Tourism industry unhappy with the budget

Budget proves to be a dry affair for tourism with no incentives, said Subhash Goyal, President of Indian Association of Tour Operators (IATO).

“As government was showing seriousness about tourism prospects in the country mainly for its contribution to national exchequer and job opportunities even at remotest places where no other industries can reach, we were very optimistic that tourism will get due recognition in this year budget. We had accordingly submitted our wish list to the Ministry of Finance through Ministry of Tourism. Our main recommendation was to accord tourism “Export Industry Status” with benefits that are given to export-oriented industries also be made available to tourism industry. This will help to get rid of “Service Tax” which is making India Holiday packages cost prohibitive and in-competitive as compared to Thailand, China, and Malaysia etc. Because of multiple taxes which entail “Double Taxation” tour operators can’t match the price which the competitive countries are offering. We strongly needed this special consideration for the poor run of the Indian tourism industry which it had since last three financial years due to global economic downturn in the major traffic generating markets which contribute maximum tourists round the year, said Goyal.

Subhash Goyal criticized the increase in service tax to 12% from 10% which will negatively impact the tourism industry as the package costs will go up due to tax on all components of tourism i.e. air rail ticket, hotel booking, transport etc. and will be detrimental to tourism.

Goyal also added, “Euro zone crises and exchange rate of US$ reaching Rs. 50.00, the packages costs do not help tour operators to keep any margin. We can’t make our packages costly, we may lose even regular business. We pleaded for withdrawal of Service Tax to boost tourism growth but are shocked to see that more areas have been included for service tax which has bearing on tourism”.

“It is unfortunate that tourism is always taxed. How much can you tax one industry year after year which is already burdened with taxes – Luxury Tax, Service Tax, Value Added Tax, Tax on Tax? It is always seen as cash cow rather than encouraging the industry to grow, time and again tourism is first to be taxed. Contribution of tourism sector toward country’s GDP (which is more than 6%) and more than 9% to the employment is always ignored. It is the time, the decision makers show commitment toward tourism as major force for country’s economic growth”, echoed Goyal.
Goyal, however, welcomed the proposal to allow direct import of Aviation Turbine Fuel permitted for Indian carriers as actual users as this may bring down the domestic airfare.

Courtesy: voyagersworld.in
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India likely to have around 1,747 million travellers by 2021: Report- Thats A WOW

Going by the double-digit growth of the travel industry, India is expected to have around 1,747 million travellers by 2021, which would require 1,88,500 additional hotel rooms, according to a recent study.

"Considering the way in which travel industry has grown in the past and factoring in the government's unassuming efforts towards growth in the sector, there will be around 1,747 million travellers and an additional requirement of 1,88,500 rooms," says a white-paper on `Hotel Room Supply, Capital Investment and Manpower Requirement by 2021' by HVS and The World Travel & Tourism Council (WTTC), India.

HVS is a global consulting and services organisation focused on the hotel, restaurant, shared ownership, gaming, and leisure industries; WTTC is a forum for business leaders in the Travel & Tourism industry.

 It predicts that by 2021, global travel industry would see 1,362 billion travellers, of which India is expected to account for 0.8 per cent.

The domestic travellers will grow at 8 per cent annually to 1,735 million by 2021. About room requirement, the report said India would need a total of 3,51,540 rooms by 2021.

Budget hotels will be the driving force because they usually have more rooms per hotel than a first-class or luxury hotel, can be built faster and cheaper in multiple micro-markets as well as in most tier I, tier II and tier III cities, it said.

The existing stock of hotel inventory is 1,63,038 rooms, it said, adding that the Indian average room inventory is less than 15 per cent of the average inventory of Asia Pacific and other global cities.

Capital investment and the manpower are two other critical aspects. The additional investment in hospitality in the country would be around Rs 1,27,600 crore by 2021, it said.

Over the past decade, the country has witnessed a host of global brands entering the market, while the domestic brands have also considerably grown, it said.

"This shift...is reflective of the maturing of the Indian hotel industry and highlights the fact that the country is a prominent market," the white-paper said.
With the proposed expansion of branded hotels, the demand for skilled manpower will grow to 2,84,386 by 2021, it said.

Courtesy: Times of India

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Tourism Scenario in India at a Glance – 2010

Last year I posted a blog suggesting that though there is a wide spread effort on part of Min. of Tourism, Government of India to attract foreign tourists, we need to put sincere effort to promote domestic tourism also. To corroborate the same thought, I have put a small analysis using the latest data on Indian tourism. Ministry of Tourism has published “India Tourism Statistics 2010″ last month. This includes tourism data pertained to 2010. This is a simple straight forward analysis to suggest that the strength of domestic tourists are so great that a proper strategy to boost it further might result into generating huge revenue as well as employment generation.


Fig 1 below shows growth rate of domestic and foreign tourists from the year 2001 till 2010. The campaign of Incredible India has significantly increased inbound tourism to India during the 2000s. The graph shows s huge spike, at about 30 per cent, during 2002 and somewhat declining trend growth with a turf during 2009 which was marred with global recession. However, the declining trend was more due to base effect rather than decline in number in foreign tourists. On the contrary, domestic tourists have shown an increase between 10 to 20 per cent through out this period. However, the growth rate of domestic tourists remained lower than the foreign tourists almost during the entire period. (Click on the Fig to view properly)

During the last decade, foreign tourist arrivals to India has increased from 5.5 million to about 18 million. Figure 2 presents the steady increase in number of foreign tourists. (Click on the Fig to view properly)

However, Fig 3 shows the actual contribution of foreign tourists to Indian tourism scenario in terms of number of tourists. Though the domestic tourists have increased substantially lower than foreign tourists, it touches almost 750 million in 2010. (Click on the Fig to view properly)

To make the scenario a little more distinct, share of foreign tourist to total tourists is presented in Fig 4. It shows that through out the period the share of foreign tourists remained stable though the absolute number has increased many folds except a couple of exceptional years due to certain externalities such as economic recession. (Click on the Fig to view properly)

This simple analysis suggests something important for Indian tourism industry. The strategy to attract foreign tourists to the country is beyond question. But, we should not neglect the opportunities to promote domestic tourism also. The potential contribution from domestic tourism can change local economy of of several destinations through generating revenue and employment. However, it is also important that the domestic tourists are made aware of preliminary principles of sustainable tourism. This would lead to benefits for a long term basis instead of short term one.


