TOURISM INDUSTRY IN INDIA

INTRODUCTION
Tourism has always been a major social phenomenon of any society. It is motivated by the natural urge of every human being for new experience, adventure, education, knowledge and entertainment. In order to understand each other's cultures and values as well as to cater several other social, religious and business interests, it has resulted in development of many tourist and infrastructure facilities. This, along with the progress of proper transportation network globally, especially of airways and waterways, has encouraged people to venture out to the foreign lands. It has facilitated the trade and commerce between the different regions of a country and between the different countries. As a result, over the years, it has acquired the status of a service industry. Tourism, being one of the largest industries, plays a key role in achieving the socio-economic goals of the development plans of a nation. It is an important service-oriented sector which has made rapid strides globally in terms of gross revenue and foreign exchange earnings. It is a composite of service providers, both public and private, which includes travel agents and tour operators; air, rail and sea transportation operators; guides; owners of hotels, guest houses and inns, restaurants and shops; etc. They are involved in meeting the diverse interests and requirements of domestic and international tourists. The tourism industry provides incentives to foster the quality of environment, generates more employment opportunities (particularly in remote and backward areas) as

well as develops necessary infrastructure facilities like roads, telecom and medical services, in the economy. In India, tourism industry holds special position as it not only have potential to grow at a high rate, but also stimulate other economic sectors through its backward and forward linkages and cross-sectional synergies with sectors like agriculture, horticulture, poultry, handicrafts, transport, construction, etc. That is, it can provide impetus to other industries in the country and generate enough wealth to help pay off the international debt. It is the third largest net earner of foreign exchange for the country. The travel and tourism sector contributes to the national integration; preserves natural and cultural environments; as well as enriches social and cultural lives of the people. It has the capacity to create substantial job opportunities, particularly for unskilled and semi-skilled workers as well as to alleviate the poverty in the country. That's why, it has been regarded as the core sectors of the Indian economy. Given India's unique endowments of biodiversity, forests, rivers, mountains, historical places, temples and pilgrims, caves, museums, monuments and culture, the industry holds immense strength for obtaining higher growth rate. The challenges in the sector lie in successfully preserving these in their original form, and making them accessible to domestic and international travellers. India offers various categories of tourism products, such as adventure tourism; medical tourism (Ayurvedic and other forms of Indian medications), eco-tourism; rural tourism; cruise tourism; meetings, incentives, conferences, and exhibitions (MICE) tourism; etc.

Defenitions of Tourism:
Aaccording to hunziker and krapf, tourism inis the totality of relationship and phenomenon arising from the travel and stay of strangers, provided the stay does not emply the establishment of a permanent residence and is not conneced with the remunerated actovities.

According to Foster Douglas,Travel and Tourism Management, Tourism is an activity involving complex mixture of material and psychological elements. The material one are accommodation, the attractions and entertainment available. The psychological factors include a wide spectrum of attitudes and expectations.

According to Ministry of Tourism (Government of India), tourism is a composite industry. It consists of various segments which can produced a wide range of products and services.

According to R.N.kaul, tourism is an industry without smoke, education without classroom, integration without legislation and diplomacy without formalities.

Tourism Statistics
1. Tourism is one of the world's fastest growing industries at present and holds the status of the world's no. 1 industry. 2. The tourism industry as a whole is presently estimated to earn over US$ 3.5 trillion worldwide. 3.The industry creates a job every 2.4 seconds with every one of those direct jobs creating another 11 indirect ones. 4. Spending on tourism amounts to 5%-10% of total consumer, spending in a year worldwide. 5. India's share of the total market is a pittance at 0.51%. The non-tourist countries like Malaysia and Indonesia get much more tourists than India. 6. However, the average duration of stay of foreign tourist in India is one of the highest in the world. On an average, it exceeds 27 days in the case of non-package tourists and is 14 days in the case of package tourists. 7. Tourism has the distinction of being the third largest export industry after gems and jewellery and readymade garments in India. 8. The Tourism industry's foreign exchange earnings in India are around $3.2 billion. Tourism is the highest foreign exchange earner if we consider the fact that net value addition in Gems and jewellery is less than 30 % whereas, in tourism it is more than 90 %. 9. It also has one of the best employment multipliers when compared with any other industry in India. It generates maximum job opportunities, as it provides direct employment to 9.1 million people and indirect employment to another 12.4 million. 10. Tourism has been a neglected sector in India. Though it was recognized as a priority sector in the Seventh Five Year Plan, hardly anything was done to promote this industry.

11. Though the government has promised to give industry status to tourism, still, budgetary support for this department is a mere Rs. 379 crore. This is despite a total tax collection of about Rs. 2000 crore in 1996 from this sector.

Unique Characteristics Of The Tourism Industry

There are four main characteristics which distinguish the tourism industry from other service providers: Inflexibility: The tourism industry is highly inflexible in terms of capacity. The number of beds in a hotel or seats on an airplane is fixed so it is not possible to meet sudden upsurges in demand. Similarly, restaurant tables, hotel beds and airplane seats remain empty and unused in periods of low demand. The seasonal nature of tourism activity exacerbates this problem. Perishability: Tourism services are highly perishable. An unused hotel bed or an empty airplane seat represents an immediate loss of that service as a means of earning profit. This has an impact on overall industry profitability. Fixed location: Tourism destinations are fixed locations so effort must be concentrated in communicating the facility to the potential consumer. A consumer can conveniently watch a Hollywood movie at the local cinema but has to be persuaded to travel to India to see the Taj Mahal. Relatively Large Financial Investment: Every modern tourist establishment and facility requires large investment, frequently over a long time scale. This means that the level of risk and the rate of return are critically important to tourism management.

