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Indian Tourism- The way forward?- A wishlist for the Modi 2.0

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Shri Narendra Modi, the then BJP’s Prime Ministerial candidate announced in January 2014 that he would concentrate on 5 Ts – talent, tradition, tourism, trade and technology, to develop India if he came to power. This was taken as a broad statement of intent and determination to drive the economy using these five pillars. The Government  launched many successful campaigns like the ‘Make in India’ and ‘Swach Bharat Abhiyan’, the messaging of which, resonated across the country and across the world.

However, in the rush of the new campaigns, it forgot or brought down in focus the earliest and most successful brand campaign that India as a country, and arguably any destination brand in the world, has seen. The ‘Incredible India’ tourism campaign which was launched in 2002 during the tenure of the Vajpayee government had a great impact on tourism arrivals in the country and became so successful that ‘Incredible India’ was used both in admiration and sometimes in derision to describe the great contrasts and inequalities of our great country.

‎According to the UNWTO, modern tourism is closely linked to development and encompasses a growing number ‎of new destinations the dynamics of which have turned tourism into a key driver for socio-‎economic progress. Tourism contributes to 70% of the world’s exports and the tourism economy accounts for nearly 10% of the world’s GDP. All this translates to the fact that one in ten jobs in the world are related to tourism directly and indirectly. In India, the sector has seen phenomenal growth over the last 15 years with the total Foreign Tourist Arrivals (FTAs) touching the 10 million mark in 2017 and India achieving an enviable 14% growth in FTAs during 2017-18 which was much above the world figures for growth. Domestic tourism has also been a great driver of the numbers with the Ministry of Tourism estimating that 1.6 billion domestic tourist visits took place in 2017.

This has driven the World Travel and Tourism Council (WTTC) to list India at 3rd position after China and US in the Travel and Tourism Power and Performance Report 2018. The phenomenal success of brands like Oyo rooms and the UDAAN scheme of the Government have proved that tourism has percolated to even the smaller cities. The Ministry of Tourism has also  given great impetus to development of tourism infrastructure through its Swadesh Darshan and PRASHAD schemes with 66 projects under the Swadesh Darshan and 23 projects under the PRASHAD schemes. These schemes finance infrastructural development and provide funding of upto Rs 100 crores each to the State Governments for developing tourism infrastructure in identified circuits .

While the above figures give an idea of the great potential that tourism holds for the development of the country and may paint a rosy picture about the overall tourism scenario, the reality is unfortunately starkly different. There is a despondency in the sector and a quick look at the brochures of various foreign tourist operators reveal that India is no longer a ‘Hot’ destination. While there is a market for the traditional trips to Golden Triangle circuit and destinations like Kerala and Goa, there is no incremental interest in repeat visits and new itineraries. This is where the failure of the Incredible India campaign comes into play. During its inception, the campaign was touted as one of the most successful destination campaigns ever and it managed to create a buzz amongst the foreign operators about India as an emerging destination. The media campaign was followed by high profile events in major tourism generating markets  like Germany, UK, US, France and China as well as sustained and focussed use of media vehicles.

However, over the past half decade this momentum has been lost and tourism seems to have been relegated to an unimportant position in the Government’s scheme of things especially in terms of promotion and marketing. From a total ignorance of the special interests of the tourism sector while implementing the GST regime to the relegation of the Incredible India campaign and the marketing efforts, there has been no movement in a sector which was touted as one of the five focus sectors. Tourism sector, even though being one of the largest foreign exchange earners (US$ 28.6 Billion in 2018), is not allowed GST waiver on foreign remittance as is done for export industries. It is a pity that even with the evolution of network centric economy, a common roadtax structure has not been brought about for the country with commercial vehicles having to pay taxes at each border (although now most are done online, small mercies)…the woes are endless.

The Incredible India campaign has become lacklustre and even though there is a push towards social media it is mostly quite run of the mill. It is indeed distressing that a proper website could be commissioned only last year and it still is in its Beta version. The promotional efforts are also hampered as the overseas India Tourism offices have been understaffed without the heads of offices not being appointed for more than 5 years now.

While the infrastructure development schemes look good on paper, they have quickly degenerated into being vehicles of political patronage and development taking place at destinations that may not attract many visitors. With no practical Operation and Management plans, the facilities created would soon deteriorate without adequate maintenance. While the e-Visas have been one of the successes of this Government and have contributed greatly to the ease of arrivals, the software is still prone to glitches and issues with payment gateways.

With the Government touting overall Foreign Tourist Arrivals (FTAs)  increases,  it is a fact that the increase is not from the major tourism revenue generating markets. That Bangladesh is now our largest Tourism Generating Market in terms of arrivals alone speaks volumes. Also, an informal survey of leading tour operators suggest that the arrivals are mostly on account of Business and VFR (Visiting Friends and Leisure) segments. While for mature destinations like Holland and Paris, business segment is more desirable, India still has not unlocked its potential for group tourism and we still need those busloads of camera wielding tourists who stay in middle level and upper middle level hotels, use coaches, visit monuments and shop at will to sustain and grow the industry.