This article is written by : Dripto Mukhopadhyay

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India to be promoted as year-round destination at ITB Berlin

Union Tourism Minister, Subodh Kant Sahai to inaugurate India pavilion which will witness participation of 50 companies and 11 State Tourism Boards

Subodh Kant Sahai, Union Minister for Tourism – Government of India will inaugurate the India Pavilion at the International Tourism Bourse (ITB), scheduled from March 7 to 11, 2012 in Berlin, Germany. The Pavilion will showcase a wide array of the country’s tourism products and destinations at ITB. It’s main focus will be to promote India as a year-round destination among global inbound source markets. The total area of the India Pavilion at ITB this year is 871 square metres. 11 state tourism boards and a total of 50 participants comprising tour operators, destination management companies, hotels and resort companies will showcase their tourism products and destinations at the Pavilion along with India Tourism.


The state tourism boards of Maharashtra, Tamil Nadu, Himachal Pradesh, Assam, Andaman & Nicobar Islands, Andhra Pradesh, Jammu & Kashmir and Dadra & Nagar Haveli, etc., will be participating at the event. This information was provided by an official from the Indian Ministry of Tourism. Along with Sahai, Devesh Chaturvedi, Additional Director General (Tourism) - Ministry of Tourism, Government of India and distinguished delegates from India will also be present at the inauguration. In addition, India Tourism will also organise an Incredible India evening, breakfast meetings and happy hours during ITB Berlin


Speaking about ITB Berlin and his expectations for India, Subhash Goyal (Chairman- Stic Travels), President - Indian Association of Tour Operators, said that ITB Berlin is the most attended and most efficiently organised travel and tourism trade show in the world. “ITB gives all participants an opportunity to interact with lots of exhibitors on a one-to-one basis. As tour operators, we always like to meet buyers, suppliers and exhibitors personally so that we can understand the products better. It provides good firsthand knowledge about various destinations, various new markets and exposure to new ideas specifically from experts in the tourism arena. Such direct interactions lead to increasing our knowledge on potential markets for India and business contracts are also signed. Our expectations are very high and all our participants are getting ready with varied holiday packages to meet the changing interest and changing profile of tourists.”


Agreeing, Peter J. Leitgeb, President and CEO, The Claridges Hotels & Resorts, said that ITB Berlin is certainly one the biggest travel tourism fairs organised across the globe. “It provides a strong platform for brand exposure on a really wide international level, helping the brand make its mark and gain recognition in the industry. It offers a great networking channel and helps promote India as a Destination very strongly. Above all, ITB Berlin is of prime importance as it helps all travel trade-related professionals to generate business.”


The travel industry feels that the Ministry needs to promote India very effectively in order to make the most of the trade fair as the tourism policy in effect sets the tone for marketing and promotions through the year. “The Ministry plays a very important role at global trade fairs like ITB and sets the trend and tone for marketing India and attracting tourists to the country. Therefore, our expectations are linked to the tourism policy at the concerned time, which should promote all aspects of the country and endeavour to make India an all-year destination. Hence, to be effective and cover pan-India, it has to work with the state tourism boards and bring out the best in what the country has to offer. This needs to be showcased at ITB - highlighting new trends and products with tourist-friendly policies. Expectations can come from growth in the new source markets and niche tourism products promoted at ITB accordingly,” said Arjun Sharma – Managing Director, Le Passage to India.


Sharma also opined that the role of tour operators is limited and it is up to the Tourism Ministry to project Brand India properly. He said, “To increase expectations of getting more tourists, we need to address issues relating to pricing of the tourism products, which is high due to the recession in the source markets when compared to other destinations. If the Tourism Ministry is proactive and innovative in its approach, is constantly working to find new ways to enhance business for India and is working on developing new tourism circuits and introducing new niche products for India, we can be positive on the outcome of ITB. We hope that budgets for Europe are used well to get the maximum exposure from such a platform by studying what others are doing at ITB and what we need to do at our end to tap the potential and be competitive. Our role is limited as tour operators; the bigger picture at ITB has to be projected by the Ministry for development of brand India.”


Rajeev Kohli, Joint Managing Director - Creative Travel said that ITB is one of the leading shows in the world and has always been a strong venue for networking with old and new clients and for enhancing business objectives. “Creative has been going to ITB for over 25 years and we are always delighted to go back. We expect to do good business and make some new contacts this year”.


“ITB is already playing an incredible role in the global tourism business scenario. It is the responsibility of the participant countries and sellers to be more innovative and active to make the whole show outstanding. ITB always provides opportunities for any destination or tourism stakeholder to present themselves in the most prominent manner. My expectation out of ITB would be that India as a participant, and especially Kerala, my own state, who are already actively participating in the trade fair, would again take part in this year’s event and derive benefits out of it,” said EM Najeeb, Chairman & Managing Director - Airtravel Enterprises Group of Companies.

Source: travelbizmonitor.com

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