Tourism in

Himachal
Pradesh and
the way
ahead

table of contents
Tourism in India 01
Growth in the number of tourists

02

Growth in the contribution of tourism to GDP

02

Factors driving growth of Tourism 03

Himachal Pradesh and its distinct features

05

Major tourist destinations 06

Assessment of Himachal Pradesh as a tourist destination

07

Growth in total number of tourists visiting Himachal Pradesh

08

Tourist profile in Himachal Pradesh

08

Foreign tourists by nationality 08

Seasonality of tourist inflow in Himachal Pradesh

09

Tourist inflow at major destinations in Himachal Pradesh

10

Key states with respect to tourism in India

11

Key states in terms of market share

12

Evolution of the ranking of states during 2007-2010

12

Case Study: Madhya Pradesh 15

Case Study: Uttarakhand 17
Assessment of Himachal Pradesh tourism infrastructure

19

Key Initiatives taken and planned by Himachal Pradesh

government 21
The way forward 25
For the state government to increase tourist inflow

26

For harnessing private sector participation

28

2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

tourism in india

The vast geography and cultural diversity of India provides it with a bounty of attractions to draw both
domestic and international tourists. There has been substantial growth in domestic and international tourists
in India over the last few years.
There are different factors aiding increase in number of tourists in the country. Per capita income has more
than doubled over the last one decade in the country. Accessibility to tourist locations has improved due to
substantial increase in the number of flights, trains as well as road connectivity to more tourist locations in
the country. The Aircraft Traffic Movement (ATM) in India has increased by 62 percent from 6.3 lakhs in 2006
to 10.3 lakhs in 20101.
In India, travel and tourism contributed INR 5,651 billion or 6.4 percent to the countrys GDP in 2011. Travel and
Tourism accounted for 7.8 percent of total employment in India in 20112.

Growth in the number of tourists

During 2006-2010, the total number of tourists visiting different
states/ UTs in India has increased from 4,740 lakhs to 7,580 lakhs,
growing at a CAGR of 12.5 percent.

Contribution of travel and tourism to GDP

Total tourists in India 2006-2010

Source: Travel & Tourism Economic Impact 2012 India -WTTC report (www.wttc.org)

Source: India Tourism Statistics 2010, 2009, 2008 and 2007 (www.tourism.gov.in)

Domestic tourist visits to states/ UTs grew at the rate of 12.5

percent CAGR during 2006 - 2010 period to reach 7,402 lakhs in
2010. Foreign Tourist arrival grew at 11 percent CAGR during the
same period and reached 179 lakhs in 20103.
To attract more foreign tourists to India, Government launched a
Scheme of Visa on Arrival (VoA) from January 2010 for citizens
of five countries, which has now been extended for six more
countries from January 20113.

Growth in the contribution of tourism to GDP

The total contribution of tourism to GDP in India has grown at a
CAGR of 4.6 percent during 2006-2010 period, reaching
INR 6,000 bn in 2012. According to World Travel & Tourism
Council, the tourism sector in India is expected to grow at even
faster rate of 8 percent over the next decade, contributing
approximately INR 13,000 bn to the GDP by 2022.

1 DGCA
2 WTTC, Travel & Tourism Economic Impact 2012, India
3 www.tourism.gov.in

This not only considers the direct impact of tourism on GDP but
also takes into account its wider impacts i.e. the indirect and
induced impacts. The graph also shows that indirect contribution
of tourism to GDP is significantly higher than the direct
contribution.
1. Direct Contribution of tourism to GDP: The direct
contribution of Travel & Tourism to GDP comprises total
spending within a particular country on travel and tourism
by domestic and foreign tourists as well as spending by
government on related services directly linked to visitors,
such as cultural (e.g. museums) or recreational (e.g. national
parks). According to World Travel and Tourism Council, the
direct contribution of tourism in India is forecasted to grow at
a CAGR of 8 percent over the next decade.
2. Indirect and Induced contribution of tourism to GDP: This
comprises investment spending (like construction of new
hotels), government collective spending, purchases done by
sectors dealing directly with the tourists and jobs supported
by the spending of people employed in tourism industry. The
indirect and induced contribution is forecasted to grow at
CAGR of 9 percent over the next decade.
From the graph above, for every rupee of direct contribution
of tourism to GDP, more than two rupees of contribution is
generated by indirect and induced effects of tourism in the GDP.
Thus, due to the multiplier impact of direct contribution, focus on
tourism sector may promote significant investment, earning and
jobs in the economy.

Factors driving growth of tourism

There are multiple factors which have aided in the growth of tourism in India and are expected to further drive tourism growth in the
country.

Source: PHD-KPMG in India report, Tourism in Himachal Pradesh and the way ahead, June 2012

Drivers
These are the factors which have direct impact on the growth of
tourism in the country.
Rise of middle class and increasing income levels: The

middle class in India has grown from 15 million households

in 2005 to 31.4 million households in 20114. The enhanced
purchasing power of middle class segment influenced the
growth in domestic travel during 2006-2010.
Increasing business travel: Over the last decade, the Indian

economy has grown consistently at an average rate of 6-7

percent per annum5. This has led to an increase in business
travel to India. The rise of multinationals, especially in the IT
and ITeS sector has also helped in increasing the business
travel.
Improved infrastructure: The tourism ministry and different

state governments are improving the facilities at various

tourist destinations. Development of new airports and
improvement in quality of roads has increased connectivity
to different tourist locations. This has helped in drawing more
tourists.
Facilitators
These are the factors that complement the driving factors in the
tourism growth

4 http://economictimes.indiatimes.com/opinion/view-point/rapid-gdp-growth-growing
middle-class-will-lead-to-india-powering-the-world/articleshow/7300851.cms and http://
articles.economictimes.indiatimes.com/2011-02-06/news/28424975_1_middle-class households-applied-economic-research

Government Initiatives: The Government of India (GOI)

has taken several initiatives to promote India as a tourist

destination. These include campaigns like Atithi Devo Bhavah
and Incredible India6 to highlight India as a significant tourist
destination on the world map. Along with this, GoIs Open
Sky policy, which gives permission to domestic airlines to
commence international flights, start-up of various lowcost carriers, and fleet expansion by domestic players have
created multiple options for domestic travelers to explore
far-off destinations within and outside India. The government
has also allowed 100 percent FDI through automatic
route in tourism and hospitality industry7 which has led to
improvement in tourism infrastructure in the country.
Convenience of travel arrangement using internet: Riding

on the digital economy rise, travel portals offering travel

packages, hotel stays, etc, have eased the trip booking
process. This has ensured that there are competitive tourist
friendly offerings available in the market.
Increase in awareness of travel options: The use of internet

has also assisted in spreading information about various

tourist destinations in India. Every state has a tourism website
showcasing the places to visit in that state and providing
information on how to reach those places. They also provide
various package tours targeted at different tourists in different
economic status.

