiary Alliance Air) has a fleet of 62 aircrafts.8 0.0 400.88 0.399. Most of the Indian carriers augmented their seat capacity significantly since 1999.0 762.0 326.8 0.0 Euromonitor from Director General of Civil Aviation (DGCA).0 2002 31.5 8. Though chartered travel seats grew at a CAGR of over 8% over the review period.056. Currently.6 42.0 95.632. chauffeur-driven car services continued to grow and its share increased by 1% since 1999.400.7 0.1 2004 328.7 80.7 1.0 40.0 2001 256.993.810.0 600.0 111.1 45.592. Budget flights began in India only in August 2003 with the commencement of operations of the low-cost airline Air Deccan. During 1999-2002. Indian Railways and trade press Table 58 % value Transportation Sales by Sector: % Value Breakdown 1999-2004 1999 Air Bus/coach Chauffeur-driven car Cruise Ferry Rail Transport by sector Source: 2000 36.300.071.0 9.9 0.6 100. value sales in ferries are also insignificant.3 Airline Capacity and Utilisation Over 97% of airline seats sold are from scheduled flights.230. Euromonitor Page 37 . Indian Railways and trade press 7.743. Its network covers 75 destinations . Table 57 Rs million 1999 Air Bus/coach Chauffeur-driven car Cruise Ferry Rail Transport by sector Source: Transportation Sales by Sector: Value 1999-2004 2000 258.

920 2004 34.0 69.8 2002 64.600 200 120 29.200 200 0 42.0 72.400 2002 42.300 200 0 39.0 61. This share was estimated at 73% in 2004. at a rate of about 6% per annum over the review period. grew slowest.4 Airline Sales by Seat Class During the review period.Travel and Tourism India However. million 1999 Scheduled Charter Budget TOTAL Source: 2000 39. Airports Authority of India (AAI) Table 60 seats sold.3 90. Airports Authority of India (AAI) Table 61 % seats sold Airline Utilisation by Type : % Breakdown 1999-2004 1999 Schedule Charter Budget TOTAL Source: 2000 66. This resulted in long delays in obtaining approvals. The number of seats sold in 2004 is estimated at 35 million seats.460 Euromonitor from Director General of Civil Aviation (DGCA). The total number of available seats by all carriers grew at a CAGR of 8% during the review period.0 66.5 69.6 90.500 2001 40.5 2004 67.280 180 0 24. Economy class grew at a CAGR of 7% over the review period in terms of number of seats sold.2 2001 61.100 Euromonitor from Director General of Civil Aviation (DGCA).000 140 0 26. million Airline Utilisation by Type 1999-2004 1999 Schedule Charter Budget TOTAL Source: 2000 26. Table 59 Airline Capacity by Type 1999-2004 available seats.9 66. However. First class.7 64. In contrast.3 90. Jet Airways’ fleet size rose from 11 aircraft in 1999 to 41 in 2003. The principal reason is the increasing scope for foreign collaborations in Indian business.7 80.600 300 900 51.800 34.200 200 0 40.150 180 0 27.3 90. Air Sahara’s capacity went up from 4 aircraft in 1999 to 12 in 2003. Euromonitor Page 38 .040 270 650 34.2 70.140 2001 24. In 2004.0 64.400 2004 50. registering an annual growth of over 8% in terms of number of seats sold.330 2003 29.960 24. business class performed the best.000 220 180 46. the two private carriers were able to expand their capacity swiftly.800 160 0 24.2 67. both Air India and Indian Airlines were constrained in implementing their capacity expansion plans because of government ownership.5 2003 64.900 200 0 35. which accounted for only 5% of seats sold in 2004.960 2002 27. Airports Authority of India (AAI) 7. total capacity was estimated at 52 million seats. economy class constitutes the largest proportion of seats sold. which resulted in growth in business travel.400 2003 46.7 Euromonitor from Director General of Civil Aviation (DGCA).

900 1.0 2004 51.200 24.7 100.600 1.7 100. However.700 1.130 5.4 5.6 Internet Transaction Trends Internet transactions constitute only a tiny share of the value of Indian transportation. million Airline Volume Sales by Seat Class 1999-2004 1999 Economy class Business class First class TOTAL Source: 2000 19. and the growth in business travel.5 100. Euromonitor estimates 7.960 2002 20. short haul flight sales were slightly higher than those for long haul flights during the review period.8 100.300 27. while all domestic flights were classified as short-haul 7.6 100.500 26.8 4.0 Euromonitor from Director General of Civil Aviation (DGCA).600 34. The share of long haul flight sales rose gradually during the review period.5 47.0 2001 51. liberalisation in foreign exchange controls. Table 64 % seats sold 1999 Short haul Long haul TOTAL Source: Note: Airline Volume Sales by Distance: % Breakdown 1999-2004 2000 52. Euromonitor estimates Table 63 % seat sold Airline Volume Sales by Seat Class: % Breakdown 1999-2004 1999 Economy class Business class First class TOTAL Source: 2000 72.7 21.0 100.0 2002 51.5 49.6 4.560 7.040 5. it was estimated that internet transactions constituted only 2% of the value of Indian transportation.9 100.1 48.3 22.4 100. Airports Authority of India (AAI) All international flights were classified as long-haul.6 48.5 Airline Sales by Distance Airline seat sales are almost equally divided between short haul and long haul flights.5 100.960 18.3 4. enabling Indian travellers to carry more foreign exchange.1 4.920 6.0 49.2 47.330 2003 21.060 5.800 1. Euromonitor Page 39 . This is largely because of increased cheap holiday options abroad.140 2001 18. the share of short haul flight sales was estimated at 51%.920 2004 25.460 Trade interviews. This is because of the low penetration of the internet in India and the reluctance of many Indian internet users to undertake e-commerce because of safety concerns.200 24.0 2003 73.8 21.8 100.0 2001 72.8 21.0 2002 73.0 2003 50.0 Trade interviews. In 2004.060 5.1 22.600 1.4 22.0 2004 73.9 100.0 52.400 29.8 100. In 2004.200 1.0 73.3 4.Travel and Tourism India Table 62 seats sold.

200.632.399.5 652.5 652. In 1999. the number of books bought through the Internet translates to a mere 1% of total tickets sold.902. TravelJini’s business mainly relates to outbound travel.8 11. Euromonitor 7.500 tickets were booked in the first month of launch. began providing such services only in 2002.0 702.0 822. However. most of whom are from middle. While about 3.54 6.4 1.0 700. this went up to about 5. By the end of 2004. Railways and internet auction sites Indian Railways began operating internet ticket booking facilities in August 2002. During 2003.887. Online agencies There are several Indian internet travel companies that provide a variety of services to travellers. though most of the bookings are through travel agents.900. MakeMyTrip mainly targets the large number of non-resident Indians living in the US and primarily offers inbound travel services.0 759. Indiatimes. this number is expected to further shoot up to 10.Travel and Tourism India However.and lower-income households.000 per day in April 2002. when the service was launched. Air Deccan is placing a great deal of emphasis on selling tickets over the internet. internet sales were almost negligible. During 2003. with railway tickets accounting for most of the balance. Two leading internet travel companies are MakeMyTrip and TravelJini.000 per day. Currently.0 2. The Hindu).6 909. including transportation arrangements and sales of air tickets.056. which began operations in August 2003. all carriers in India offer such facilities. Air India and Indian Airlines. Business World.1 1. For instance.88 0. This represented a 150% increase over 2002. air tickets worth Rs700 million were bought through auctions on Indiatimes. In its efforts to reduce costs to the minimum.350. the two major carriers. Direct suppliers: traditional airlines Traditional airlines in India were rather late in offering internet booking facilities.0 762.241. given the huge number of rail passengers. it sold air tickets valued at Rs560 million.7 Emerging Products Euromonitor Page 40 . A number of regular brick and mortar travel companies also offer such services through their websites.0 827.0 5. These proved to be quite popular among Indians. the only no-frills carrier is Air Deccan.570. The purchase of airline tickets constitutes over 90% of internet transactions relating to transportation.0 1.4 920. On the other hand. Table 65 Rs million 1999 Internet Others Total Source: Transportation Sales: Internet Transaction Value 1999-2004 2000 2001 2002 2003 2004 270. Direct suppliers: no-frills At present. The main player here is Times Internet which owns the auction website.040. TravelJini sold air tickets worth Rs360 million in 2003.931.300.7 16.043. the share of internet transactions rose rapidly over the review period. Another popular mode of internet sales of air tickets is through internet auction websites.0 Trade press (Economic Times.592.333.829.

Each state has a road transport corporation.0 5. Maharashtra Road Transport Corp (MSRTC) and Andhra Pradesh Road Transport Corp (APSRTC) are two of the largest corporations.0 58. Kingfisher Airlines is owned by the UB group. 27% were those travelling in its international flights.0 45. 7. While there was some talk of an “operational merger” between Air India and Indian Airlines in October 2003. The main exception is Air India.0 Indian Railways. A few of the traditional Indian carriers. Air India and Indian Airlines are the next largest players. which is primarily involved in the Indian liquor industry. During 2004. which offers both inter-city services as well as commuter services in major cities in their state. in terms of turnover. over the years. This service became very popular among Indians and the carrier rapidly increased its network.0 10.9 Key Players – Revenue Rankings The single largest player in transportation is Indian Railways with passenger revenue reaching Rs139 billion in 2003/2004.679. Most of the companies are loss making and heavily subsidised by their respective states. Because of the success of Air Deccan. However. several other companies also plan to offer low-cost airline services. Euromonitor estimates 7. among passengers carried by Indian Airlines. During 2003.240.Travel and Tourism India Low-cost airlines Low-cost no-frills airlines constitute an emerging service in Indian transportation. 7. Indian Airlines was incorporated as a domestic airline and Air India as an international carrier. The number of passengers carried by Air India is less than those of Euromonitor Page 41 . Air India. are also planning on entering low-cost airlines through separate subsidiaries. mainly to the Gulf. which expects to commence operations in January 2005.8 Key Players – Mergers and Acquisitions There were no noteworthy mergers and acquisitions in transportation during 2002-2004.970. DGCA.503. The two national carriers. Table 66 Rs million 2003/2004 Indian Railways Air India Indian Airlines Jet Airways Sahara Airlines Alliance Air Source: Key Players by Revenue 2003/2004 Year end March March March March March March 139. During 2003. The cheap air tickets that it offers also drew away a number of railway passengers who traditionally travel in higher-priced rail coaches. This service began only in August 2003 when the low-cost carrier Air Deccan began operations.846.10 Key Players – Passengers Carried The ranking of players in transportation in terms of passengers broadly mirrors that in revenues. Air India also carries a large number of passengers on the domestic legs of its international flights.400. One such player is Kingfisher Airlines. Passenger revenues were traditionally cross-subsidised by the freight revenues. there was growth in each other's specialised area. the revenues of Air Deccan are expected to rise to Rs6 billion. such as Air India. this has not materialised. trade press. the carrier’s revenue totalled Rs1 billion.0 32.

while air travel sales grew only marginally at 2% overall during 1999-04. However.0 1. it must be noted that Indian Railways also runs the suburban rail network. Passengers carried by Indian Railways were estimated at 5 billion in 2003/2004. growth is forecast to rise to 7% per annum during the forecast period. Hence. Moreover. Sales from travel in chauffeur-driven cars are also expected to grow at the same rate of 8% per annum during 2004-2009. more Indians are able to travel by air. In constant value terms. In fact.0 6. with rising disposable incomes from sustained economic growth.Travel and Tourism India Indian Airlines and Jet Airways. A major factor was government ownership. with the ongoing upgrading of highways and increasing comforts offered by buses. This is mainly because of capacity constraints as well as increased competition from other modes of transport. Air India. especially because of its convenience and flexibility. Jet Airways ranks higher than Indian Airlines. trade press. Sales from bus/coach travel are predicted to grow at a CAGR of 8% in constant value terms over the forecast period. DGCA.11 Key Airline Players – Market Share The shares of the two national carriers. which constrained them from responding quickly to competition. With growing competition and the emergence of budget airlines. a large proportion of passengers carried consist of such daily commuters. Sales from rail travel are forecast to grow at the slowest pace of 5% per annum during the forecast period. Leaving aside cruise travel which is nascent. Considering only domestic travel. Jet Airways and Air Sahara. sales from land travel are expected to continue to grow at the fastest pace during the next five years.12 Forecast Sales by Sector Air travel sales are expected to grow at a much faster pace during 2004-2009 compared with the review period. Euromonitor estimates 7. the share of Indian Airlines fell steeply from 39% in 1999 to 31% in 2003. in terms of passengers carried.120.471.578.234.130. Chennai and Kolkata.258.0 1. many passengers strongly prefer land transportation.776. Table 67 ‘000 passengers 2003/2004 Indian Railways Jet Airways Indian Airlines Air India Alliance Air Sahara Airlines Source: Key Players by Numbers of Passengers Carried 2003/2004 Year end March March March March March March 5. The higher ranking of Air India in terms of revenues is not surprising considering that it is essentially an international carrier. For instance. fell during 2001-04 by under one percentage point each. now. its capacity expansion plans were affected because of long delays in getting government approval. in the case of Indian Airlines.0 Indian Railways. Euromonitor Page 42 .2 3. air travel is becoming much more affordable for Indians. these carriers were able to quickly introduce innovative strategies to draw passengers. which is a major network for daily commuting in cities like Mumbai. so that its revenue per passenger is much higher than that of domestic carriers. 7.0 7. This is because. Air India and Indian Airlines. The gainers were the two private airlines. This is only slightly lower than the constant value growth of 10% registered during the review period. It is also important to make the distinction between domestic and international passenger travel while examining trends in shares. Being in private hands.