TYPES OF TOURISM
There are a number or emerging dimensions of tourism. These include:

1. Medical Tourism: Indian tourism is aiming to promote its allopathic treatment as a tourist attraction. Medical tourism tends to provide worldclass treatment at low price and is gaining worldwide acceptance. Doctors and other medical experts are organizing health camps and other general awareness programs. The vast array of health care services includes ayurveda, yoga, naturopathy, meditation,spas and many more

2. Spiritual Tourism: India has a rich heritage of cultures and religions. There is so much mental pressure and disturbance all over the world that people are looking forward to find solace. India is being represented as a destination for spiritual tourism. Spiritual tourism includes all the religions, religious places associated with them, and emotional attachment and beliefs attached to these centers. Thus, through religious tourism there is a sincere effort to bring better understanding among various communities, nations and thus foster global unity.

3. Rural Tourism: Real India is rural India. Almost 74% of the population is in rural areas. For the development of rural India, government is promoting rural tourism. Rural tourism showcases the rural life in India, the art, culture and heritage, the nature and wild life and

various other aspects of rural India. The rural India has a great potential to attract foreign tourists. The rural tourism helps in improving lives of rural people and maintaining the quality of environment.

4. Adventurous Tourism: India is an incredible destination for adventures. The snow capped Himalayas, erratic streams, safaris, etc all add to its natural glory. Water sports, elephant safari, mountaineering, skiing, gliding, trekking, river rafting, etc are breath-taking opportunities for adventurous people. Ladakh, the Garwal hills, the Himachal hills, Darjeeling, Goa, Lakshadweep, Andaman and Nicobar Islands, are some of the places that offer adventure tourism.

5. MICE Tourism: MICE (meetings, incentives, conferences and exhibitions) is associated with business travelers. It caters to various forms of business meetings, international conferences and conventions, events and exhibitions. India is gaining pace to become an ideal MICE destination due to the flourishing business here. The MICE industry converts the annual business meetings and conferences into a glamorous and enjoyable event for the delegates and attendants. To develop business tourism in India, some renowned MICE centres are already established. The Ashok (New Delhi), Hyderabad International Convention Centre (Hyderabad), Le Meridien (Cochin), Delhi International Expo Centre (Noida) are some of them.

6. Eco Tourism: People are visiting India to unravel the secrets of nature. Eco tourism (also known as nature tourism) relates to nature and its attractiveness so that the visitors experience it in its pristine settings. Eco tourism attracts domestic as well as international tourists towards the

magnificent ancient cities, hill stations, remote villages, desert areas and wildlife centuries and parks in India.

Sectors of Tourism
The principal sectors of tourism, each with some examples given, are as follows: Transportation i) Airways ii) Roadways iii) Railways iv) Waterways Accommodation i) Unclassified ii) One Star iii) Two Star iv) Three Star v) Four Star vi) Five Star Adventure tourism and recreation i) Guiding ii) Lectures iii) Theatre iv) Music v) Meetings vi) Golfing Attractions i) Natural Scenes ii) Historical Excellence iii) Artificial Beauties iv) Social-Cultural Excellence Events and conferences i) Festival ii) Trade Shows iii) Olympic Games Restaurants

i) Chinese ii) Oriental iii) Western iv) Estern

Services i) Information Centres ii) Tourism Associations Travel trade i) Tour Companies ii) Travel Agencies Tourism is the worlds largest growth industry. According to the World Tourism Organization (WTO). International and domestic tourism combine to generate up to 10% of the worlds Gross Domestic Product (GDP, see Glossary) and often a higher share in many small nations and developing countries.

The Seven Ps of Tourism Marketing Mix

The Seven Ps of Tourism Marketing Mix

Physical Evidence

Product Price

Process

The Seven Ps of Tourism Marketing Mix Place

People

Promotion

The Product Mix:

Tourism Product
ACCOMMODATION

RECREATION

RESTAURANT

ATTRACTION

TRANSPORTATION

SHOPPING

The tourism product is essentially an intangible thing. Also, because tourism is a multi-segment industry, the task of formulating a product mix becomes more difficult & challenging. Selling a holiday is selling dreams. The way to win the customers heart is through the peripheral services provided along with the core product. Thus a tourism product is quite a complex one,

including the destination, airline seat, hotel room, occasional tangible products such as souvenirs, a free bag or bottle of whisky, etc. Innovation in the tourism industry helps to raise the sensitivity in this regard. There is nothing fixed or fundamental about the tourism product. The content factor is within the jurisdiction of the government that undertakes the maintenance, development and conservation of tourist attractions such as parks, museums, beaches, historical treasures, etc. Unless these factors are developed in the right fashion, the marketing professionals would never be successful in making the marketing resources productive. Thus the direct or indirect patronage of the government is essential to get a positive response. The government and private tourist organizations work together to undertake activities such as developing infrastructural facilities such as transportation, water, banking, Medicare facilities, etc., and also developing and maintain hotels, cottages, havelis, lodges, etc.

The Price Mix:

In pricing decisions, the product or the service mix of the tourist organization is important. They have to set prices in line with the quality of services to be made available to the customers. Pricing decisions are influenced by internal and external factors. The tourism professionals are supposed to watch the emerging trends in both the markets. They are required to think in favour of discounting price. These may include discounts for cash payments, seasonal discounts, trade discounts etc. But while offering the discounts, it is not to be forgotten that it may also create image problem since some of the value sensitive tourists may doubt the quality.

The Promotion Mix:

Creation of awareness has a far reaching impact. The tourist organizations bear the responsibility of informing, persuading and sensing the potential tourists in a right fashion. The marketers need to use the various components of promotion optimally so that they succeed in increasing the number of habitual users. Promotion helps in maximizing the duration of stay, frequency of visit by offering new tourist products in the same country to areas which hitherto have remained untapped or partially tapped. The various dimensions of tourism promotion are as follows: Advertising: Advertisement helps in furnishing important information to the actual and potential tourists. Its coverage is wide. Advertising is aimed at the public to create awareness of the travel offers available on a resort and its attractions to influence their business decisions. Intangibility can be compensated with the help of visual exposure of scenes and events. We can project hotel bedrooms, well arranged restaurants and cafeterias, swimming pools etc. Publicity: It focuses attention on strengthening the public relations measures by developing a rapport with media people and getting their personalized support in publicizing the business. It helps in projecting the positive image of tourists organizations since the prospects trust on the news items publicized by the media people. Eg. Kumarakom in Kerala after Prime Minister A B Vajpayees visit. The publicity programme include regular publicity stories and photographs to the newspapers, travel editors, contact with magazines on stories etc. There are different