5 http://economictimes.indiatimes.com/opinion/view-point/rapid-gdp-growth-growing-middle-
class-will-lead-to-india-powering-the-world/articleshow/7300851.cms
6 www.incredibleindia.org
7 http://www.expresshospitality.com/20120215/market03.shtml

himachal pradesh and its

distinct features

Popularly known as the Devbhumi Land of the Gods, Himachal Pradesh is a beautiful hill state in India,
nestled in the north-west region of western Himalayas. The state is landlocked with the Tibetan plateau to the
east, Jammu and Kashmir to the north, and the Punjab to the west. The state stands apart from its neighbours
in terms of its sheer topographic diversity. From vast tracts of high-altitude Trans-Himalayan desert to dense
green deodar forests, from apple orchards to cultivated terraces, from snow capped high Himalayan mountain
ranges to snow fed lakes and gushing rivers, Himachal Pradesh offers breathtaking pristine beauty.
Major tourist destinations
District

Tourist destinations

Pilgrimages

Wildlife sanctuaries

Other places of interest

Bilaspur

New Bilaspur Town,

Swarghat, Salasi village

Naina Devi

Bhakra Dam, Gobind Sagar Lake,

Deoli Fish Farm

Chamba

Dalhousie, Khajiar Chamba

town, Saho village

Laxmi Narayan Temple,

Vajreshwari Devi Temple

Manimahesh Lake,
Chamera Lake

Hamirpur

Hamirpur town, Bela village

Baba Balak Nath, Deotsidh

Temple, Markanda

Sujanpur Tira

Kangra

Dharamshala, Mcleodganj,
Palampur, Nerti village

Jwala ji, Chamunda Devi,

Bajinath Temple

Tibet Museum, Kangra Fort,

Kangra Valley, Pong Dam

Kullu

Hadimba Temple
Kullu, Manali Manikaran,
Naggar Vashishth, Shamshar
village

Great Himalayan National Museum of Himachal Culture

Park, Majathal Sanctuary & Folk Art, Gu Chu Sum
Movement Gallery, Rorrich Art
Gallery

Lahaul &
Spiti

Spiti, Kaza, Keylong,

Udaipur village

Trilok Nath Temple

Pin Valley National Park

Kunzam pass, Kye Monastery,

Rohtang Pass, Godhla Fort

Mandi

Sundernagar, Sh
Bagi Village

Shikari Devi Temple

Shikari Devi Wildlife

Sanctuary

Rewalsar Lake, Prashar Lake

Shimla

Shimla, Kufri, Hattu Peak,

Narkanda, Hiun Village

Kalibari Temple, Jakhoo

Temple, Tara Devi,

Chail Sanctuary

Shimla state Museum, Prospect

Hill, Chadwick Falls

Sirmour

Paonta Sahib, Rajgarh,

Trilokpur, Nahan, Renuka,
Sangdah Village

Paonta Sahib Gurudwara,

Renuka ji Temple

Renuka Sanctuary,
Simbalbara Sanctuary,
Churdahar Sanctuary

Jaitak Fort, Churdhar Peak,

Shivalik Fossil Park

Solan

Kasauli, Parwanoo, Barog,

Chail, Baniya Devi Village

Jatoli Temple

Gorkha Fort, Karol Tibba and

Meteol Tibba, Sadhu Pul

Una

Una Town, Nari Village

Chintpurni Devi, Shiv Bari

Temple

Dera Baba Rudru Nand ji Ashram

Kinnaur

Rekongpeo, Pooh, Chhitkul,

Sangla, Brua Village

Kinnar Kailash

Source: Himachal Tourism website (www.himachaltourism.gov.in)

The above table demonstrates the diversity and tourism

potential of Himachal Pradesh. Its serene valleys can promote
medical/ wellness and spiritual tourism in the state. Its terrain
also provides innumerable opportunities to promote adventure
tourism. Given the climate and topography of Himachal Pradesh,
adventure sport activities like river rafting, para-gliding and
trekking are popular in the state. Availability of natural resources
makes the state suitable for investments in sectors such as
tourism, agricultural produce, hydroelectric power and cement.
1

IBEF Report on Himachal Pradesh, November 2011

states average GSDP growth rate between 2004-05 and 200910 was about 11.4 percent. Given its topography, the state is a
leading producer of apples, producing 2.8 lakh metric tonnes of
apple in 2009-101.
The rural regions and pilgrimages can be used in promoting
rural tourism and pilgrimage tourism respectively. Hence,
opportunities are plenty for Himachal Pradesh to provide the
necessary infrastructure to attract higher tourist inflows.

assessment of himachal
pradesh as a tourist
destination

Growth in total number of tourists visiting Himachal

Pradesh
Compared to national average growth rate of 12.5 percent, the
number of tourists in Himachal Pradesh has grown at a CAGR of
14 percent during the 2006 2010 period.
The total number of tourists (foreign as well as domestic) visiting
Himachal Pradesh has consistently increased over the last 5
years increasing from 88 lakhs in 2007 to 151 lakhs in 2011
Total tourists in Himachal Pradesh 2006-2010

Himachal Pradesh is performing better than the other states

in India as a whole in terms of attracting both domestic and
foreign tourists. The number of domestic tourists in the state has
increased from 77 lakhs in 2006 to 129 lakhs in 2010, growing at
a CAGR of 14 percent as compared to a CAGR of 12.5 percent at
the India level.
In terms of foreign tourists, their number has increased from 3
lakhs to 4.5 lakhs in the same period, growing at a CAGR of 13
percent which is also above the CAGR of 11 percent at the India
level.
The mix of foreign and domestic tourists visiting Himachal
Pradesh has stayed almost constant from 2006 to 2011. It
highlights the potential of the state to attract domestic and
foreign tourists on a sustained basis.

Foreign tourists by nationality

An analysis of the foreign tourist arrival data in Himachal Pradesh
in 2011 shows that visitors from UK comprise the largest
proportion of foreign tourists with 15 percent share of the total
foreign visitors. Tourists from USA and France comprise the next
biggest share with 7 percent share each.

Source: Department of Tourism, Himachal Pradesh

The performance of Himachal Pradesh in attracting tourists

has been better than the average growth in number of tourists
across India. However, the current rank of 13 in terms of number
of tourists visiting the state in 2010 indicates that there is further
potential which may be leveraged by showcasing the state as an
important tourist destination.