5 121.0 153. the sustained positive growth registered.187.653.808. Table 68 Rs million 2004 Air Bus/coach Chauffeur-driven car Cruise Ferry Rail Transport by sector Source: Euromonitor Forecast Transportation Sales by Sector: Value 2004-2009 2005 348.7 1.Travel and Tourism India When good news outweighs the bad At the time of reporting.4 112.7 3.688.211. 8.0 174.5 1.276. This is not at all surprising considering the very low wages of drivers. This is predicted to rise by about 14% in 2004 so that value would cross Rs103 billion.604.4 2008 427.0 483.0 146.5 2.370.883.0 2.0 8. cars are rented out along with drivers and the extent of car rentals for selfdriving is negligible.88 0.768.625.888. intense competition made prices competitive.0 167. Table 69 Car Rental Market: 1999-2004 Euromonitor Page 43 .9 663.286.639.130.0 1. This and other sources of information available at the time of writing strongly suggest that transportation value and transportation volume are unlikely to be negatively affected in 2005 or the other years during the forecast period.545.0 139. The second reason is that as unorganised car rental proliferated.512.402.55 6. Another reason for this strong preference is the poor state of many roads in India and chaotic traffic.0 1.930.362. so that almost all Indians and foreigners hiring cars in India prefer to hire chauffeur-driven cars because of convenience and comfort. The reason for growth in car rental is twofold.548. Car rental services is characterised by many small players and the lack of developed big players.0 103.6 1.8 130. so that those hiring cars would rather let chauffeurs navigate the traffic than do it themselves.400.0 1.2 611.8 5.025. CAGR over the review period stands at 13% in current value terms.5 521.230.0 160.112.4 2009 461.550.8 4.2 2.5 141.530.081.0 1.73 4.831.22 6.237.50 9.705.1 CAR RENTAL Market Size Doing it differently The nature of car rental in India is totally different from car rental in more industrialised countries. in India. especially through the advent of low-cost airlines.0 1.5 1. Good growth The value of car rental grew by nearly 13% in 2003 to reach an estimated value of more than Rs90 billion. This is because.4 2007 397.071. Even for the Indian operations of Hertz and Avis. First there was an increase in customers with the growth in tourism.7 1.892.2 563.056. the overwhelming bulk of revenues come from chauffeur-driven cars and car rental for self-driving is minor. in India.5 2.5 2006 371.302. was expected to far outstrip any decline as a result of lesser tourist travel to areas impacted by the Indian Ocean earthquake of December 2004. travel by rented “chauffeur-driven cars” is synonymous with “car rentals”.7 719.6 154.858.70 2.1 328. Hence.

5 449.071.166.0 9.8 66.000. Society of Indian Automobile Manufacturers data.555.378.1 63.4 8.0 Volume 5.0 5.538 53.506.507.5 495. especially domestic tourists. During 2003. Table 71 Number Fleet size (‘000) 1999 2000 2001 2002 2003 2004 Source: Structure of Car Rental Market 1999-2004 Operators 40.9 68.894.139 406.0 15.1 65.3 Sales by Sector and Location Business car rentals account for the bulk of sales.300. Average fleet size is only about 15 currently.4 534.0 68. Hence.5 79. the share of business was estimated at 71% which is likely to remain unchanged in 2004.6 8.071.4 2.102.125. During 2004. fleet size is predicted to grow by 9% to reach 621. Euromonitor Page 44 .2 Fleet Size and Number of Operators The total fleet size of Indian car rental for 2003 was estimated at 573. trade interviews. As a result.5 572.000 operators. there are over 62.450 57.0 12.0 12.8 71.3 86.4 Euromonitor based on Ministry of Road Transport.7 8. trade press Table 70 % growth Car Rental Market % Growth: 1999-2004 Current 1999 2000 2001 2002 2003 2004 Source: Euromonitor Constant 10.946 49. many of the tiny operators have informal or formal arrangements with travel agencies or tour operators to make it easier for them to get customers. The dominant share of business is not surprising since car rentals are a more expensive mode of transport compared with others such as buses and railways.857.5 85.652 44. This number grew at a CAGR of nearly 9% over the review period.8 91.494.0 10.8 9.9 13.6 11.808.254 62.Travel and Tourism India Rs million/'000 transactions Current 1999 2000 2001 2002 2003 2004 Source: Constant 57.0 73. do not make as much use of rented cars as business travellers do.823.391. trade press 8.2 4.5 Volume 63.0 103. many leisure tourists.0 Euromonitor based on Ministry of Road Transport data.0 80.6 71.7 57.161.000. However.5 621.632.4 78. Car rental is highly dispersed with thousands of small and individual operators.

trade press 8.128.4 80.6 56. Table 72 Rs million 1999 Business .923.2 20.379.0 26.1 5.408.0 2002 70. the percentage share of car rental for more than three days is increasing.0 60. On an average.152.0 2002 56.6 6.267.397.668.0 2003 71.8 23.0 23.082.5 19.286.2 22.700.300.Non-airport leisure Car rental services by sector Source: 2000 69.479.Non-airport business Insurance replacement Leisure .0 2004 73.0 60.0 25.933.0 6.0 60.021.8 73.851.0 5. Table 74 Car Rental Average Duration by Sector 1999/2004 Euromonitor Page 45 .8 48.0 9.1 23.0 69.9 8.0 Euromonitor estimates based on industry interviews.3 21.1 91.686.107.Airport leisure .419.820.937.0 2004 71.350.0 5.071.183.0 24.0 2001 51.0 31. business trips are shorter than leisure trips and therefore see average rental duration of three days.0 100.2 100.Non-airport business Insurance replacement Leisure .384.6 8.2 63.0 9.454.844.4 Rental Duration The per-day rental duration of large tour operators is 10 hours.4 10.085.Airport business .6 100. Insurance replacement is non-existent in India at present but might come into being once better and more competitive insurance practices are adopted.2 103. This is because not all airports have a price-competitive car rental facility due to the high rental charges imposed by the Airports Authority of India (AAI).9 9.5 61.9 7.654.4 29. trade press Table 73 % value Car Rental Sales by Sector and Location: % Value Breakdown 1999-2004 1999 Business .3 5.Non-airport leisure Car rental services by sector Source: Car Rental Sales by Sector and Location: Value 1999-2004 2000 45.296.Airport business .0 31.1 4.3 17.8 2003 64.9 16.0 25.5 29.0 30.255.5 34.5 61.052.7 30.9 3. The rental of cars for between four to seven days can be expected to become more popular as tourism increases in the short run and larger organised players emerge in the long run.1 Euromonitor estimates based on industry interviews.0 9.8 23.0 100.0 65.8 17.0 60.2 100.0 6. As tourism grows. two days less than leisure trips.0 14.Travel and Tourism India For both business and leisure.808.0 10.8 57.9 4.856.0 100.5 29.857.Airport leisure .104.0 2001 70.7 44.0 9.838.632.8 3.085. the share of non-airport rentals is much higher than airport rentals.507.9 39.0 39.4 5.9 24.345.0 6.1 6.906.

0 30.6 Trends Internet Transaction Trends Car rental internet transaction sales grew rapidly over the review period at an estimated CAGR of 94%. trade press 2004 57. Booking on reaching destination is a safe option for most tourists.0 4.0 1.0 6. it is expected that such sales will remain tiny. Bigger tour operators either run their own car rentals or enter into agreements with other car rental companies. Even in 2004.0 5. Smaller tour operators or travel agents only retail the services of other car rental companies. Almost all star-rated hotels provide this service.0 100. Table 76 % transactions 2004 Pre-booked . at Rs156 million.of which pre-booked over the Internet Included in holiday Booked at destination TOTAL Source: Note: Euromonitor from industry interviews Only incoming tourists were considered Time of Booking: % Breakdown 2004 20. 20% of all cars rented are pre-booked and these are popular mainly with corporate travellers. The rest of the cars are rented through package tours.0 50.0 37.0 0.0 2.5 Time of Booking Half of all car rentals are booked at the destination itself. However. which include car rentals in the holiday package.0 36.0 5.0 0.0 100. constituting merely 0.0 59. as the car rental can be organised by the hotel itself.7 2.0 8. Most hotels either provide their own service and/or have tie-ups with car rental companies.0 8.0 Table 75 Average Car Rental Duration: % Breakdown 1999/2004 % share by number of days 1999 0-3 4-7 7+ TOTAL Source: Euromonitor from industry interviews. An important reason for the small share is that the internet is mainly used by inbound leisure Euromonitor Page 46 .1% of the overall market.0 2.Travel and Tourism India Average number of rental days 1999 Business Leisure Insurance replacement AVERAGE Source: Euromonitor from industry interviews.0 100. One can also rent a car straight from the company. A car may also be rented at the airport itself though this can turn out to be more expensive. trade press 2004 3. this growth is from a tiny base of Rs6 million in 1999.

This also meant that its fleet grew at a faster pace.9 73. International Travel House also has a fleet of about 600 cars.0 73.0 Euromonitor from trade press 8. ITC. The company’s revenues in 2003/2004 totalled Rs250 million.Travel and Tourism India tourists whereas domestic travellers.7 13.0 103. Avis and International Travel House.7 Key Players – Mergers and Acquisitions There were no significant mergers or acquisitions in car rental during 2002-2004.7 57. Because of its relationship with Hertz. Another major player is Mercury Car Rentals which is a joint venture between the Oberoi group.3 91.9 Key Players – Fleet Size The small size of the key players in relation to overall sales is vividly demonstrated by the fact that the largest player.632. Sales from its car rental business amounted to Rs241 million in 2003/2004.5 91. 8. the leading Indian hotel company and Avis.857. Table 79 Key Players by Size of Fleet 2001-2004 Euromonitor Page 47 .7 103. The bulk of internet sales in car rental take place through the websites of the three leading companies – Hertz.8 91.0 240.0 80. Table 78 Rs million 2003/2004 Carzonrent International Travel House Source: Note: Key Players by Revenue 2003/2004 Year end March March 250.507.809.1 29.477. Euromonitor Revenues for International Travel House only include car rental sales 8.3 57.652. who are much less comfortable with the internet for ecommerce. International Travel House also provides a number of travel services other than car rentals.4 48.1 65. there are a huge number of unorganised players.6 80. This is partly due to the highly fragmented nature of car rental in India. Apart from a few significant national players.4 65.300.208. Table 77 Rs million 1999 Internet Others Total Source: Car Rental Sales: Internet Transaction Value 1999-2004 2000 2001 2002 2003 2004 5. Carzonrent was able to expand its business faster than International Travel House.808.9 Company reports.065. Hence. account for the bulk of car rental sales.3 155. Close behind is International Travel House. trade press. the travel division of the conglomerate.071. mergers and acquisitions as such are not very clear to begin with.8 Key Players – Revenue Rankings The leading car rental player is Carzonrent. the master franchisee of Hertz in India. Carzonrent (the master franchisee of Hertz) had only 627 cars in early-2004.618.

1 0.900 2.Carzonrent. However. Euromonitor Year end December Key Players by Average Daily Rate for Car Hire 2003 Price platform Premium Premium Premium 2. The average daily rate for car hire of the key players range from Rs1.2 0.12 Forecast Sales by Sector and Fleet Size Sales by sector Euromonitor Page 48 .2 0. This is not surprising since there is tremendous competition in economy car rentals from a huge number of tiny and small operators.Travel and Tourism India Number of cars ’000 2001 Carzonrent International Travel House Source: Trade press.1 0. Table 80 Rs 2003 Carzonrent International Travel House Mercury Car Rentals Source: Note: Company websites. this share rose over the review period.2 0.050. Table 81 % retail value rsp Company Carzonrent India Pvt Ltd International Travel House Ltd Mercury Car Rentals Others Total Source: Note: Key Players by Market Share 2001-2004 2001 0. It built up a relationship with many companies for utilising its cars.2 0.2 99. Carzonrent is the most dynamic company of the three in terms of increasing its share.000 1. Euromonitor 2002 0.0 0.4 0.together have a share of less than 1%.6 0.6 0. It also set up travel desks at a number of hotels and outlets at airports.2 0.1 0. It tied up with various hotels to offer holiday packages to customers who hire its cars. International Travel House and Mercury Car Rentals cater to premium rentals.2 0.0 2004 0.0 2003 0.0 2002 0.4 2004 0. The three top companies .10 Key Players – Average Daily Rate All three key players Carzonrent.2 99.0 Euromonitor based on company report. trade press Market share for International Travel House only reflects car rental sales 8.4 100.3 2003 0.050 8.6 100.2 99.6 100.2 99. International Travel House and Mercury Car Rentals .11 Key Players – Market Share The minor role played by the top companies in relation to huge unorganised sales is demonstrated by the shares of the leading players.5 100.900 to Rs2.3 8.

9 30. This is because of the expected expansion in share of organised players with better and well maintained cars.1 42. with the expected growth in tourism during the forecast period.Non-airport leisure Car rental services by sector Source: Euromonitor Forecast Car Rental Sales by Sector: Value 2004-2009 2005 78.8 141. Sales to leisure travellers are expected to grow much faster than to business travellers. Table 82 Rs million 2004 Business .021.821. leisure travel is expected to rise in importance. In spite of the seemingly catastrophic effects of the Indian Ocean earthquake of 26 December 2004.478.744.9 154.920.844.0 130.2 63.7 6.808. Their total number was about 28.7 904.0 73.0 9.4 668.3 130.883.743.4 121. are expected to spend more on their trips and utilise car rental services to a greater extent.535.5 80.762.6 2009 101.112.845.9 24.9 71.9 33.976.1 TRAVEL RETAIL Market Size Travel retail outlets comprise travel agents. there is no downside forecast to car rental in India as a result of this singular factor at the time of writing.0 Table 83 Forecast Car Rental Fleet Size 2004-2009 Number of cars ‘000 Fleet size 2004 2005 2006 2007 2008 2009 Source: Euromonitor % growth 8.465.976.2 103.3 15. in early-2005.3 86. This is because.5 7.085.869.6 9.3 7.9 46.7 30.4 121.8 10.6 27.6 141.791.8 38.024. especially domestic tourists.838. This means that the revenue generated per car will rise significantly.3 2008 94. This is mainly because car rental is already very small in India and is unlikely to be affected as the affected areas are similarly amongst the lesser geographical areas of importance as far as car rental services are concerned.680. Fleet Size The fleet size is forecast to grow at a CAGR of under 8% during the forecast period.7 2007 88.046.0 154.916.0 833.425.8 41.5 8.019.1 6. which is lower than the predicted growth of sales.270.716.5 7.9 9.9 7. which is a reversal of trends over the review period.1 772.0 718.264.0 8.5 7.614. Moreover.7 52.5 621.6 8.856.815.5 2006 83.653.633.000 in 2004.Travel and Tourism India It is predicted that sales of car rental services will rise at a CAGR of 8% during the forecast period in constant value terms. 9. Total Euromonitor Page 49 . leisure travellers.Airport leisure .081.1 14.3 75.3 11.451.6 12.Non-airport business Insurance replacement Leisure .107.1 37.873.Airport business .768.0 33.796.582. tour operators and exchange providers.8 67. with an expected growth of 2% over the previous year.700.1 112.