The private sector has also its share of blame with rampant undercutting by the Destination Management companies in a market that does not have much variety. While the Golden Triangle has been so oversold, the destinations in the South and the East remain vastly under marketed and with unrealised potential. If new destinations have been created using the schemes mentioned above, either they are not easily accessible or they have not been adequately marketed. One can only think of only two or three new destinations, that have been marketed adequately and found a place in itineraries in the past 5-6 years.

There is no move towards marketing experiences like Adventure which can attract tourists to different destinations round the year and India is still sold as an ‘exotic’ destination of palaces, forts and yoga. The problem is that there are now many other countries which are more compact and easy to reach and travel in with the same product and the visitor today goes more for experiences than for destinations. Almost all of our destinations lack an active night life which is a great dampener and this has come about over the years due to many factors; security, government laws and cultural repressiveness.

Now that a progressive forward looking government with a clear vision for doubling India’s  GDP over the next 3 years (5 trillion dollar economy by 2022) has taken over for its second term, it is imperative that it looks at lower hanging fruits and nothing could be more juicy and at the lowest branch than tourism. A new minister has taken charge and it is imperative that  a clear action plan for tourism can at best exploit this vital industry.

  1. Relook at the incentives provided to the foreign tour operators by the Ministry of Tourism and have a cell in the Ministry which would work with ICPB to actively bid for Travel and Tourism related Conferences in new destinations (away from Delhi). These conferences attract the opinion makers of the tourism industry and can go a long way in influencing the decisions by the agencies to sell the destination.
  2. Encourage familiarisation trips of tour operators and media agencies with active financial commitment from both airlines and DMCs.
  3. Recognise tourism as an export industry and provide adequate monetary and tax incentives and maybe look at a tax holiday for 3-5 years as a special incentive. Also rationalise the GST structure by bringing the maximum tax to 18% with input credits to DMCs. It is also high time that a uniform road tax structure be brought about throughout the country. GST has proved that such a measure is possible.
  4. Earmark special zones at major tourist centres that would have night bazaars and hawker centres like Singapore and Bangkok. Establish adequate security arrangements and safety protocols in these areas. This should be done through State Governments/ NGOs/ cooperatives on a self-sustaining For-profit model with the central government only providing design and quality benchmarks and liberalised funding through banks.
  5. The scheme for Special Tourism Zones to be developed in big scale with amusement parks, hotels and other experiential attractions.
  6. Identify at least 4 new destination/circuits each year and after providing adequate experiential facilities market it vigorously both in domestic and international market along with incentives to tour operators who bring the early visitors. All the efforts need not be successful. If only one of the product becomes popular that is one more new destination.
  7. Encourage the spirit of competitive federalism by getting the State Governments to develop new destinations and market them internally for domestic tourism.
  8. Announce a Visit India @75 Year in 2022 to coincide with 75 years of Independence at least two years in advance and announce visa free travel for visitors from UK, USA, Australia, Russia, Germany, UAE, Israel and South Korea (Japanese visitors already enjoy visa free travel) and a visa on arrival for ASEAN countries. Have various events include high profile sporting events, conferences and festivals during the year all planned and publicised at least.
  9. Restructure the ASI and bring the top 10 most visited monuments under a for profit central corporation that will generate funds for their upkeep through gate revenue and also through events, exhibitions, etc. as well as provide dividends to the parent organisation for upkeep of other monuments. This can work closely with the Tourism Board through cross representation. Follow the same model for museums. It is high time we ditch the socialist model.
  10. Restructure the Ministry of Tourism: The Government started the first term with the slogan of ‘Minimum Government’ but seems to have lost its way in five years. The Ministry of Tourism is one of the smallest ministries of the Government of India and it really doesn’t matter in the larger scheme of things. The fact that Tourism is not in any list (State, Central of Concurrent) of the constitution makes it nobody’s baby.
  11. The Ministry of Tourism can replaced by a semi -autonomous India Tourism Board which can be an example of Private Public cooperation and this can be under the direct control of the PMO or NITI Aayog in the initial stages with active participation and stake of the private sector . The Board would takeover the promotional functions of the Ministry as well as benchmark and regulate the industry through the hotel and tour operator classification system. Government can fund it through an initial corpus and then fund recurring expenses through a cess. It can then recruit professionals for various functions and also associate professional agencies for PR and other related work.

It is the time that hard hitting decisions are taken and implemented and the historic mandate that the nation has provided to the Hon’ble Prime Minister is for taking such decisions and we now know that he is capable of doing so. Here is wishing him all the support and encouragement.

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