Tourist profile in Himachal Pradesh

The tourist inflow in Himachal Pradesh over 2006-2011 period
has witnessed increase in both domestic and foreign tourists.
However, domestic tourists contribute the significant proportion
of the total number of tourists in the state.
Growth of domestic and foreign tourists in Himachal Pradesh

The data highlights that apart from English speaking countries

like UK, USA, Australia and Canada, a fair share of foreign tourists
arrive from non English speaking countries like France, Germany,
Italy and Japan. Thus, providing tourist related information on the
Himachal tourism website and at the tourist information centers
in multiple languages may add to the convenience of the foreign
tourists.
Country

Percentage share

UK

15%

USA

7%

France

7%

Germany

4%

Australia

4%

Canada

3%

Italy

2%

Japan

2%

Malaysia

2%

Source: Department of Tourism, Himachal Pradesh

Source: Department of Tourism, Himachal Pradesh

Average bed nights spent in Himachal Pradesh by foreign tourists

Source: Department of Tourism, Himachal Pradesh

The average bed nights spent in Himachal Pradesh by a foreign

tourist in 2011 is just 1.2 highlighting that the avenues of
entertainment for these visitors need to be increased as well as
communication program around them need to be reinforced to
make tourists stay longer. Although foreign tourists comprise
less than 3 percent of the total tourists in India, they constitute
17.8 percent of travel and tourism contribution to Indias GDP1.
This higher propensity to spend of foreign tourists highlights the
significance of their longer stay in the tourism growth. To achieve
this, the Himachal Pradesh government while marketing the
state as a tourist destination overseas may also try to develop

broader tourist circuits on the line of Delhi Agra Jaipur to

place the state on the itinerary of international tourists. This may
include tie up with state Governments of neighboring states
e.g. Delhi, Punjab, and J&K to develop integrated packages
and investment in logistic infrastructure to allow smooth
transportation.

Seasonality of tourist inflow in Himachal Pradesh

The graph below shows the number of tourists arriving in
Himachal Pradesh in a particular month as a percentage of total
number of tourists arriving in 2011.

Seasonality in tourist inflow in Himachal Pradesh

Source: Department of Tourism, Himachal Pradesh

The graph highlights that Himachal Pradesh witnesses maximum

tourists during the period from March to June with 46 percent
of the total tourists visiting the state visit during these 4 months.
This is the period during which summer vacations start in schools
across the country resulting in peak tourist traffic.
During the four winter months from November to February, the
tourist inflow to Himachal Pradesh is at lowest as accessibility to
different tourist locations within the state is a challenge during
this harsh winter period.
1

WTTC, Travel & Tourism Economic Impact 2012, India

Thus, there is high seasonality in the tourist inflow in Himachal

Pradesh and focused initiatives may be taken to attract tourists
during off-peak seasons. Attracting corporate tourists for
conducting off site trainings and conferences and organizing
national and international level events during this off season may
help in reducing the tourist traffic seasonality. A more balanced
distribution of tourists across the year would also be helpful in
attracting more private investors to the state.

10

Tourist inflow at major destinations in Himachal Pradesh

A detailed look at the tourist inflow in 2011 at various districts in
Himachal Pradesh shows that only three districts (Shimla, Kullu
and Kangra) corner over 50 percent of the total tourists coming

to the state though the state has 12 districts. Development and

promotion of other potential districts as tourist hubs would aid in
more equitable tourism growth in the state.

Citywise tourist share and growth rates

Source: www.himachaltourism.gov.in

Also, the graph shows that tourism has grown at a faster pace in
districts that were not prominent in the tourist circuits. In the last
few years, the number of tourists preferring to visit newer tourist
districts like Hamirpur, Kinnaur and Lahaul & Spiti has increased
at a rapid rate. It highlights the potential of growing tourism in
districts adjacent to popular destinations in the state.

Harmirpur and Una may have benefitted from their geographical

locations as they lie between two most preferred tourist
destinations of Shimla and Kangra. Similarly, Lahaul and Spiti
may have benefited due to the adjacency with Kullu and Manali.
It highlights that popularity of key tourist hubs has positive
influence on the adjacent districts and Himachal Pradesh
government may utilize this adjacency effect to attract the
tourists to lesser popular tourist destinations.

11

key states with respect to

tourism in india

12

Key states in terms of market share

In terms of market share (market share being defined as the
total number of tourists visiting a state as a percentage of total
tourists in the country), the top 8 states in the country are:
states

Market
Share

Rank in
2010

CAGR (20062010)

Andhra Pradesh

20.6%

9%

Uttar Pradesh

19.3%

8%

Tamil Nadu

15.1%

18%

Maharashtra

7.1%

30%

Karnataka

5.1%

1%

Madhya Pradesh

5.1%

36%

4%

16%

Rajasthan

3.5%

3.5%

West Bengal

2.9%

7%

Himachal Pradesh

1.8%

10

14%

Uttarakhand

The top 6 states combined receive over 70 percent of the

tourists visiting different states/UTs in India.

The market share of Himachal Pradesh in total number of

tourists is still modest as compared to other top performing

states
Growing at 36 percent, the rate of growth in the number of

tourists is highest for Madhya Pradesh, closely followed by

Maharashtra at 30 percent. The rate of tourism growth in
these 2 states is significantly higher than the other states
present in the top 8, with Tamil Nadu having the next best
tourism growth CAGR of 18 percent

Source: India Tourism Statistics 2010, 2009, 2008 and 2007 (www.tourism.gov.in)

Evolution of the ranking of states during 2007-2010

Following table gives top 8 most preferred tourist destinations in India in terms of number of visitors during 2007-2010.
Rank

2007

2008

2009

2010

Andhra Pradesh

Andhra Pradesh

Andhra Pradesh

Andhra Pradesh

Uttar Pradesh

Uttar Pradesh

Uttar Pradesh

Uttar Pradesh

Tamil Nadu

Tamil Nadu

Tamil Nadu

Tamil Nadu

Karnataka

Rajasthan

Maharashtra

Maharashtra

Rajasthan

Maharashtra

Karnataka

Karnataka

Maharashtra

Madhya Pradesh

Rajasthan

Madhya Pradesh

Uttarakhand

Uttarakhand

Madhya Pradesh

Uttarakhand

West Bengal

West Bengal

Uttarakhand

Rajasthan

Source: India Tourism Statistics 2010, 2009, 2008 and 2007 (www.tourism.gov.in)

13

A comparison of investment in tourism made by these states as a percentage of the total state budget in these states during 20072010 has been shown below:
Investment in tourism as a percentage of total budget

Source: Planning Commission state Plans Outlays 2007-2011

Andhra Pradesh, Uttar Pradesh and Tamil Nadu have

consistently stayed at the top of the list over 2007-2010 period

even though their investment in tourism as a percentage
of total outlay is among the least of the top 8 states, 0.09
percent, 0.14 percent and 0.21 percent respectively. The top
position of Andhra Pradesh is understood to be due to the
presence of Tirupati temple with millions of people visiting
it every year1. Similarly, the major tourist attractions in Tamil
Nadu are Chennai, Madurai and Rameshwaram. Uttar Pradesh
also attracts a lot of tourists due to presence of places like
Varanasi and Agra. One common factor among the top 3
states is the presence of holy pilgrimages in these states
signifying relevance of pilgrimage tourism especially in terms
of domestic tourism growth.
Maharashtra has moved up in the rankings from 6 in 2007 to

4 in 2010 which is justified by its higher spend on promoting

tourism in the state. Its spending on tourism is 0.62 percent of
the total budget and is among the highest in the top 8 states.
The state invests its tourism budget on maintaining existing
tourist sites like Ajanta and Ellora, developing new sites,
publicity etc.
Madhya Pradesh entered into the top 8 in 2008 and has

stayed in the list after that, showing that it is possible for other
states to enter into the list of top performing state given they
take the right measures to promote tourism. Although the
average investment of the state in tourism is just 0.22 percent
of its budget, it has been able to attract private investment
in tourism projects. It is also using PPP models for the
development of tourism infrastructure.2 The state may have
also benefitted by the effectiveness of its marketing campaign
where it is ranked higher than most of the top tourist states in
India3.