146.857.7 220.0 25. it grew at the rate of 14% per annum in current value and 10% per year in constant value terms. Table 84 Travel Retail Market: 1999-2004 Rs million/No of outlets Current 1999 2000 2001 2002 2003 2004 Source: Constant 112.880.2 Trends Outlets by Sector Travel agencies account for about 83% of all the travel retail outlets.1 22.100.556.660. there is considerable overlap in functions of a number of travel agencies and tour operators.7 4. like Thomas Cook.0 180.6 1. following the drop in tourist arrivals in India after the September 2001 terrorist attacks in the US affected global tourist flows.7 3. With the boom in tourism since 2003.5 Euromonitor based on trade press and industry interviews Table 85 % growth Travel Retail Sales % Growth: 2000-2004 Current 2000 2001 2002 2003 2004 Source: Euromonitor Constant 8.2 -0.8 127.1 127. which are both travel retailers and tour operators.0 26. tour operators.532.0 27. During the review period. However.8 154.9 19.0 112.239.9 117.907.6 180.0 157.504. The size of travel retail sales fell in 2001.615.950.300. The various outlets in this can be classified as: • • • • Large travel retail companies. In 2003.0 Volume 23.740.6 140. travel retail continued to grow impressively in 2003 and 2004. Kuoni and Cox & Kings.8 122.615. Inbound tour operators.0 28. Hence.770.0 9.3 24.8 -3. the value of travel retail grew sharply in 2002.1 2.4 9.9 13.140. Tourist arrivals in India continued to fall in 2002.4 Volume 5. However.Travel and Tourism India current value sales were estimated at about Rs220 billion in 2004.9 17. the Department of Tourism chalked out the guidelines for recognition of travel agents. Euromonitor Page 50 . dependent on flights only for their revenue.2 14. tourist transport operators and adventure tour operators. Mid-sized travel agencies. especially because of an escalation of tension between India and Pakistan. this shrinkage in inflows of foreign tourists was more than made up by a sharp rise in domestic tourism as well as outbound tourist traffic from India. Outbound tour operators.660.0 24. However. only a small proportion of travel retail outlets register with the Department of Tourism.

competition is limited. Dedicated currency exchange outlets only Table 87 Travel Retail Outlets by Sector: % Volume Breakdown 1999-2004 Euromonitor Page 51 . These are low-budget tours and hence state companies deal with the largest volumes. Adventure tour operators are those who engage in activities related to adventure tourism in India. There was a major increase in the number of outlets providing exchange services since 2002. including transportation arrangements and sales of air tickets.200 23. This is because. Travel agencies are dominated by mid-sized players. Their significant economies of scale make it very difficult for the smaller independent tour operators to compete with them. In addition.000 23. especially the bigger ones.950 2001 265 3. IATO and industry interviews Estimates include unorganised sector. There is a significant gap between the shares of travel agencies and tour operators because many of the travel agencies. since the internet accounts for only a small proportion of travel retail sales. However. A number of regular brick and mortar travel companies also offer such services through their websites.700 21. accommodation or other destination services. TAAI. Under the new policy. who also represent most unorganised travel retail services. In addition. Competition from the internet There are several Indian internet travel companies that provide a variety of services to travellers.740 Euromonitor estimates from trade press. such as water sports.000 24.450 23. especially airline companies.615 2002 306 3. Table 86 No of outlets 1999 Exchange services Tour operators Travel agents Travel retail services by sector Source: Note: Travel Retail Outlets by Sector: Units 1999-2004 2000 250 3. there is little doubt that. mountaineering and trekking and safaris of various kinds. State tour operators are popular for their daily tours.950 22. servicing both inbound as well as outbound tourists.Travel and Tourism India • • Domestic tour operators.770 2004 400 4. these licensed dealers and money changers were permitted to appoint agents/franchisees for undertaking restricted money changing activities. Moneychangers.300 240 3.450 28. such competition will become more serious. in January 2002. the Reserve Bank of India announced a major liberalisation in its policy relating to licensing of entities for providing such services.556 2003 350 4.500 20. in coming years. Tour operators account for only 16% of the total number of travel retail outlets. they may also arrange for transport.300 26. there is also competition from direct internet sales by companies.550 25. aero sports. They also organise package tours within the state. At present.800 21. double up as tour operators. which also include the state tourism corps and adventure tour operators.220 27.

accounting for 66% of the total sales of travel agencies.8 3.6 100.7 3.2 100. Now. foreign exchange provision.0 Euromonitor based on industry interviews and trade press Others includes railway ticketing.4 100.5 67. visa services and car rental services 9. Though cruises constitute a tiny share (an estimated 1% in 2004).6 100.2 14.0 Euromonitor estimates from trade press. Dedicated currency exchange outlets only 9. foreign exchange provision etc. However.4 Travel Agencies – Type of Holiday and Destinations Type of holiday Flight-only has a large share of sales because many Indians travel for meeting friends/relatives. business.0 14.7 100. TAAI. as a business strategy.1 83.0 2004 1.0 2001 1.9 3.8 84. visa services.8 4. This is expected to rise further to 15% in 2004.8 3. constituted 14% of sales in 2003.8 10. Euromonitor Page 52 .9 10.5 4.9 10.0 2001 13.0 69. The share of city breaks is small. In fact. Package tours.0 67.3 15.3 Travel Agencies – Services Even though flight-only sales have the largest share.9 84.0 3.0 67.7 10.2 4.2 100.0 2002 13. car rentals. many travel agencies consciously attempted to diversify into providing other travel services.8 10. The shares of accommodation and travel insurance also grew during the review period. which are quite popular in India.4 100.5 100.0 1. Other services offered by travel agencies include railway ticketing. this share fell over the review period. it is expected to grow from 2% in 1999 to 3% in 2004.7 82.4 15. It is expected that these other services will account for nearly 11% of sales in 2004.0 14. the carriers wish to reduce this further to 5%.0 4.8 10.3 4.0 2002 1. health or study.9 100. the share of flight only lost almost four percentage points in its share of the total sales since 1999. this decision is yet to be implemented. IATO and industry interviews Estimates include unorganised sector.8 84. because of strong resistance from the travel agencies.0 14.Travel and Tourism India % 1999 Exchange services Tour operators Travel agents Travel retail services by sector Source: Note: 2000 1.1 100. However.5 100.0 2003 1. However.7 84.0 2004 14.5 66.0 2003 14.8 3. This is because other types of holiday in are growing in popularity.0 11. they are increasing in popularity as a result of aggressive marketing by cruising companies. Table 88 % value 1999 Package tours Flight only Accommodation Travel insurance Others TOTAL Source: Note: Travel Agency Value Sales by Service: % Breakdown 1999-2004 2000 12.5 68. The main reason is that. a number of agencies are being forced to adopt this strategy because of the move by a number of international airlines to reduce the commissions that they give to travel agencies for sales of their air tickets. the commission was reduced from 9% to 7%.0 100. In 2002. The share of package holidays is expected to reach 10% in 2004 because the expanding Indian middle class with rising incomes began spending more on leisure travel.7 5.

9 69.5 0.7 0.1 19.0 2001 8. pilgrim travel and adventure travel.0 Euromonitor based on industry interviews and trade press Others includes railway ticketing.6 0. A number of north Indians visit Bangalore or Chennai in the south for a city break.0 0.0 19. Mountains.2 17.7 0.0 2004 10.4 70. for many south Indians a trip to Delhi constitutes an interesting holiday especially because of its historical monuments.0 1.2 100.3 68.8 0. it still commands 69% of share. though more popular in the past. health or study. There is therefore the Buddhist circuit.6 0.0 100. accounting for 13% of their value sales in 2003.0 6.8 2.2 70.0 2002 8.0 100.0 69.Travel and Tourism India Destinations Though the share of “others” is reducing. the south-India temple tour and the Golden Triangle of Agra.8 0. all of which grew in popularity during the review period.6 100. Table 89 % value 1999 Package holiday Flight only City break Cruise Fly-drive Others TOTAL Source: Note: Travel Agency Value Sales by Type of Holiday: % Breakdown 1999-2004 2000 7. foreign exchange provision. Culture was always a strong point in India and visits to historical places attract both the foreign and domestic tourist. Travel to destinations that have cultural tourist attractions represent the second highest share of value sales for travel agents. Beaches are becoming popular with the land-locked domestic tourist.5 72. This comprises travel for non-holiday purposes such as business.8 0.2 18.5 2.0 100. Delhi and Jaipur.3 0. meeting friends/relatives.5 2. which is expected to rise marginally in 2004. Bangalore is popular because of its salubrious climate and gardens while Chennai is well known for its beaches. Travel agencies developed packages that take customers to a similar set of sites. as movies and travel programs increase their level of awareness. are losing their novelty and are also reaching their saturation point in terms of capacity.7 0.2 17. visa services and car rental services Table 90 Travel Agency Value Sales by Destination: % Breakdown 1999-2004 Euromonitor Page 53 .0 19. Thus value of travel to beach destinations represents nearly 9% of the total value sales by travel agents in India in 2004.0 2003 10. Similarly. Popular city break destinations There are several cities in India which are popular city break destinations for Indians visiting them for the first time.5 100.5 1.0 2.9 0.

the share of hotel referrals reduced.4 100.0 2001 7.0 1.0 1. Table 92 Tour Operator Value Sales by Source of Sale: % Breakdown 1999-2004 Euromonitor Page 54 .0 73.7 10.9 100. This share is expected to remain unchanged in 2004.4 6.8 1.300 2003 23.5 13.0 2.0 1. as tourists are taking the initiative to pre-plan their holidays.0 72.5 Travel Agencies – Exchange Services As part of their diversification strategy.0 1.000 1. The proportion of travel agencies providing such services increased from 6% in 1999 to an estimated 8% in 2004.0 70. However.0 7.200.4 11.5 73. This also led to an increase in the number of travel agencies offering such services.550 2002 22. meeting friends/relatives.0 6.5 2. The internet is meanwhile an emerging source for sales of tour packages.Travel and Tourism India % value 1999 Beach Countryside Mountain Culture Others TOTAL Source: Note: 2000 7.2 6.0 100.300. are unable to put together their own tours and therefore offer tours run by either state tourism companies or big tour operators.0 2003 8. outbound and domestic tourism in India. who dominate.850.0 9.9 6.0 2004 8.0 6.0 6. About 20% of sales take place either through self-advertising through brochures at hotel lobbies or airports or directly by customers approaching the tour companies or state tour companies.700.0 69. wildlife and adventure destinations 9. pilgrim tours. Many mid-sized travel agents. study etc). health. In fact this trend is on the increase because of the fast rate at which the mid-size travel agents are growing as well as the increasing inbound.1 100.4 13.1 7.1 68.9 Euromonitor based on industry interviews and trade press Includes agencies with restricted money-changing facilities 9.550.8 8.7 100.0 1.400. Table 91 Outlets 1999 All travel agencies Travel agencies offering exchange services % of travel agencies offering exchange services Source: Note: Travel Agencies Offering Exchange Services 1999-2004 2000 21.450 20.000 2001 21. 70% of tour operators’ sales took place through travel agents.9 12.0 2002 8.3 7.5 7.0 Euromonitor based on industry interviews and trade press Others includes travel for non-holiday purposes (business. The Reserve Bank of India announced a major liberalisation in its policy relating to licensing of entities for providing foreign exchange services in January 2002.5 2.6 Tour Operators – Source of Sale In 2003.220 2004 23. increasing numbers of travel agencies began to offer foreign exchange services during the review period.0 6.9 100.9 7.6 3.0 1.

0 2004 70. tour operators are far less dependent on flight sales.0 100.0 22. accounting for 17% of sales in 2003. A number of north Indians visit Bangalore or Chennai in the south for a city break.0 2002 68. accounting for nearly a quarter of sales.0 20. This is likely to fall only marginally in 2004. as the share of countryside and mountain destinations reduced. Culture is a major attraction for foreign tourists.0 6.0 100. Many states like Kerala and Rajasthan promote their traditional festivals like the Rajasthan camel races. Bangalore is popular because of its salubrious climate and gardens while Chennai is well known for Euromonitor Page 55 .0 5. The majority of tour operators in India work in niches and only the large ones provide all types of tours.0 10.0 60. City breaks are relatively small with a predicted share of 9% in 2004.0 28. accounting for almost half of total value sales. In 2003. This share is expected to rise marginally in 2004.0 100.0 5. trade fairs etc 9.0 100. a certain tour operator may only provide the service of pilgrim tours and not adventure tours.0 30. Buddhism and Sikhism which are typically located far away from their home towns. For example. who earn nearly 70% of their total value sales from flight-only sales.0 2003 70. culture tours accounted for 18% of tour operators’ value sales. Jainism. Destinations The largest share remains with “others”.0 7. Pilgrim tours.0 100. with flights accounting for only one third of their total sales.Travel and Tourism India % value 1999 Travel agency Direct/brochure Internet Others TOTAL Source: Note: 2000 62.0 0.0 10.0 2001 66. In 2004.0 100. up from 16% in 1999. This saw tour operators’ business swelling from cultural tours. are also important. Popular city break destinations There are several cities in India that are popular city break destinations for Indians visiting them for the first time.0 26.0 5. Package holidays are next in importance. With the advent of adventure tour operators in India and the increasing demand for them. categorised under “others”. their value share increased by about three percentage points over the review period. the share of adventure/trekking holidays is expected to be nearly 15%. the annual Pushkar mela and the famous boat races of Kerala.0 19.0 2. This is due to the fact that the major share of “others” is pilgrim tours.0 Euromonitor based on industry interviews and trade press Others includes hotel referrals.0 1.7 Tour Operators – Type of Holiday and Destinations Type of holiday As compared to travel agencies. The huge numbers associated with pilgrim tourists are because of India’s large multi-religious population and the regular visits of many Indians to the holy shrines of various religions like Hinduism.0 0. These are characterised by low fares but a high volume of travellers. Most mountain destinations have now reached their saturation point in terms of attraction value and cater mainly to budget domestic tourists.0 8. The percentage value sale for beaches saw a growth of nearly 2% since 1999. which includes temple tours.