groups in publicity, such as advertising publicity, projected publicity, structural publicity and personal publicity. Sales promotions: Sales promotion measures are the short term activities seeking to boost sales at peak demand periods to ensure that the firms obtain its market share and are used to help launch a new product or support an ailing or modified one. The tool of sales promotions is designed to appeal particularly to those customers who are pricesensitive. There are a number of techniques to promote sale and the tourist professional need to use them in the face of their requirements vis-vis the emerging trends in the business. Eg. In the tourism industry, a travel company offers give-aways to their clients, such as flight bags, wallets for tickets and forex and covers of passport. The hotels offer a number of facilities like shoe shine clothes, first aid sewing kits, shower caps and shampoo. Further, the VIP clients also get fruits and flowers in their rooms. Word-of-mouth Promotion: Most communication about tourism takes place by word-of-mouth information which in a true sense is word-ofrecommendation. In the tourism industry it is found that the word-ofmouth promoters play the role of a hidden sales force, which instrumentalizes the process of selling. The high magnitude of effectiveness of this tool of promotion is due to high credibility of the channel, especially in the eyes of the potential tourists. The sensitivity of this tool makes it clear that tourist organizations need to concentrate on the quality of services they promise and offer. The marketers or the tourist organizations need to keep their eyes open, identify the vocal persons or the opinion leaders and take a special care of them so that they keep on moving the process of stimulating and creating demand.

Personal Selling: Personal Selling is based on the personal skill of an individual. The oral representation in conversation bears the efficacy of transforming the motivation into persuasion. The travel and hotel business depend considerably on the personal selling. The development of travel and tourism has been possible due to well educated and trained sales personnel. The development of tourism business has been influenced by the services rendered by the travel agents and travel guides since they work as information carriers. Personal selling is the personal presentation of a tangible product or intangible services or ideas to the personal customers. It is important to mention that in the tourism industry, the personnel who attend tourists form an essential ingredient of the product, such as sales personnel are found responsible for dealing with customers behind the counter, the resort representatives cater to the need of tourists when they reach the destination etc. all of them play a vital role in ensuring that the tourism products satisfy the tourists. The phrase- the customer is always right applies specifically to the tourism industry. No reduction in price would compensate for impolite and indecent travel guide, a solvent waiter and a surly or a haughty coach driver. These facts are testimony to the proposition that the travel business is linked with the performance and behaviour of sales personnel or travel staff. Telemarketing: it is a method of selling in which a professionally sound telemarketer expands the business. The quality of technology and the communicative ability of the telemarketers determine the magnitude of success of this component. In tourism, the travel agents, offices of airways, receptionist, and secretaries cant work efficiently if the telephonic services are not up to the mark. This makes a strong advocacy in favour of recruiting a person considered to be professionally sound,

personally-committed sales personnel having an in-built creativity, innovation and imagination.

Place Mix:
Place or distribution management is concerned with two things availability and accessibility. Researchers in tourism must determine how and where potential customers prefer to buy tourism products and services. Most tour operators sell their services through travel agents, however some deal directly with the consumers and eliminate middlemen. Other companies may also utilize more than one method of distribution. Airlines, for example, sell tickets through travel agents, and sell seats on flights to tour operators, and also offer travellers to book seats themselves through their own booking offices. There exist, however, a number of intermediaries in the tourism marketing channel. It depends largely on the channel type. The intangibility feature in the service sector prevents intermediaries from taking possession or ownership of goods. Tourism, however, proves an exception where cuisine and souvenirs are goods and ownership is possible for the intermediaries. Transport also plays a major role in the tourism industry. It makes the destinations accessible to people from around the world. Also, in the case of tangible products in tourism such as souvenirs and cuisine, transportation becomes a major logistical component.

People Mix:
We cant deny the fact that sophisticated technologies have been successful in accelerating the place of development. We also agree with this view that new generation of information technologies have simplified the task of decision makers. At the same time we also have to accept the

fact that the sophisticated technologies cant deliver goods to the development process if the employees operating and maintaining these technologies are not of world class. Technologies need due support of human resources who invent, innovate and develop technologies. Like other industries, the tourism industry depends substantially on management of human resources. The tourism industry is an amalgam of the services of a lot of people and hence this industry cannot work efficiently if the travel agents, tour operators and travel guides lack world class professional excellence. Of course the offices of travel agents depends on the new technology but after all employees and the other staff contribute significantly to the process. The travel guides need professional excellence since the projection of a positive image regarding a destination in particular requires their due cooperation, failing which even the world class services offered by the travel agents are found meaningless. The tour operators also need to manage human resources efficiently. In the management of people, the related organizations are required to think in favour of developing an ongoing training program so that we find a close relation between the development of technologies and the quality of personnel who are supposed to operate and maintain the same. They need a lot of credentials to fulfill the expectations of the customers. The organization has to make the environmental conditions conducive and focus has to be laid on the incentives to the employees for energizing the process of performance orientation. Employee orientation requires due weightage to efficiency generation, value-orientation and perfection. In the tourism industry the travel agents and the travel guides are the two most important people who speak a lot about the industry. Hence it is imperative that they have to be at their best at all times. Travel guides

especially, are expected to have a lot of patience, good sense of humour, tact to transform the occasional tourists into habitual ones, thorough knowledge of the places, linguistic skills etc.

Process Mix:
The service process refers to how a service is provided and delivered to customer. Delivery system is a creative process. It begins with a service concept and strategy to provide a service. In order to achieve these objectives, various alternatives must be analysed and identified before a decision is made. Designing a service process involves issues such as location facility, design and layout for effective customer and workflow, procedure and job definitions for service providers, extent of customers involvement, measures to ensure service quality, equipments selection and adequate service capacity. The size of the tourism firms determines the operation process of the firm. The following steps are involved in the delivery of tourist product. 1. Provision of travel information. 2. Preparation of itineraries. 3. Liaison with providers of service. 4. Planning and costing tours. 5. Ticketing. 6. Provision of foreign currency and insurance.