Uttarakhand invests 1.48 percent of its budget in tourism

which is the highest among these top 8 states. It has yielded

results for the state as it has risen from number 8 to 7 in the
last 5 years.
Himachal Pradesh government invests 0.28 percent of its

budget in tourism which is below the average investment

of the top 8 states. This may be one of the factors that have
resulted in Himachal Pradesh slipping from 12 spot in 2007 to
13 spot in 2010.
This highlights that some states like Andhra Pradesh and Tamil
Nadu have been consistently able to draw maximum number of
tourists due to the presence of religious sites, whereas there are
other states like Maharashtra and Karnataka that have invested
in tourism in the state and have been able to garner the attention
of the tourists.
The key areas of investment by these states have been4
Promotion of state tourism in national and international forums
Transport infrastructure in terms of road and transport

connectivity
Developing new tourist destinations in the state
Establishing good quality hotels and restaurants
Providing better facilities at tourist sites in terms of wayside

amenities, etc.
Himachal Pradesh may channelize investment to showcase
its natural beauty, develop newer circuits along with holy
pilgrimages to attract tourists to the state. The state realizes the
importance of investing in the above mentioned facilities and
there has been action in these areas however, these efforts need
to be sustained to continuously reap the benefits.

1 http://www.financialexpress.com/news/andhra-pradesh-top-tourist-destination-tourism- 3 HVS Whitepaper on Hotel Room Supply, Capital Investment and Manpower requirement by
ministry/819071/0
2021
2 http://www.hospitalitybizindia.com/detailNews.aspx?aid=5473&sid=1
4 state tourism department websites

14

15

case study
madhya pradesh

16

Madhya Pradesh is one of the upcoming tourist states in the

country. Recently, it bagged four national tourism awards from
the Union Ministry - Best Tourism state, Best Tourism Film, Best
Publicity Material and Best Civic Management of a tourism
destination in India1. Madhya Pradesh has focused on following
key areas aiding tourism promotion in the state.

Inviting national and international investments The state

government has been undertaking efforts to rope in national and
international investors to develop infrastructure in the state. To
promote investor confidence in the state, the Madhya Pradesh
state Tourism Development Corporation (MPSTDC) organizes
tourism conclave in association with reputed industry bodies.6

Marketing Understanding the importance of marketing and

advertising to catch the attention of tourists, Madhya Pradesh
government hired a reputed brand and advertising agency to
construct a tourism friendly image2. Understanding the fact that
majority of tourists in India are domestic tourists, it has used TV
commercials to promote its tourism. The move has worked well
for them and has helped Madhya Pradesh move up the ranking
of states in terms of share of tourists visiting the state.

Fort and palaces to be converted into heritage hotels The

government of Madhya Pradesh has created an inventory of
forts/palaces to be converted into heritage hotels. These forts/
palaces are planned to be offered to the private investors
on a long term lease (90 yrs)/Freehold/PPP basis through a
transparent process.4 For the forts/palaces in private hands, the
role of the Government is envisaged to be limited to bringing
the private players and investors together and facilitating the
entire process. The state has created a land bank of 500 hectares
and has invited private investors to set up properties at these
locations5.

Development of new sites New religious, historic and natural

sites are being developed as tourist destinations to attract more
and more national and international tourists to the state. Thirtyseven tourist places have been selected for further development.
Dividing the state into tourism sectors The tourism potential
of Madhya Pradesh is being increased by identifying select
tourist sectors in the state. The state is giving special attention
to developing Panna, Chitrakoot, Khajuraho and Orchha as
tourist destinations3. The government has also set up Tourism
Promotion Councils in various districts of the state to promote
tourism.
Investment in infrastructure Investment is being made at
a fast pace in tourism and supporting infrastructure needed to
promote it. Investment is also coming from foreign countries.
Three companies from Republic of China have invested recently
in the state. Some of the positive aspects of investment in
Madhya Pradesh are availability of land at relatively attractive
price, peaceful industrial atmosphere, immediate action on
investment proposals and harmonious social atmosphere.

1 Indian Express - http://www.indianexpress.com/news/mp-sikkim-receive-top-tourism-

awards/918543/
2 http://www.ogilvy.com/News/Press-Releases/November-2010-Ogilvy-Mumbai-creates-a-
new-TVC-for-MP-Tourism.aspx
3 http://articles.economictimes.indiatimes.com/2008-09-07/news/28465645_1_tourist-
destinations-tourism-council-tourist-places

Key learnings from initiatives undertaken by

Madhya Pradesh
Following key factors have helped Madhya Pradesh strengthen
its positioning and potential in terms of attracting tourists:
Judicious selection of marketing tools in increasing the

awareness of the tourist potential of the state.

Harnessing the tourism potential through identification and

development of potential new tourist destinations.

Establishment of required administrative set-up for

development and promotion of different regions and sites in

the state.
Regular meet with various tourism sector stakeholders to

create awareness about government initiatives and avenues

for private sector participation for tourism promotion.
Promotion and channelization of private sector investments

through PPP (Public- Private Partnership) models in the

development of state tourism infrastructure.

4 http://www.financialexpress.com/news/mp-takes-cue-from-rajasthan-to-turn-forts-into-
hotels/908633/
5 http://www.constructionupdate.com/CMS/Newsletter/NewsFiles/31556.html
6 http://www.travelbizmonitor.com/mp-tourism-to-organise-tourism-conclave-from-feb-12-to open-representative-office-in-varanasi-15439

17

case study
uttarakhand

18

Uttarakhand has reasonably similar topography like Himachal

Pradesh. A large portion of the tourist traffic in Uttarakhand
is driven by the presence of sacred places like Haridwar and
Chaar Dhaam, yet Uttarakhand as a state matches the profile
of Himachal Pradesh in terms of having scenic valleys, beautiful
hill stations and wildlife sanctuaries which provide the scope
for promoting new forms of tourism like wellness tourism, eco
tourism, adventure tourism, etc.

Liasioning with tour operators The state has focused

on promoting tourism in lesser known destinations in
Uttarakhand. Uttarakhand Tourism Development Board organized
familiarisation tours for 50 tour operators from across the
country to new destinations in Garhwal and Kumaon regions5.
The state is actively working with these private tour operators
in not only promoting these destinations but also inviting their
feedback to effectively promote tourism in the state.

