Tourism sector in India

WHY IN NEWS:

• Hit by the pandemic related restrictions, the global travel and tourism economy contracted by 49% in 2020-21.

INTRODUCTION

• The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in India.
• Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains and places of natural beauty spread across the country.
• Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country

STATISTICS

• Travel and tourism sector accounted for 8% of the total employment in the country and 6.8% of India’s GDP
• India's rank in Travel and Tourism Competitiveness Index of World Economic Forum has moved to 34th position in 2019 from 65th rank in 2013
• According to World Travel & Tourism Council (WTTC) India ranked 10th among 185 countries in terms of travel & tourism’s total contribution to GDP in 2019.

POTENTIAL/ ADVANTAGE

• Robust demand:
  • By 2029 India’s tourism sector is expected to grow 6.9% to reach 35 trillion rupees and accounting for 9.2% of total economy
  • International tourist arrival in India is expected to reach 30 million by 2028
• Fast pace of digitalization:
  • India is the most digitally advanced traveller nation in terms of digital tools being used for planning, booking, and experiencing a journey.
• Burgeoning middle class:
  • India’s rising middle class and increasing disposable income has supported the growth of domestic and outbound tourism.
• Role of MNCs:
  • International hotel chains are increasing their presence in the country, and it will account for around 47% share in the tourism and hospitality sector of India by 2020 and 50% by 2022.
• Large investment inflow:
  • India was globally the third largest in terms of investment in travel and tourism with an inflow of US$ 45.7 billion in 2018, accounting for 5.9% of the total investment in the country.
  • Hotel and Tourism sector received cumulative FDI inflow of USD 15.61 billion between April 2000 and December 2020.
• Policy support:
  • Campaigns such as Swadesh Darshan, a theme based tourist circuit was launched to harness the tourism industry’s potential
• Diverse attractions:
  • India offers geographical diversities, cultural richness, numerous local traditions like art forms, dances etc.
• Medical tourism:
  • India’s low-cost healthcare facility with presence of quality health care specialists makes the country a good destination for medical treatments

GOVERNMENT INITIATIVES

• Improving connectivity and infrastructure:
  • Swadesh Darshan Scheme:
    • It aims to develop theme-based tourist circuits in the country.
    • These tourist circuits will be developed on the principles of high tourist value, competitiveness and sustainability in an integrated manner.
  • Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD):
    • It focuses on identifying and developing the pilgrim sites across the country to enrich the religious tourism experience.
  • Tourist helpline:
    • Launch of 24x7 toll free multi-lingual tourist helpline in 12 International languages including Hindi and English.
  • National Integrated Database of Hospitality Industry (NIDHI):
    • It aims to get a clear picture of the geographical spread of the Hospitality Sector, its size, structure and existing capacity.
    • It will serve as a common repository of data from Ministry of Tourism, State Departments of Tourism and Industry and enable the Central and State Governments to deliver better support and services including policies and strategies
  • ‘Adopt a Heritage’ Scheme:
    • It aims to involve public sector companies, private sector companies, and corporate citizens/individuals to take up the responsibility for making our heritage and tourism more sustainable
    • It is to be done through the development, operation and maintenance of world-class tourist infrastructure and amenities at ASI/ State heritage sites and other important tourist sites in India.
  • RCS- UDAN:
    • It has been introduced with the main objective of facilitating / stimulating regional air connectivity by making it affordable
    • Under RCS UDAN-3, connectivity is further improved with 46 tourism routes included for better connectivity of important tourist places including Iconic sites
  • Viability Gap Scheme for Revenue Generating Tourism Projects:
    • Scheme is meant to promote Public Private Partnerships (PPPs) in tourism infrastructure development
  • Iconic Tourist Destinations Scheme:
    • It is a central sector scheme for the development of identified iconic destinations in the country with the objective of
      • Holistic development of selected Iconic Sites to global standards
      • Develop sustainable tourism infrastructure
      • Robust Operations and Maintenance plan
      • Publicity and Promotion of Iconic Sites
      • Employment generation through community participation
• Improving foreign tourist arrivals:
  • E-visa:
    • At present the e-Visa Scheme is available to nationals of 169 countries
    • e-Visa is valid for entry through 28 designated Airports and 5 designated seaports
    • Government has substantially reduced the fee on e – visa to increase tourism competitiveness of the country.
  • Incredible India campaign:
    • Launch of the Incredible India 2.0 campaign with market specific promotional plans and content creation.
    • Incredible India Website launched in Chinese, Arabic and Spanish languages to attract tourists from these regions.
  • India Tourism offices abroad:
    • Promotional activities in tourist generating markets overseas through the India Tourism Offices abroad with active participation in travel fairs and exhibitions
  • Cultural connect:
    • Organization of biennial International Buddhist Conclave.
    • Project Mausam is a cultural and economic project by the Ministry of Culture and ASI which aims to connect countries on the Indian Ocean
    • International Day of Yoga
• Skilling:
  • Incredible India Tourist Facilitator (IITF) Certification Programme
    • It is a Pan-India online learning program accessible from different digital devices.
    • The programme aims at enhancing the overall experience of tourists by creating a pool of local, trained professionals
• Institutions:
  • Ministry of Tourism
    • It is the nodal agency to formulate national policies and programmes for the development and promotion of tourism
    • Ministry also has the following autonomous institutions
      • Indian Institute of Tourism and Travel Management
      • Indian Culinary Institute
  • India Tourism Development Corporation (ITDC)
    • It is a hospitality, retail and education company owned by Government of India
  • National Tourism Advisory Council
    • It serves as a think tank of the Ministry of Tourism
• Promoting entrepreneurship in the sector:
  • Organization of annual Global Tourism Mart for India in line with major international travel marts being held in countries across the world.
  • It provides a platform for all stakeholders in tourism and hospitality industries to interact and transact business opportunities.
• Special focus on NER:
  • Organisation of Annual International Tourism Mart for promotion of tourism in North Eastern States.
• Pandemic response:
  • SAATHI (System for Assessment, Awareness & Training for Hospitality Industry):
    • The initiative will effectively implement guidelines/SOPs issued with reference to COVID-19 for safe operations of hotels, restaurants etc.
  • Stranded in India’ portal:
    • It aims to facilitate and extend support to foreign tourists who were stranded in the country on account of cancellation of flights/lockdown.
• Tax incentives:
  • GST Council announced a cut in the tax rate on hotel room tariffs, a move aimed at giving a boost to the hospitality sector
• Other initiatives:
  • ‘Dekho Apna Desh’ initiative
    • It aims to create awareness among the citizens about the rich heritage and culture of the country and encourage citizens to travel within the country.
  • Ek Bharat, Shreshtha Bharat
    • Its primary objective is to strengthen cultural relations of various regions in the country and to encourage mutual connection between people residing in different states