Physical Evidence Mix:

Generally a service transaction involves the interaction of the service provider with the customer in a service environment. Physical evidence is termed as the social as the social environment along with the tangible cues. Zeithaml & Bitner defines physical evidence as the environment in which the services are delivered and where the firm and customer interact and any tangible commodities that facilitate performance communication of the services. Physical Evidence includes all the efforts taken by the service provider to tangibilise their services, they include: 1) Physical facilities. 2) Physical environment. 3) Social settings The attraction for tourist is the experience and this must be tangibilised with the help of tangible items like comfortable seats while travelling, layout and design of the resort, ambience etc. As the product in tourism is intangible , there is a need to describe the product fully which can be done by providing an elaborate brochure that shows how different elements of the programme are carefully planned to include all necessary information to make a comfortable holiday.

S.L.E.P.T. Analysis

The Tourism Industry in India

Social:
Tourism was always looked upon as something that led to the destruction of the social fabric of a place. The more the amount of outside people coming into a place, the more the perceived risk of that place losing its identity. A good example is Goa. From the late 60's to the early 80's when the Hippy culture was at its height, Goa was a haven for such hippies. Here they came in thousands and changed the whole culture of the state. This had a ripple effect on the country. People became cautious, especially of the international tourists. Whenever a certain place became famous, the example of Goa was cited to discourage the inflow of international tourists. However some places such as Kerala and Rajasthan have been able to strike a balance between their own culture and the demands of the international tourists and have profited handsomely in the bargain. People are now adopting themselves to the fact that tourism pays and it can be a major source of income for them. In addition, tourism as a form of recreation has really caught on. People themselves have started travelling and are willing to travel to a place that is out of the way and exotic. While traditionally travelling on a holiday meant going to a hill station or a beach, now people are willing to go in for adventure tourism and also visit places that might be exotic and cannot really be called hospitable. For example, now places like Leh and Lakshwadeep are mentioned in the same breath as Goa or Kashmir.

Legal:
The laws that govern the industry are not the same in all the parts of the country. Many of the laws that are in effect are old and archaic, and not geared to meet the challenges of the 21st century. Eco-tourism policies and Guidelines have been formulated by the Government in consultation with the industry and are being implemented on a voluntary basis. With respect to taxation, the World Travel and Tourism Council has observed that Tax paid by tourists in India is the highest in the world. Indian hotels charge about 40% taxes compared to other Asian countries where it varies between 3% and 6%". Such high taxation renders the tourism sector as a whole uncompetitive. Further, there is considerable disparity between state level taxes, especially on food and beverages. In fact, the sales tax on imported beverages varies widely, e.g. 63% in Karnataka to 28.75% in West Bengal. With respect to Foreign Investment in any tourism related venture, clearance must be obtained from the Central government (RBI or Foreign Investment Promotion Board). 51% foreign equity is automatically approved subject to meeting certain prescribed criteria, including having a capital base proposal below US $143 million (Rs. 6 billion). In the case of NRIs, 100% foreign equity is automatically approved. Foreign equity holding above 51 percent are possible, but are subject to FIPB approval. It is to be noted that the Ministry of Industry provides final clearance of FIPB approval. Dividends on such investments are repatriable.

The National Policy on Tourism lays emphasis on sustainable development of tourism. In accordance, the Government has brought out a comprehensive Eco Tourism Policy and Guidelines. There are several Acts and laws, which ensure sustainable tourism. These are the Wild Life Protection Act 1972, the Environment (Protection) Act 1986, and Prevention of Cruelty to Animals Act 1986. These do not set aside any specific area for tourism, but such areas have to be identified by the State Governments and obtain the required approvals/relaxations.

Economic:
The tourism industry not unlike the other industries grows with the increase in the spending of the people. The more the people spend the more the industry grows. The spending power of the people has been increasing in the country and all over the world. Since we are concentrating on the international tourists, the large increase in the spending power in most developed countries has left a large amount of idle cash in their hands. This has led to a tourism boom the world over and India has been no exception. There have been more people coming into the country with more cash than ever before. This has lead to an increase in the demand for better hotels. People who previously used to come to the country on a shoestring budget and hunt around for the cheapest accommodation can now afford to go in for luxury hotels. This has led to an increase in the number of hotels in the country. However, an increase in spending does not only limit itself to accommodation. The increase in the spending is also evident in the increase in the number of people travelling by air. Even the number domestic tourists travelling by air has dramatically gone up.

Political:
The political factors are the main driving force of the industry. The Indian tourism industry is built on the backbone of Government support and the industry cannot sustain itself without it. The various archaeological sites and the places of historical importance, the roads and the railways are all in the hands of the Government. All the support services like the hotel industry, the airlines industry and the tourist operators to name some are heavily dependent on the support and the cooperation of the Government.

The major reason as to why tourists visit India is for the vast and rich heritage that our country has. That is under the control of the Government, through the Archaeological Survey of India. Any policy change that comes into force can have dramatic effect on the way the industry players perform. For example, the Government charges high rates of taxes on the luxury and the star category hotels and this has always been a cause of disagreement between the hotel associations and the Government. There are many areas where the growth of tourism has not been rapid or has seen dramatic fall because the political environment has not been conducive. Examples are the North East for the former and Kashmir for the latter. The neglect of the Government in developing the North-East has led to a situation where there is practically no tourism in the seven states. Similarly, the political turmoil in the state of Kashmir and now in Gujarat has caused a virtual decimation of the flourishing tourism industry. However, there has been a change in many of the policies of the Government with regard to the tourism industry. The hotel industry has been getting many incentives and many State Governments are encouraging the growth of major hotels in their states. After years of tight

control over airport infrastructure, Government has finally taken the decision to privatize the airports.

