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The Rediff Business Interview/Neeraj Ghei

'Our politicians have never visualised tourism as a vehicle of economic development'

Neeraj Ghei is not only the youngest, but the first woman to head the Travel Agents Association of India in its 46 years of existence. As joint managing director of India’s leading travel organisation -- Sita World Travel (India) Limited -- she has been closely involved with the travel and tourism trade for over twenty years. She spoke to Vinod Behl about the problems facing the industry. Excerpts from a lengthy interview:

What are your priorities now that you have taken over TAAI?

The first priority at TAAI is asking all our principals and constituents of the industry to consult us before they make any change that affects travel agents. Very often, we are not informed about such changes, which hampers our work as travel agents. Take, for example, the new aviation policy drafted by the United Front government. As an organisation concerned with consumers's interests, we could have given some vital feedback, but we don't even know what the policy is all about.

We are not averse to change, but want to be taken into confidence. So, we are appealing to all government undertakings and our principals (hotels, airlines, et al) that if you are implementing a new policy, involve us in the exercise as we are an important arm of the tourism and travel trade.

Another thrust area is addressing the TAAI's need for human resources. We are trying to help members get the right kind of professionals. Service is a very important segment of our business as customer expectations are rising and we need a trained work force. There is a need for a national curriculum for travel and tourism companies who pick up professionals from colleges and universities and spend a good amount of time and money training them. The easiest thing to do is to poach on the staff of another travel agency, but we are keen on increasing the availability of trained manpower to help our members.

What, according to you, are new challenges before the TAAI?

One challenge is create an apex body. Today, we have more than one association of travel agents, tour operators, hoteliers, etc. The immediate need is to create a federation -- an Indian Tourism Council -- where all the travel and tourism trade bodies comes together. This is the biggest challenge that confronts the tourism industry.

Another major challenge is to impress upon the various political parties to harness the potential of tourism in the country’s economic development. We have been meeting leading politicians of all the political parties, to impress upon this aspect. We feel that as the nation enters the new millennium, tourism must emerge as an important national activity because it generates a great amount of employment. In fact, many nations depend solely upon tourism for generating employment to earn vital foreign exchange. India, after 50 years of independence, accounts for only 0.4 per cent of world tourists despite its huge potential.

Tourism, in India, is a state subject. And instead of encouraging it as an economically viable activity, our policy-makers have been burdening this sector with taxes which are as much as 35 per cent in some areas.

What about the political will to promote tourism?

Our tragedy is that none of the political parties who have been in power have any commitment towards tourism. None of them had the will to see that tourism came on the national agenda as a prime economic activity.

Unfortunately, travel and tourism has always been considered as an activity for the elite, by the elite, and of the elite. Our politicians never visualised it as a vehicle of economic development.

We have asked all the political parties to express their long-term policies on promoting tourism, and asked them to put it on their manifesto. That would give us a fair idea of which parties are seriously thinking of promoting tourism.

What kind of impact has the devaluation of the rupee had on the travel trade?

Devaluation is bad for any economy. The immediate impact of the rupee devaluation is that it has made overseas travel costly for Indians, particularly for those heading West. And if the rupee declines further, there will be a perceptible decline in the growth rate of overseas travellers, both leisure and business, heading for the United States and Europe.

Devaluation makes your exports more competitive. But in our case, the majority of tourism products -- airline prices, hotel tariffs and tour packages -- is priced in dollars, which cannot be passed on to the consumers. This leaves only the pricing of the tour operators. And because that constitutes only 15 to 20 per cent of the total package price, how much of the difference can finally be passed on to the consumers?

The only way out, to gain advantage of the rupee's fall, is to price all tourism products in rupees. The Department of Tourism has done a good thing by directing all hotels to follow a uniform pattern of a single tariff, but it should insist on a rupee tariff. A rupee pricing for all tourism products will make them competitive compared to the neighbouring countries.

The growth of tourism infrastructure leaves much to be desired.

We suffer from an unbalanced growth of tourism infrastructure. We have the best of hotels in the world, but we have the poorest approach roads. Take the classic example of Khajuraho. We have 500 rooms in that city, but the daily air capacity to Khajuraho is just 50! And the Jhansi-Khajuraho-Varanasi circuit roads are in poor shape.

