PREFACE

A national policy on tourism highlighting the importance of the sector and the objectives of tourism development in the country was presented in the Parliament in 1982. The policy was formulated in an environment of a closed economy with rigid licensing procedures. The policy did not emphasize the role of private sector, and foreign investment was not envisaged. The policy also did not lay adequate emphasis on domestic tourism and the need for product development. In the Chief Minister’s Conference held on October 30, 2001, the Prime Minister of India Shri Atal Bihari Vajpayee had stated:-. 

1. Meeting of all foreign and domestic officers of Tourism Ministry.
2. Meeting of State Tourism secretaries and
3. Meeting of the State Chief Ministers and Tourism Ministers.

1. Account should be taken of the fact that for the last four decades or so, a tourism revolution has been sweeping the world. In 1964, the number of tourists leaving their homes, worldwide, was 100 million. This number increased to 200 million in 1974, 500 million in 1992 and 700 million in 2001. And this number is likely to swell to 1.5 billion by 2020 and receipts from it are estimated to cross $2000 billion.

If India has to partake in this revolution in a meaningful way, it must change its strategies as well as the techniques and tools of its machinery of implementation. In this connection, it has to be noted with concern that during the last decade or so, India’s share of world tourist traffic has remained static at 0.38 per cent.
 
2. At the institutional level, a framework would have to be evolved which is Government-led, private-sector driven and community-welfare oriented. Government have to provide a legislative framework to regulate tourism trade and industry, ensure safety and security of the tourists and create basic infrastructure and health-care facilities. The private sector has to act as a main spring of the activities and impart dynamism and speed to the process of development as well as conservation. Both Government and the private sector would be required to safeguard the stability and also the social and economic advancement of the local communities and the communities in the neighbourhood.
3. The deep-rooted relationship of tourism and our cultural assets should be fully recognised and provided for. Improvements and environmental upgradation of the protected monuments and the areas around them should be considered as a linchpin of the tourism industry.
4. Effective linkages and close coordination should be established with such Departments as Civil Aviation, Environment, Forest, Railways, Home, etc.
5. Sustainability should serve as a guiding star for the new Policy. The development and management strategies should be so worked out as to ensure that tourism largely acts as a smokeless industry and its ecological footprints remain as soft as possible. No one engaged, directly or indirectly, in the tourism industry, should be allowed to secure short-term gains by resorting to what has been called the darker side of tourism. Neither over-exploitation of natural resources should be permitted nor the carrying capacity of the tourist-sites ignored.
6. Greater emphasis should be laid on eco-tourism whose parameters should be broader than those of nature tourism alone. It must help in eliminating poverty, in ending unemployment, in creating new skills, in enhancing the status of woman, in preserving cultural heritage, in encouraging tribal and local crafts and in improving overall environment and facilitating growth of a more just and fair social order.
7. Special thrust should be imparted to rural tourism and tourism in small settlements, where sizeable assets of our cultural and natural wealth exist.
8. Due importance should be given to domestic tourism, particularly tourism connected with pilgrimage, and it should be so designed that the infrastructure created under it serves as a backbone of international tourism in times to come.
9. A new class of young tourists, with marked preference for adventure and distant destinations, in hills, caves and forests, is emerging. This class is not looking for 5-star accommodation but only for simple and clean places to stay. The requirements of this class of tourists should be met and guest tourism encouraged through Panchayats and local bodies and associations.
10. Special attraction of tourist for the Yoga, Siddha, etc., as well as for the Indian cuisine should be made use of and effectively encouraged.
11. The tourist industry and travel agents should be persuaded to evolve and adopt voluntarily a Code of Ethics and its infringement should be firmly dealt with by Tour and Travel Associations.
12. A section of the State police should be earmarked to act as tourist police and special training should be imparted to it.
13. At the international level, India should play a dynamic role and make its presence felt at the World Tourism Organisation, World Tourism and Travel Council and Earth Council. Its unique cultural values and spiritual heritage should be projected with dignity and elevation befitting a great nation, whenever suitable opportunity comes our way.
14. The civilisational issues as well as issues pertaining to civic administration and good governance must be attended to and made an effective part of the tourism policy. It should be ensured that good policies are not shipwrecked in the sea of half hearted implementation.