CHALLENGES OF TOURISM SECTOR

• Skill gap:
  • The number of adequately trained individuals for the tourism and hospitality sector is a key challenge to giving visitors a world-class experience.
  • They are very limited number of multilingual trained guides, and the limited local awareness and understanding of the benefits and responsibilities associated with tourism
• Infrastructural constraints:
  • Deficiencies in infrastructure and inadequate connectivity hamper tourist visits to some heritage sites.
  • Also, India has various tourist destinations but few circuits or segments such as the Golden Triangle (Delhi-Agra-Jaipur).
• Inadequate marketing:
  • Although it has been increasing, online marketing/branding remains limited and campaigns are not coordinated.
  • Tourist information centers are poorly managed, making it difficult for domestic and foreign tourists to access information with ease.
• Higher lending rate:
  • RBI has equated the hotel sector with real estate and this leads to lending at a high interest rate from banks.
  • Thus CII suggested the hotel industry be granted ‘infrastructure’ status.
• Underutilization of tourism potential:
  • As per World Economic Forum’s Travel & Tourism Competitiveness Report 2019 >> India ranked 8th on cultural resources and business travel, 13th on price competitiveness and 14th on natural resources
  • Despite these superb rankings, India’s overall tourism competitiveness ranking at 34 >> It reveals that India has not monetized or marketed the precious assets embedded in its heritage to their full potential, as other countries do.
• Safety concerns:
  • Several tourists are concerned about safety issues, especially in remote rural areas where enforcing law and order may be faced with much more challenges.
• Pandemic:
  • The outbreak of the Covid-19 pandemic has brought almost all areas of the business to a standstill
  • The worst affected has been the tourism and hospitality industry >> which had to bear the brunt of lockdowns and social distancing.
  • According to the UN World Tourism Organization (UNWTO), this is by far the worst crisis international tourism has faced since records began in 1950.

WAY FORWARD:

• Tap the potential of rural tourism:
  • Improved infrastructure and connectivity of rural India can improve rural tourism.
• ‘One India One Tourism’ Approach:
  • Tourism encompasses multiple ministries and takes place in and within states.
  • It thus requires a National Tourism Council, an empowered legislative body that will enable fast-tracking of Centre-state level tourism matters and will create a ‘One India One Tourism’ approach.
• Bring tourism in the concurrent list:
  • Confederation of Indian Industry (CII) has sought the inclusion of tourism in the concurrent list to enable the Centre and States to effectively regulate the sector as well as frame policies for growth.
• Conservation of Heritage Sites:
  • Conservation and development of all heritage sites should be undertaken and completed through either government funding or through NGOs/Corporate Social Responsibility (CSR) activities.
• Provide ‘Infrastructure status’ to the hotel industry:
  • Confederation of Indian Industry (CII) suggest that the hotel sector be delinked from real estate and also be granted infrastructure status under Income Tax Act
• Promotion of Niche tourism:
  • Identification of strengths of villages in different states and introduction of customised trips like Tribal tours in North-East India, cultural and heritage walk in Rajasthan
• Capacity building at grass root level:
  • Adequate finances must be devolved to the gram sabha for maintenance of basic infrastructure.
  • Training of villagers to guide and assists tourists.
• Promote sustainable and responsible tourism:
  • Ecological impact of increased number of tourists must be assessed

PRACTICE QUESTION:

Q. Discuss the measures required to overcome connectivity and seasonality challenges in tourism sector in India