Technological:
Although technology does not seem to be a major influence at first glance, it plays a major part in the promotion of a place. Better communication facilities are one of the first prerequisites for growth in the inflow of tourists. This has been made possible with technology. Improved technology in the field of communication at cheaper costs has resulted in many remote and inaccessible areas of the country getting connected to the rest of the world. This connectivity has made these places visible to the world. Better communication means access to media. And that is very important if any place wants to be on the world tourist map. Similarly better transportation facilities have lead to a dramatic increase in the number of tourists visiting any particular place. The presence of an airport and the availability of frequent flights are a great convenience to any traveller.

S.W.O.T. Analysis

Strength
a) India's geographical location, a culmination of deserts, forests, mountains, and beaches.

b) Diversity of culture i.e. a blend of various civilizations and their traditions.

c) A wealth of archaeological sites and historical monuments.

d) Manpower costs in the Indian hotel industry are one of the lowest in the world. This provides better margins for the industry.

e) A very wide variety of hotels is present in the country that can fulfil the demand of the tourists. There are international players in the market such as Taj and Oberoi. Thus, the needs of the international tourists and travellers are seen to while they are on a visit to India.

WEAKNESSES
a) Lack of adequate infrastructure. The airlines in India, for example, are inefficient and do not provide basic facilities at airports. The road condition in India is very bad.

b) A xenophobic attitude among certain sections of people.

c) No proper marketing of India's tourism abroad. Foreigners still think of India as a land of snake charmers. There are many places where the image of India is one of poverty, superstition, and diseases. The case of Plague in Surat in 1994 led to a decrease of 36% in arrival of foreign tourists in India.

OPPORTUNITIES
a) More proactive role from the GOI in terms of framing policies.

b) Allowing entry of more multinational companies into the country giving us a global perspective.

c) Growth of domestic tourism. The advantage here is that domestic tourism and international tourism can be segregated easily owing to the difference in the period of holidays.

THREATS
a) Economic conditions and political turmoil in other countries affects tourism. b) Political turbulence within India in Kashmir and Gujarat has also reduced tourist traffic. c) Aggressive strategies adopted by other countries like Australia, Singapore in promoting tourism.

Market Segmentation

Holiday As A Base Demand As A Base Geography As A base Psychography As A base Demography As A base Socio-economic As A base Purpose As A base Age As A base

Market Segmentation

Tourism

Holiday As A Base includes: i) Mass Market ii) Popular Market iii) Individual Market

Demand As A Base includes: i) Primary Opportunity ii) Secondary Opportunity

Geography As A Base includes: i) Cities ii) Provinces iii) Regions iv) Countries

Psychography As A Base includes: i) Lifestyle ii) Personality Motive iii) Product iv) Knowledge

Demography As A Base includes: i) Age ii) Sex iii) Occupation iv) Class v) Religion

Socio-economic As A Base includes: i) Rich ii) Poor iii) Rural iv) Urban v) Literate vi) Illiterate

Purpose As A Base includes: i) Business Travel ii) Cultural Tourism iii) Common Interest Convention iv) Congress

Age As A Base includes: i) Kids ii) Teens Youths iii) Grey iv) Young v) Married vi) Single

TRAVEL SECTOR IN INDIA

Thomas Cook (India) Ltd.

Thomas cook follows simple philosophy ' Enough is not Enough'. It is their thinking, their achievement, their plans or their offering. It is their thinking that has made Thomas cook a leader in the travel industry. It helps Thomas cook to offer the customer a complete travel solution. No matter what the world is indeed getting smaller because the world of Thomas cook is getting bigger.

Products: Thomas cook take care about various aspect while introducing there product like attraction, facilities and transportation. Attraction deserves an intensive care. It includes natural site, places of historic interest, event and cultural attractions. For e.g. : The tour of Europe includes 'Time Elevator' , The Sistine chapel - Vatican museum , Romantic gondola ride is Venice and many more famous places which we always wish to see.

Price: Pricing of tourist product is complex. geographical location of the destination, seasonality and verging demand affects pricing decision. The Thomas Cook offers their Europe tour for EX MUMBAI / DELHI EX CHENNAI : INR 73000 + EURO 2259 : INR 80000 + EURO 2259

Cost of ticket taxes, visa fees, and medical insurance is included in customer tour price. A person below 12yrs is a considered as a child and above 12yrs an adult.

Place: Place is the very important factor in tourism industry. place refers to the branches of the company. Thomas Cook (India) Ltd. has 160 offices in 56 cities across the country. 36 counters at 8 airports across the India. A global presence with offices in 13 countries

Promotion: Thomas cook promotes there products through radio, TV, newspaper, cinema, and magazines. The main source of promotion is people who had already consumed that product. For e.g.: Mr. Ragvendar shetty and family Hats off to Thomas cook, for organizing such wonderful tour and that too at an honest value for money price the choice of hotels Indian cuisine and itinerary were stunning. Our special thanks to our tour manager who was highly

professional, dedicated, very and at the same time firm. We are looking forward to another tour with Thomas cook . This type of feedback also helps to promote the product.

People: The person who attends the need of the tourist, forms an essential ingradient in tourism marketing. The people from Thomas cook are responsible for fulfilling the wants of their customer. They are always polite to the customer. They give proper and adequate knowledge to the customers about their tours

Process: Following is a process of Thomas cook industry while serving there customer. Provision of travel information. Provide prior information of wending destination and time etc. Preparation of itineraries. Liaison with provider of service. Planning and costing tools. Ticketing. Provision for forging currency and insurance. Physical evidence:From the point view Thomas cook they done brilliant job regarding physical evidence. They provide broachers which includes all the information about the travel. They themselves arrenge the tickets for their customers.They also provide comfortable travel to their customer.

Raja Rani Travels Pvt.Ltd.