Travel and Tourism

India

its beaches. Similarly, for many south Indians a trip to Delhi constitutes an interesting holiday especially because of its historical monuments.
Table 93 % value 1999 Package holiday Flight only City break Cruise Fly-drive Adventure/trekking holiday Others TOTAL
Source: Note:

Tour Operator Value Sales by Type of Holiday: % Breakdown 1999-2004

2000 24.9 34.6 6.0 2.2 0.0 11.6 20.7 100.0

2001 24.4 34.0 8.0 2.5 0.1 12.9 18.1 100.0

2002 24.0 33.7 8.0 2.8 0.1 13.4 18.0 100.0

2003 23.7 33.2 9.0 3.0 0.1 14.0 17.0 100.0

2004 24.0 33.0 9.0 3.2 0.1 14.5 16.2 100.0

25.3 35.3 5.0 1.9 0.0 11.4 21.1 100.0

Euromonitor based on industry interviews and trade press Others includes pilgrim tours

Table 94 % value

Tour Operator Value Sales by Destination: % Breakdown 1999-2004

1999 Beach Countryside Mountain Culture Others TOTAL
Source: Notes:

2000 13.4 8.5 11.7 16.5 49.9 100.0

2001 13.8 8.2 11.5 16.7 49.8 100.0

2002 14.2 7.8 11.4 16.9 49.7 100.0

2003 14.7 7.5 10.8 17.5 49.5 100.0

2004 14.8 7.4 10.7 17.6 49.5 100.0

13.0 9.0 12.0 16.0 50.0 100.0

Euromonitor based on industry interviews and trade press Others includes pilgrim tours, business tours, cruises, adventure tours etc Data includes only inbound and domestic travel

9.8

Exchange Services – Sales by Outlet and Type

Sales by outlet During the review period, the Reserve Bank of India (RBI) liberalised its policy relating to licensing of firms for providing foreign exchange services. In January 2002, in a major liberalisation move, RBI permitted licensed dealers and money changers to appoint agents/franchisees for undertaking restricted money changing activities. Because of these policy changes, foreign exchange transactions through non-banking agencies increased rapidly. In 2003, about a third of the total value sales of all exchange services come from travel agencies and bureaux de changes. However, the share of banks (an estimated 38%) is still the highest. A large proportion of foreign exchange dealings in India take place through the black market, known as hawala. However, the share of the black market declined due to RBI’s liberalisation of foreign exchange controls in response to India’s growing foreign exchange reserves. For instance, in November 2002, the RBI doubled the annual foreign exchange limit that Indian travellers can use for personal travel from US$5,000 to US$10,000. In 2003, it is estimated that the share of the black market was 30%.

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Travel and Tourism

India

Sales by type According to RBI regulations, there is an annual limit of US$2,000 on the amount of foreign currency that Indians travelling abroad can carry for personal travel. The remainder of the overall limit of US$10,000 can be taken through traveller’s cheques or banker’s drafts, which are obviously not popular with travellers due to inconvenience and charges. However, in actual practice, Indian travellers use much less of their annual foreign exchange limit. Hence, the actual proportion of foreign currency is significantly higher at an estimated 52% in 2003.
Table 95 % value 2003 Travel agents Banks Bureaux de change Others TOTAL
Source: Note:

Exchange Service Value Sales by Outlet: % Breakdown 2003

18.0 38.0 14.0 30.0 100.0

Euromonitor based on industry interviews and trade press Others includes the illegal market for black money in India called ‘hawala’

Table 96

Exchange Services Value Sales by Currency vs Traveller’s Cheques: % Breakdown 2003

% value 2003 Foreign currency Traveller’s cheques TOTAL
Source: Notes: Euromonitor from trade sources and trade press Includes dealing in black money Outbound tourists only

52.0 48.0 100.0

9.9

Online Travel Agencies

Direct suppliers Direct suppliers of travel services that sell through the internet mainly include large and mediumsize hotels, airline companies and the Indian Railways. Direct sales increased over the review period. This had adverse implications for a number of travel agencies. For instance, one of the reasons for the reduced commissions being passed on to travel agencies by foreign airlines companies is their belief that more passengers will purchase tickets through the internet. Online agencies There are several Indian internet travel companies that provide a variety of services to travellers, offering transportation arrangements, sales of air tickets and hotel accommodation. A number of regular brick and mortar travel companies also offer such services through their websites. Two leading internet travel companies are MakeMyTrip and TravelJini. MakeMyTrip mainly targets the large number of non-resident Indians living in the US and primarily offers inbound travel services. On the other hand, TravelJini’s business mainly relates to outbound travel.
Table 97 Travel Retail Sales: Internet Transaction Value 1999-2004

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Travel and Tourism

India

Rs million 1999 Internet Others Total
Source:

2000

2001

2002

2003

2004

2,816.5 4,463.6 4,956.9 8,051.9 10,808.4 14,787.2 109,844.3 123,068.5 122,143.1 149,828.1 169,332.3 205,717.3 112,660.8 127,532.1 127,100.0 157,880.0 180,140.7 220,504.5
Euromonitor from trade press

9.10

Emerging Products

Adventure tourism India has enormous potential for adventure tourism because of its diverse terrain including mountains, lush forests, beaches, rivers and lakes. Hence, there is a lot of scope for adventure tourism activities like trekking, rock climbing, rafting, scuba diving and skiing. A number of states actively promote these activities. Not surprisingly, adventure tourism in India grew rapidly in recent years. During 2003, the value of adventure tourism was estimated at over Rs400 million. The demand for adventure tourism led to a growing number of tour operators specialising in arranging adventure tours. This trend even led to the establishment of the Adventure Tour Operators Association Of India and guidelines being framed by the Ministry of Tourism for recognising such operators.

9.11

Key Players – Mergers and Acquisitions

There were no noteworthy mergers and acquisitions during 2002 and 2003. In 2004, Kuoni Travel (India), the large travel conglomerate, acquired Resnet from Traveljini, an internet travel company. Resnet is an online booking engine and a comprehensive reservation solutions provider to the hospitality industry. The acquisition of Resnet is part of Kuoni India’s overall strategy to enter internet sales and provide a competitive edge.
Summary 4 List of Mergers and Acquisitions 2002-2004 Kuoni India India Travel retail Resnet booking engine India Travel retail 2004
Company press release, Euromonitor

Takeover company Country Sector Acquired company Country Sector Year
Source:

9.12

Key Travel Agencies – Revenue and Market Share

Revenue Ranking Most of the leading travel agencies in India derive revenues from various travel and tourism activities not restricted to travel agency services. For example, Kuoni, Cox & Kings and Travel Corp derive a significant and inseparable volume of their revenues from tour operator services. These and other services, which such players offer to the consumer, are often considered by travel agencies to be a critical part of the total service offering to the consumer.

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actively promoted its tours in recent years. trade press Travel Agents: Revenue Rankings 2003/2004 Year end March March March March March 7.1 3.3 85.1 3.800. trade press 9.9 4.273. The company tried to acquire Travel Corp (India) to enhance its position in travel but was not successful. Kuoni India is the leader. Thomas Cook and Raj Travels. Euromonitor Page 59 . it caters to vegetarian travellers through vegetarian tours. Kuoni India. Thomas Cook had a value share of only about 1%.0 Kuoni Travel India Ltd Cox & Kings Travel Corp (India) Ltd Thomas Cook (India) Ltd International Travel House Ltd Others Total Source: Euromonitor from company reports. The shares of Cox & Kings and Travel Corp (India) are estimated at 4-5% in 2004.0 2004 6.6 4.0 4.400.6 4.7 100.9 0. Acknowledging the need for language markets for hindi speakers.6 Table 99 % retail value rsp Company Travel Agencies: Market Share 2001-2004 2001 5.Travel and Tourism India Kuoni India is the top travel retail company with estimated revenues of Rs8 billion in 2003/2004. Kuoni India's Inbound division operates under the umbrella brand name SITA.2 4.0 0. Its share rose over the review period.3 84. Similarly.7 100.1 0. It was followed by Cox & Kings and Travel Corp (India) which had estimated revenues of Rs5 billion each in 2003/2004.13 Key Tour Operators – Revenue and Market Share Revenue ranking The top four outbound tour operators in India are travel agencies: Kuoni Travel India.3 100.4 86. SOTC pioneered Marathi and Hindi tours with SOTC Bhraman Mandal and SOTC Vishwa Darpan respectively.1 1. The size of unorganised travel retail is clearly visible as the top players account for 17% of the total business in 2004.0 5. Kuoni's outbound tour division.0 2003 5. A key strategy followed by Kuoni India to reach the leadership position was the acquisition of several players.0 1. It operates both packaged tours and customised holidays for individual travellers.0 2002 5. had a value share of nearly 7% in 2004. SOTC’s core competency is escorted tours and its flagship brand SOTC World Famous Tours caters to a cosmopolitan clientele.1 0. Cox & Kings. Market share The top player.0 1.2 380.3 100.800. Table 98 Rs million 2003/2004 Kuoni Travel (India) Ltd Cox & Kings Travel Corporation (India) Ltd Thomas Cook (India) Ltd International Travel House Ltd Source: Euromonitor from company reports.7 1.7 3.4 4. SOTC.2 0. with estimated revenues from tour operations of Rs4 billion during 2003/2004.3 83.

it is difficult to distinguish their tour operations from their travel agency services.0 62.0 2002 35. Table 102 Exchange Services: Revenue Rankings 2003/2004 Euromonitor Page 60 .0 100. such as Star cruises. Table 100 Rs million 2003/2004 Kuoni Travel (India) Ltd Source: Euromonitor from company website.7 77. It must be noted that almost all big travel retail companies offer foreign exchange services. Market share Apart from Kuoni Travel.110 Table 101 % retail value rsp Company Tour Operators: Market Share 2001-2004 2001 22.0 Kuoni Travel India Ltd Others Total Source: Euromonitor from company website. TravelMate.Travel and Tourism India The leisure travel division of Cox & Kings in India offers the Indian traveller a wide choice of holiday options both abroad and within India and operates three branded holiday/ tour products: Duniya Dekho and Flexihols in outbound tourism and Bharat Dekho in domestic tourism. They account for a significant proportion of local tours. Cruise companies. The main non-bank players are Thomas Cook and American Express. Kuoni Travel was estimated to account for 37% of all tour operators value sales. Market share Thomas Cook had a value share of 18% in 2003.0 2004 38. This is further expected to improve to 38% in 2004.0 100. which run tours. This is expected to fall marginally to 17% as the company concentrates on its other travel services.0 100.0 65. for the other major players. trade press Tour Operators: Revenue Rankings 2003/2004 Year end March 4. Besides these travel agency-tour operators.14 Key Exchange Services – Revenue and Market Share Revenue ranking The banks remain the most popular dealers in foreign exchange in India. In 2003.0 2003 37. Kuoni India has a subsidiary. also sell cruise tours in India. which focuses exclusively on this area. there are government-run tourism companies.3 100. trade press 9. With the relaxation in the Reserve Bank of India rules regarding licensing of money changers. Thomas Cook’ financial services division generated revenues of Rs319 million in 2003/2004.0 63. For instance. small money changers meanwhile burgeoned.

larger travel agents providing a range of services will thrive. especially because of economies of scale. while it will grow during the forecast period.Travel and Tourism India Rs million 2003/2004 Thomas Cook (India) Ltd Source: Notes: Year end March 319. There is little doubt that. sales of travel retail services are predicted to grow by 6% per annum in constant value terms.0 Thomas Cook (India) Ltd Others Total Source: Company annual report. With the growth of tourism in India.0 82.2 Company annual report. This process will be hastened by the ongoing trend of airline carriers reducing commissions to agents for selling tickets. this is not likely to be a severe constraint. Sources indicate that damage to physical infrastructure such as roads was not irreparable. In comparison. compared with annual growth of nearly 10% (in constant prices) over the review period. Many of them will merge with larger operators or wind up operations. The number of tour operators is predicted to grow at a CAGR of 4% during the forecast period given the expected growth in demand for their services. During the forecast period.0 2003 18.0 100. Indian Ocean earthquake impact In spite of the economic loss experienced by India as a whole stemming from the Indian Ocean earthquake in late December 2004. Some of the major reasons include better tourist infrastructure. travel agencies that are highly dependent on such commissions and that do not offer other services will be severely affected. Euromonitor Includes wholesale purchase and sale of foreign currencies and paid documents Data not available for Amerian Express Table 103 % retail value rsp Company Exchange Services: Market Share 2001-2004 2001 15. The only negative factor for travel retailers is the growing use of the internet for travel purchases.0 2002 16.0 85.0 100. Euromonitor 9.0 84. a low annual growth of merely 1% is predicted in the number of travel agents during the forecast period. its share in sales is likely to remain at a modest level. Outlets Currently. Euromonitor Page 61 .0 100.15 Sales Forecast Sales and Outlets Inbound and outbound tourism and domestic tourism within India are expected to grow robustly over the forecast period. compared with 3% growth over the review period. Hence. improved marketing of tourist attractions and a greater capacity of Indians to travel because of enhanced disposable income. in coming years. tiny and small travel agencies will find it hard to survive. there will be a process of consolidation. This would obviously imply more demand for travel retail services. However. it is not likely to adversely affect travel retail in the forecast period. This is because the use of the internet for such services is currently small and. Hence.0 100. there are a huge number of tiny travel agencies. the number of money changers is forecast to grow rapidly at 9% per year from 2004-2009 with further exchange control liberalisation by the RBI.0 2004 17. However.0 83.

