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India's tourism saga only gets better

Tourism in India is the third largest net earner of forex and contributes six per cent to our GDP, writes Saikat Neogi.

india Updated: Oct 17, 2006 16:48 IST

With Conde Nast Traveller ranking India as the fourth most preferred travel destination and Lonely Planet selecting the country among the top five destinations from 167 countries this year, India has finally made its mark on the world travel map.

Global recognition is evident from the rising number of India-bound tourists. From just 17,000 international arrivals in 1951, the number has grown to 39 lakh in 2005. According to the Ministry of Tourism, we have already clocked almost 30 lakh foreign tourists between January and September, as compared with 27 lakh during the same period last year.

In the past three and half years there has been a 45.5 per cent growth in foreign tourist arrivals, pushing India's foreign-exchange earnings from $3.5 billion in 2003 to $5.7 billion in 2005. Foreign tourists in India spent an average of $1,470 per person last year; nearly double the global average of $844. France, the top tourist destination in the world, earned only $556 per tourist last year. The ministry estimates that by the end of 2012, India's foreign-exchange earnings from foreign tourists will cross $12 billion. In fact, the World Travel and Tourism Council estimated that Indian tourism industry would grow annually at 10 per cent over the next decade, the highest in the world.

Tourism in India is the third largest net earner of foreign exchange and contributes 6 per cent to our gross domestic product (GDP). It also employs the largest number of people. In 2003-04, according to the National Council for Applied Economics Research, the industry employed 4 crore people directly and indirectly, which was 8.78 per cent of the total employment in the country.

Packaging India

Much of the credit goes to the Ministry of Tourism's high-decibel 'Incredible India' campaign launched towards the end of 2002. The campaign mounted a concerted effort in international print, electronic, and Internet media besides outdoor advertising and road shows to showcase the country's tourism-friendly aspects. "It helped create high visibility and brought in high-value traffic into the country," says Amitabh Kant, joint secretary, Ministry of Tourism. Earlier, the ministry was solely dependent on its overseas offices to promote India as a tourist destination.

As the world is waking up to an India beyond the Himalayas, or the enchanting Thar Desert, the ministry is now focusing on niche areas like medical, ecology, rural, golf, wellness and spiritual tourism. With about 1.5 lakh foreign patients coming in every year, the medical-tourism market in India is now estimated at over $300 million and by the end of this decade it will grow up to $2.3 billion. Last month, the ministry partnered with the United Nations Development Programme (UNDP) to develop 71 villages across the country to showcase our unique traditions.

Spot the problem

While there is enough for the ministry to feel proud of, several problems like shortage of hotel rooms, delay in the issue of visas, a slew of taxes and poor infrastructure have yet to be sorted out. The Federation of Hotel and Restaurant Associations of India estimates that there are at present 97,000 hotel rooms in the country. It says if foreign-tourist arrival grows at 8 to 10 per cent over the next three years, India will need 30,000 additional rooms in various categories.

The Planning Commission estimates that India will need 1.6 lakh rooms more to accommodate the projected 58 lakh tourists by 2010, and 3 lakh rooms by 2020 to meet the projected tourist arrivals of 89 lakh.

The current growth of hotel rooms is less than 2,000 rooms a year, forcing hoteliers to double room tariffs in the past two years. Also owing to high land prices, there are more five-star hotels than budget hotels, making India a high-cost destination. Tarun Thakral, chief operating officer of Delhi-based Le Meridien hotel, says the land for hotel construction should be given on long-term lease as in countries like China and Malaysia.

Taxes — like luxury, service and transport tax — which total about 25 per cent do not help either. And then there is the visa issue. While countries like Malaysia, Thailand, and Sri Lanka have initiated visa-on-arrival scheme, a foreign tourist to India has to wait for a month to get an Indian visa. "If we do not implement a similar scheme foreign tourists with a South Asia itinerary will skip India," says Subash Goyal, president of the Indian Association of Tour Operators.