Shri. Raja Patil, founder of Raja Rani Travels Pvt.Ltd., formed Raja Travels in 1962 with a vision of Providing the common man with an opportunity to explore this magnificent country. Through dedicated efforts, a spirit of national patriotism and a perspective focused on the belief, Learn to travel & travel to learn. This proprietorship firm soon expanded its scope of operations to form Raja Rani Travels Pvt. Ltd. Product: Raja Rani arranges The tour of Europe with two different forms thar are Best of Europe and Glimpses of Europe.in this tour they coverd Italy, Vatican, Austria, Switzerland, Germany, Belgium, Netherland, France, United Kingdom etc. It includes natural site, places of historic interest, event and cultural attractions. Price: Raja Rani offers their Europe tour for Best of Europe Adult Child Rs.72, 950 + Euro 1850 Rs.40, 950 + Euro 1275 Glimpses of Europe Rs.52, 950 + Euro1125 Rs.42, 950 + Euro 845

The entire tour cost or advance of Rs.5000/- is acceptable in form of cash cheque or DD in the name travels company.

A person below 12yrs is a considered as a child and above 12yrs an adult.

Place: Raja Rani Travels Pvt.Ltd. has their head office at Mahim, Mumbai 400016, also in Pune, New Delhi and Shrinagar.they have their authorised agents all over the Maharashtra. They have their assistance centers in 11 major cities in India.

Promotion: Raja Rani Pvt. Ltd. promotes there products through radio, TV, newspaper, cinema, and magazines. In 2008 they arrange following events: Book Launch- Top 50 Marathi MATA Carnival Maharashtra Road Shows Mumbai Celebration 2008 The main source of promotion is people who had already consumed that product. For eg. Mrs and Mr. Swadi All major sightseeing of all european countries with a comfortable tour itinerary, excellent hotels and good food at a low cost- Our Europe Tour was a long and cherished dream come true!!! Thanks to Raja Rani, the pioneers of Professional Tourism in India.

This type of feedback also helps to promote the product.

Process: Following is a process of Thomas cook industry while serving there customer. Provision of travel information. Provide prior information of wending destination and time etc. Preparation of itineraries. Liaison with provider of service. Planning and costing tools. Ticketing. Provision for forging currency and insurance.

People: The person who attends the need of the tourist, forms an essential ingradient in tourism marketing. The people from Raja Rani Ltd. are responsible for fulfilling the wants of their customer. They are always polite to the customer. They give proper and adequate knowledge to the customers about their tours

Physical Evidence: Raja Rani Ltd. done brilliant job regarding physical evidence. They provide broachers which includes all the information about the travel. They themselves arrenge the tickets for their customers.They also provide comfortable travel to their customer.

BUDGET

2008 TOURISM INDUSTRY

BUDGET MEASURES
1) An amount of Rs 0.6 bn to be allocated for the Commonwealth Games 2) Five year holiday from income tax is granted to two, three or four star hotels established in specified districts having UNESCO-declared 'World

Heritage Sites'. The hotel should be constructed and start functioning during the period April 1, 2008 to March 31, 2013. 3) Corporate income tax rates, surcharge and dividend distribution tax kept unchanged.

BUDGET IMPACT
1) The development of hotels in world heritage sites will help promote tourism in the country. 2) The funds allocated for the common wealth games would help bring in additional supply of rooms in the North India region. 3) The measures taken on the infrastructure front will also help improve the prospects of the Indian hospitality sector. If these measures are implemented, then it will go a long way in promoting India with wellconnected tourist destinations.

STEPS TAKEN TO MAKE INDIA A TOURIST ATTRACTION

1) India.s competitiveness as a tourist destination is affected by the high cost of air Travel. The inadequate number of international flights allowed into the country in the bilateralCivil aviation agreements put a constraint

on the availability of air seats for internationaltourists and leads to an increase in the air fares compared to fares for other destinations. Forthe last two years, an open skies policy has been declared on an ad hoc basis in the five winter months in order to make more seats available for the traditional rush season. However, this is not an adequate response since airlines are not able to plan addition to capacity on a long-term basis. In order to make India a major tourist destination, facilities and services at airports, which have been rated by tourists as between poor and average, are to be improved. Presently, Indian airports lag behind in international standards in many respects. Domestic air travel is also expensive compared to neighbouring countries. Central excise duty and high rate of state sales tax - average 25 percent - on aviation turbine fuel (ATF) constitute 30 percent of operating cost of domestic flights in India. There is need for notifying ATF as a .declared good. Attracting only a uniform central sales tax of 4 per cent to reduce the cost of domestic air travel.

2)

Hotel tariff in India is also very high because municipal bodies

auction land for building hotels, which makes it difficult for hoteliers to construct budget hotels. Taxes, such as luxury tax at the state level, also increase the cost of hotel accommodation. High taxation, differential rates of taxes in various states on tourist vehicles, entry tax, and parking charges at each state/destination push up the cost of tourist transport . Another key segment of the sector and also subject the tourists to avoidable harassment because the vehicle needs to stop at each state border to pay the taxes. Tourist Trade Associations estimate that all these factors make India more expensive by 25

per cent to 30 per cent as compared with other tourist destinations in the region.

3) To provide for the safety and security of tourists, Andhra Pradesh, Goa, Kerala, Jammu and Kashmir, Rajasthan, Himachal Pradesh, Maharashtra, Uttar Pradesh and Delhi have deployed trained and motivated police force at tourist places. The Centre has taken up with state governments the issue of enactment of a Tourist Trade Act, to conserve and preserve tourist areas and for the approval of persons/agencies/institutions dealing with travel and tourism trade offering quality services. Revised guidelines for tourist guides, travel agents, tour operators and tourist transport operators have been issued to prevent harassment of tourists.

4)

Hotel management and catering education programmes assume

special importance in view of the modernisation and expansion of the countrys hospitality industry. Currently, there are 24 Institutes of Hotel Management and six Food Craft Institutes which follow the curriculum of the National Council of Hotel Management and Catering Technology (NCHMCT). The Indian Institute of Travel and Tourism Management (IITTM at Gwalior caters to the requirement of professionals in the travel and tourism sector. The National Institute of Water Sports at Goa and the Indian Institute of Skiing and Mountaineering at Gulmarg are premier institutes meeting the needs for upgrading the skills of service providers in adventure and water sports. In order to break new ground in culinary arts, the Ministry of Tourism is setting up an Advanced Institute of Culinary Arts as a joint venture with private academic institutions.

