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Development of Tourism in India PDF
Development of Tourism in India PDF
BRIEF REPORT
ON
TOURISM IN INDIA
August 2013
A brief report on Tourism in India
1. INDUSTRY OVERVIEW
1.1 Background
Tourism is driven by the natural urge of every human being for new experiences, and the
desire to be both educated and entertained. The motivations for tourism also include
religious and business interests; the spread of education has fostered a desire to know more
about different parts of the globe. The basic human thirst for new experience and knowledge
has become stronger, as communication barriers are getting overcome by technological
advances. Expenditure on tourism induces a chain of transactions requiring supply of goods
and services from the related sectors. The consumption demand, emanating from tourist
expenditure also induces more employment and generates a multiplier effect on the
economy.
Tourism in India is broadly classified by its regions - North, East, West and South Indian
tourism. Each part of India offers identifiable differences from the rest of the nation. The
creation of niche tourism products like medical tourism, wellness tourism, religious circuits,
adventure tourism, cruise tourism, and caravan tourism has served to widen the net of this
sector. Inbound tourism is booming and the country is going all out to lure more travelers
from around the world. Contrary to perceptions across the world that tourism in India is still
confined to traditions, the country is opening up with trendy tour packages and affordable
air travel deals to woo inbound visitors from every segment.
The Indian Tourism sector is one of the largest service industries in the country in terms of
its contribution to the Gross Domestic Product (GDP) and Foreign Exchange Earnings, as
well as for providing employment to millions. The sector in fact is expected to generate
around US$ 42.8 billion (INR 1,897.7 billion) by 2017, according to an industry research.
The amount of foreign direct investments (FDI) inflow into the hotel and tourism sector
during April 2000 to April 2013 was worth US$ 6,664.20 million. Foreign tourist arrivals
(FTA) during the Month of June 2013 stood at 0.44 million as compared to FTAs of 0.43
million during June 2012, registering a growth of 2.5 per cent and the domestic tourism is
expected to increase by 15 per cent to 20 per cent over the next five years.
become a major global tourist destination, with the Tourism sector expected to contribute
around INR 3,414.8 billion (US$ 77.0 billion) by 2021. India is currently ranked 12th in the
Asia Pacific region and 68th overall in the list of the world's attractive destinations.
Foreign tourist arrivals in the country have increased substantially during the past decade
motivated by both, business and leisure needs and are further expected to grow at a
compound annual growth rate (CAGR) of around 8 per cent during 2010-2014. Visitor
exports are a key component of the direct contribution of the sector.. By 2021, international
tourist arrivals are forecast to total 11,149,000, an increase of 6.1 per cent pa generating
expenditure of INR 1,344.7 billion (US$ 30.3 billion). The country has received 3.3 million
foreign tourists during the period January to June 2013.
The main driver for increase in tourist traffic to India has been the following factors:
India offers various tourism options due to its vastness and diversity, attracting tourists from
all over the world. The country boasts of natural treasures like mountains, ocean, seas,
deserts, rainforests, valleys etc. on one hand, while world-class healthcare infrastructure on
the other, which provides varied kinds of tourism options such as adventure and rural
tourism, sustainable tourism/eco-tourism, cruise tourism, golf tourism and medical tourism
to the travelers.
1.3.1 Rural Tourism
The Ministry of Tourism started the scheme of rural tourism in 2002-03 with the aim to
showcase art, rural life, and culture and heritage to the tourists at various rural locations and
villages. The Ministry intends to help the local community economically and socially,
together with facilitating interaction between the local population and tourists, through this
scheme. On 28 February 2011, 169 rural tourism sites in 28 States/Union Territories have
been sanctioned by the Ministry of Tourism. This segment has also been winning accolades
in the international circuits as well. For instance, the Rural Tourism Project at Hodka village
in Kutch District of Gujarat won the Pacific Asia Travel Association (PATA) award for the
year 2010 under the Heritage category.
India is one of the most lucrative medical tourism markets in the world. The sector is
witnessing remarkable growth on the back of Government support through policies and
initiatives, low cost, less waiting time and healthcare infrastructure. The growth in India’s
medical tourism market will be a boon for several associated industries, including hospital
industry, medical equipments industry and pharmaceutical industry.
Tour Operators
Major Players
In the large/luxury hotels segment there are about 11 long-standing players such as ITC
Hotels, Asian Hotels, The Oberoi Group of Hotels, Hotel Leela Ventures, ITDC, Indian
Hotels, The Park Hotels and international players like Hilton Hotels, Marriott International,
Le Meridien Hotels & Resorts, and Radisson Hotels & Resorts. There are about 16 listed
hotel groups in the mid-segment including Bharat Hotels, Oriental Hotels, Nehru Place
Hotels, Jaypee Hotels, Piem Hotels, and Taj GVK Hotels.
