Imagine when the entire world is going out of way to woo the world’s largest tourism source market, ie., China; India, despite announcing 2015 to be ‘Visit India Year in China’ and then forgetting about it, shows amply the malaise that has come ail India’s inbound tourism sector. The mood is that of “appalling gloom” in the inbound trade as the individual estimates range from 2015 being flat to ‘small decline’ to a growth decline of as much as 20 per cent in the organised inbound tourism sector.
Clichéd as it may sound, India’s mechanism for tourism growth has brittle foundation and therefore as the new inbound season looms large there is anything but euphoria in the Indian inbound trade at the moment.
But first let’s look at a few numbers before we get talking to the industry. In the previous decade when India tourism witnessed its best year of growth between 2003 and 2007 (Growing by over 115 per cent in these five years), worst followed in 2008 and 2009. Even during these years India fared better when compared with the international growth numbers. However, this is the first time since 2003 that India’s inbound numbers have gown below the world average.
In 2008, when India recorded a steep decline due to the global economic meltdown and the Mumbai terror attack, arrivals grew by 4 per cent, way behind the previous year of over 14 per cent but above the world average of 2 per cent. In 2009 when Indian arrival declined by 2.2 per cent over the previous year affected by the global economic crisis and H1N1 influenza, the global numbers declined by over 4 per cent.
However it is the first time in over 12 years that India recorded a growth of 4.5 per cent in the first eight month this year (January-August 2015), below the last year’s global tourism growth of 4.7 per cent.
Consider this. In 1980 India and Turkey had about the same inbound arrival figures, 1.2 million each. Today as Turkey is closing on 40 million, India is inching towards 8 million, a number that Turkey was getting in 2000.
PATA India Chapter’s Vice Chairman and Abercrombie & Kent’s Managing Director, Vikram Madhok, rebuffs the point, stating that it’s like comparing apple with oranges or chalk and cheese. “Our (India’s) approach to tourism is totally different. They run their business like a CEO does for his company or a corporation does. They have targets and they work towards it,” pointing to a growing and seething anger in the inbound trade that scant little is being done to grow tourist arrivals and initiatives like e Tourist Visa are only half hearted efforts.
According to Sarabjit Singh, Vice Chairman, FAITH and Sr. Vice President, IATO, there is little rationale in the growth rate that the inbound data shows. Commenting on the outlook this year, Singh says, “As far as inbound tourism in the organised sector is concerned the growth rate has fallen down. The real situation on the ground is that if we do not get the things (going) right-now, we will have 15 to 20 per cent companies in the tourism sector out of business, anything between 50 to 100 hotels can be either be sold or will be declared NPA. There is at least 20 per cent less business and tour operators are finding it difficult to remain solvent.”
IATO Vice President and Creative’s Joint Managing Director Rajeev Kohli, agrees with his IATO colleague stating that the situation is going from bad to worse as there virtually have been no growth in the organised tourism sector.
Suggesting that hotel occupancy is a good indicator of increasing tourist arrivals in the organised tourism sector, Kohli says “Why not ask any hoteliers in the town? Why are hotels empty? Why are the tour operators not occupied? Why are the guides not getting assignments?
“Business is very depressed. And people are fed up of government’s lack of action. Now the government has notified that we will increase monument entry fee by 300 per cent. Delhi government has said we will increase taxes. No action has been taken by the current government of India beyond Visa (e Tourist Visa) and that also is not perfect and they refuse to change it.”
There are a number of reasons to this, he says. “One, there is total lack of India as a (tourism) product in the global travel community. We have done a very inadequate job of protecting our brand. We have done a really poor job of marketing. We have done a wonderful job of increasing our prices. Ad hoc government ruling at the centre and state are hurting the strategy. The foreign tour operators are saying that why not to put our money elsewhere where there is market stability and we can make some money,” he said while adding “I think our government is delusional that people are dying to come and see India.”
Not so differently, Madhok says that when you talk about system and procedures, I think they (Government) have to look at all the processes that make India a more pleasing and a more agreeable place for people to come to. Cleanliness, improving India’s image vis-a-viz tourists’ safety and security concerns, rationalising tourism taxes which he says is “absolutely ridiculous”, are some of immediate areas of concern that he suggests need attention to address the current “flat or there is a decline” situation for inbound tourism.
Year 2008 was Madhok’s A&K’s record year in India. It has been a long wait since. Madhok is expecting 2015 to be his second best year riding on a resurgent US market for his company. While further adding to the source market dynamics at play at the moment, Madhok says that from amongst the feeder markets, other than the US rest of the market are either in retarded growth or show minimal growth. “Besides, entire Europe is in trouble, other than perhaps Germany and Switzerland. And they are very sensitive to Incredible India right now because of the safety or security concerns and all this negative publicity about India.”
Singh also exhorts the tourism trade to be bolder in sharing information about situation on the ground. We are hesitant to talk about the real situation with our business and instead say that it is doing good prompting the government to assume that everything is fine. This needs to be corrected, he says.
Acknowledging that there are external factor as well Singh says that there are so much to do in order to put our house in order and we can at least attend to that in order to create a better appeal for Indian tourism product. High rate of tourism taxes which is in the region of 25 to 30 per cent is much higher than other popular tourist destinations like France, Thailand, Singapore where tourism taxes are in the region of 5-8 per cent and make their product very competitive.