• position tourism as a major engine of economic growth;
• harness the direct and multiplier effects of tourism for employment generation, economic development and providing impetus to rural tourism;
• focus on domestic tourism as a major driver of tourism growth.
• position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination;
• acknowledges the critical role of private sector with government working as a pro-active facilitator and catalyst;
• create and develop integrated tourism circuits based on India’s unique civilization, heritage, and culture in partnership with states, private sector and other agencies;
• ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched, spiritually elevated and " feel India from within".

1. Tourism and National Development in India – Current Situation and Prospects

(Table A – Annexure I-A). In most countries with a large population, domestic tourism is the foundation of a viable and sustainable tourism industry. Much of the growth of global tourism has been generated by domestic tourism, which tends to be more focused on rural destinations. With a growing interest in the intangible culture of different countries (i.e. lifestyles, cuisine, ceremonies, music, religious beliefs, traditions, customs, and history), there is a strong potential to encourage international tourism to the rural areas as well. India’s share of global international tourism at 2.64 million foreign arrivals through its borders in the year 2000 is relatively small in volume (about 0.38 percent) but almost twice as high in terms of US$ receipts (about 0.69 percent)

(Table B – Annexure I-A). On the other hand, India’s share of global domestic tourism is much higher (around 4.6 percent of estimated global domestic tourism). While the proportion of global US$ receipts from international tourism increased from 0.57 percent in 1990 to 0.69 percent in 2000, this compares with a share of 1.37 percent in 1981. In contrast, India’s neighbours in South and South–East Asia have more effectively utilised tourism for economic growth and employment creation

(Table C – Annexure I-B) A forecasting study undertaken by the World Tourism and Travel Council estimated that in 2001, tourism would account for 10.7 percent of global Gross Domestic Product, 207.1 million jobs; US$ 1,063.8 billion in export value, and US$ 657.7 billion in capital investment. A study on the economic impact of tourism conducted by the World Tourism and Travel Council estimated that in 2001, the consumption activity arising from domestic and international tourism will contribute 5.3 percent of India’s Gross Domestic Product. Tourism will also sustain 25 million equivalent full time jobs or 6 percent of India’s workforce, and contribute more than US$ 3 billion in gross foreign exchange receipts. Separate estimates prepared by the Department of Tourism using a multiplier based on 1980 research suggests that the actual employment generation effect of (direct & indirect) tourism in India is around 42 million (includes full time/part time/casuals). The forecasting study undertaken by the World Tourism and Travel Council further indicates that between 2001 and 2011:

• global Gross Domestic Product will increase from 10.7 percent to 11 percent;
• global employment contribution will increase from 207.1 million to 260.4 million jobs or 9 percent of total global employment;
• the global value of tourism related exports will increase from US$ 1,063.8 billion to US$ 2,538.3 billion or 12.8 percent of global export value; and
• global capital investment in tourism will increase from US$ 657.7 billion to US$ 1,434 billion or 9.3 percent of global investment.

Forecast Change in the Share of International Tourism Arrivals between Developed and Developing Regions
 

Regions	2000	Share %	2010	Share %	%AAG
Developed Regions of the World	528	78.45%	730	69.79%	3.29%
Less Developed Regions of the World	145	21.55%	316	30.21%	8.10%
Total	673	100.00%	1046	100.00%	4.51%
Source: WTO Forecasts

 

WTTC’s status paper, "The India Imperative" has analysed India tourism in the light of the latest Tourism Satellite Accounting Research TSA (2001) and projections for the year 2011. Subject to addressing key policy issues highlighted in the paper, WTTC has identified India as one of the foremost growth centers in the world in the coming decade.

• The development priorities of the Government of India up to 2012 are to place the economy on a significantly higher growth path that will deliver greater economic benefits in the context of the new global economic and security order, but also enhance human well-being, achieve social equity, sustainability, and efficiency. To achieve this overall development goal, the Government of India has embarked upon a strategy that involves a radical departure from past policies, and institutional arrangements in order to optimize and release the potential of its natural, human, financial, and technical resources.

