India needs to take forward ‘Holiday in India’, on the lines of, ‘Make in India’ as a strategy and not as a marketing campaign
Tourism’s impact on a destination’s social and economic areas are massive. It contributes around 10 per cent to global GDP and over 9 per cent is job creation. In India it is in the region of 6 per cent to GDP and about 5.5 per cent to jobs. This can change substantially and at a faster rate if the government’s ‘Make in India’ campaign can sincerely be imbibed in tourism as well. Developing destinations with innovative new ideas and right tourism infrastructure and then effectively marketing it is the key to the promotion of tourism and Make in India can further expedite the pace of change.
Tourism in India has definitely grown, and grown in absolute numbers. If India was hovering at just over 2 million foreign arrivals at the turn of the millennium, it has today grown to close to 9 million tourists. But given the vast opportunity to grow India’s tourism pie in the global arena, share of India of it has remained abysmally low at just about 0.68 per cent and not even 1 per cent which is what the current tourism dispensation at Ministry of Tourism, Government of India has set as target.
Domestic Tourism that is widely believed to be India’s tourism mainstay has recorded impressive growth year-on-year with a little over 220 Million annual domestic travels in the year 2000 now expected to be nearing 1.6 billion by the end of 2016. On the domestic air travel front, Indian carriers flew nearly 100 million passengers in 2016 according to available DGCA numbers. India emerged as the stand-out performer topping the chart globally for the second year in a row in domestic air travel growth with a record 23.3 per cent increase in domestic air travel demand in 2016, which is twice that of neighbouring China. However, here again, if we compare the numbers with a market as developed as United States, the number of annual domestic travel in India is just about 0.08 per person per year against 2.5 in the US, that is around 32 times less! Once again, it clearly is indicative of the impending growth in the domestic air travel demand in India in the coming years.
Can ‘Make in India’ play the role of that catalyst in unleashing and spurring the growth? There is indeed optimism. However there is also, at the same time, need to create that conducive environment, especially on the policy front in order to develop an enabling environment that’s suitable for Make in India and tourism to be effectively imbibed together.
SATTE 2017 Business Session on ‘Make in India and Tourism’ was roundly discussed by a distinguished panel that included Air India CMD Ashwani Lohani; N Srivastava, Commissioner of Tourism and Managing Director, Gujarat Tourism; Mahmud Shah, Director, Kashmir Tourism and Aashish Gupta, CEO, FAITH. The session was moderated by Subhash Goyal, Member, NTAC and Immediate Past President, India Association of Tour Operators.
Holidays in India: Infra Thrust
An interesting development on imbibing ‘Make in India’ into ‘Tourism’ recently has been that industry federation FAITH that represents ten national travel, tourism and hospitality associations, has proposed the concept of ‘Holidays in India’ that it says is on the lines of ‘Make in India.’ There are many sensible suggestion that FAITH has argued to garner government attention towards ‘Holidays in India.’
So what is ‘Holidays in India?’ It is essentially a set of suggestions aimed at not only growth in tourism and destination development but interestingly it also takes up issue of stemming the flow of Indian money to foreign shores through outbound travel.
FAITH’s first key recommendation is ‘developing massive demand centres’ for growth in tourism. The current tourism that is happening in India can only take so much growth. Whereas the country requires a radical jump in numbers. The Winter Olympics that Sochi played host to a few years ago has forever changed the profile of this nondescript Russian town and had catapulted it to the centre stage of winter sports in the world. When Shanghai Disneyland opened within four months it got 10 million tourists. ‘Holidays in India’ proposes that the government set-up five such mega tourism zones in North, South, East, West and North East in partnership with states on the PPP basis.
The latest budget has seemed to attention to this industry suggestion. Finance Minister Arun Jaitley’s remark in his budget speech on tourism as “a great economic multiplier and of economic importance” and announcing five special tourism zones is indicative of that.
According to Lohani, “Make in India and tourism is all about creating and developing new destinations. We have to create new destinations. Besides, Make in India and tourism is also about handicraft, textiles, gift items and souvenirs etc.,” he says.
Sharing experience from his stint at Madhya Pradesh Tourism, Lohani informs of many destinations that M P Tourism developed and put them on state’s tourism map. Destinations like Tawa, Bargi, Indira Sagar, all large water reservoirs that tend to naturally attract visitors given the availability of right infrastructure, were developed as part of this initiative and are becoming increasingly popular tourism spots with visitors with each passing year. If these destinations have already begun to pick up, initiatives like sair-sapata in Bhopal also has woken up the local population to city’ heritage and tourism attractions, he adds.
Outlining various state initiatives to promote tourism N Srivastava, Commissioner of Tourism and Managing Director, Gujarat Tourism, emphasises the need to develop the right tourism infrastructure to boost tourism. He informs the state has received over 180 applications, thanks to states tourism friendly investment policy, totalling more than Rs 8,500 crore in investment opportunity in the state’s tourism sector. “Hotels, restaurants, a large number of theme parks, among others have been covered in this. Government is all out for promotion of tourism in the state. In fact, because of all these measures, the increase in tourism in the state is 17 per cent across domestic and international arrivals put together,” Srivastava said.
The effect of developing the right infrastructure in order to boost tourism is telling for Gulmarg particularly for winter sports tourism activities here after the Gondolas started ferrying people to this ski resort, catapulting the destination today as one of the major attraction for holiday makers. “We were the first to import the Gondola technology in the state of J&K, building at the time world’s highest Gondola. Off late, we are taking this to other destinations as well,” informs Mahmud Shah, Director, Kashmir Tourism, while outline the benefit of the developing right infrastructure in order to develop destinations’ tourism profile.