450 28.412.4 1.137 29. Even though the value of tourist attractions grew consistently in the review period.844. 10.2 1.078 24.2 60.541.874 29.292 400 4. except for a dip in 2002.883 23.378. The government also paid little attention to other tourist attractions like museums or art galleries.1 46.773. With the continuing boom in inbound and domestic tourism.368. there is sufficient activity existing to help take up any slack created by the loss of travel retail personnel or outlets within the first quarter of 2005. There are many attractions such as zoos that fail to attract many tourists due to lack of development.203. there is still much untapped potential.300 10.7 6.1 1.673 23.973 2009 621 5. Table 104 Forecast Travel Retail Value Sales: 2004-2009 Rs million constant 2004 rsp Value 2004 2005 2006 2007 2008 2009 Source: Euromonitor % value growth 7.0 51.9 5. Table 106 Tourist Attractions Market: 1999-2004 Rs million/'000 people Current 1999 2000 2001 2002 2003 2004 Source: Constant 907.2 Table 105 No of outlets Forecast Travel Retail Outlets by Sector: Units 2004-2009 2004 Exchange services Tour operators Travel agents Travel retail services by sector Source: Euromonitor 2005 448 4.8 907.530.450 23.2 4.502.340.435.8 53.1 TOURIST ATTRACTIONS Market Size The value of tourist attractions grew by a hefty 19% in 2003 to reach a current value of Rs1.413 24.475.632 2008 580 5.258 30.3 282.9 1.068.332.681 billion.0 1.017 29.9 253.280.806 2006 493 4.250 2007 537 5.435 million.1 1.6 1.2 294.9 1.6 Euromonitor based on government publications and trade press Euromonitor Page 62 .0 1. sales are forecast to grow by 17% in 2004 with sales reaching Rs1.467.228.9 268.8 5.5 48.8 Volume 43.685 28.959.5 237.206.7 1.Travel and Tourism India Simultaneously.3 220.504.256 24.121.680.

Other attractions that attract a fair number of tourists are amusement parks. national parks/areas of natural beauty and theatres. The rise in the share of historic buildings and sites in sales during 2000 and 2001 is explained by the decision of the government to sharply raise the entry fee for foreigners. Circuses and magic shows are meanwhile a dying art in India and one hardly sees or hears of them anymore. especially in the northern part of India. There are a number of national parks/areas of natural beauty because of the country’s diverse landscape and ample natural beauty in the form of jungles.5 19. snow-capped peaks and pristine beaches.9 14. marine forests.1 -10. hills. The number of amusement parks is also rising rapidly and became popular with domestic tourists. Table 108 Tourist Attractions Sales by Sector: Value 1999-2004 Euromonitor Page 63 .2 Sales by Sector Apart from monuments.1 5.9 12.3 17. protests from those affected by this move led the government to reverse its policy.0 46. theme parks.8 -18.0 15. thus depriving it of one of the greatest global tourist draws. there are very few public aquariums. with this share predicted to rise marginally to 57% in 2004. Historic buildings/sites attract the most tourists and account for 56% of all sales from tourist attractions in 2003.1 6.8 -21.0 14.Travel and Tourism India Table 107 % growth Tourist Attractions Market % Growth: 1999-2004 Current 1999 2000 2001 2002 2003 2004 Source: Euromonitor Constant 41. there are not too many attractions like museums. Though most of the major cities have a zoo.1 10. as well as other places of interest. Zoos and aquariums account for little more than 4% of tourist attraction value in 2004. of which India has many. On the other hand. galleries. while casinos are banned by law in India. However. Such monuments include traditional favourites like the Taj Mahal. they are not of an international standard and not many tourists visit them.7 10.3 Volume 11.

5 1.0 2002 0.9 4.8 67.9 1.5 57. trade press Others includes some large temples.6 65.7 4.5 100.0 2.8 32.4 2002 6.4 64.5 0.4 100. fairs 10.9 17.6 1.3 24.5 0.7 5. Historic buildings/sites traditionally were the biggest draw for foreign and domestic tourists.1 4.5 15. Out of these. These numbers could potentially be much larger if planned development takes place similar to that of eco-tourism in Kerala.4 1.3 190.4 1. annual sports events.3 100.332.9 9.8 89.2 4.4 63.4 94.9 964.4 0.8 15.9 10.4 530.4 1.4 76.1 185.5 5.6 907.0 2004 0.8 58.4 7.0 5.0 Euromonitor based on Department of Tourism and Parliamentary Committee reports.0 20.9 6.4 100.8 6.3 109.1 110.9 100.7 10.7 100.3 81.9 7.0 947. cultural festivals.6 3.6 6.4 1.2 6.0 2001 5.8 1.0 1.6 5. Although other attractions also saw growing numbers over the review period. trade press Others includes some large temples.6 225.6 849.Travel and Tourism India Rs million 1999 Art galleries Casinos Circuses Historic buildings/sites Industrial tourism Museums National parks/areas of natural beauty Theatres Theme/amusement parks Zoos/aquariums Other tourist attractions Tourist attractions by type Source: Note: 2000 4. Euromonitor Page 64 .0 3.435.680. They account for about 60% of visitors to all tourist attractions in 2004.0 165.5 56.0 2003 6.5 56.616 historical monuments of national importance in the country.7 140.5 0.475.2 2004 7. 126 centrally protected monuments are the most popular among tourists. which proved successful.4 20.7 45.4 0.3 7.5 13. this is largely due to a greater number of domestic tourists.3 Visitors by Sector The Archaeological Survey of India (ASI) declared 3.6 15.7 13.2 13.4 27.4 143.8 6. This share fell marginally over the review period as other attractions also emerged.5 41.6 101.0 2003 0.8 4.2 1.8 37. annual sports events.4 1.0 56.9 Euromonitor based on Department of Tourism and Parliamentary Committee reports.5 2.2 2.8 681.5 5.2 15.4 3.203. fairs Table 109 % value Tourist Attractions Sales by Sector: % Value Breakdown 1999-2004 1999 Art galleries Casinos Circuses Historic buildings/sites Industrial tourism Museums National parks/areas of natural beauty Theatres Theme/amusement parks Zoos/aquariums Other tourist attractions Tourist attractions by type Source: Note: 2000 0. The total number of zoos established in India since 1800 are 355.2 53. cultural festivals.5 9.4 60.4 30.5 4.3 62.0 2001 0.0 6.9 809.6 61.5 205. New Delhi.4 0.9 4. India has around 84 museums out of which 19 are in the capital.4 81.5 123.9 259.0 0.5 58.

trade press Only visitors to tourist attractions which charge a fee for entry are included. cultural festivals.1 4.1 8.6 4.2 0.0 6.2 5.198. Others includes some large temples.1 3.8 5. 10.3 0.130.1 46.2 59.3 4.978.8 53.8 100.7 4.8 Euromonitor based on Department of Tourism.480.2 0.0 2004 1.2 2. Pushkar Mela and the boat races of Kerala.4 30.054.5 8.030.2 60.2 58.5 4. Table 111 % Tourist Attractions Visitors by Sector: % Breakdown 1999-2004 1999 Art galleries Casinos Circuses Historic buildings/sites Industrial tourism Museums National parks/areas of natural beauty Theatres Theme/amusement parks Zoos/aquariums Other tourist attractions Tourist attractions by type Source: Note: 2000 1.6 29.5 690.4 10.032.2 5.0 6.9 1.4 666.048.0 103.2 31.1 6.259.0 2003 1.8 100.6 787.3 0.0 2002 1.121.7 8.4 3.4 Internet Booking Trends The utilisation of the internet for making bookings for tourist attractions in India is negligible.0 1.0 Euromonitor based on Department of Tourism.6 10.7 3.781.4 9.1 439.340.844.997.0 26. Many states like Kerala and Rajasthan promote their traditional festivals like the Camel Races.0 1. Others includes some large temples.664.209.1 4.527.2 9.0 4.5 586.4 508. Table 110 '000 people 1999 Art galleries Casinos Circuses Historic buildings/sites Industrial tourism Museums National parks/areas of natural beauty Theatres Theme/amusement parks Zoos/aquariums Other tourist attractions Tourist attractions by type Source: Note: Tourist Attractions Visitors by Sector: 1999-2004 2000 2001 2002 2003 2004 527.6 9.7 4.1 1.255.1 600.8 3.0 6.2 60.9 5.5 1.4 513.111.3 9.453. fairs.547.1 1.7 3. cultural festivals.8 10.632.9 3.813.6 43.2 59.9 97.0 101.3 1.0 4.4 5.Travel and Tourism India What attracts many leisure tourists to India is the diversity and uniqueness of its culture.2 0.3 0.415.1 6.6 1.3 3.4 27.731.541.560.2 5.9 35.185.9 4.4 8.959.3 87.3 7.4 8.450.507.206.6 488.5 9.6 9.206. 10.9 100.4 2.0 2.1 584.9 4.0 2001 1.7 102.0 4.0 2. annual sports events.1 3.2 2. fairs.306.2 59.3 4.223. trade press Only visitors to tourist attractions which charge a fee for entry are included.511.1 616.5 48.5 Emerging Products Amusement parks Euromonitor Page 65 .0 51.065.491.7 104.887.2 4.0 100.2 60.1 6.4 4.284.5 8. annual sports events.3 8.858.3 9.6 2.0 100.516.2 100.

7 672.4 1. However.112. While Appu Ghar in Delhi and Essel World in Mumbai have been in existence for many years.5 967.769.3 812.0 954.4 1. a large number of new amusement parks emerged over the review period.0 580. according to official records. Sun Temple (Konarak) and Agra Fort were the other attractions with estimated visitors of over a million in 2003.2 822.549. It is estimated that there were about 2 million visitors to the Taj Mahal in 2003. This will encourage more visits to tourist attractions and greater sales. 10.2 678. many were also set up near other tourist towns.5 1. Some of the major reasons include better tourist infrastructure.2 13.0 2.8 691.1 783. with the boom in inbound and domestic tourism.522. Visitors Euromonitor Page 66 . Table 112 ‘000 visitors 2002 Taj Mahal. Aurangabad Golconda Fort. improved marketing of tourist attractions and greater capacity of Indians to travel because of enhanced disposable income.6 800. The Red Fort and Qutb Minar. Many of them are located in the outskirts of large cities.4 658.761. Ellora Caves.Travel and Tourism India Amusement parks are growing in popularity in India.487. sales of tourist attractions are forecast to grow by a CAGR of nearly 10% in constant value. Hyderabad Bibi-Ka-Maqbara Group of Monuments.3 565.363.351. The dominance of historical buildings and sites is predicted to gradually decline from 57% in 2004 to 52% in 2009.7 Key Players – Visits The majestic Taj Mahal continues to be the top tourist attraction site in India.0 553. Agra Red Fort. as other tourist attractions gain in popularity. 10.1 9.2 2.135.095.4 1. New Delhi Qutb Minar. 2003-2004 Euromonitor 10.2 11.774. this is almost entirely among domestic tourists.9 1.6 1.6 Key Players – Mergers and Acquisitions There were no mergers or acquisitions of note for tourist attractions in India or its operators from 2002-2004. However.4 2004 2.7 1. compared with about 9% during the review period. Foreign tourists are not attracted because most of them come from countries where amusement parks offer a much larger range of entertainment options.074. both in New Delhi. This is because visitors to such towns are likely to have more time to visit such parks. Konarak Agra Fort.3 902.8 683.491.8 Sales Forecast Sales and Visitors by Sector Inbound and domestic tourism within India is expected to grow robustly over the forecast period.0 2002 Department of Tourism.5 807. Mamallapuram Gol-Gumbaz TOTAL: Source: Major Tourist Attractions by Visitors 2002-2004 2003 2.494.8 570. Agra Ajanta Caves. New Delhi Sun Temple. During the forecast period.105.278. This is expected to rise substantially in 2004.3 1.8 1.

1 2.Travel and Tourism India As regards the number of visitors to tourist attractions.511.3 189. however.3 77.4 8.7 161.9 964.9 7. are operated by the government.9 35.868.9 129.0 50.3 39.7 73.2 93.0 165. Table 113 Rs million 2004 Art galleries Casinos Circuses Historic buildings/sites Industrial tourism Museums National parks/areas of natural beauty Theatres Theme/amusement parks Zoos/aquariums Other tourist attractions Tourist attractions by type Source: Note: Forecast Tourist Attractions Sales by Sector: Value 2004-2009 2005 9.5 89.000 still missing and feared dead in early February 2005.3 2006 10.0 7.7 1. This is because most of the tourist attractions.9 229.3 220.141.5 7.5 204. particularly historical monuments. it is predicted that they will grow by about 9% annually during the forecast period.389.6 2008 13. cultural festivals.5 2009 16.6 2. India was indeed hit hard by the Indian Ocean earthquake of 26 December 2004.9 259.5 8.4 1.339.6 373.5 45.4 105.8 67. is the expectation and to an extent realisation already that more local visitors will be present at affected areas due to curiosity as much as for religious purposes. as tourism infrastructure was quickly restored in many affected areas.0 334.3 109. Given the over 1 billion population of the country though.9 102. This affected the level of growth in sales.307.6 65.6 Euromonitor Others includes some large temples.5 1. sources were in agreement that visitor numbers would not be affected in 2005 and beyond.047.8 32.6 250. It is expected therefore that in the short term.1 134. Sales are expected to only marginally outpace visitor numbers.9 81.252.2 1. The worst affected areas are being restored gradually.0 411.2 115. compared with about 7% CAGR during the review period.2 2.8 8.680. Indian Ocean earthquake impact With over 10.8 1. annual sports events.9 450.1 1.000 confirmed deaths and nearly 6. To make entry affordable to the less affluent households.0 266.2 2007 12.2 251. fairs Table 114 Forecast Tourist Attractions Visitors by Sector: 2004-2009 Euromonitor Page 67 . Offsetting this change. in 2005.1 184.7 102.670.7 297. the government kept the price of entry tickets low and has not increased them in step with inflation.2 53. foreign visitors to affected areas may well decline marginally although they are expected to visit other parts of India instead.4 1.071.8 8. although religious places of interest affected during the earthquake and resultant tsunami have not experienced any decline in the visits of religious devotees.5 2.