• able to maximize the productivity of India’s natural, human, cultural, and technical resources, and are sustainable development.
• labor intensive and cottage or small industry based, providing employment that is of a high quality thus contributing to higher quality of life;
• capable of being primarily focused on rural areas with appropriate and relatively low cost programs;
• has extensive forward and backward economic linkages that build overall income, employment (especially for women, youth, and disabled persons bringing greater social equity, and justice), investment, and raises central, state, and local government revenue;
• is able to deliver significant levels of hard currency as an export industry;
• able to promote understanding, peace, and contribute to national unity and regional stability.

SWOT Analysis The tourism sector’s contribution to the national development priorities and strategies has so far been relatively limited. A review of the sector’s competitive strengths and weaknesses, opportunities, and threats indicates that it has considerable growth potential. The main results of the analysis are:

• India’s great competitive strength from a tourism point of view is its ancient and yet living civilization that gave rise to four of the worlds great religions and philosophies, and brought travelers and trade millennia ago. The rich natural and rural landscape of India is punctuated with the built heritage of its ancient past and more modern structures of the present and its hopes for the future. India’s contacts with other civilizations is reflected in the rich cultural diversity of its people through its language forms, cuisine, traditions, customs, music, dance, religious practices and festivals, its holistic healing traditions, art, and craft.
• The main competitive constraints facing the tourism sector are the low priority that the sector has been given by government
• (Table D – Annexure I-B). In the past it was unable to effectively link its role in relation to national development priorities, undue focus was laid on the international market at the expense of domestic tourism, the poor quality of the environments surrounding many of India’s main tourist sites, the security scenario in the region that affects the perception of India as a safe and secure destination, the quality of facilities and services at attractions
• (Table E – Annexure I-C), the quantity and quality of transportation service, and related infrastructure, facilitation of entry to India by international tourists, the multiplicity and high level of taxation
• (Table F – Annexure I-C), limited availability of tourist information in - source markets and at destination, limited scope, accuracy and reliability of market data for planning and management, insufficient marketing of India in its domestic and international markets, lack of attractive project financing, restrictive land use policies that limit the availability of suitable land for tourism development, limited and poor facilities and services outside the major cities, especially in rural areas, and the lack of community participation leading to in some cases hostility to tourism. The low priority accorded to tourism has meant that it has played only a marginal role in India’s development programs to date and this is reflected in the limited budgets, limited cooperation and coordination capabilities, and an inability to implement strategic initiative and projects.
• Notwithstanding the constraints (which themselves present opportunities), the key competitive opportunities are:- (1) leverage the huge potential of its domestic urban population to develop rural tourism

Table G – Annexure I-D); (2) leverage its strength as one of the world’s ancient civilizations in the context of its rich and diverse natural heritage to increase its share of the huge international travel market, especially the fast growing long haul segment of this market, and (3) leverage India’s strength as one of the world’s largest economies for business, trade, meetings, convention, incentive, events, and exhibition based tourism.

1. substantially increase the proportion of the urban resident leisure and pilgrimage tourism to rural areas not just in terms of volume but also in terms of length of stay and expenditure. For example, the total urban resident leisure and pilgrimage domestic market is estimated to increase from 22.5 million in 2001 to 50.5 million by 2012 and it would be a key objective to encourage these to visit the rural areas through appropriate strategies; and
2. substantially increase the volume of high-yielding (high average per capita expenditure) international tourists from the priority regional and long haul source markets based on the identified travel interests.

On the other hand, when the industry is properly planned, developed and managed at all levels of government in partnership with the private sector, it will strengthen India’s socio-cultural structure. It would valorize its tangible and intangible cultural and natural heritage, and lead to positive economic impacts including enhanced employment and income opportunities in rural areas, lower importation costs, and stronger inter-industry linkages. The vehicle for achieving the positive benefits of tourism, mitigating the negative effects, and delivering sustainable industry development framework of India’s national development priorities is the preparation and implementation of a comprehensive national tourism policy. The overall goal and strategy for the development of the tourism industry is to ensure that its development is closely tied to the national development priorities of the country. In this context the Government of India’s vision for the development of the tourism sector is:

1. Positioning and maintaining tourism development as a national priority activity;
2. Enhancing and maintaining the competitiveness of India as a tourism destination.
3. Improving India’s existing tourism products and expanding these to meet new market requirements;
4. Creation of world class infrastructure
5. Developing sustained and effective marketing plans and programs.

