Cover Story

Indian Tourism : Long way to the top?

Contrary to popular belief (both within and outside the country), of India being one of the fastest emerging destinations around the world, the ground reality is far different from the overtly hyped bracket designated to us. A study of the available statistics revealed that the Indian inbound segment continues to languish at Number 46 at the expense of its own immense potential. Bhisham Mansukhani explores

The subject is so beaten, it almost seems politically incorrect to broach Indian inbound segment in a negative vein. Yet, the parallel and consistently growing outbound segment unintentionally shows inbound tourism in poor light. While the problems are visibly apparent to everyone including the wildlife which is becoming as scant a sight as international tourists, India's precise position in comparison to its peers is interesting in as much as it underlines the urgency of expunging these problems. The contemporary issue of infrastructure however has assumed a pre-eminence in the minds of international tourists which is unfortunately lost on India's powers-that- be but not on its competition.

Driving economies

Tourism is the world's largest industry, with an annual revenue of almost $500 billion. And it is growing fast, with airline arrivals expected to double by 2010. Leisure is estimated to account for 75 per cent of all international travel. Domestic tourism is generally thought to be up to five times that of international arrivals. The WTO puts global revenue from tourism in 2003 at US $ 514.4 billion. Globally, tourism accounts for roughly 35 per cent of exports of services. The World Travel and Tourism Council (WTTC) predicts that the ten new accession countries which joined the EU in 2004 will generate up to 54.6 billion US $ of travel and tourism GDP, and create an extra three million jobs.

In 2004, the top 10 tourism destinations accounted jointly for more than 363 million international tourist arrivals or almost half of the 760 million arrivals reported worldwide. According to the preliminary data by WTO, an estimated 460 million international tourist arrivals were recorded worldwide in the first seven months of 2005. This represents an increase of some 25 million arrivals compared with the respective period of 2004, or a 5.9 per cent growth. It means that international tourism is not only on track to consolidate the bumper year it had in 2004 (+10.7 per cent), but it will also exceed the forecast long-term average growth of 4 per cent.

Where is India?

According to WTTC, India will rank sixth worldwide in terms of real growth of international tourist spend in the forthcoming decade (2006 to 2015) and Indian tourism is expect to grow at an impressive 8.6 per cent for the same period. The 'Incredible India campaign' was awarded the 'PATA Gold Award' and India was appointed chairperson of the WTO Task Force to draw up a strategy for rehabilitation of tourism in the tsunami affected areas. Add to this the fact that international tourist arrivals was up by 23.5 per cent over 2003.

Now, this would be a good time to abjure any of the celebratory pre-emptions made so far regarding the Indian market because even the most casual analysis puts the optimist on very thin ice. Presently, the over-hyped comparison doing the global rounds is that of India and ‘friendly’ neighbour China. It is quite surprising to note that in every comparison, which involves emerging destinations, China and India feature glaringly. But on closer inspection, the facts are further than skin deep. China beats India from the onset and the gap only widens. It would just be preposterous to even have a notion of such a comparison when concrete fact stares you in the face. According to the 2005 WTTC tourism report, on account of visitor exports in 2005, which includes expenditures by international visitors on goods and services within the resident economy, India stood at a lowly 46th position generating US $3.7 billion while China is seventh, generating US $27.3 billion. Perhaps, the futility of rank comes across most evidently in the future forecast wherein, in 2015, China will remain seventh but will generate US $59.8 billion while India will climb up to number 36 and yet generate a relatively average US $10.5 billion.

In 2005, travel and tourism in India is expected to generate US $44.7 billion of economic activity and will be at 22nd, while for China it will generate US $265 billion. In 2015, India will climb the ladder to sixteenth and generate about US $121.3 billion while China will have an incredible ascent to the number two slot with US $875.1 billion. According to the travel and tourism economy, an indicator of the direct and indirect gross domestic product, China is currently 6th in terms of revenue generation (US $217.8 billion), while India is way down in 20th position generating a mere US $35.2 billion. In 2015, China is expected to climb up to the second position generating US $675.1 billion and India will only trudge up to 14th generating a modestly better US $81.5 billion.