Now let us look at the Delhi-Agra-Jaipur circuit (India's most popular tourist destinations). The tourist cannot travel quickly on this prime golden triangle circuit. Despite being about 300 kilometres apart, you need more than six hours to travel between Agra and Jaipur. Worse, there is no train or air connection between Agra and Jaipur, two world famous tourist centres. This forces tourists to visit Agra just for a day, which means that the hotels there -- among the best -- remain unused, just to be back in Delhi to take a flight to Jaipur.

Don’t you think that being an expensive destination is proving to be a deterrent to the inflow of foreign tourists?

Yes, it is true that we are too exorbitant for our own good. Foreign tourists are forced to land in the gateway cities of New Delhi and Bombay because the famous tourist destinations do not have international airports. And the costs of tourism products in these two cities are crippling.

Secondly, the cost of travel -- luxury coaches, cars -- become expensive because of the high level of interstate taxes. The taxes are sometimes as much as four times the cost of fuel.

We have been lagging behind in promoting domestic tourism by not going in for non-luxury hotels.

Every successful tourism nation always builds its industry on domestic tourism. You cannot live in isolation and say that you will build your tourism industry on foreign tourists. By promoting domestic tourism, you also build a balanced infrastructure. Today, 140 million Indians travel within the country, whether it is for vacation or pilgrimage. The number of pilgrim tourists is growing rapidly and we have failed to tap this boom. We need to increase the number of superfast trains and require a fair spread of good, hygienic 2 to 3 star hotels.

If we develop domestic tourism, we will also be able to wipe out the stigma of 5-star tourism that India has acquired. Our tourism is branded as a 5-star culture because we have not developed a network of economy hotels, thereby limiting domestic tourism only for the rich.

Why are we not developing new tourist circuits while overdoing the existing circuits?

It is a very sad situation. Take the classic case of Manali. It is a pity we have destroyed this beautiful hill station. We in India believe in killing the goose that lays the golden eggs. When Manali was becoming a hot tourist spot, every hotelier rushed there to cash in on the gold rush. And there was no control over the haphazard growth, particularly to save Manali's environment. You have to respect what the environment can sustain. There is an immediate need to go in for sustainable tourism.

Is not the growth rate of tourism in India very low and the investment in tourism quite inadequate?

I agree that the growth rate of tourism is woefully inadequate. And even as far as capital investment in tourism is concerned, the basic investment needs to flow in the area of building infrastructure of airports and convention centres. Hyderabad has very good air connections and hotels, but lacks a convention centre with a capacity of 1,500. Similarly, there are several examples of investment not flowing into a particular sector of infrastructure.

A basic problem of sufficient investment not flowing to the tourism sector is that hotels and other tourist facilities have long gestation period before investors get their returns. Therefore, in order to encourage investment in this sector, the government must come out with tax benefits and other incentives besides arranging loans at lower interest rate. Unless subsidy on investment is given, investment flow will not pick up.

What impact does prohibition have on tourism?

Prohibition certainly has an adverse effect on the financial viability of hotels, convention centres, etc, particularly when the corporate and business traveller is today the mainstay of hotel business.

Many feel we are not doing enough for promotion of tourism abroad.

I believe that direct media campaigns on promoting the brand equity or image of the country have to be backed by good media news on a destination. India, unfortunately, does not make good news. When India appears in the world media, it is because of bomb blasts, calamities, riots, ethnic violence, etc. People are just not attracted by glossy advertisements. India's image can only be built up by a sustained media projection of the country along with ad campaigns.

Plans have been afoot about promoting tourism among the South Asian countries, but nothing concrete has emerged so far.

The promotion of tourism among the South Asian countries depends upon the general co-operation among these countries at the political and economic levels. Everything depends upon how conducive the political atmosphere is. The response from South Asian countries is lukewarm and the talk of promoting tourism in the region is little more than lip service.

What are the prospects of tourism in the 21^st century?

Tourism prospects on the global front are extremely bright. In India, however, the scenario will continue to remain bleak unless we put our act together.

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