• Inclusion of Tourism in the concurrent list of the constitution of India. This will provide a constitutional recognition to the tourism sector, help in channeling the development of tourism in a systematic manner and enable central government to legislate for tourism development. The proposal for including tourism in the concurrent. List was circulated to the State Governments and discussed at the Chief Ministers’ Conference. Majority of the States have agreed to the proposal. The state-wise status may be perused at Annexure –I-E.
• To provide effective linkages and close coordination between Departments, a Group of Ministers on Tourism has already been constituted.
• Constitution of a Tourism Advisory Council with key stakeholders to act as a "think tank".
• Prepare the basis for the adoption of the Tourism Satellite Account system based on SN3 protocol for the national accounts;
• Plan, and implement a professionally managed integrated communications strategy to be called the ‘National Tourism awareness campaign’;

3. Enhancing India’s Competitiveness as a Tourist Destination

1. Visa on Arrival - Implement visa on arrival and consider strategies for the fast issuance of visas and permits including electronic visa approaches, and improved processing of arrivals by customs and immigration officials.
2. Computerization of the system of issue of visas by Embassies / High Commission.
3. Air capacity available to India is woefully short during peak travel months ranging from October to March and specially from main tourism originating destinations like North America, Western Europe and South East Asia. Additional seat capacity from the major destinations would provide a major impetus to tourism and economic development. An analysis by Indian Council for Research on International Economic Relations (ICRIER) reveals that the benefits of the additional seat capacity whether provided by the national carrier or any other international carrier would have a significant benefit for national economy.
4. The model at Annexure –I-F strengthens the argument for opening India’s sky for enhancing tourism through increased capacity.
5. Improve the standard of facilities and services at the nations international and major domestic airports by employing professional property management agencies to manage the physical premises on an outsource basis, and speeding up the privatization/leasing of airports.
6. There is a need for creation of special tourism police force for deployment at major tourism destinations. This will provide travelers security through a sprit of courtesy and hospitality.

