India as we could see has started making strides in tourism sector with progressive last three successful years in respect of international tourist arrivals with average over 15% growth year on basis and Is now poised to perform consistently over several more years on the sameline. The diversification of tourism products with excellent accommodation of international standard with good transport system are indeed driving the tourism growth forward with befitting foreign on direct investments. These investments really have contributed in having infrastructure of international standard.
With knowledge of English language, superior I.T. capabilities well- trained manpower in hospitality services and global exposure through regular advertisements. India has made an important mark in the traffic generating markets and reaping the benefits as seen through the tourist arrival figures which has now crossed 5 million figures in 2007 from 4.47 million in 2006.
However, the global market witness fierce competition particularly among neighbouring countries who are offering challenging tariff which we are not in a position to match and that has put our products in a challenge for customers acceptance and sustainability. Unfortunately, we are not in a position to see the changing consumer participations which eventually turn into their preference. Nodoubt consumers are ready to give a premium price if it is really unique. But present scene is quite different. Now people are more price sensitive to quality. Consumers have a wider range of quality products available in the market with competitive price coming with solid delivery terms. This drives the price factor into a fierce competition. The challenging issues in todays cotemporary situation for India is that in a buyers market, “cost improvement” in making the product plays greater role. Whereas India as destination is getting itself out priced mainly because of over doses of taxes. Now even due to depreciation of US dollar against rupee India has become cost prohibitive for holidayers.
Also our inability to handling high volume is our weakness. The demand has been created and thanks to the Incredible India campaign, there is now greater interest to visit India but supply is very limited. There is acute shortage of accommodation, mainly budget accommodation at all entry points. Increasing hotel tariff, congestion at airports are our negative points. No big development in infrastructure is possible on a short notice. It takes its own time. But by that time business may go somewhere.
Also no great improvement could be envisaged in the government levis and taxes which are component of the end price of our packages & which is making our packages over priced products.
Even increasing oil prices & its cascading effect on other related packages on tourism industry mainly aviation and surface tours segment in tourism sector is now visible in a big way. This has negatively impacted the tourism industry.
Fund availability and financial management issues which is needed for upgrading technology to be abreast with the modern developments is also a big constraint for Indian tourism sector.
All these are basically is termed as “Market Dynamics” where we need to do proper home work and before we can think of sustainability of growth. With such deterrents we are not in a position to take timely decisions. The conclusion of all the above explanation is that we need to become competitors and meet the challenges given by our competitions. Otherwise even we may loose our domestic tourists too who all will be having the beeline for overseas holidays and India as a destination will not prosper.