As for personal travel and tourism, which includes all personal spending by an economy's residents on services and goods, India is 19th with US$ 22 billion. Comparatively, China is in 8th position with US $89.8 billion. In 2015, India will only climb up to 13th position with US $56.4 billion, while China will be 3rd with 306.4 billion.

As for government expenditure, China is predictably in the top ten (9), generating US $8.2 billion while India is number 31 spending under a billion (US $857.4 million). Even Singapore spends more on tourism development (US $1,219.5 million). By 2015, India would have only spent US $1.8 billion while China would have spent US $17.6 billion.

The short-haul factor

India's inherent habit of ignoring a golden opportunity has not surprised many. So when other countries, and much smaller ones are riding heavily on the short-haul element of travel, India is looking at the finger instead of the moon. Though worldwide, long haul travel is expected to grow faster, at 5.4 per cent per year over the period 1995-2020, than intra-regional travel, at 3.8 per cent, the difference is huge. The ratio between intra-regional and long-haul travel will shift from around 82:18 in 1995 to close to 76:24 in 2020, which again does not take much from those destinations who focus on short-haul travel. Again, India's old ‘competitior’ China receives more than 80 per cent of its tourists from short-haul markets. By comparison, United Kingdom and the United States alone account for close to 55 per cent of its inbound traffic.

Singapore's instance further drives home the point. For example, Singapore received 703,901 visitors in September 2005. Now it is crucial to note that this number largely comprised tourists coming in from short-haul destinations. Indonesia (136,000), China (67,000), Australia (61,000), Japan (57,000) and Malaysia (44,000) were Singapore's top five visitor-generating markets in September 2005. These markets accounted for 52 per cent of total visitor arrivals for the month. Perhaps this myopic approach is at the root of India's parsimonious share of world tourism (0.44 per cent). Looking at the sheer numbers, India definitely needs to take the cue.

Ground reality

So where is India, really? Is it actually poised to become as prominent a tourism player as WTTC has kindly forecast it to be or must we again apply context? In truth, India is way below its justified position, considering its size, population and resource. And any criticism, of the dismal state of India's infrastructure and modest spending towards improving it, abysmal room inventories when juxtaposed with those of other South and South East Asian destinations and a local ignorance of tourism's socio-economic significance, hasn't even been delved into herein, not only because it is already too visible but also overstates the gloom.

The optimism however dwells not just in the forecasts. An attentive 10th five-year plan, which concedes all of these problems and charts out a roadmap for the future, a domestic aviation sector growing by more than 24 per cent that is increasing its footprint and making air travel more affordable and a bounty of hotels across premium and mid segments are laying the pitch to sustain the present resurgence in numbers. That in itself is refreshing because the story until recently was always about turning things around before they went awry again.

While the cold statistics continue to embarrass India in the face of its potential, she is finally walking, if not cantering in the right direction as tourist numbers haven't looked south since 2002, touching 3.37 million in 2004. `Keep walking', the famous kicker for one of India's famous whisky imports is now however outmoded in her case. Time to run, as it's still a long way to the top.

Their say

"Today India is poised to grow exponentially in travel, tourism and hospitality but mere chalkboard plans with no drive and determination will prove futile. " - Praful Patel, Minister of state for civil aviation	"Growing at an estimated 8.6 per cent over the next decade, India is the 3rd fastest growing travel and tourism economy in the world. " - Jean-Claude Baumgarten, President, World Travel and Tourism Council	"Not only will metros be areas of hotel development but also emerging tourist and business destinations of the country. " - PRS Oberoi, chairman, East India hotels

"India is one of the most magnificent tourist destinations in the world with a heady mix of experiences to satisfy domestic and international travellers." - Koos Klien, president, Hilton Middle East and Asia Pacific	"While access by air is much improved, the problems begin on the ground - the airports reeling from overcapacity, lack of hotel rooms and high tariffs and poor infrastructure." -Tej Sahani, MD, Vista Learning Hub