• India has a unique cultural heritage. It has a vast array of protected monuments spread throughout the length and breadth of the country. India has 22 world heritage sites (16 are monuments). The conservation, preservation and integrated development of the area around these monuments provides a rare opportunity for growth and expansion of cultural tourism in India.
• Develop sustainable beach and coastal tourism resort products based on a more flexible approach to developments in the coastal zone. There is a need for identifying a series of government sites on the West Coast of India, free of encroachments, for the development of beach resorts by the private sector, with sites to be offered on long term lease at preferential terms. These sites should primarily be in the regions of Goa, Kerala, and North Karnataka, for reasons of air access.
• Develop and position the Cochin and Andaman & Nicobar Islands as international cruise destination. This positioning is supported by their proximity to international cruise routes, their exotic appeal and the need for high quality, low impact eco-tourism activities in the islands, and develop a dedicated cruise terminal;
• Capitalize by packaging India’s unmatched variety of traditional cuisines that are today becoming increasingly popular in the world. The linkages and ripple effects created by a rapidly expanding restaurant sector can have dramatic implications for the Indian economy, implement private public partnership of the Culinary Institute of India that will research and document ancient culinary traditions, create a highly skilled workforce of culinary professionals that can populate not only hotel and catering establishments in India, but also internationally, serving to promote India internationally through a non-traditional medium, and encourage Indian entrepreneurs to establish restaurants of Indian ethnic cuisine internationally, by conceiving a innovative incentive scheme;
• Actively promote the development of village tourism as the primary tourism product to spread tourism and its socio-economic benefits to rural and new geographic areas. Key geographic regions for the development and promotion of endemic tourism. The optimum locations appear to be: Northeast states, Uttaranchal, Rajasthan, Ladakh, Kutch, Chattisgarh, and the Plantation regions (tea, coffee);
• India has some of the greatest variety of fauna in the world that has perhaps not been exploited to its full potential for tourism. In this context, the wildlife sanctuaries and national parks needs to be integrated as an integral part of the India tourism product, and priority needs to be given to the preparation of site and visitor management plans for key parks, after a prioritization of parks. Tentatively, these would be: Corbett National Park, Kanha National park, Bandhavgarh National park, Ranthambhore, Mudumalai, Nagarhole, Kaziranga, Periyar, Bharatpur, Little Rann of Kutch, Chilka, and Sundarbans. The quality of tourist facilities available at the parks should be enhanced, in particular improve visitor information / interpretation centers, and the tiger and the elephant should be the ‘brands’ if Indian wildlife tourism;
• India perhaps has one of the greatest adventure tourism assets in the world in the form of the Himalayas, as well as in its mighty rivers. Mountain based adventure (soft and hard) activities in the Himalayas, creating the ‘Himalayas’ as the brand and icon of Indian adventure tourism should be developed and promoted. White water and more sedate great river rafting offers a unique tourism product, while regulations and certification for adventure tourism operators should be introduced so they meet minimum safety and conservation standards;
• That the domestic tourism market is mostly local or regional in nature and prefers recreational pursuits and that recreation and leisure is a vital component of the quality of life, particularly in urban areas, and needs to be recognized.
• India, despite its size, significance and attributes with world cities such as New Delhi and Mumbai, receives a minuscule proportion of the global meetings, incentives, convention, exhibition market with only 97 international conventions bringing approximately 25,000 people in the previous year. It is imperative not just for India’s tourism development, but also for the development of international and domestic trade and commerce, that India construct a world class international convention centre in Mumbai.
• India is a region of the world’s greatest bio-diversity, with a variety of unique natural locales, and is therefore, a perfect candidate for ecotourism. In this context, ecotourism should be made a priority tourism product for India with the focal points located in the Himalayas, Northeastern states, Western Ghats, Jharkhand, Andaman & Nicobar Islands, and the Lakshadweep Islands. Tour operators needs to be encouraged to promote ecotourism, which should also be made a grassroots, community based movement, though awareness, education and training of the local community as guides and interpreters;
• India is today being ‘re-discovered’ by the world at large for the depth of its understanding of the physical, mental, emotional and spiritual manifestations of the world and humankind. In particular, India has traditions that focus on the holistic healing of individuals and on elevating the individual to a higher plane of consciousness and awareness. This can be India’s most unique tourism product – holistic healing and rejuvenation of the individual from every dimension – physical, mental, emotional and spiritual, and in doing so, it will capture the essence of the best of Indian philosophy and culture for international and Indian visitors alike.
• India has come to have a series of unique lodging products that can become one of India’s immediate unique selling propositions (USPs). In this context, steps should be taken to eestablish a scheme for providing seed capital to entrepreneurs for the development of such unique accommodation products to be funded and administered at the State level, with adequate controls;
• India is a veritable shopper’s paradise and the retail trade provides enormous forward and backward linkages throughout the economy. In this context, shopping should be recognized as an integral part of the tourism experience and a most valuable contributor to revenues. The development of dedicated shopping centers for traditional crafts, designed along the lines of ethnic village haats such as Dilli Haat and Shilpagram needs to be encouraged, the availability of information on where to procure specific crafts and produce reliable, unbiased shopping guides enhanced, funding support to reputed NGOs promoting the handicrafts sector should be provided, a directory of traditional crafts persons should be produced and promoted, touting should be controlled through regulation and legislation, and the "Made in India" brand should be promoted;
• India has unique events, fairs and festivals, some of which are well established, such as Pushkar, Desert Festival at Jaisalmer, Kumbh Mela, etc. In this context, this sector should be promoted as a unique product of India, the "Festivals of India" program should be reintroduced in the top 12 future markets for India. Initially, there should be an annual event in UK and USA, followed by triennial events in each of the other markets;
• Business travel is also a form of tourism and typically occurs in urban environments and should be recognized accordingly. Urban quality along the lines specified for regional and site master plans, including tourism interests and requirements in the urban planning process should be improved, and New Delhi and Mumbai should be positioned as "World Cities" and the level of physical infrastructure, urban ambience, and public services developed befitting such a status; and
• A series of themed cultural attractions should be developed based on outstanding site planning and design, a National Register of key cultural sites for tourism should be prepared and published, and Delhi should be positioned as the cultural capital of India supported by an ongoing and vibrant calendar of cultural events.

3.4.1 Creation World-Class Infrastructure India’s physical infrastructure is the very foundation on which tourism is to be built, and this ranges from ports of entry, to modes of transport to destinations, be they airways, roads, railways, or waterways, to urban infrastructure supporting tourism facilities such as access roads, power and electricity, water supply, sewage, and telecommunications amongst others. In this context, the strategic actions in relation to road, railways, waterways, and airport facilities are identified below.