5)

A new scheme on Capacity Building for Service Providers, launched

in the Tenth Plan, provides training, through one to five day modules, to persons who are working in the unorganised sectors, and others who come into contact with a large number of tourists, like those working in small hotels, roadside eating places, dhabas, ticketing agents, travel agencies, police personnel etc. The training covers cooking techniques, basic nutrition values, nutrition preservation, etiquette, basic tourism awareness, communication skills, behaviour skills, first aid and also energy conservation. The scheme has provided the basic framework for a countrywide training programme in human resource development for various groups of service providers in the tourism industry.

STEPS TAKEN TO ACCELERATE TOURISM GROWTH

1. Reduction in Entry Fee and Passenger Tax for Monuments

2. 3. 4. 5.

Over 17,000 additional international air seat capacities. Maximizing use of Information Technology For Promotion Touch Screen Information Kiosks. Up-gradation of Domestic Airlines, better services and increased frequency

6. 7. 8. 9.

Communication revolution. Increase Hotel Rooms to 1, 25,000 by 2002. More Budgets for Overseas Marketing Being Restored. More Efficient Immigration.

10. Faster Processing of Visa by Indian Missions 11.. Visa on Arrival

IMPROVING AND EXPANDING INDIAN TOURISM

The major beneficiaries of tourism development are private sector agencies like tour operators, hotels, transport operators, restaurants etc.

There is need for higher levels of participation by the private sector in all stages of tourism development. The Ministry of Tourism has issued guidelines for the privatisation of assets created with Central financial assistance like accommodation units,wayside amenities etc for better management and maintenance. The Ministry has alsointroduced a scheme for private participation in revenue generating projects with 25 per centequity from the government. The scheme of the Ministry of Finance for viability gapfunding for supporting public-private partnerships in infrastructure covers, inter alia,support for convention centres. The feasibility of covering budget hotel accommodation under the scheme is being considered.

1) It is evident from the increased activityin the development of hotels and resorts along the wildlife circuits that the tourism sector isresponding to the increasing demand for ecotourism. India has a significant number of wildlife sanctuaries and national parks and they provide a great opportunity for expanding the tourism market. The Ministry of Tourism formulated a policy on eco-tourism in 1998 involving a selective approach, scientific planning, effective control and continuous

monitoring. The cardinal principles of the policy are: i) Involve the local community in tourism activities. ii) Identify and attempt to minimise the likely conflicts between use of resources for tourism and livelihood of local inhabitants. iii) The form and scale of tourism development should be in harmony with the environment and socio-cultural characteristics of the local community iv) It should be planned as a part of the overall area development

strategy, guided by an integrated land-use plan and be associated with commensurate

expansion of public services.

2) Operational guidelines for the implementation of the policy by the states and the tourism trade are also in place. The Central government has also set up a National Committee on Eco-Tourism and Mountains to work out details of managing the fragile ecosystem and to consider programmes for development of eco-tourism in the country. The Committee needs to give priority to the eco-systems, which are coming under pressure from growing population and nature-related factors like lower rainfall

3) Health tourism is another area with a high potential for growth. Health tourism is nonseasonal and the average length of stay of a person is long, depending upon the medical procedure involved. The low cost of medical treatmenhigh level of expertise and varied systems of medicine of India are factors that can lead to an increasing share of health tourists in the total tourist arrivals. The southern states, especially Kerala, have developed health tourism as one of the products for promotion of tourism.

4) The Archaeological Survey of India (ASI) looks after the heritage sites that are major tourist attractions. For the integrated development of heritage sites, the Ministry of Tourism has taken up a large number of projects during the Tenth Plan period involving upgrading of facilities in the most popular sites in close co-ordination with the ASI. Action Plans are being formulated with the active involvement of state governments for developing popular heritage sites outside the purview of the ASI through public-private partnerships.

Public sector and private sector organisations are being encouraged to adopt some of the well-known heritage sites under the ASI for maintenance under the National Cultural Fund ASI levies entry charges to each heritage site. In order to make lesser-known heritage sites also attractive in region, a scheme should be introduced to facilitate tourists to visit the maximum number of heritage sites with concessional entry charges

CURRENT AFFAIRS

TOURISM SECTOR TO GENERATE MORE THAN 2 LAKH JOBS BY 2010:

The Tourism and Culture Minister Smt. Ambika Soni has said that infrastructure and skilled man power have to be in right place in the next five years in the wake of boom in tourism sector and economic growth of the country. Addressing a group of budding air hostesses here today, she said it is projected that by 2010 about 10 million foreign tourists will

arrive in the country and the out bound tourism will also grow manifolds which currently stands at 8 million tourists. modernisation/ upgradation of international airports at Mumbai and Delhi, creation of about one lakh fifty thousand additonal rooms in budget and star category hotels are the main challenges before all the stakeholders in civil aviation and tourism sector. The country will witness tremendous employment generation in the skilled and semi-skilled sector viz. pilots, aviation engineers, air hostesses, stewards, ground handling staff, guides, travel agents, tour operators and freight agencies. The Minister said the tourism sector is likely to generate two lakh plus jobs by 2010 in the wake of commonwealth games. She said tourism and civil aviation are inextricably linked; these two sectors feed upon each other and support each other. A strategy to develop manpower resource should take into account the demands and the growth trajectories of both aviation and tourism.Smt. Soni said Government is ready to have public private partnership both in tourism infrastructure development and training and upgradation of skills through specilized institutions.