175.0 1.541.376. 12.664.9 9.3 3.605.6 5.632.672.2 814.718. the continued disinvestments of the State in leading players is an added area through which mergers and acquisition targets are entering when once they were out of reach.3 875.240.075.7 3. In contrast.4 81.4 8.146.511.450.8 67.0 91.590.3 60.731.8 8. 12.Travel and Tourism India '000 people 2004 Art galleries Casinos Circuses Historic buildings/sites Industrial tourism Museums National parks/areas of natural beauty Theatres Theme/amusement parks Zoos/aquariums Other tourist attractions Tourist attractions by type Source: Note: 2005 2006 2007 2008 2009 787.423.544.505.6 6.728.432.0 97.3 87.216. Others includes some large temples.563.0 7.544.659.1 4.503.0 4.1 Key facts GROWTH COMPANY PROFILES Kuoni Travel (India) Kuoni Travel (India) Pvt Ltd was set up in 1997 as a fully-owned subsidiary of Kuoni Travel Holding (Switzerland).6 5.0 1.1 5.344. 11. Kuoni India was created by acquiring SOTC.5 43.9 7.148.7 5.317.5 39.210.611.0 101.256.5 6.938.0 88.3 8.088.1 49. fairs.138.066.2 74.864.3 666.2 7.2 5.275.1 KEY STRATEGIC ALLIANCES Trends There were no strategic alliances of note between companies across travel and tourism in India during 2002-2004.4 8.052.0 1.389.822.4 Euromonitor Only visitors to tourist attractions which charge a fee for entry are included. the industry continues to be relatively fragmented and outright acquisitions by larger players are more common. Kuoni India continued to emphasise acquisitions as well as growth in existing business.0 970. annual sports events. SITA Co name and status: Parent company: Financial year end: Travel and tourism sales (2004): Travel and tourism market involvement: Major travel and tourism brands: Source: Euromonitor from company information.3 6.0 1.519. a leading tour operator for outbound travellers.997.172.073. 11. tour operations and other travel retail services SOTC.0 99.0 93.6 6.5 1. trade press Euromonitor Page 68 . Summary 5 Kuoni Travel India: Key Facts Kuoni Travel (India) Pvt Ltd Kuoni Travel Holding March Rs8 billion (forecast) Travel agency.4 4.1 6.022.2 46.807.0 975.8 52.2 3.3 7.1 2. It emerged as the top travel retail company in India by the end of the review period.0 35.0 94.7 3. In addition.2 9. cultural festivals.6 1.644.3 6.928.3 6.

it then acquired SITA World Travel. Euromonitor Page 69 . Kuoni India was formed through the acquisition of SOTC. Nepal and Sri Lanka. This made Kuoni India’s largest travel retail company. E-Holidays provides Indian holidays globally via the internet. India’s leading outbound tour operator. Summary 6 1999 Kuoni India: Summary of Key Events 1999-2004 Kuoni’s outbound division. a leading provider of travel services for inbound travellers. trade press 2000 2001 2002 2003 2004 Source: Travel operations As indicated above. It welcomes between 50. SOTC. SITA MICE (meetings. SITA (Kuoni’s inbound division) is the speciality destination manager for tour operators sending their clients to India. It also caters to vegetarian tours. India’s top destination manager for visitors from the Middle East Sets up FIT Holidays to market and operate international and domestic holidays for free individual travellers Enters domestic tourism with SITA Holidays of India and also sets up Kuoni Academy of Travel for training in the field of Travel and Tourism and TravelMate. conferences and events) is the leader in conference management in the country. SOTC.000 guests into India every year.000 and 70. an online booking engine and reservations solutions provider to the hospitality industry. in 2000. India’s top destination manager for visitors from the Middle East and Resnet. Africa and South East Asia. The brand. a foreign exchange money changing subsidiary Acquires Resnet. It handles the largest volume of charter tourists into Goa each year and is now set to introduce new eco-tourism products.Travel and Tourism India Corporate development Kuoni India adopted an aggressive strategy of acquisitions to enlarge its operations in India during the review period. The acquisition of Resnet is part of Kuoni India’s overall strategy to enter internet sales and provide a competitive edge. gets the outstanding performance award for South Asia from World Travel Mart (London) Becomes India’s largest travel retail company with the acquisition of SITA World Travel Takes over Tour Club. SITA’s business activity is categorised under five key business units: • • • • SITA Incoming Services sells India Holidays in the US and Europe. SOTC also entered FIT (Free Individual Traveller) retail with the introduction of Christopher Columbus Holidays providing customised and fully flexible holidays. was retained and was vigorously marketed as India’s leading package tour brand. Subsequent acquisitions include Tour Club. it pioneered tours for Marathi and Hindi speaking Indians. SOTC’s core competency is escorted tours. Tour Club focuses on individual travel and special tailor-made itineraries and is a leader in the Middle East. Acknowledging the needs of Indians speaking different languages. After beginning its operations through the takeover of SOTC. incentives. an online booking engine and reservations solutions provider to the hospitality industry Euromonitor from company information.

These include VFS (visa felicitation services) to foreign consulates in India and TravelMate. Table 115 Rs million 1999 Net sales % growth Source: Note: Kuoni India: Financial Summary 1999-2004 2000 4.Travel and Tourism India • Kuoni India Trails is a specialist receptive agency for Kuoni businesses worldwide and leader in the Far East. this increased four-fold to about Rs4 billion with the acquisition of SITA. sales were about Rs6 billion. Kuoni India provides other travel-related services. Summary 7 Jet Airways: Key Facts Jet Airways (India) Pvt Ltd March Rs33 billion (forecast) Airlines Jet Airways Co name and status: Financial year end: Travel and tourism sales (2004): Travel and tourism market involvement: Major travel and tourism brands: Source: Trade press. This is expected to rise by at least 30% in 2004. In addition. an Indian entrepreneur with extensive experience in the Indian travel and airlines industry. In 2004.0 2004 7. under which private companies could enter the domestic airline industry. It also operates a business travel division in partnership with Business Travel International (BTI). Kuoni India entered domestic tourism with SITA Holidays of India.000 4. since 1974.000 20. It was set up by Naresh Goyal. Naresh Goyal operated Jetair Pvt Ltd. Jet Airways was started in response to the Open Skies Policy adopted by the government of India. which provides foreign exchange services to Kuoni customers. Euromonitor Euromonitor Page 70 . A major factor was inorganic growth through acquisitions. Financial summary Kuoni India’s sales galloped over the years. While sales were just about Rs1.000 267.2 2002 5. it also started international services (to Colombo and Kathmandu) in response to a change in government policies whereby private airlines can operate such services to a few destinations in South Asia.2 Key facts Jet Airways Jet Airways (India) Pvt Ltd began operations in 1993.0 1.6 2001 4. Japan and China. which was hitherto restricted to the public sector.9 2003 6. Kuoni India is also the first Indian principal agent of Western Union Money Transfer Services (USA) that provides money transfer services.768 19. In 2003. a global travel management company. In 2003.088 Euromonitor from company information.800 30. Earlier. Kuoni continued to expand through takeovers of smaller companies as well as by increasing its existing business through innovative and customer oriented strategies. trade press Year end March. Jet Airways operates domestic airline services covering over 40 destinations in India.1 billion in 1999. data for 2004 is a forecast 12. which provided sales and marketing representation to foreign airlines in India.

Because of the constraints of being a government-owned company. including cost cutting and productivity enhancement measures. The number of daily flights increased from 24 in 1993-94 to over 250 in July 2004. sales grew by around 16% per year during 1999-2004. the airlines incurred losses. This is not surprising considering the severe competition between domestic airlines. was less able to provide a highquality and punctual service. Since a high proportion of Indian domestic air traffic comprises of business travellers. with flights to Colombo and Kathmandu.Travel and Tourism India Corporate development Jet Airways rapidly expanded its operations over the years. dethroning Indian Airlines. Jet Airways had an estimated domestic value share of about 46%. Financial summary As a result of the rapid growth in operations of Jet Airways. Destinations locally were extended to destinations in neighbouring Sri Lanka and Nepal most recently in 2004. in recent years. debt servicing costs were high. However. India's first in-flight mail order shopping programme. which resulted in sharp cuts in air fares. to restore profitability after the large losses in 2002-2003. In fact. because of the acquisition of a large number of aircraft in recent years. profitability was low. Its aircraft number rose from 4 in 1993-94 to 41 in February 2003. The destinations covered by the airline expanded from 12 in 1993-94 to 44 in July 2004. Summary 8 1999 2000 2001 2002 2003 2004 Source: Trade press. Euromonitor Jet Airways: Summary of Key Events 1999-2004 Introduces ATR 72-500 for flights on short distance feeder routes Co-branded credit card launched in association with Citibank Jetmail. Indian Airlines. with reduced fares on select routes Introduces cost-cutting measures in order to restore profitability Jet Airways starts international operations with flights to Colombo and Kathmandu Airline operations Jet Airways rapidly scaled up its operations in domestic airlines during the review period. As a result. it emerged as the largest domestic airline in India. making it one of the youngest fleets in the world. its chief competitor. Its objective right from the beginning was to emerge as the "Businessman's Preferred Airline" through high-quality and reliable air travel. Jet Airways focussed on this. The emphasis placed by Jet Airways on technology and on time performance played an important role in the success of the airline. launched Launches new promotional scheme. The management took a number of steps. and sluggish passenger traffic resulting in overcapacity. The airline operates modern aircraft and maintains a young aircraft fleet with an average age of 4 years as on July 2004. “Everyone can fly”. Table 116 Jet Airways: Financial Summary 1999-2004 Euromonitor Page 71 . Moreover. During 2003-2004.

969. In 2001. the ITC-Welcomgroup chain expanded at a more rapid pace compared with most other hotel chains in India. Summary 9 ITC Ltd: Key Facts ITC Ltd March Rs2. packaged foods and confectionery.019 million Hotels ITC prefixed hotels.2 n/a Directorate General of Civil Aviation. With the travel and tourism industry in India poised for rapid growth. ITC announced that it was merging ITC Hotels with itself.3 13.764.trade press.720. WelcomHotel. In August 2004.331.0 24.5 22. ITC entered the hotels business in 1975 and rapidly expanded its network of hotels. it inaugurated the 386-room ITC Hotel Grand Maratha in Mumbai. is underway and is expected to be ready this year. The amalgamation would facilitate the better alignment of investment and incomes. even these were operated by ITC Hotels.8 -134.444.5 13.822. Currently. besides promoting fiscal efficiencies and rationalization of operating costs.503. A primary objective was to position ITC hotels as the preferred destination for upmarket business travellers in six major Indian cities. ITC Hotels.1 1. WelcomHeritage. greeting cards and other FMCG products.5 n/a 157. A key reason for this was the decision taken by the company in 1998 to invest a huge amount of Rs15 billion over a period of five years to achieve a national rollout. paperboards and specialty papers. In terms of hotel accommodation. in which it had a 72% equity stake. Euromonitor Page 72 . ITC opened super-deluxe hotels.8 25.5 101.0 19.0 39. the bulk of ITC’s hotel business was undertaken by its subsidiary. Though ITC owned a few premium hotel properties itself. In December 2002.3 Key facts ITC ITC Ltd operates the ITC-Welcomgroup chain of hotels. Until 2004. Fortune hotels Co name and status: Financial year end: Travel and tourism sales (2004): Travel and tourism market involvement: Major travel and tourism brands: Source: Note: Euromonitor from company data Sales relate to ITC Hotels which was merged with ITC in 2004 Corporate development ITC is one of India’s largest private companies with a diversified presence in cigarettes.7 124. ITC felt that the merger would provide investors with clear visibility on the total value creation in the hotels business. Euromonitor Year end March 12.8 28.004. These emerged as India's fastest growing chain of premium hotels during the review period.6 1.3 -2. which became landmarks in their respective cities. the ITC Grand Central at Mumbai.Travel and Tourism India Rs million 1999 Net sales % growth Net profit % growth Source: Note: 2000 2001 2002 2003 2004 15. packaging.1 32. ITC has over 60 hotels located in 50 cities in India. ITC felt that the timing of the merger was opportune. Since a large proportion of the capital employed in the hotels business was on ITC's balance sheet.7 -207. branded apparel. hotels. agri-business.1 26. During the last few years. The construction of another business hotel.7 25. it unveiled the 240-room ITC Hotel Sonar Bangla Sheraton and Towers in Kolkata.

6 6 118. Delhi Branding strategy adopted for positioning hotels in different categories ITC Hotel Grand Maratha in Mumbai opened ITC Hotel Sonar Bangla Sheraton and Towers inaugurated in Kolkata A new hotel. as in the case of other leading hotel chains in India.121 -14. ITC Hotels. Thus. In fact.301 7.9 -31 -124. Euromonitor Year end March 12.8 1.577 29.8 2002 1. WelcomHotel brand are five star hotels.2 127 5. ITC-Welcomgroup also implemented the concept of branding hospitality services including cuisine.4 Key facts Air Deccan Euromonitor Page 73 . ITC Hotels was under considerable financial pressure because of the decline in the number of business and leisure travellers to India.210 120 Company reports. sprawling residences preserved over generations. WelcomHeritage is the brand of palaces. This meant creating a “Hotel within a Hotel” by segmenting and branding the hotel services. sales grew by a hefty 30% while net profit shot up to Rs202 million.217 8. trade press Hotel operations ITC operates a branding structure. Sheraton Towers and the Executive Club to cater to the needs of the global business traveller. Table 117 Rs million 1999 Net sales % growth Net profit % growth Source: Note: ITC Hotels: Financial Summary 1999-2004 2000 1. catering to the full range of hotel categories: • • • • ITC prefixed hotels constitute super-deluxe hotels. with itself Euromonitor from ITC. sales of ITC Hotels grew at an annual rate of 6%.317 1. which is significantly higher than the growth rates registered by the other two older premium hotel chains the Taj and Oberoi groups. Financial summary During 1999-2004. there was a strong revival. which are old-style. Fortune Hotels denotes four-star budget hotels. during 2003-2004.6 2003 1.3 2004 1.436. forts and havelis. During 2001-2002. However. begins construction at Mumbai ITC announces merger of its subsidiary. it offers exclusive ITC One.6 202 3. ITC Grand Central. or 34 times higher than net profit in the previous year. since 2003.Travel and Tourism India Summary 10 1999 2000 2001 2002 2003 2004 Source: ITC Hotels: Summary of Key Events 1999-2004 38% stake taken in Ansal hotels.5 120 – 2001 1.