1. Development of Integrated Circuits

(b) Roads The road network is particularly vital to tourism, for almost 70 percent of passenger travel in India is by roads. Many tourist circuits too, are entirely dependent on roads. The current government plan for the road system in the country, covering both inter-state highways and improvements to rural roads directly supports tourism development. There is an urgent need to construct and improve highways linking the World Heritage Sites and places of tourism significance. Ministry of Road Transport and National Highways will collaborate with Ministry of Tourism in this effort.

(c) Railways The Indian Railway system can be an enormous asset in the development of the tourism and hospitality industry in the country. India has 7,000 railway stations and 11,000 trains. The railways have a special fascination for foreign tourists who wish to experience the country both at leisure and close personal contact with the indigenous people. The unqualified success of the "Palace on Wheels" substantiates the contention. For the vast majority of domestic tourists it is the railways, which is the main affordable means of travel linking the length and breadth of the vast and often enhancing sub-continent. Railway services are equipped not only to meet the travel needs of domestic and foreign tourists, but also have the infrastructure and land resource to contribute significantly to the growth of hotel accommodation in the country. The following measures are necessary:

• Introduction of Special Tourist Trains with a preset itinerary and with private sector participation.
• Tourist Trains – experienced private sector organizations need to be encouraged to introduce special tourist services between important destinations. In concept these special coaches may be privately owned by organizations who will design, build manage and market the product. To improve the financial viability and promote investment, accelerated depreciation should be allowed on such investments.
• Railway Hotels – the Indian Railways have a plan for establishing 100 hotels at railway stations serving specific tourist centers. The Private Sector should be incentivised to operate these hotels on long-term leases. These hotels could provide clean inexpensive accommodation for the budget tourists. The proposal to construct 100 hotels of 100 rooms in three years will add 10,000 rooms and help significantly to reduce the gap between supply and demand for hotel rooms.
• Heritage Railway Buildings – the Indian Railways owns a number of heritage structures. Effectively maintained and marketed these would not only serve as railway stations but also as places of tourist attractions. Some of these structures are Mumbai CST and Chruchgate and Lucknow railway station.
• Hill Railways – India is the proud possessor of five hill railways, which can compare with the best hill railway system in the world. These railways (Darjeeling, Nilgiri, Matheran, Kangra and Shimla) are slated to be encrypted by UNESCO as world heritage. It is essential to tap the enormous tourist potential of these products by developing these special tourist trains.
• Railway Heritage Tourism – Special tourism trains like Royal Orient, Budh Parikrama, Palace on Wheels and Fairy Queen are extremely popular with tourists, as they are steam hauled tourist trains. Stem traction is still operative in India and for special tourist segment it should be continued in perpetuity, otherwise skills to operate this kind technology could die.
• Other Trains – More trains like Shatabdhi and Rajdhani with a special tourism and hospitality focus should be planned both for the foreign and domestic tourists.

India’s 7,000 kms coastline remains untapped for the promotion of cruises. There is immense potential for this activity in the East, South and West of India. Apart from Ocean-going Cruise Lines (a circuit being contemplated by potential Indian operators in Mumbai – Goa – Lakshadweep – Cochin – Colombo – Maldives), the potential for River cruises in India needed to be developed for the North-Eastern States, (Brahmaputra and Ganges) and Kerela. India is blessed with a vast coastline as well as several navigable rivers that have extreme tourism significance. To capitalize on this, the strategic actions are to:

• liberalise after due study the regime governing operation of passenger services along India’s coastline, as this can form both a means of transport as well as a tourist attraction.
• harness the potential of India’s mighty rivers, especially the Ganges and the Brahmaputra as a means of transport as well as unique tourism products.

• differentiate itself from the competing destinations including developing a unique market position, image, and brand that cannot be held by a competitor;
• undertake an extensive qualitative and quantitative market research program in the target source markets;
• identify and assemble a highly attractive product offering tailored to the interests of each source market, and develop and implement on-going cost-effective promotion programs in each source market in partnership with the States and the private sector of the tourism industry in India and the source markets. Of special importance is the formulation and implementation of a village tourism program that would be primarily targeted at the domestic urban market in India but which could also attract the international market;
• establish an effective and on-going market representation presence with the travel trade in each source market; and
• establish an Internet portal in various languages to service the information, product description, and product sales requirements of the target market segments in each source market, and to connect these directly with the preferred suppliers.

