CURRENT TOURISM TRENDS IN INDIA

 
In 2006, India’s share had been 0.8% of the world market travel and tourism market . This share has risen from
0.6% in 2001, registering a 13% CAGR as against 8% CAGR for the world during the same period. Further, the
WTO has forecast the Travel & Tourism Industry in India to grow by 8% per annum, in real terms, between 2008
and 2016. Foreign exchange earnings from tourism alone could show annualized growth of 14% during the same
period.
Despite the burgeoning share of the Asian market, India’s total share in world tourist arrivals, however, remains a
modest 0.8%, even though international arrivals to India have seen somewhat of a dramatic turnaround since
2002, when a temporary declining trend was reversed aggressively. This turnaround was the result of several
factors such as Government of India’s “Incredible India” campaign, high visibility afforded to India by its economic
success, the tourism industry’s constant search for new destinations, and to some extent improvement in
infrastructure in specific areas (such as better air connectivity of smaller and remote destinations). The total
foreign tourist arrivals in India in 2005 was around 3.92 million, registering a CAGR of 18.1% over 2002-2005 vis-
à-vis world tourist arrivals which registered a growth of barely 4.76% on a larger base (See Exhibit below).
Exhibit 12 3: International Tourist Arrivals by Region (millions)

 
Source: World Tourism Organization
Whether measured by the yardstick of its vast tourism resources, or its emerging economic importance, India’s low
share of tourism receipts and arrivals could be termed below potential.
Exhibit: Competitiveness Ranking of Nations on Factors affecting Tourism
Business
Regulatory Human, cultural
  Overall Environment &
Framework and natural resources
Infrastructure

Country Rank Rank Rank Rank

Switzerland 1 2 2 2

USA 5 33 1 12

Hong Kong SAR 6 4 14 14

Australia 13 16 10 26

Greece 24 20 32 15

Malaysia 31 27 27 57

Italy 33 42 30 32

Mauritius 39 35 46 39

Brazil 59 67 48 67
 Argentina 64 85 58 45

India 65 62 55 81

China 71 78 61 93
Source: World Economic Forum, World T&T Competitiveness Report, 2007, Geneva
The Competitiveness Report notes that India has key strengths, linked mainly to cultural endowments. For instance
India ranks 7th in terms of number of World Heritage sites. The country also benefits from excellent price
competitiveness, and ranks 6th overall in this category. Low ticket taxes and airport charges as well as low prices
(mostly for manufactured goods and not so much for the service industry in the premium range) in the economy as
a whole contribute to India’s price competitiveness.
It is imperative to point out that India has the advantage of a strong domestic tourism base which was in excess of
200 million tourists in 2006. This base is likely to grow on the back of a rapidly rising middle class with increased
incomes and awareness levels and is not greatly affected by the Competitiveness ranking which is primarily a
comparison with other countries.
Hence despite low rankings on the Competitiveness scale, it emerges that India can leverage its higher rankings in
certain categories to exploit its tourism potential over the next decade with appropriate planning and sensitivity
towards the environment. Also, certain states such as Gujarat have a natural advantage due to their historical,
cultural and natural endowments which could be appropriately targeted for better tourism flows.