In addition, there are more than 90 listed hotels and resorts in the small/mid-sized segment
including Country Club, EIH Associate Hotels, Kamat Hotels, and Mahindra Holidays and
Resorts. Apart from these, as mentioned earlier, there are a number of guest houses and
hotels, particularly in the budget and small hotel segments, which are primarily run by
localized players.
Major Players
Thomas Cook India Pvt Ltd
Cox & King India Pvt Ltd
Kuoni India Ltd
2. GOVERNMENT POLICY
Government of India, the government has allowed 100 per cent foreign investment under
the automatic route in the Hotel and Tourism related industry. The terms hotel includes
restaurants, beach resorts and other tourism complexes providing accommodation and /or
catering and food facilities to tourists. The term tourism related industry includes:
Travel agencies, tour operating agencies and tourist transport operating agencies.
Units providing facilities for cultural, adventure and wildlife experience to tourists
Surface, air and water transport facilities for tourists
Convention/seminar units and organizations
As a facilitative measure to make Tourism sector in India more attractive the following
initiatives are taken by Government:
The Government has launched a Scheme of ‘Visa on Arrival’ (VoA) from January 2010
for citizens of five countries, viz. Finland, Japan, Luxembourg, New Zealand and
Singapore, visiting India for tourism purposes. The Government has now extended this
Scheme for the citizens of six more countries, namely Cambodia, Indonesia, Vietnam,
Philippines, Laos and Myanmar from January 2011. During the period January-June
2011, a cumulative figure of 5774 VoAs were issued, with a total of 865 & 770 VoAs
issued in the months of May & June respectively.
The Ministry of Tourism has launched a scheme for development of nationally and
internationally important destinations and circuits through Mega Projects. As on
4.2.2011, 38 mega projects have been identified, out of which 26 projects have already
been sanctioned.
To overcome the bottlenecks of multiple inter – state road transport barriers, Ministry of
Tourism has been advocating implementation of seamless travel for commercial tourist
vehicles. This would facilitate smooth movement of tourist traffic and avoid delays and
inconvenience to tourists.
6 Goa Churches of Goa
7 Gujarat Dwarka-Nageshwar-Bet Dwarka Circuit
Shuklatirth-Kabirvad Mangleshwar Angareshwar
8 Haryana Panipat-Kurukshetra-Pinjore
9 Himachal Pradesh Eco and Adventure Circuit (Kullu-Katrain-Manali)
10 Haryana & Panchkula-Yamunanagar (Haryana)-Paonta Sahib (Himachal
Himachal Pradesh Pradesh) Circuit
11 Jammu & Kashmir Mubarak Mandi Heritage Complex
Naagar Nagar Circuit (Watlab via Hazratbal, Tulmullah,
Mansbal and Wullar Lake), Srinagar Spiritual and Wellness
Destination Leh – Ladakh
12 Karnataka Hampi
3. FUTURE POTENTIAL
The Tourism sector is expected to perform very well in future and the industry offers an
interesting investment opportunity for long-term investors. The India travel and tourism
industry ranked 5th in the long-term (10-year) growth and is expected to be the second
largest employer in the world by 2019. This means that the sector’s share of total national
investment will increase from 4.7 per cent in 2011 to 4.8 per cent in 2021.
The hospitality consultancy HVS India and World Travel and Tourism Council (WTTC) has
pointed out that in next 10 years, the Indian hospitality sector will need an additional supply
of 180,000 rooms, a capital investment of $25.5 billion for constructing them and manpower
of 211,000 to operate these additional hotels. From the current 810 million travelers, both
domestic and international, India is slated to host 1,747 million travelers in 2021. Some of
the key policy changes mentioned in the white paper include grant of infrastructure status to
the industry, hotel sector to be included within the interest subvention schemes and
rationalization of taxes which includes service tax, luxury tax, VAT/sales tax, tax on
transportation etc. Also, the public-private partnerships (PPP) for the conservation of
heritage sites, setting up of single nodal agency for all hotel project approvals and higher
budgetary allocation for tourism by the state governments.
The Tourism industry in India provides opportunities in diverse fields such as tours and travel
circuit, hospitality and hotel sector and development of specialized tourisms such as medical
tourism, rural tourism, golf tourism, cruise tourism, adventure tourism, eco tourisms, and wellness
tourism.
The WTTC predicts that by 2021, global travel would reach 1,362 million travelers. India, according
to WTTC, is expected to account for 0.8% of those travelers or 11.1 million international travelers.
The Tourism sector is witnessing fast growth due to the ever-growing number of participants in
allied businesses such as hotels, tour operators, airlines, shipping lines, among others. Therefore, the
sector is expected to witness high growth in the near future and offer varied opportunities to the
investors in all these areas of businesses. In fact, the hotel industry is one of the major areas wherein
investors can look for long-term opportunities. Foreign tourist arrivals in the country have increased
substantially during the past decade motivated by both, business and leisure needs and are further
expected to grow at a compound annual growth rate (CAGR) of around 8 per cent during 2010-
2014