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The Rediff Business Special/Tourism in doldrums

Name it, India has got it, except tourists

Pallavi Ghosh in New Delhi

India has it all. The looks: sprawling deserts, vast green plains, limpid backwaters, white beaches, cool, blue mountains. The vital statistics: the world's highest peak, wettest place, stylish metropolises.
A multicultural society: cuisine, custom and tradition -- sometimes, a thousand-year-old rubbing shoulders with the young and trendy that is as much at ease in New Delhi as New York. And yet, so few people come over to discover India.

Tourism figures for 1997 reveal that just 0.4 per cent of the world's 617 million tourists visited the country. And during their visits, they spent just 0.7 per cent of the US $448 billion spent round the world on tourism.

While China welcomed 23 million tourists last year, India got only 2.2 million. Even Indonesia, which woke up to the potential of tourism only recently, had double that number. And between 1996 and 1998, the growth in the India-bound tourist population was just 0.7 per cent, so small it isn't worth talking about.

Besides, over the past three years, 40 per cent of those who have visited India as tourists were people of Indian origin. Since they are here to meet family and relatives, they earn India none or little foreign exchange. They spend neither on souvenirs nor stay in hotels, contributing nothing to the Indian economy.

Effectively, expatriates are just visitors to India, not tourists. And for several reasons, tourists, who earn revenue for the country, provide business, and contribute to economic growth, are dwindling every year.

What's gone wrong?

Credit must be given where it is due. Policy makers do realise tourism is a service industry which can give an impetus to the economy. Here is a labour-intensive industry in job-starved India. Tourism can employ more than 21.4 million people (2.4 per cent of the country's population), directly by hiring people in hotels and the service sectors and indirectly by promoting handicrafts (offering a market to artisans and craftsmen).

World Travel and Tourism Council estimates tell us international travel and tourism accounts for over 10 per cent of the GDP and 11.4 per cent of global investment and an estimated output of US $3.4 trillion. So why can't India get a share of that?

Because in India, tourism has a history of missed opportunities.

The Asian Games in 1982 opened India to the world and the government went all out to woo travellers. After incentives were doled out, five-star hotels began sprouting all over the place. Travel agents and tour operators were encouraged to open shop and tourism became a sunrise industry.

Adding to the general optimism were the figures offered by the World Tourism Organisation: that by 2010, one billion international visitors would be travelling for business and pleasure. Which meant India had to offer much more than just the Taj Mahal and elephant rides as its unique selling point.

That's where things went wrong.

In 1991 India devalued the rupee twice. For about six months, till such time as the tourism industry was struggling to recover costs, a tour of India cost virtually nothing. Then hotels began jacking up rates.

By the time the rupee had stabilised, hotel rooms were unaffordable, except for the very well-heeled. So hotels ended up with large capacities and no tourists.

It got worse. The south-east Asian economies collapsed and their currencies were devalued. For an undiscerning tourist, whose only preoccupation was to make his dollar stretch to the maximum, south-east Asian countries became more attractive destinations.

Today, cut-throat competition is forcing tour operators and airlines to cut margins and improve services. It is a constant struggle to stay in a tight market.

In India, in an otherwise gloomy tourist scenario, the nuclear tests cut tourist inflow by nearly 30 per cent. Travel agents, trying to get business from Europe, saw their bookings cancelled one after the other. The last year has been disastrous for the tourism business.

But in India, even when the going was good, there was little effort to formulate a tourism policy and market India properly.

Consider the facts.

India's tourism promotion budget is abysmally low. While Thailand spent over US $51 million in 1995 to promote tourism, India's 1998-99 budget for the same purpose is $22.8 million. Given that India has to compete with about 120 countries to get tourists, enticing them is a stupendous task.

Ram Kohli, chairman, Creative Travels, and founder-president of Indian Association Tour Operators, says, "Look at the working of the tourism missions set up abroad. Their only task is boosting trade. They have done nothing. For most officers, it is a lucrative posting abroad. And those few who want to do something are not able to do so due to lack of consistent guidelines from the head office. Few have the courage to take individual initiative."

Agrees Kamal Hingorani, executive director, New Airways: "The result is fudged tourist arrival figures so that the central government does not cut down the budget allocated to tourism offices."

Kohli points out instances where embassy staff abroad have made things difficult for those interested in visiting the country. "A group coming from Korea had to cancel their plans and opt for another destination as our embassy dilly-dallied over granting a visa. So much for tourism promotion."

Part II: Disorder Inc

Courtesy: Sunday magazine

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