3.5.2 Market Research An extensive program of market research in India’s primary source markets is an essential first step to:

• establish the present image of India as a destination in relation to its competitors;
• the ensemble of products likely to be of interest to the markets in each primary source country;
• issues such as pricing, concerns about security, health, safety, and quality, basic information on how to arrange a trip to India including visa issuances, currency, and telecommunications, transportation services; and
• the influence of media, Internet portals, and the buying behavior of the customer.

3. Digital Technology for Marketing

4.0 Summary India’s tourism industry through the capacity of it’s tourism resource, facilities and services and as yet relatively untapped market potential has considerable scope for expansion and development. The Tourism Policy elucidated above aims at setting-up a framework that will allow the various stakeholders to fully develop the potential of tourism and to harness this to the national development priorities.

Annexure – I-A   Travel and Tourism (T&T)
- the world’s largest industry (Table A)

Share of World	% of Total (2000)
GDP	11.0
Employment	8.0
Exports	7.9
Capital Investment	9.4

Source : Ministry of Tourism International/National Tourist Arrivals
 

(Table B)

Year	Tourist Arrivals (India)	Tourist Arrivals(World) in Millions	Percentage Share of India
1995	2,123,683	565.4	0.38
1997	2,374,094	618.2	0.38
1999	2,481,928	650.0	0.38
2000	2,641,157	698.3	0.38

  Source : Ministry of Tourism Annexure – I-B Tourism - A tremendous opportunity for India (Table C)                            Source:WTTC   (Table D)                                     Source: WTTC   

Annexure –I-C Percentage Tourists Rating Facilities as 'Average' or 'Poor' (Table E) 

1. States/UTs who have supported the proposal in writing

2. States who have opposed the proposal in writing

S No	Name of the State
1.	Andhra Pradesh
2.	Madhya Pradesh
3.	Tamil Nadu
4	Kerala
5.	Punjab
6.	Karnataka
7.	Jammu & Kashmir

 

3. States who have not sent their confirmation so far.

S No	Name of the State
1.	Haryana
2.	Jharkhand
3.	Maharashtra
4.	Rajasthan

        
 

THE MODEL

HOTEL ROOMS REQUIRED FOR ADDITONAL 1 MILLION TOURISTS   Note     Bed Nights       Additional Tourists   1,000.000  Visitors Average length of stay 1 10  Nights Bed Nights per annum    10,000.00  Bed Nights         Room Capacity       Average annual Occupancy    65%    Guests per room  2 1.4    Annual bed nights available per room    332            Additional Rooms Required    30,107    Average cost per room 3 0.15  Rs. Crores         Investment required    4,516  Rs. Crores         EMPLOYMENT GENERATED BY THESE HOTEL ROOMS         Director Employment (2 persons per room) 4 60,214  Persons         Indirect employment (3 persons per room)  4 90,321  Persons         Total Employment generated    150,534  Persons

1 The average length of stay as been assumed at 10 nights. There are no detailed studies that have been conducted in this regard, however based on our experience in this industry sector, average length of stay for Resort locations, like Goa are 12 nights per annum, for the Golden Triangle - 8 nights per annum and for the Southern circuits - 7 nights per annum. Government statistics put the average length of stay at 21 days. However, with the pre-ponderance of business visitors and visitors from neighbouring countries who do not form part of the target market an average length of stay of 10 nights has been assumed. 2.  The number of guests per room at resort locations, is, as expected, as high as 1.9 persons per room, however for city locations and business visitors, the average s in the region of 1.1 per room. Erring on the side of caution we have made an assumption of 1.4 guests per room. 3.  The average cost per room has been assumed at Rs.15 lakhs, this takes into account land, construction, fit out and pre-opening expenses. Actual averages range from Rs.70 lakhs for a 5 star deluxe property in Mumbai, to as little as Rs.12 lakhs per room for smaller budget hotels in secondary locations. Since budget hotels are now a primary focus, an average of Rs.15 lakhs per room is considered appropriate. 4.  In this model we have assumed that direct employment will be provided in the ratio of 2 persons per room and indirect employment to the tourism industry will befurther 3 persons per room. The direct employment ratio is in line with present industry norms within the country. However, based on studies carried out in the past, estimates of indirect employment by the tourism industry range from 3 to 5 persons per room.