Uttarakhand has performed well in terms of attracting tourists

during 2006-2010 period, as the total number of visitors in the
state increased from 168 lakhs in 2006 to 303 lakhs in 2010,
growing at a very healthy CAGR of 16 percent. Some of the key
factors for this healthy growth have been mentioned below.

Promoting different forms of tourism The state government

is also focusing on creating new tourist circuits. It is promoting
a new circuit christened Vivekananda Circuit showcasing the
places Swami Vivekananda visited and stayed in the state6. The
Government is also aggressively setting up adventure centers
across the state for promoting outdoor activities like trekking,
mountaineering, river rafting, kayaking, canoeing, rowing, water
and snow skiing and has shortlisted 19 locations to establish
these centers. A program has been started at Choti Haldwani to
provide the rural experience to urban children and it has received
good response7. It is also promoting eco tourism to increase
the tourist footfalls and has created an Eco tourism wing of the
Uttarakhand government for promoting eco tourism activities in
the state8.

Total tourists - Uttarakhand

Key learnings from initiatives undertaken by

Uttarakhand
Following key initiatives have helped Uttarakhand in promoting
and harnessing its tourism potential:
Source: India Tourism Statistics 2010, 2009, 2008 and 2007 (www.tourism.gov.in)

Focus on development of tourism infrastructure by

channelizing investment from govt. and private investors.

Investment in tourism With an average investment in tourism
as a percentage of total state budget of 1.5 percent during
the 2007-2010 period1, Uttarakhand government is spending
significantly on tourism sector as compared to other key tourist
states in India. Focus on tourism investment by Uttarakhand
government may be one of the factors aiding faster tourism
growth in the state. The density of hotel rooms per 100 square
Km of state area in Uttarakhand is 1.8 which is high as compared
to other similar terrain states2. Five ropeway projects have
also been added to improve connectivity in areas of Nainital,
Mussoorie, etc3. The state has been able to attract investments
from private players as well as the central government to
improve its tourism infrastructure. It highlights the focus of
Uttarakhand government and private sector in developing
tourism infrastructure in the state.

Identification and development of new tourism circuits and

locations and involvement of key stakeholders in promotion of

the same.
Leverage the gifted religious pilgrims in the state to attract

domestic tourists year on year basis.

Development of centres of recreational activities across the

state to attract adventure loving tourists.

Make use of different resources of the state to promote

various forms of tourism.

Pilgrimage tourism Domestic tourists form a major portion

of the total tourists visiting the state. A key factor for this
high domestic tourist inflow in the state is the presence of
holy pilgrimages like Haridwar and Chaar Dhaam in the state.
According to ACNielsen4 report on Uttarakhand for Ministry of
Tourism, over 70 percent of the domestic tourists in Uttarakhand
visit Haridwar. It highlights the high potential of pilgrimage
tourism in drawing domestic tourists in India.

1 Planning Commission state Plans Outlays 2007-2011

2 HVS Whitepaper on Hotel Room Supply, Capital Investment and Manpower requirement by
2021
3 http://www.expresstravelworld.com/201005/market12.shtml
4 http://www.tourism.gov.in/CMSPagePicture/file/marketresearch/statisticalsurveys/07%20
uttaranchal.pdf

5 http://articles.economictimes.indiatimes.com/2008-04-17/news/28384744_1_tourist-
destinations-tour-operators-foreign-tourists
6 http://www.expresstravelworld.com/201108/market11.shtml
7 http://in.news.yahoo.com/uttarakhands-chhoti-haldwani-region-promotes-rural-tourism-
corbett-121603877.html
8 http://in.news.yahoo.com/uttarakhand-government-promoting-eco-tourism-145645789.html

19

assessment of himachal
pradesh tourism
infrastructure

20

Connectivity1
Road Road connectivity is critical for tourists to commute from
one city to another and Himachal government has addressed
this area at high priority. The total length of motorable roads in
Himachal Pradesh increased from 22,200 km in 2002 to over
30,000 km in 2009. As of March 2011, the total length of National
Highways in the state is about 1409 km2. Himachal Pradesh
government has given a high priority to the transportation
sector in the Twelfth Five Year Plan. It has proposed 21 percent
of the total outlays in this plan to be spent on improving the
transportation and communication sector in the state. An all
weather road from Manali to Leh is also under construction and
is planned to be completed by 20153. However, the road length
per 100 sq Km area for Himachal Pradesh is 38.1 which appear to
be modest as compared to many of the key tourist states in the
country4. Therefore, efforts on improving road connectivity need
to continue.

and railway pickups, guide services, etc. The total number of

travel agencies in the state has increased from about 405 travel
agents in 2003 to 1,100 in 20107. Along with this, there are about
500 guides to assist the tourists and providing them with the
details of the places they visit.

Branding
The state government promotes Himachal using slogans
like Unforgettable Himachal13 and A Destination for All Seasons
and All Reasons14 . This has had excellent feedback from the
tourism fraternity. The state has nominated movie star Preity
Zinta as the brand ambassador of Himachal Pradesh Tourism to
promote the state both nationally and internationally. The state
recently won national-level Best Tourism Promotion Award for
its campaign Unforgettable Himachal and coffee table
book Har Ghar Kuchh Kehta Hai8. The effectiveness of the
marketing campaign of Himachal Pradesh tourism has also
increased over the last 2 years4. Sustained focus on branding
both in India and internationally may help increase tourist flow in
the state.

Rail Owing to the hilly terrain of the region, rail connectivity is

a constraint. Himachal Pradesh falls under the Northern Railway
Network. Two narrow gauge lines connect Kalka with Shimla
and Joginder Nagar with Pathankot; with a route length of 96 km
and 113 km, respectively. A 33 km broad-gauge line connects the
Nangal Dam to Charuru.11 The state is also pushing the central
government for Mandi-Manali-Leh rail line12 which will give a
major boost to tourism in Himachal Pradesh and J&K.

Tourist information kiosks

Air Air connectivity to Himachal Pradesh is limited but is

helped by nearby airport at Chandigarh and Delhi with excellent
road connectivity. Himachal Pradesh, by itself, has 3 airports at
Kullu, Kangra and Shimla which have limited number of services
currently. In addition to these, there are more than 50 operational
helipads while another 12 new helipads are in the pipeline. A
new international airport is also proposed at Sunder Nagar
district.

Festivals and events

Accommodation
Himachal Pradesh offers a vast range of accommodation facilities
to tourists to choose from depending on his preference and
budget. The number of hotels in Himachal Pradesh has increased
from 1,500 in 2003 to 2,150 in 2010 with the total number of
beds rising from 34,000 to 51,000 in the same period5. Majority
of these hotels are located in major tourist hubs of Kullu, Manali
and Shimla. The actual total number of beds available may be 3040 percent higher than this due to the presence of small guest
houses and unorganized sector accommodation6. However, the
accommodation facilities in smaller or lesser visited places may
need to be improved.