It was set up by Deccan Aviation Private Ltd. As a low-cost carrier. India's largest private heli-charter company. Initially. no events are mentioned for 1999-2002 Source: Note: Airline operations Air Deccan started with a fleet of small ATR-42 aircraft. The airline also leveraged the power of the internet to lower costs and simplify the booking process. it created a dramatic change in the Indian airline industry because of its low pricing. This created an Euromonitor Page 74 . it was able to offer low fares and proved to be popular among passengers. Air Deccan was able to create a niche for itself. Hubli. Only economy class is available and no upper class seats. with no complimentary catering.520 million Airlines Air Deccan Co name and status: Parent company: Financial year end: Travel and tourism sales (2004): Travel and tourism market involvement: Major travel and tourism brands: Source: Company reports. its Managing Director. trade press. All this helped to cut down ticketing expenses and reduced commissions to travel agents. who was earlier in the Indian Army. which was formed in 1995. It also adopted a unique dynamic fare system where fares were increased as the date of flight departure came closer. the operations of Air Deccan were restricted to South India. There is also a lower requirement for flight attendants and air hostesses. Rajamundry and Vijaywada. It acquired Airbus aircraft for this purpose. It operated short distance flights connecting smaller cities in south India. Euromonitor Corporate Development Air Deccan began operations in 2003. which began operations in 2003. with Bangalore. Summary 11 Air Deccan: Key Facts Air Deccan Deccan Aviation Pvt Ltd March Rs5. known as “trunk” routes in India.Travel and Tourism India Air Deccan is India’s first low-cost airline. Summary 12 2003 2004 Air Deccan: Summary of Key Events 2003-2004 Begins operations as a low-cost airline connecting smaller cities in south India Expands to a national low-cost carrier with flights connecting metro cities like Bangalore. Mangalore. Though Air Deccan began operations only in August 2003. Madurai. It is based in Bangalore. Chennai and Hyderabad. Besides cutting costs this also means that galley space can be reduced and more seats can be accommodated on each plane. Air Deccan adopted several strategies to keep fares much lower than competitors. in 2004 it became a carrier operating nationally and is currently scouting for funds from foreign partners to finance its ambitious growth plans. Since other national carriers did not have flights on many of these routes. Call centres are also being used as a major ticketing channel. Most of its flights are also across short distances. Delhi and Mumbai. Euromonitor Since Air Deccan began operations in 2003. Air Deccan became a national carrier in August 2004 by operating flights connecting cities like Bangalore. It placed an emphasis on acquiring small aircraft and utilising them better than other airline companies. Coimbatore. Mumbai and Delhi Trade press. Snacks and juice are only provided for purchase. The starting fare was as low as Rs500 excluding taxes. However. The driving force of the airline is Captain G R Gopinath. It offers substantial fare concessions to passengers who make bookings through the internet. such as Belgaum.

sales are expected to be around Rs6 billion representing a 380% rise compared with the previous year. it generated sales of Rs1 billion. With the rapid expansion in its network. media and entertainment.5 Key facts Air Sahara Air Sahara commenced operations in December 1993 following the Indian government's decision to open the skies to the private sector. Table 118 Rs million 1999 Net sales % growth Source: Note: Trade press. However. No profit figures were available at the time of writing. It is part of Sahara India Pariwar.Travel and Tourism India enormous stir in the airline industry. housing and infrastructure.853 million Airlines Air Sahara Co name and status: Parent company: Financial year end: Travel and tourism sales (2004): Travel and tourism market involvement: Major travel and tourism brands: Source: Trade press. Most of them are now thinking in terms of starting low-cost flights. For this reason. which is a diversified conglomerate with interests in public deposit mobilisation. this is expected to rise sharply this year. Air Sahara rapidly expanded its value share in domestic air travel though to a much lower extent than Jet Airways. Financial summary Since Air Deccan began operations only in August 2003.150 - 2004 5. forcing reluctant competitors to follow suit to maintain their competitiveness. The share of Air Sahara in the domestic airlines industry was estimated at 13% in 2003.520 380 - 12. Euromonitor Year end March Air Deccan: Financial Summary 1999-2004 2000 - 2001 - 2002 - 2003 1. Summary 13 Air Sahara: Key Facts Air Sahara Sahara India Pariwar March Rs10. Euromonitor Page 75 . Since it is part of a huge cash-rich group. it often spearheaded fare cuts. it is yet to complete a full financial accounting year. as Air Deccan is privately held and is not obliged to divulge such details. Air Deccan will probably continue to have a first mover advantage. During August – March 2003. other Indian airlines are now feeling threatened by its growth. the leader. Air Sahara has access to considerable financial resources and was able to implement strategies to enhance share without excessive concerns about the impact on profitability. tourism. Since Air Deccan has ambitious network expansion plans. Euromonitor Corporate development Since commencing operations in 1993. consumer products and information technology. During 2004-05.

with deep pockets.877. Sahara India Pariwar.3 12. In November 2003.8 25. the impact on overall Indian tourism was negligible. For instance. under which free gifts are given to lucky passengers Starts an online auctioning of air tickets in alliance with Indiatimes.000 lives were lost and another 5.com Inaugurates its first international flight to Colombo Announces a 30% cut in Apex fares to metro cities Airline operations Air Sahara’s fleet includes a number of Boeing aircraft with an average age of less than 5 years. when sales almost doubled. Air Sahara connects 22 destinations with 119 flights and offers 11. Since 1999. It was able to sustain these losses since it is part of a large business group. 2004.5 n/a -76. It inducted 50-seat Canadair Regional Jets (CRJ 200) in 2004 to take the total fleet strength to 19 aircraft. Table 119 Rs million 1999 Net sales % growth Net profit % growth Source: Note: Air Sahara: Financial Summary 1999-2004 2000 3. Launches the Fly n Smile program. However. sales growth was at the expense of profitability. which is an onboard auctioning programme where passengers have a chance to win gifts at low prices.0 2002 4.6 14. its in-flight entertainment became very popular with passengers.972. Air Sahara was the fastest growing airline. while over 10.1 -6. However.4 616. the airline incurred losses in almost all years. 13.5 9.7 2003 2004 2. Air Sahara appears to be playing for the long-term.1 -1. Summary 14 1999 2000 2001 2002 2003 2004 Source: Trade press. Euromonitor Year end March 13.600 missing and feared dead by early-February 2005 and there was considerable physical damage.8 -378.Travel and Tourism India Air Sahara was very innovative in its strategies to woo customers.2 357. Financial Summary Since 1999.598.trade press.0 96.9 17.800 seats per day.4 n/a Directorate General of Civil Aviation.1 -48. This includes Bid ‘n’ Win.194.2 -349.599.1 FUTURE OUTLOOK Indian Ocean Earthquake India was one of the Asian countries affected by the Tsunami caused by the Earthquake in the Indian Ocean near Indonesia on December 26. Euromonitor Page 76 .9 2001 5.000.0 -377. it inaugurated its first international flight to Colombo to take advantage of the government’s policy to permit private airlines to operate services to select south Asian countries. Growth was especially rapid in financial year 2003. Hence. among the full-service Indian carriers.391. Euromonitor Air Sahara: Summary of Key Events 1999-2004 Sets up a number of executive lounges in metro cities Introduces online reservations facility.7 53.

there is a lot of scope for adventure tourism activities like trekking. a sea resort with ancient temples. However. While adventure tourism in India grew in recent years. TTDC Resort and the MGM Beach Resort. This is evidenced by the fact that only about 0. This offers considerable investment opportunities for foreign companies. In fact. Hardest hit areas Only a few localised areas were severely affected by the Tsunami.2 Market Opportunities Taking off with airlines Given the relatively small size of domestic air travel among Indians. The western coast was totally unaffected by the tsunami. rivers and lakes. Hence. Though the tidal waves also hit a few areas in other states like Andhra Pradesh and Kerala. There is enormous scope for providing facilities to expand this. by January 2005 most of these resorts were functioning normally. except for a minor impact in the southern tip in Kerala as indicated earlier. The government announced in its budget statement of July 2004 that the limit on foreign direct investment will be increased from 40% to 49%. Home comforts Euromonitor Page 77 . proceeded normally even when the Tsunami waves were pounding the coastal areas in a few parts. 13. Hence. rock climbing. the impact was minor. In Kerala. the overall impact of the Indian Ocean Earthquake on Indian tourism was negligible. damage in Tamil Nadu was almost entirely confined to coastal villages without any tourist significance. scuba diving and skiing amongst others. the relief efforts which are in full swing are fast restoring normalcy. In any case.1% of foreign tourists and 0. It is also important to note that it is India’s western coast that is popular among tourists interested in beach tourism. for which Kerala is well known. In particular. only a few small areas were affected and not a single beach resort suffered any damage. rafting. In Tamil Nadu. a few resorts in Mahabalipuram. the backwater cruises. Profiting from the adventurous spirit India has enormous potential for adventure tourism because of its diverse terrain including mountains. the damage was not extensive and. lush forests. although it would continue with the policy of not allowing foreign airline companies to invest in local air. A number of states are actively promoting these activities. These included a few coastal areas in the state of Tamil Nadu and the Andaman and Nicobar Islands. the size of this is far below its potential. Impact of lower tourism flows in the Andaman and Nicobar Islands on India as a country While the Andaman and Nicobar Islands suffered extensive damage. for instance setting up campsites and offering adventure tour packages on a wider scale. suffered some damage. air travel grew rapidly in 2004. there is enormous potential for growth in the domestic airlines industry. particularly in fledgling low-cost carriers. as low-cost air services expand their reach and air fares become increasingly affordable. these islands account for an extremely tiny share of tourists.03% of domestic tourists visit these islands. GRT’s Temple Bay. These included resorts like the Taj Fishermen’s Cove.Travel and Tourism India There are several factors that explain the minor impact of the Tsunami on the Indian tourism. Apart from these resorts in Mahabalipuram. beaches.

This offers a number of business opportunities for Indian and foreign hotel companies. India Tourism Development Corp Ltd (ITDC). the state governments will actively look for private sector partners to improve the operations of these accommodation units. Hence. Environmentally-friendly ventures The National Tourism Policy 2002 places considerable emphasis on the promotion of eco-tourism. However. it is also expected that there will be Euromonitor Page 78 . there are still a few ITDC hotels that the government plans to privatise. This represents a substantial increase compared with the annual growth of 7% registered during the review period.Travel and Tourism India Since around 2000. Moreover. the range of entertainment options offered by such amusement parks is much smaller compared with parks in industrialised countries. The main reason for the predicted rise in growth of incoming tourism receipts is the forecast rise in tourist arrivals.3 Receipts Tourism Receipts and Expenditure Incoming tourism receipts are forecast to grow at a CAGR of 10% in constant 2004 prices during the forecast period. such long-stay visitors are growing in numbers. Keeping Indians entertained Amusement parks such as Appu Ghar in Delhi are growing in popularity in India. This provided the impetus for the emergence of service apartments. The government also set up a National Committee on Eco-Tourism and Mountains to work out details for managing the fragile eco-system and to consider projects and programmes for the development of eco-tourism in India. there is considerable potential for the setting up of more service apartments and other service-oriented businesses catering to the needs of these visitors from more developed economies primarily from Western countries including the US. Disinvestment opportunities The government already privatised a large number of hotels earlier owned by the public sector company. However. which combine the comforts of home with the advantages of hotel services. With the increasing globalisation of the Indian economy following economic liberalisation. the number of such apartments in India currently is small in relation to demand. Hence. there are large business opportunities for foreign companies with expertise in this area to collaborate with Indian firms in setting up world-class amusement parks with state-of-the-art equipment and facilities. Given all these promotional efforts. predominantly among domestic tourists. a growing number of visitors to India stayed for relatively long periods. Many of these amusement parks are located on the outskirts of large cities or near other tourist towns. However. the state governments run a large number of accommodation facilities. However. there is considerable scope for the private sector to invest in setting up accommodation facilities or tour packages in areas which are being developed for eco-tourism. Summary 15 Opportunities for Growth and Investment Foreign investment in domestic airline companies Adventure Tourism Service apartments Amusement parks Eco-tourism Privatisation of hotels and accommodation facilities Source: Euromonitor 13. It is possible that in coming years. Many of these are expatriates on short business assignments.

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a rise in real expenditure per tourist. This is because, with improved tourist infrastructure and better promotional efforts, more affluent tourists will be attracted to India. Expenditure Outgoing tourism expenditure is predicted to grow at a slightly higher CAGR of nearly 11% during the forecast period, compared with the forecast growth in incoming tourism receipts. With rising incomes, an increasing proportion of upper-middle-income and affluent Indians will travel abroad in the coming years. Besides this growth in departures, it is also predicted that Indians travelling abroad will spend more during their trips because of the rise in their disposable incomes. Easy credit facilities locally will also encourage such spending. Continued price differentials for large consumer durables such as TVs will also continue to spur outgoing tourists to return with such big ticket purchases from destinations as varied from the US and Europe, to Asian destinations such as Singapore and Malaysia. Domestic tourism It is predicted that domestic tourism expenditure will grow at the fastest pace of 12% per annum during the forecast period, compared to incoming tourism receipts and outgoing tourism expenditure. There is enormous potential in the growth of domestic tourism. Currently, only a small fraction of Indians travel on holidays. With sustained economic growth leading to rising household incomes, it is expected that more Indians will be able to afford holidays within the country, although overseas holidays will be too expensive for many. This will significantly augment the current domestic tourism levels, which in part are blurred by local pilgrimages and other religiousrelated activities that attract droves to places such as the Ganges River and the Tirupathi temple amongst others.
Table 120 Forecast Incoming Tourism Receipts: 2004-2009

Rs million constant 2004 rsp Value 2004 2005 2006 2007 2008 2009
Source: Euromonitor

% value growth 12.0 11.0 10.0 9.0 8.0

216,862.8 242,886.3 269,603.8 296,564.2 323,255.0 349,115.4

Table 121

Forecast Outgoing Tourism Expenditure: 2004-2009

Rs million constant 2004 rsp Value 2004 2005 2006 2007 2008 2009
Source: Euromonitor

% value growth 12.0 11.0 10.5 10.5 10.0

202,986.0 227,344.3 252,352.2 278,849.2 308,128.3 338,941.2

Table 122

Forecast Domestic Tourism Expenditure 2004-2009

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Rs million, constant 2004 rsp Value 2004 2005 2006 2007 2008 2009
Source: Euromonitor

% growth

538,866.5 608,919.1 685,034.0 767,238.1 855,470.5 949,572.2

13.0 12.5 12.0 11.5 11.0

13.4

Balance of Payments

In India, receipts from incoming tourists normally exceeded expenditure by outgoing Indian tourists. In fact, the Indian government encouraged this trend in order to earn foreign exchange. Controls on the annual limits of foreign travel expenses by Indians constituted an important policy instrument for this purpose. However, with burgeoning foreign exchange reserves, there was major liberalisation in such exchange controls since 2000. The limit on the annual quantum of foreign exchange that Indian tourists are permitted to utilise for trips abroad was raised from US$3,000 to US$5,000 in 2000 and again, increased to US$10,000 in 2002, which is the limit prevailing in 2004. It is expected that there will be further liberalisation in this limit in coming years. Hence, during the forecast period, it is predicted that the balance of tourism payments will reduce over time, at an annual rate of 6%, as tourism expenditure grows faster than tourism receipts. However, it is still expected that receipts will exceed expenditure because of the higher spending power of foreign tourists visiting India, compared with Indians travelling abroad in general.
Table 123 Rs million Receipts 2004 2005 2006 2007 2008 2009
Source: Euromonitor