BRIGHT PROSPECTS OF GROWTH OF TOURISM IN INDIA: ECONOMIC SURVEY: Economic Survey-2007-08

The Economic Survey 2007-08 has said that the prospects for growth of tourism in India are bright. The overall development of tourism infrastructure coupled with other efforts by the Government to promote tourism such as appropriately positioning India on the global tourism map through the Incredible India campaign, according greater focu s to newly emerging markets such as China, Latin America and CIS countries, and participating in trade fairs and exhibitions will facilitate tourism growth. The rate of growth of tourism sector in India has been way above the world average in the last few years. 2006-07 is the fourth consecutive year of high growth in foreign tourist arrivals and foreign exchange earnings from tourism. 2006-07 saw arrival of approximately 46.33 lakh foreign tourists in India, thereby registering a growth of 13 per cent over the previous year. As per advance estimates, foreign exchange earned during 2006-07 due to tourism was $ 9696 million a growth of 23.5 per cent over the previous year.s

FUTURE PROSPECT

According to the 2008 estimates of the World Tourism Organisation (WTO), international tourist inflow in India by 2020 would be 10 m. This makes the country one of the fastest growing tourist destinations in the world second only to China. India accounts for 0.5% of world tourism, and the tourist inflow is expected to grow at the rate of 4% till 2010. Strong GDP growth, improving infrastructure, confidence on the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms. The favourable demand supply gap is likely to continue when major expansions would come in. With no new supply coming in the near future, average room rates are expected to surge higher. Many international hotel chains either have or on the look out for setting up shop in the country. Companies like the Hilton and Hyatt group have already tied up with local giants East India Hotels and Asian Hotels. Others like Four Seasons, are on the lookout for a partner or would be setting up their own hotels, government permitting. This clearly shows that India is on the international tourism radar.Although prospects are promising, any change in the global geo-political situations can and have adversely affected the performance of this sector. Also, the heightened demand for land, especially from real estate players has led to a steep escalation in the prices. Also, shortage of manpower is going to be a huge challenge going forward. Hotel players with a diversified portfolio across different segments are likely to be the key beneficiaries. This should be one of the determining factors while investing in this sector.

KEY POSITIVES
1) India as a tourist destination - With 20% compounded growth in foreign tourist arrivals over the last four years, India continues to be a hot tourist destination. Though India accounts for a fraction of global tourist flows currently, the country is expected to increase its market share over the long-term. The recognition of tourism as an industry in the recent past has paved the way for increased competition. This, we believe, is likely to shape industry fortunes for the better. 2) Infrastructure development - The road development project along with other aspects like airport modernisation and port development is likely to result in increased economic activity. With air tariffs also falling steeply owing to increased competition, the tourism sector is expected to witness increased inflow of foreign tourists, higher inbound tourist flow and development of new tourist destinations within the country. 3) New segments - Sensing the enormous potential, new segments have emerged in the country. Budget hotels, service apartments, mid-market segments have started gaining importance. Further, people are also visiting the country for medical tourism, wild life, spa and other nonwork purposes.

KEY NEGATIVES
1) Getting expensive - The room rates on account of demand supply mismatch continued to touch new highs. This resulted in a drop in occupancy rates. Also, India compared to its Asian peers looked expensive as a tourist destination. As a result of the high room rates in branded hotels, unregulated, unorganized hotels and guesthouses segments have emerged, thus increasing competition. 2) Regional hubs developing - As mentioned above, though India has the potential, in the tourism sector, competition is more global. The rapid growth of China, select South East Asian countries and the pace of development in the Middle East could affect India in terms of its ability to attract tourists into the country.. 3) Susceptible to geo-political events - Since tourism is a global

phenomenon, any adverse developments on the geo-political front are likely to impact global tourist flows. India is no exception to the same, as was evident during events like September 11, Iraq war and SARS.

NEW AVENUES
Climate Change is a universal challenge and the world community has agreed to respond, in parallel with its commitments to the Millennium Development Goals. Tourism will play its part in the global response in solidarity with other sectors. We have a special responsibility and opportunity - in the worlds poorest and emerging countries tourism is one of the principle services exports with a strong comparative advantage. Tourism is also a proven weapon in the war on poverty. Responsible growth patterns must find ways to capitalize on this. During 2007 UNWTO was actively involved in helping the Tourism sector 1) Assess the interrelationship of climate change and tourism. Through a science based report on the economic, operational & market impacts as well as the challenges and opportunities. 2) Consider meaningful response patterns. Based on Multistakeholder evaluation and recommendations contained in the Davos Declaration Framework. The Declaration (augmented by Ministerial decisions in London and Cartagena) sets out directions for change for the Tourism Sector & calls on stakeholders to establish a long range low carbon emission roadmap with immediate concrete action plans supporting global response and coherent with the commitments to the Millennium Development Goals. 3) Participate in the global response framework. This includes a tourism input - alongside other economic sectors - to the recent UN Climate Summit in Bali, Indonesia as well as within Secretary General Ban Ki-

moons system wide roadmap to support adaptation, mitigation, technology and finance. i) In 2008 our focus will be on ii) Increasing awareness of the Davos Declaration Framework and Encouraging its implementation by all stakeholders. iii) As a first step UNWTOs Assembly has made the theme of World Tourism Day 2008 Tourism Responding to the Challenge of Climate Change - the organization & its Members will undertake a year long campaign around this theme.

WORLD TOURISM DAY

The institution of so-called world days to highlight among government and private circles and the public at large, salient features of the activities of intergovernmental organizations, is a widespread practice. Each year, the organizations belonging to the United Nations System, for example, celebrate world days devoted to the United Nations; world peace; human rights; health; literacy; environment; womanhood; childhood; cooperation for development; telecommunications, etc.

Establishment of the World Tourism Day It was at its third session (Torremolinos, Spain, September 1979), that the General Assembly of the World Tourism Organization (UNUNWTO) decided to institute, commencing in the year 1980. WORLD TOURISM DAY is to be commemorated on 27 September each year by appropriate events on themes selected by the General Assembly, on recommendation of UNWTO's Executive Council. This date was chosen to coincide with an important milestone in world tourism: the anniversary of the adoption of the UNWTO Statutes on 27 September 1970. The main purpose of World Tourism Day is to foster awareness among the international community of the importance of tourism and its social, cultural, political and economic values. The timing of World Tourism Day is indeed particularly appropriate in that it comes at the end of the high season in the northern hemisphere and the beginning of the season in the southern hemisphere,

when tourism is of topical interest to hundreds of thousands of people worldwide from all walks of life and to tourists and the operational sector in particular. The Organization invites all interested parties to take part on 27 September each year in the special celebrations taking place in their respective country or holiday destination. The UNWTO SecretaryGeneral issues a message each year to mark the occasion