Vast tulip gardens have greatly added to the destination appeal of countries like Holland and enchanted and attracted visitors from across the world during the tulip bloom. J&K has also recently experimented with expanding its Tulip Garden. J&K has the largest Tulip Garden of the country and the number of such gardens is set to increase amidst a host of initiatives by the state like taking tulip plantation to destinations like Gulmarg and Pahalgam and also working towards reducing its reliance on imported tulip germ plasm and developing its own supply of the tulip cells.
Other initiative where the state tourism department wants to focus under ‘Make in India’ scheme is to focus on promoting J&K cuisines, particularly its heritage of forest food that it’s promoting since last year and, as Shah says, has generated good interest among the locals as well as people from outside the state.
Film shooting is another segment that the state tourism is keen to promote in the state where it sees opportunity with its Europe like surrounding, spectacular landscape from Kashmir to Ladakh and single window clearance system to make it easy for the film shoots to take place in the state.
Infra & Industry status for hotels
‘Infrastructure’ and ‘Industry’ recognition to hotels has been a key industry demand. Hotel is a very big infrastructure sector. Currently, hotels do not get recognised as infrastructure sector by the Government, baring for those above the capex of Rs 250 crore by the RBI.
“China has 2.5 million hotel rooms and they get 60 million (foreign) tourists. India has 0.2 million hotel rooms and gets 8 million (foreign) tourists. There is a direct co-relation. Besides, each hotel rooms generate one direct and three indirect jobs. Look at the economic potential. It needs to be recognised as a (infrastructure) sector and RBI needs to recognise hotel capex 25 crore and above as infrastructure,” Gupta reveals.
Industry status to hotels can be other major catalyst in spurring growth in hotel development under ‘Make in India’ initiative and in turn help overall tourism growth. It was pointed that every state likes to talk about the fact that they have given the industry status to hotels but very few state actually gave industry status to this sector.
Tax incentives & GST
Gupta says, “Why give people money to support their food and livelihood. Why not give them jobs. Our recommendation is give people direct tax incentive for holidaying in India, like every 50,000 rupees spent on domestic holidaying get exempted of tax.” This is aimed at generating massive demand of travel that in turn will create millions of new job opportunity and new demand of hotel and other tourism related infrastructure.
“If people do their MICE conferences within India, give them 200 per cent of their expenses that they incur. That is, if a company spends one crore in India give them a tax exemption worth two crore. Do you know US$20 billion go out of India (in tourism) out of which US$ 8 billion is on MICE. Imagine the amount of money which can stay back in India,” he further argues.
A long time in the making, GST has been hailed a key game changer for tourism. However for that to happen there is need for the Government to keep a tourism friendly GST. “Wherever GST has been introduced in the world, the GST rate for tourism has been kept half of the standard rate,” Gupta stresses while advocating for a lower GST rate.
How to make it happen
FAITH CEO also argued for the tourism to be included in the concurrent list. “As in GST that will herald an era of one-country one-tax in India, similarly we need one-country one-state one-tourism tourism philosophy. Unfortunately, tourism is not even defined in the constitution. Concurrent is probably the way forward,” he opines.
On the demand front, it was argued to develop strategic source market focus which in turn will further catalyse ‘Make in India’ for tourism. India gets 70 per cent of its tourists from long-haul destinations. Whereas worldwide wherever tourism has succeeded 80 per cent of tourism happen within the region, within 3 hours flying time be it ASEAN, Shenegen NAFTA region. For India tourism to grow, the country needs to focus on the ASEAN region which is nearby and the most strategic market that India should develop.
Airports activation was another point that was put in the spotlight. Industry’s long pending demand to activate many dormant and remote airports in far-flung areas like Hill states and elsewhere has finally begun to show signs of change with the government recent schemes on regional and remote connectivity. However, the onus is on the airports to approach the state, whereas industry feels that it should have been the other way round.
What will go a long way in making it happen for India tourism is tourism related sensitisation that will not only help putting greater spotlight because of its socio-economic benefits but can also clear the misgivings about tourism being an elitist activity. Tourism industry, under the leadership of FAITH, along with NITI Aayog has undertaken a tourism sensitisation programme right to the doorsteps of the Prime Minister where they are working on a 15 year demand planning for tourism.
In Conclusion
Gupta says that if ‘Holiday in India’, on the lines of ‘Make in India’, is taken forward as a strategy and not as a marketing campaign then currently tourism that gets 2 per cent of GDP goes up to 4.5 per cent of GDP. “Tourism currently has five percent of employment; it goes to 11 per cent as against the global standard which is 10 per cent. China is currently at 9.9 per cent. Tourism’s overall employment currently is four and half crore which will become 13 crore. Holiday in India is the strategy to be followed,” Gupta says suggesting for policy makers and industry alike.
Further, the need to innovate and new ideas of product and destination development was emphasised vigorously. Srivastava said that tourism department are today very interested in exploring new avenues and innovations for growth of tourism in their state. “Starting cruise tourism in Gujarat and making best use of our coastal areas as well new innovative products like using aircraft body or train coaches for restaurants etc. or using inland waterways like Narmada reservoir for inland cruise tourism. Many things can be still done and there is lot of scope,” he said while talking about some new ideas and initiatives that his department is currently working on.
In summation, the Air India CMD once again stressed that Make in India and tourism is all about innovations. “The problem with our working is not about lack of ideas. It is all about converting that idea into physical reality. That is the name of the game. That is the most complicated part,” he says while concluding.