EARNINGS FROM TOURISM & AVIATION FROM ADDITIONAL 1 MILLION VISITORS   Note     Visitors Spending        Number of additional visitors    1,000.00  Visitors Spend per visit (Presently $ 1,300)  8 1,100  US$ Import Leakage  9 10%  Proportion         FX Earnings    990  US$ Million FX Earnings    4,356  Rs. Crores         Air India Revenue       Number of additional visitors  3 500,000  Visitors Average Km per pax    16,000  Km per pax Average Rate per Km  10 0.10  US$ Import Leakage  9 45%  Proportion         FX Earnings    440  US$ Millions FX Earnings    1,936  Rs. Crores         Ratio of Tourism FX Revenue Vs. Airline FX Revenue    2.25     Summarised Costs & Benefits       Tourism Industry Air India Capital Expenditure 4,516 10,535  Rs. Crores FX Revenue Net of Imports per annum  4,356 1,936  Rs. Crores Ratio of annual net FX Revenue to Capital  0.96  0.18  Ratio         Employment  150,534 6,300  Persons

8.  The present expenditure per visitor is in the region of US$ 1,300 per visit. Here again assuming higher volumes, lower expenditures per visit of $ 1,100 have been assumed. 9.  Import Leakage - In measuring the benefit to the economy, it is necessary to deduct the cost of imports. Based on studies conducted worldwide and taking into account that India is a large relatively developed country and not an island economy like the Maldives, Mauritius or Seychelles, it is estimated that no more than 10% of visitors spending is in relation to imported items. In the case of airlines the proportion of import leakage is considerably higher by way of loan repayments, purchase of spare parts and foreign exchange expenditure that needs to be incurred. Estimates range from 40 to 50% on a worldwide basis we have assumed an import leakage factor of 45%. 10.  The average rate per passenger kilometer has been assumed at $ 0.10 per passenger kilometer. The fares between Mumbai and some of the major source markets have been compiled and this average comes to 11.28 per passenger kilometer for the lowest excursion fares. The average including business and first class fares (even though smaller volumes) would be higher. However, the passenger kilometer rates compiled which would lower the average considerably. The international norm of 10 per passenger kilometer is therefore appropriate.

AIRCRAFT REQUIRED FOR ADDITIONAL 1 MILLION TOURISTS         Annual round trips per aircraft        Average distance from markets    8,000  km Average round trip time    17  Hours Annual aircraft utilization    4,500  Hours Annual round trips per aircraft    265  Round         Aircraft Carrying Capacity       Seats per aircraft  5 400  Seats Average load factor  6 65%  Load Passengers per aircraft    260  Pax Proportion of Foreign Visitors  7  50%  Proportion         Aircraft Required    29.06      Say 29  Aircraft Investment per aircraft  5  752.5  Rs. Crores         Total investment or lease capital value    21,823  Rs. Crores Assuming Air India retains just under 50% of Capacity    10,535  Rs. Crores     14 747's           EMPLOYMENT GENERATED BY THESE AIRCRAFT         Air India average per aircraft    720  Person  World average per aircraft (including outsourcing)    250  Person  Average assumed for the purpose of this model    450  Person          Total Employment generated    6,300  Person

5.  We have assumed acquisition by lease or purchase of 747 aircraft with an average seat capacity of approx. 400 passengers. Such aircraft are presently said to be valued in the region of US$ 150 million (Rs.751) 6.  Average load factors for popular traffic routes range from 75 to 95%, however with a substantial airline capacity, as assumed by this model, it is reasonable to assume that load factors will drop averages which are in the region of 65%. 7.  At present based on total international traffic handled at all Indian airports, the ratio of foreign visitors with 63% of arrivals and departures being made up of Indian passengers. With this increase in capacity been assumed that this ratio will alter to 50% foreign visitors and 50% Indian travelers for the in capacity. If the present ratio were to be retained the model would lean even more favorably towards the cost of airlines expansion.