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For a few dollars more

We’ve lost it. There’s no other way to describe India’s pathetic efforts to become a global tourism destination. With under five million international tourists visiting Incredible India in 2006, we attract less than one eighth of fifth-ranked Italy’s tourist traffic.

Dipen Sheth | Print Edition: May 1, 2008

Dipen Sheth

We’ve lost it. There’s no other way to describe India’s pathetic efforts to become a global tourism destination. With under five million international tourists visiting Incredible India in 2006, we attract less than one eighth of fifth-ranked Italy’s tourist traffic. And a pathetic 5.6% of top-ranked France’s tourist arrivals (see table Red Carpet).

Here’s an exceprt from Tourism Highlights 2007, published by the UN World Tourism Organisation: “For many destinations, visitor expenditure on accommodation, food and drink, local transport, entertainment, shopping, etc is an important pillar of their economies, creating much needed employment and opportunities for development. Some 75 countries earned more than $1 billion from international tourism in 2006.”

Consider Singapore (a country closer to India), smaller than our National Capital Region. They have a history that’s less than a tenth as rich as ours, no Taj Mahal, no Kashmir, no Goa, no art and literary tradition worth the name, no evolved theatre and cinema. And they certainly have no music or dance to compete with ours. Yet, Singapore attracts about 70% more tourists than India.


For a minute, think of what might happen if we could do something about this. What if, (apart from the 4.6 million who visit India) another 10 million global tourists were to flock to India and spend only $1,000 per head while they are here? That’s $10 billion (or Rs 40,000 crore) of consumer spending.

I may not be a great economist, but in a trillion-dollar economy it’s easy to see that this is a cool 1% in one shot! And I’m not even considering the multiplier effect as this money circulates in the real economy once it leaves the first spender’s hands. Now, what if the 10 million additional tourists were to grow to 20 and then 30 million? We’d still be way behind France.

Where can we start? There are plenty of things we can do to create the ideal conditions for tourists to come to India and genuinely enjoy themselves. The basics could include some desperate improvement in airport and immigration infrastructure. Where might that catapult the business of constructing and managing airports?

 Red Carpet

2006 reank
Country

2005

Arrivals (millions)

2006

Arrivals (millions)
% change 2005/2004 % change 2006/2005 
1.
France75.9 79.1
1
4.2
2. Spain55.9 58.5 6.6 4.5 
3. United States
49.251.1
6.8 3.8 
4. China
46.8 49.612.1
6.0
5. Italy36.5
41.1
-1.512.4
 India
3.9 4.413.313.5 
Source: UN World Tourism Organisation,Tourism Highlights 2007
And what would happen to airline companies? With all that growth in air travel beyond our wildest dreams, fares would drop further. Thousands of young men and women would find jobs as pilots, cabin crew, support and technical staff. A couple of large maintenance, repair and operations hubs would be set up locally by companies like Airbus and Boeing. In fact, large chunks of aircraft manufacturing would automatically shift to India.

Next, we need more hotel rooms. Leela, Indian Hotels and Orchid would probably grow faster than your most optimistic estimates. More dollops of investment, more jobs. Our visitors would need to lug themselves around the country. For which we’d have to invest in and manage roads, expressways, trains and planes. Obviously, these won’t be earmarked only for tourists. Our own citizens will also make use of these facilities, thus making them more profitable and more affordable for all.

We’ll require plenty more tour operators, auto rental agencies and bus companies. Not to mention the increased business that would naturally accrue to craftsmen like potters, weavers, artists, musicians and writers. The world would romance India’s flavours and colours. And of course, you can count on a big surge in domestic tourism — so many Indians I know prefer holidays abroad just because they want an “efficient and enjoyable” experience.

Cut back to reality. Indian cities are ugly, dirty, smelly, smoggy urban nightmares. Barring Delhi there is no city with any semblance of a world class public transport system or city roads of passable quality. Disruptions in power and water supply, serpentine logjams on roads are commonplace. Public safety cannot be taken for granted anymore. Government and public apathy is visible everywhere.

If we are to reform this country, we should not only change it for ourselves but also for the tourists, who can then become ambassadors for Incredible India. Right now, they are too scared, shocked and scarred by their experiences in our country, barring the sanitised isolation they pay for in luxurious hotels and spas. And this is certainly not in keeping with our tradition of treating guests as we would treat God.

Dipen Sheth is head of research, Wealth Management Advisory Services. He can be reached at mailto:dipen@wealthmanager.ws%20

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