Tour operators and guides

Himachal Pradesh has a good network of tour operators and
guides. These private tour operators provide travel related
services, such as transport vehicles (tourist coaches and taxis),
hotel reservations, local sightseeing, air and rail bookings, airport

1 IBEF report on Himachal Pradesh, November 2011 and http://www.hpplanning.nic.in/

Roads%20and%20Bridges%20in%20Himachal%20Pradesh.pdf
2 IBEF report on Himachal Pradesh, November 2011
3 http://www.igovernment.in/site/all-weather-roads-link-jk-ladakh-soon
4 HVS Whitepaper on Hotel Room Supply, Capital Investment and Manpower requirement by
2021
5 www.himachaltourism.gov.in and 20-year Perspective Plans on Tourism Sector, Himachal
Pradesh
6 20-year Perspective Plans for sustainable tourism development in Himachal Pradesh
7 himachaltourism.gov.in and Drshti report on Sustainable Tourism Development in Himachal
Pradesh

The state government invested INR 22.50 lakhs in setting up IT

enabled tourist information kiosks in Himachal Pradesh in 20119.
The funding was provided by the Union Ministry of Tourism.
Tourist related information such as important tourist destinations;
weather, hotel, railway and bus bookings and other related
facilities will be provided to the tourists through these kiosks.

To attract national and international tourists to Himachal Pradesh,

the government organizes several events throughout the year.
These include - Internationa Shimla festival, Winter Carnival
at Manali, Ice Skating festival, Tribal festival and many more10.
Himachal Pradesh needs to continue focus on such events to
increase tourist footfalls, especially during the off-peak season
(November-February).

Urban infrastructure
Urban infrastructure in Himachal Pradesh has been identified
as a key focus area under the central government Jawaharlal
Nehru Urban Renewal Mission (JNNURM). Shimla is one of
the 65 cities that have been identified under JNNURM for local
infrastructure development. Under this mission, four projects
worth USD 33 million have been sanctioned and are currently
under implementation to improve the urban infrastructure
in the city2. These include widening of tunnels, solid waste
management etc. which shall help improve tourists experience
in Shimla. The government policy to ban the usage of plastic
bags has also helped in improving the sanitation issues and
preventing the environment. Overall these initiatives have had a
positive impact on the growth of tourism in the state.

8 http://www.indianexpress.com/news/patil-to-confer-tourism-award-on-hp-today/917894/
9 http://www.travelbizmonitor.com/PrintArticle.aspx?aid=13703&sid=36
10 www.himachaltourism.gov.in
11 IBEF report on Himachal Pradesh, November 2011
12 http://articles.economictimes.indiatimes.com/2012-03-14/news/31168836_1_railway-budget rail-budget-new-railway-lines
13 http://www.himachaltourism.gov.in/
14 http://www.indfy.com/himachal-pradesh/

21

key initiatives taken and

planned by himachal pradesh
government1

Himachal Tourism (www.himachaltourism.gov.in)

22

Some of the key initiatives at the policy formulation and

implementation steps taken by the government are detailed in
this chapter.

Division into circuits

Himachal Pradesh Tourism Development Corporation has divided
the state into four interesting circuits. These circuits pass
through different terrains making one feel as if one is trekking
through ages at different times. These circuits are
a. Dhauldhar Circuit (Dalhousie, Dharamshala, Palampur, etc.),
b. Beas Circuit (Mandi, Kullu and Manali),
c. Tribal Circuit (Sarahan, Sangla and Nako) and
d. Sutlej Circuit (Shimla, Solan and Paonta Sahib).
There are multiple tour options available for each of the circuits
providing several choices to the tourists.

Tourism policy
The Department of Tourism and Civil Aviation came out with a
forward looking tourism policy of Himachal Pradesh in 20052. It
showcased the importance of tourism to the state economy and
identified several thrust areas to promote tourism in the state.

Home stay scheme

This scheme was launched in 2008 by Himachal Pradesh
government with an aim to provide clean, comfortable and
affordable supplementary accommodation to tourists in rural
areas in the vicinity of famous tourist destinations when hotels
and guest houses are packed to capacity.
This scheme was intended to broaden the stake holders base
for tourism in the state by including rural and interior areas of the
state in providing tourism accommodation infrastructure and at
the same time decongest the urban areas, which cannot support
any further tourism traffic. The initiative also aimed at providing
employment and generating economic value in the rural areas.
The state government has provided several incentives to
promote this scheme by exempting the home stay units from
luxury and sales tax and charging domestic rates of water and
electricity from these units.4

Har gaon ki kahani

This initiative was started by the Himachal Pradesh government
in 2010. One village was selected in each of the twelve districts
of the state and fascinating tales, folklore and anecdotes related
to these villages are used to lure tourists. This novel scheme
aims at developing villages of historic importance as tourism
villages by providing basic amenities and provides tourists a peep
into rustic life of the hill state.
The state government has received accolades for this initiative
and won the award for most innovative marketing campaign5.
The state government is in process of launching the second
phase of this scheme in August 2012 as more villages in the
districts are being identified6. To identify villages for this initiative,
the tourism department encouraged people from across the
state to send fascinating stories and legends, stories of gods
and goddesses, prevalent religious beliefs, local customs, rituals
followed on the occasion of marriage and festivals etc related
to their native place. These were then reviewed and funds were
allocated to the villages with interesting stories and historical
facts7.

Tourism promotion
The Himachal Pradesh Tourism Development Corporation
(HPTDC) has been using print media to promote tourism in
the state. These include advertisements in newspapers and
publishing books like Unforgettable Himachal. The department
has also used TV channels, primarily news channels to advertise
tourism. It participates in various national level tourist festivals
across the country and also conducts road shows to draw more
tourist attention.

Adventure tourism
The state government highlighted the potential of adventure
tourism in Himachal Pradesh Tourism Policy published in 2005.
Since then, to promote Himachal Pradesh as an adventure sport
destination, adventure tourism activities like trekking, mountain
biking and para-gliding, ice skating, skiing, river rafting, heliskiing, car rallies are being organised in different areas of the
state for tourists.

The scheme has proved to be highly successful for the

Himachal Pradesh government with Home Stay units evoking
overwhelming response in Kullu, Manali, Shimla, Dharmshala,
Palampur and Dalhousie regions. A very large percentage of
tourists prefer to stay in small affordable accommodations in
clean homely environment. A total of 891 rooms in 332 units
were registered as Home Stay units by February 20113.

2 http://www.himachaltourism.gov.in/file.axd?file=2010%2F4%2FTourism+Policy+2005.pdf
3 http://www.himachal.nic.in/hipa/LabtoLand/RD/RuralTourism.pdf
4
Department of Tourism, Himachal Pradesh
5 http://www.ttfotm.com/ttf/award.html

6 http://www.dailypioneer.com/state-editions/chandigarh/64527-himachal-to-launch-second phase-of-rural-tourism-soon.html
7 http://www.himachalpr.gov.in/features/FEATURE-27E10.htm

23

Policy incentives
To encourage private sector participation in tourism and create
employment in the state, the state declared a 10 year tax holiday
for entertainment units and deferred payment of luxury tax by
hotels and tourism units8. This has provided a major boost for
development of tourism infrastructure in the state.