Forecast Balance of Tourism Payments: Value 2004-2009

Expenditure 202,986.0 227,344.3 252,352.2 278,849.2 308,128.3 338,941.2

Balance 13,876.8 15,542.0 17,251.6 17,715.0 15,126.7 10,174.2

216,862.8 242,886.3 269,603.8 296,564.2 323,255.0 349,115.4

13.5
Trends

Number of Arrivals

Policy makers in the government placed a greater emphasis on promoting tourism as a means of generating economic growth and employment. In particular, the tenth 5-year plan (2002-2007) provides for large investments and promotional efforts to support growth in this. Hence, during the coming years, there is likely to be a major improvement in tourist infrastructure as well as enhanced marketing efforts. For these reasons, during the forecast period, visitor arrivals are predicted to increase at a CAGR of nearly 10%, which is substantially higher than the 6% annual growth registered during the review period. Popular destinations

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The UK and the US are expected to continue to lead in significance in terms of the countries of origin of visitors. Together, they are forecast to account for nearly 30% of arrivals in 2009. While neighbouring Bangladesh is also predicted to be a major country of origin, with a 16% share forecasted for 2009, visitors from that country are mostly not tourists in a strict sense. Most of them are people crossing the border to seek temporary employment or to visit relatives. Preferred mode of transport It is expected that air travel will continue to dominate as a mode of transport for arrivals. In 2009, air travel is forecast to account for about 83% of arrivals. However, with the growing normalisation of political relations between India and Pakistan, the share of land and rail transport is expected to increase, albeit at a very slow rate for the initial years of the forecast period at least, although this might well change towards the end of the forecast period.
Table 124 '000 people % growth 2004 2005 2006 2007 2008 2009
Source: Euromonitor

Forecast Visitor Arrivals: 2004-2009

3,355.4 3,757.9 4,133.7 4,547.3 4,956.5 5,353.0

12.0 10.0 10.0 9.0 8.0

13.6
Trends

Number of Departures

At present, it is only upper-middle-income and affluent Indians who can afford holidays abroad. However, with rising incomes, the size of these consumer groups is growing. During the next few years at least up to about 2010, with further economic reforms and sustained economic growth, this trend is expected to continue. Moreover, with easier financing options provided by banks in India, it is becoming easier to travel abroad. The rising globalisation of the Indian economy is also resulting in greater business travel. For all these reasons, it is predicted that departures will grow at a CAGR of 10% during the forecast period which is significantly higher than the annual growth of 6% registered during the review period. Popular destinations The most popular destination during the review period was the Middle East. This is mainly because of travellers seeking temporary employment in the region or making visits to relatives there, since there is a large Indian community employed in Middle East countries. However, it is predicted that during the forecast period, the share of Middle East countries as a tourist destination will fall with reduced employment opportunities in the region, at the same time that opportunities elsewhere are opening up. On the other hand, the share of Singapore will rise both for tourist and business reasons. One reason was the affordability of holidaying there for many Indians, given its proximity, which means that the air fare is relatively low. During the forecast period, it is predicted that the share of Singapore will rise further and that it will emerge as the country accounting for the highest proportion of departures by 2009. The rising incidence of budget air travel is also likely to increase the number of travellers to Singapore and other Asian destinations such as Thailand and Malaysia. The US, the UK and Thailand will continue to remain as other major destinations for Indian travellers.

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7 8. travel agencies will have to diversify rapidly into the provision of value-added services rather than merely selling air tickets. air transport is expected to continue to dominate as the preferred mode of transport for departures.0 6.5 10. Table 125 '000 people % growth 2004 2005 2006 2007 2008 2009 Source: Euromonitor Forecast Visitor Departures: 2004-2009 5. with relations between India and Pakistan moving from animosity towards cooperation.400. • Losers Major predicted losers during the forecast period are: • Travel agencies depending on commissions: currently.Travel and Tourism India Preferred mode of transport As in the case of arrivals. this number is expected to increase at a rapid pace.0 6. Sea transport. are realising this fact and a number of them are investing their resources in setting up budget hotels. With low-cost airline carriers offering much more affordable fares.318.0 9. However. Forecast Sales by Travel and Tourism Markets: Value 2004-2009 • Table 126 Euromonitor Page 82 .5 10. Those agencies that are tardy in adopting such a strategy will have a tough time surviving. keeping the interests of both countries in mind. the upper class rail coaches will increasingly lose out to other modes of transport.1 11. Railways: although railways will continue to carry a huge number of poor and middle class travellers because of low fares. with the increasing popularity of internet bookings as well as direct sales by suppliers. is also rising in popularity among Indian travellers.021. there are a large number of travel agencies who rely on commissions for their earnings. its share is forecast at 97%. This is because of the inflexibility of railway routes and timings and the reduced cost advantage of using trains.050. the share of land and rail transport is likely to rise.5 13.3 7. During the forecast period.4 8. Even the top Indian hotel companies. the number of airline passengers will rise rapidly. the rate of such commissions fell and are expected to fall further during the forecast period. In 2009. only a small proportion of domestic travellers use air transport because of high fares.0 10.7 Winners Travel and Tourism Markets Major predicted winners during the forecast period are: • Low-cost airline carriers: currently. However. Hence. which traditionally concentrated on 5-star hotels.815.653. especially cruises. Budget hotels: there are not enough budget hotels with good facilities in relation to potential demand. especially air travel.

3 9.7 130.4 14.3 2.5 4.6 154.672.1 10.295. Table 127 Forecast Sales in Travel and Tourism Markets: Internet Transaction Value 2004-2009 Rs million 2004 Travel accommodation sales by sector Transport by sector Car rental services by sector Travel retail services by sector Source: Euromonitor 2005 5.834. in travel retail services.352.4 9.1 235.5 121.670.1 2006 6.127.22 1. In hotels. this is forecast to more than double from 5% in 2004 to 10% in 2009.307. ie any person visiting another country for at least 24 hours.1 26.067.037.50 1.70 1. this is forecast to rise from 10% in 2004 to 14% in 2009.467. DEFINITIONS Where possible this report adheres to the statistical definitions of international and domestic tourism used by the World Tourism Organisation (WTO): • International arrivals: refers to international tourists.9 268.6 2.3 14.9 30. Unless otherwise stated arrival figures exclude same-day visitors and transit and cruise passengers as this can distort Euromonitor Page 83 .5 39.196. though currently low.098.8 30.0 254.868.511.2 61.157. it is predicted that the share of internet transactions in sales in various travel and tourism will rise rapidly during the forecast period.3 282. Moreover.3 216.8 Developments in Internet Transaction Sales Internet penetration.658.333.998.050. Each trip is counted separately and thus includes people travelling more than once a year and people visiting several countries during one holiday.473.5 23.5 6. for a period not exceeding 12 months and staying in collective or private accommodation.2 294.4 2.7 182.244.7 3. For all these reasons. In airlines.3 199.7 728.883.211.883.696. Reduced costs are a major motivation.402.4 2008 2009 4.071.808.2 18.0 220.0 13. The strong emphasis of low-cost airlines on internet bookings is an important reason for predicting this sharp increase.653.094. While Indians were hesitant to use the Internet in the past for e-commerce because of security reasons.73 0.3 141.7 1.112.5 2.512.6 1.4 4.392. they are increasingly becoming more attracted to e-commerce because of its convenience.4 6.506.680.8 155.6 49.796.773.130.839.9 34.412.2 22.88 1.454.1 16.014. Similarly.Travel and Tourism India Rs million 2004 Travel and Tourism Travel accommodation sales by sector Transport by sector Car rental services by sector Travel retail services by sector Tourist attractions by type Source: Euromonitor 2005 2006 2007 2008 2009 166. is rising rapidly in India.504.0 2.081.502.0 112.302.1 103.5 237. this is predicted to increase from 7% in 2004 to 12% in 2009.55 1.9 253.2 2.2 2007 8.2 1.530.787.725.063.056. medium and large establishments in the Indian tourism industry are also placing considerable importance on creating facilities for internet transactions.768.4 1.

For the purposes of this report. this should also include expenditure on day visits abroad. Domestic trips: number of trips taken by residents of the country within the country. this is broken down into nine principal sectors: Campsites: covers areas set aside for camping and caravans. may include meals. • Chalets: rented accommodation in mountain or country areas. RevPAR: this signifies revenue per available room in travel accommodation. Other: smaller types of accommodation. Domestic tourists: this varies from country to country and can refer either to actual tourists spending one night or more away from home within their normal country of residence or to the number of stays by residents within their normal country or residence. not providing • meals. The definition of the length of a trip varies from country to country. It is based on the revenue generated by accommodation outlets with regard to capacity in terms of rooms. including their payments to foreign carriers for international transport. • International departures: refers to the number of trips undertaken by national residents to another country for any other reason than to carry out an activity remunerated in the country of destination. not listed above but • included in country statistics. for the purpose • of tourism. often in dormitories. includes youth • hostels. • Private accommodation: privately-owned houses or individual rooms rented to tourists on • an unofficial basis. except in certain cases when these are recorded separately. Domestic tourist expenditure: the spending on travel and tourism services by domestic visitors on their trips. ie the number of rooms available for use by domestic and international visitors. includes • lodges and inns. Guesthouses: rooms within officially-recognised private accommodation. travel within the country. although there are exceptional cases that are recorded separately. entertainment. including fares paid to national carriers for international transport and any other prepayments made for goods or services received in the country of destination. This should also include receipts from day visitors from abroad. Data thus excludes international transport fares purchased within the country of origin. International tourism receipts: these are classified as payments by international inbound tourists. Self-catering apartments: providing lodging in allocated tourist apartments. Most national statistics on domestic tourism expenditure exclude that on travel to and from the destination. International tourism expenditure: this is expenditure by outbound tourists abroad.Travel and Tourism India arrival figures in important cruise destinations. accommodation. Travel accommodation: travel accommodation covers the main types of accommodation used by incoming tourists and domestic tourists. Hostels: providing low-cost/budget accommodation. Again. Number of bed nights: refers to the total number of beds in travel accommodation occupied over the year • • • • • • • • • • Euromonitor Page 84 . • Motels: roadside hotel accommodation for motorists. It may refer to either the use of rooms or of beds. often with breakfast included. Tourism spending: this analyses tourism spending by foreign and domestic tourists on items such as food. such as holiday camps. Occupancy rates: this expresses the relationship between available capacity and the extent to which it is used. Data includes foreigners residing permanently in the country of departure. excursions and shopping. Hotels: providing lodging and optional meals. rented to tourists on a nightly or weekly basis. Occupancy rates are based on the number of nights of both domestic and international tourists. It also excludes those in paid employment abroad.

car rental is analysed separately. may include • meals Transportation: the price paid for the mode of transport by the consumer • Car rental: the price of car hire to the consumer • Travel retail: the price paid by the consumer for travel retail services • Tourist attractions: the price of admission to tourist attractions • Volume by sector is measured as follows: • Euromonitor Page 85 . Car rental covers sales to incoming tourists and domestic use.Travel and Tourism India • Transportation: transportation covers the mode of transport used by tourists going to their holiday destination and within the country. while their own car is repaired following an accident. • Cruise: travel by cruise ship • Ferry: travel by ferry • Rail: travel by passenger train Car rental: the car rental market covers the hire of passenger cars by both business and leisure users and from airport or non-airport locations for short-term rentals. • Leisure. The transportation market assesses seven main modes of transport: • Air: includes schedule. Excludes taxis. • Exchange providers: within this report. For the purpose of this report. covering sales to incoming and domestic tourists and is broken down into the following sectors: Art galleries • Casinos • Circuses • Historic buildings/sites • Industrial tourism • Museums • National parks/areas of natural beauty • Theatres • Theme/amusement parks • Zoos/aquariums • Others • Units of Measurement • Value by sector is measured in terms of consumer value sales. unless otherwise stated. • Business. • • Due to the difficulty of establishing sales by sector as a result of the overlap of business between the sectors above. ie in terms of the actual spending by consumers: Travel accommodation: the price paid for accommodation by the consumer. companies that sell them to the public and those that supply foreign currency. It therefore excludes banks and travel agencies. charter and budget airlines • Bus/coach: overland travel by bus or coach • Chauffeur-driven car: passengers driven to their destination by a hired third party. this term refers to dedicated currency exchange outlets only. It excludes long term leasing by businesses. The market for travel retail covers sales to outgoing and domestic tourists and internal use by incoming tourists. It covers sales for outgoing travel by country residents and internal travel by foreign and domestic tourists. • Insurance replacement: where domestic residents use a rental car paid for by an insurance company as a replacement vehicle. • Travel agencies: retail outlets that sell holidays and holiday services. Travel retail: The travel retail market covers companies that put package holidays together for the general public. • Tour operators: companies that organise holiday packages and sell them either directly to the public or through travel agencies. value by sector will not be given and will be provided at total market level only. • Attractions: the attractions market covers the sites visited by tourists.

Data for 2004 are estimates based on part-year figures. Value sales are sector specific and thus exclude all other non-sector specific company operations. the following terms were defined as: • Domestic trips: refers to trips within the country to a place other than the person’s usual place of residence during which the person stays at commercial accommodation/establishments for a period of not less than 24 hours or one night and for not more than six months at a time for any of the following purposes: • Pleasure • Pilgrimage • Business • Study • Health • Social functions Long haul refers to all international flights Short haul refers to all domestic flights • • Euromonitor Page 86 . unless otherwise stated Travel retail: number of travel retail outlets Tourist attractions: number of visitors to tourist attractions Market shares are based on companies’ consumer values sales. Country-specific Definitions Based on national and official statistics.air: number of available seats and seats sold Car rental: number of car hire transactions.Travel and Tourism India • • • • • Travel accommodation: number of accommodation outlets and number of rooms and bed nights Transportation .

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