The global down turn in international tourist arrivals is visible since last august and in case of India, the trend continues since November 2008 and as per reports of the Ministry of Tourism in February/March there was negative growth in international tourist arrivals. However, it is interesting to see some of our competing countries are doing very well like Malaysia , Singapore , even China . If global recession is affecting demand, it should affect all. It is therefore the time has come when must look into the inherent lacunas which is the cause for slump in tourism business and helped to aggravate the situation.
First problem is the Attitude towards tourism. Though it contributes over 7% to GDP, create over 50 million jobs, helps in earning foreign exchange over 17 billion, it is never counted as a national priority sector. It lacks comprehensive approach. As it is linked to tourism friendly approach by the respective ministries, and different government ministries speak in different voices, tourism is lost in the debate whether it should be given any priority. Even often questioning the relevance of tourism in foreign exchange earning as now foreign exchange can be earned from many other sources & those sources have good job opportunities. It is more shocking when they claim tourism is an elitist activity and relative low income people have no relevance to tourism for them; tourism is just luxury which they can’t afford. So tourism need not be given that much priority.
Multiplicity of taxes have taken our competitiveness as our competitors like Thailand, China, Sri Lanka, Malaysia have favorable tax advantage and our performance is abysmal is also due to uncertainties on the foreign exchange front where our currency has moved in the range of Rs. 42 to Rs. 50 for a dollar in a year. Here our competitors have advantageous foreign exchange rates. When stimulus packages were announced by the Government to revive the industries, tourism was totally ignored. That is the recognition tourism gets from the Government because of its valuable services rendered in creation of jobs and foreign exchange earnings. Thus our problem arises from the lack of resolve to give due priority to tourism. Hope some day instead of giving lip sympathy something concrete in the form of tax concession given to tourism sector.
As for India , adverse impact has been visible in Hospitality sector and rightly so as the hotel prices went beyond reach of the leisure holidayers. Due to security threats even corporate business came down. These hoteliers never wanted to lower prices and be competitive when market shrinked and competition got tighter. In the business, it is essential to be more realistic. But when they actually decided to lower the prices, the clients had already moved to the favourable & affordable competitive destinations. It will take some time to bring them back. The cost part is very important in a situation like the present one. Tourists are going to save reach dollar in the time of crises.
Similarly our Aviation sector suffered as demand dried up for long haul travels and all time problem of higher sale tax by state government on Aviation Turbine Fuel continued, inspite of Central Government giving various tax relief’s on purchase of oil. The airline never responded with reduction in ticket fare timely and thus continued to have adverse effects. Things appear to have improved now but the delay in decision at the right time warded off the demand even domestic travels got negatively affected what to talk of international travels.
Other inherent disadvantage which are root cause of our poor performance is lack of infrastructure, be accommodation, road, surface transport, guides, railways, basic amenities at tourist sites, tourist Hubs, hygiene, beggar menace, touts at tourist places specially taking tourists for a ride – all these infrastructural lacunas have given a very bad image to our country. Tourists feel that Incredible India campaign is glorified too much where as the reality is different. The mouth to mouth publicity on return from India by tourists have spread the message that “a lot more need to be done”. It is not only overpriced destination it is also over publicized destinations without proper facilities. It is tax loaded and it is not safe too. Probably this safety part is now being talked with reference to Mumbai terror attacks, regular reporting in the press about cheating, rape, kidnapping, road rage killing, accidents, bank robbery etc. People are loosing confidence and have a feeling that there is lack of sound governance. All these made adverse impact than global economic slowdown for the sustainable growth of Indian tourism. Acute shortage of trained man power is another draw back and this hampers Quality in service.
Tourists have also willy-nilly talked about visas not being issued in time, long Ques and even not so friendly attitude of the missions abroad. Similarly some what lukewarm approach of National airlines and its lacking Quality Services (which only serve ethnic tourists & not so enthusiastic to have western clients) have been the experience of tourists. Our airlines should gear up to serve more western tourists rather than branded as carrier for NRI’s, good thing is that tourist arrival market is in the throes of a recovery as in April 2009 the international tourist arrivals is expected to get a better than expected rise. Unless the Government addresses the fundamental issues concerning bottleneck areas the arrivals will not show the positive growth.