Inauguration of Shimla heritage museum

In 2011, Himachal Pradesh government inaugurated a heritage
museum which showcases the heritage of Shimla. It provides
visitors a glimpse of heritage building of British Raj and is aimed
at attracting more domestic and foreign tourists to the state. The
government is also investing in restoring The US Club building
which houses the Shimla Heritage Museum.

Initiatives in the pipeline

a. Golf courses: Recognizing the potential to develop golf as
a niche tourism product for attracting both international and
domestic tourists, especially the high end visitors, state
government is planning to set up golf courses at industrial
township of Baddi and tourist resort at Manali under Publicprivate-Partnership (PPP) model and has offered land and other
facilities to the private sector.

Development Bank (ADB). ADB would be providing a funding

of USD 95 mn for the development of various infrastructural
facilities in Himachal Pradesh10. Some of the planned facilities
include:
i. Development of circular road and parking near Naina Devi
ii. Information Centres, toilet and parking facilities at Pong
Dam
iii. Restoration of Shimla Heritage museum
iv. Infrastructure improvements, development of jetties,
development of trails, landscaping etc. in Ranser and Karu
Islands
v. Development of camping sites at Dhameta and Nagrota
Suriyan11.
d. Developing new circuits: The state government is also
working closely with the Ministry of Tourism to develop new
tourist circuits in the state. A new adventure and eco tourism
circuit has been identified in Himachal Pradesh covering Kullu,
Katrain and Manali12.

b. Connectivity improvements: Ten more helipads are to be set

up in Sirmour, Kinnaur and Mandi districts to increase the total
strength of helipads in the state to 70. Heli-taxis services in
the state is also planned to be started soon. The government
is also in the process of increasing the ropeway connectivity in
the state by setting up ropeways at Palchan and Bijli Mahadev
in Kullu district. Work on several other ropeways is also in
progress9.
c. Development institution funding: The state has also
been able to attract direct foreign assistance from Asian

8 http://www.pppinindia.com/state-policy-himachal-pradesh.php
9 http://www.hospitalitybizindia.com/detailNews.aspx?aid=9393&sid=1

10 http://www.financialexpress.com/news/adb-to-fund-tourism-infra-projects-in-hp/726166/1

11 Depart of Tourism, Himachal Pradesh

12 Ministry of Tourism, Annual Report, 2010-11

24

25

the way forward

26

For the state government to increase tourist inflow

Marketing
a. Advertising on television: One of the biggest take-away
from the success of other Indian states that have witnessed
tourism growth is the impact of marketing and advertising
on tourism. Tourism is a highly competitive industry as
multitudes of tourism destination options are available to the
potential traveler. Thus, marketing is a key function for the
state as it helps in promoting a distinct image of the state and
catching the travelers attention, thereby influencing ones
decision. Himachal Pradesh government has thus far focused
on advertising in print (including in-flight advertising) and its
television advertising has largely been on news channels1.
However, with domestic tourists comprising over 97 percent
of the total tourists in the country5, television commercials
on prime channels, internet advertising, along with current
channels of advertisement is likely to reinforce efforts to reach
huge potential tourist market
b. Participation in events: In-flight promotions may be
continued to attract more and more international travelers. To
attract more foreign tourists, Himachal Pradesh may focus on
increased participation in trade fairs and tourism events held in
different parts of the world.
c. Use of social media: To improve the brand visibility of
Himachal Pradesh tourism, a strong presence on internet
and in the social networking media is necessary. Tourists can
be encouraged to provide reviews of their trip to Himachal
Pradesh and latest upcoming events should be posted on
these websites. Innovative videos can also help in promoting
the tourism.
Thus, a joint effort between the Himachal Government,
Department of Tourism, hoteliers, tour operators, and travel
organization may be needed to promote Himachal Pradesh as
a tourist destination on national as well as international stage.
Development in infrastructure
One of the best ways to promote a tourist destination is through
word of mouth. Hence, it is important to provide a pleasant
experience to tourists visiting a place and sound infrastructure
is needed for that. This includes good roads, availability of prepaid taxi services, good connectivity with different parts of the
country, etc. The density of branded hotel rooms in the state is
0.9 rooms per 100 square Km2 and may need to be augmented
to be at par with some of the peer states. The government needs
sustained efforts to improve on this dimension. All this needs
to be taken care of to elevate the image of Himachal Pradesh
as a preferred tourist destination3. However, natural beauty for
which Himachal Pradesh is known for should be preserved while
developing the tourism infrastructure
Inviting private investment
The state government may focus on encouraging investment
from private players for improving infrastructure facilities,
accommodation and service quality, developing and maintaining
tourist sites. The government may play the role of a facilitator
1 Department of Tourism & Civil Aviation Himachal Pradesh Annual Reports
2 HVS Whitepaper on Hotel Room Supply, Capital Investment and Manpower requirement by
2021
3 Report on Infrastructure Gaps in Tourism Sector in Kullu-Manali, Himachal Pradesh
4 Presentation before the Planning Commission on Annual Plan 2012-13 and Twelfth 5 year

plan, Government of Himachal Pradesh

in order to channelize private investment in the state towards

development of tourism. The Government has already planned
major incentives to encourage private participation. The state
declared a 10 year tax holiday for entertainment units and
deferred payment of luxury tax by hotels and tourism units6. In
addition, the government may also convene periodic events and
tourism conclave which will engage stakeholders and boost
the investor confidence. Heritage sights may be developed and
maintained based on PPP model by leasing them out to private
players whereas hotels and restaurants can be entirely funded
by private players. To increase the attractiveness of Himachal
Pradesh to private players, model of private sector participation
in the infrastructural areas mentioned above may need to be
evolved. Also, it is important to have a streamlined process for
investment approval in tourism projects.
Pilgrimage tourism
Religious tourism is the single largest driver of Tourism in India.
For example, Andhra Pradesh witnesses a very large number
of people visiting Tirupati Balaji every year7. Similarly, over 70
percent of the total tourists in Uttarakhand visit Haridwar8. This
shows the high potential of pilgrimage tourism in India. Himachal
Pradesh is also blessed with multiple pilgrimage destinations
like Naina Devi, Chamunda Devi, Jwala ji and Paonta Sahib
Gurudwara. The tourism potential of these places should be
tapped by developing the supporting infrastructure of these sites.
Special package tours covering major pilgrimages in Himachal
Pradesh may be started to pull more domestic tourists to the
state.
Organise international events to promote adventure
tourism
Himachal government currently organizes a few international
events like Ice Skating Festival, International Paragliding
competitions, etc. Aggressive promotion of adventure tourism
sites in the state and holding international events at different
locations in the state can give a major boost to tourism.
Dharamshala currently hosts some matches of Indian Premier
League.9 Hosting larger number of international cricket matches
at this stadium will also help in increasing the tourist footfalls. A
significant number of events during the Nov-Feb period may help
in attracting more tourists during this off-peak season period. The
state may also set up institutes offering courses in adventure
sports to differentiate it from other states and establish itself as
a pioneer in adventure sport market in India.
Training
Tourism contributes 10 percent of GSDP of Himachal Pradesh
and the government aims to increase it to 15 percent by 20204.
To achieve this, apart from all the infrastructural requirements,
the state will need a lot of skilled labor to provide services to
the visitors. The state would also need local entrepreneurs to
establish recreational facilities, hotels etc. Hence, providing
quality training to the locals is going to be critical for Himachal
Pradesh to achieve its goal. There should be regular trainings
conducted for developing guides, entrepreneurs, waiters and
front office staff.
5 India Tourism Statistics 2010 (www.tourism.gov.in)
6 http://www.pppinindia.com/state-policy-himachal-pradesh.php
7 http://www.financialexpress.com/news/andhra-pradesh-top-tourist-destination-tourism ministry/819071/0
8 http://www.tourism.gov.in/CMSPagePicture/file/marketresearch/statisticalsurveys/07%20
uttaranchal.pdf
9 http://articles.timesofindia.indiatimes.com/2011-05-02/tale-spin/29495956_1_ipl-hotels-hpca

27

Circuit rationalization

Localization of content for foreign tourists

As mentioned above, the Himachal Pradesh government has

divided the state into four circuits to provide different experience
to the tourist. However, there are too many destinations across
each circuit and with the average duration of a trip of a domestic
tourist being 2-4 days only, the number of destinations in each
circuit may be rationalised.

As stated earlier, Himachal Pradesh receives a fair share of

foreign visitors. A significant number of these foreign visitors
belong to non-English speaking countries like Germany, France,
Italy, etc. Hence, the service provided to these visitors may be
improved by providing information in their local language at the
tourist information centers. The website of Himachal tourism
may also be translated into different languages. Apart from this,
different language trainings to guides may also help in ensuring
more pleasant experience to these guests.

Establish new circuits

Himachal Pradesh has the potential to promote various forms of
tourism like wellness tourism, corporate tourism and ecotourism
etc. The state needs to develop new circuits to tap the potential
of these upcoming forms of tourism. Wellness or Health circuits
covering regions like Dharamshala and Mcleodganj may be
promoted. Similarly corporate circuits in regions having good
connectivity and other amenities may be set up to offset the
seasonality in tourist inflow.

28

For harnessing private sector participation

Hotels and restaurants

Recreational centers and shopping complexes

With the growing number of tourists visiting Himachal Pradesh

year after year, there is immense potential for hoteliers/investors
to build good quality budget and luxury hotels in the state. The
Himachal Pradesh government aims to increase the contribution
of tourism to GSDP from 10 to 15 percent by 20208 and is
promoting tourism in the state, so the number of visitors is likely
to grow providing ample opportunities for the investors to benefit
from it. Seasonality of the traffic is a risk for this segment but it
may be mitigated by developing corporate clients and organizing
off site trainings and conferences during the off season.

With the number of tourists visiting the hills of Himachal

Pradesh increasing consistently every year, the state offers
growing potential to the investors in retail and entertainment
space. The potential areas of investment may be shopping malls,
multiplexes, amusement parks, etc.

Developing tourist sites

One of the keys to attract tourists to a state is the maintenance
of existing tourist sites and development of new ones. Private
sector has a role to play in both these aspects. The state
government of Himachal Pradesh is focused on performing the
role of a felicitator and is inviting private players via PPP route to
develop new destinations or lease existing sites for maintenance.
Training institutes
As mentioned earlier, Himachal Pradesh needs significant trained
personnel to achieve its targeted growth in tourism. This would
require training programs for Entrepreneur Development, Hotel
Management, Adventure sports, Front office tasks, etc. It is
difficult for the government to create so many trained personnel
by itself and thus there is great potential for private sector to
fulfill this gap. The scope of this opportunity is good given that
Himachal Pradesh government is promoting tourism courses
among the youth of the state.

Other opportunities
Apart from the above mentioned areas, the other likely areas for
private investment may be:
Travel and tour operations
Adventure activities operations.

The past initiatives undertaken by the Union and Himachal

Pradesh government have yielded a strong impact on the
tourism market in the state. Some of the initiatives by the
government and the private sector outlined in the above section,
will further strengthen the position of Himachal Pradesh as a
tourist destination and will enable the state to achieve greater
economic and social prosperity.

Presentation before the Planning Commission on Annual Plan 2012-13 and Twelfth 5 year
plan, Government of Himachal Pradesh

29

about kpmg in india

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30

about phd chamber of

commerce and industry

PHD Chamber of Commerce and Industry, established in 1905, is a proactive and

dynamic multi-state apex organisation working at the grass-root level and with strong
national and international linkages.
The Chamber acts as a catalyst in the promotion of industry, trade and entrepreneurship.
PHD Chamber, through its research-based policy advocacy role, positively impacts
the economic growth and development of the nation. PHD Chamber is more than an
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Life & Part of It and contributes significantly to socio-economic development and
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PHD Chambers geographical span covers the 10 states of Chhattisgarh, Delhi, Haryana,
Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, Punjab, Rajasthan, Uttar
Pradesh, Uttarakhand and the Union Territory of Chandigarh. Apart from its headquarters
in New Delhi, the Chamber has regional offices in Jammu, Shimla, Chandigarh, Lucknow,
Jaipur and Bhopal.
Diversified and Large Membership Base
PHD Chamber has a direct membership of over 1,600 corporate entities and serves
more than 45,000 indirect members through 150 Association Members and 8 Secretarial
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networking events in the region served by us.

KPMG Contacts

PHD Chamber Contacts

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Headquarters

Jaideep Ghosh
Partner, Management Consulting
T: +91 124 307 4152
E: jaideepghosh@kpmg.com

PHD Chamber of Commerce and

Industry
PHD House,
4/2 Siri Institutional Area
August Kranti Marg,
New Delhi - 110016
T: +91 11 2686 3801-04/4954 5454
F: +91 11 2685 5450/4954 5451
E: phdcci@phdcci.in

Atul Gandhi
Partner, Tax
T: +91 172 393 5781
E: atulgandhi@kpmg.com

kpmg.com/in

Punjab, Haryana & Chandigarh

PHD Chamber of Commerce and
Industry
PHD House, Sector -31A,
Chandigarh - 160031
T: +91 172 263 8981/8653/8662
F: +91 172 263 8982
E: mail@phdccichd.com
Himachal Pradesh
PHD Chamber of Commerce and
Industry
Room No. 205, Udyog Bhawan,
Shimla - 117044
T: +91 177 280 7855
E: phdshimla@phdcci.in

phdcci.in

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