Industry Dynamics
Travel & Tourism
SUBMITTED BY:
VISHAL HARCHANDANI
Introduction
India ranked 12th among 184 countries in terms of travel & tourisms total contribution to GDP in 2012.
In India, the sectors direct contribution to GDP is expected to grow at 7.8 per cent per annum during 2013
2023 vis--vis the world average of 4.2 per cent.
Travel & Tourism investment is estimated at INR1,233.0bn or 4.7% of total investment in 2011. It should rise
by 8.7% pa to reach INR2,827.5bn (or 4.8%) of total investment in 2021.
SWOT Analysis
Strengths
India's geographical location, a culmination of deserts, forests,
mountains, and beaches.
Diversity of culture i.e. a blend of various civilizations and their
traditions.
Such diversity helps in selling niche areas of tourism like
culture tourism, food tourism, herbal tourism, eco tourism,
wildlife tourism and adventure tourism
A wealth of archaeological sites and historical monuments.
UNs World Heritage sites
List of countries with 20 or more World Heritage Sites
Country
Number of sites
Italy
Spain
China
France
Germany
Mexico
India
47
43
41
37
36
31
28
United Kingdom
28
Russia
24
United States
21
Weaknesses
Lack of adequate infrastructure. The airlines in India, for
example, are inefficient and do not provide basic facilities at
airports. The road condition in India is very bad. India has one of
the highest fatal road accidents in the world.
A xenophobic attitude among certain sections of people.
No proper marketing of India's tourism abroad.
There are many places where the image of India is one of
poverty, superstition, and diseases.
Opportunities
Allowing entry of more multinational companies into the
country giving us a global perspective.
Growth of domestic tourism. The advantage here is that
domestic tourism and international tourism can be segregated
easily owing to the difference in the period of holidays.
Selling niche areas of tourism owing to diversity of all sorts.
Improved conditions of roadways could attract more people
Threats
Political turbulence or civil commotion taking place in
neighboring countries that affect the image of entire South
Asia
Terrorism and criminal activities in few states affect the
countrys image and discourage tourists.
TOURISM POLICY AND INITIATIVES PROVIDE BOOST TO THE INDUSTRY(1/2)
The government passed the Tourism Policy in 2002
based on the seven pillars shown in the diagram
It is aimed at speedy implementation of tourism
projects, development of integrated tourism circuits,
special capacity building in the hospitality sector
and new marketing strategies
Atithi Devo Bhavah is one of the successful initiative
taken by the Ministry of Tourism to create awareness
about the effects of tourism and sensitise people
about our countrys rich culture
Various facets of the Tourism Policy 2002
Safai
(cleanliness)
Samrachna
(infrastructure)
Sahyog
(cooperation)
Swagat
(welcome)
Tourism
Policy 2002
Soochna
(information)
Suraksha
(security)
Suvidha
(facilitation)
Source: Ministry of Tourism
TOURISM POLICY AND INITIATIVES PROVIDE BOOST TO THE INDUSTRY(2/2)
Five Year Plan
Special boards
Tourist police
Allocation for NorthEastern Regions
During the 12th Five-Year Plan, a budgetary support of USD2.8 billion has been approved
for the Ministry of Tourism for development of tourism infrastructure projects, including
rural tourism and human resource development projects
During the 12th Five-Year Plan, USD1.3 billion has been allocated for the Ministry of
Culture
The ministry set up a Hospitality Development and Promotion Board, which will monitor
and facilitate hotel project clearances/approvals
The ministry in consultation with state/UT administrations has proposed to employ tourist
police at prominent tourist spots
The government has planned an investment of 10.1 per cent of the Central Plan
allocations for North-Eastern Regions and Sikkim in budget FY14
Source: World Travel & Tourism Councils Economic Impact 2013
GROWTH OF INVESTMENTS IN THE TOURISM SECTOR.(1/2)
Capital investment in the tourism and
hospitality sector has been rising
consistently
Investments are expected to increase at a
CAGR of 18.6 per cent during 200713E
and reach USD37 billion
Capital investments in the tourism sector
(USD billion)
CAGR: 18.6%
31.6
37.0
28.4
28.5
2010
2011
31.9
24.2
13.3
2007
2008
2009
2012
2013E
Source: World Travel & Tourism Councils economic impact 2013,
GROWTH OF INVESTMENTS IN THE TOURISM
SECTOR.(2/2)
The governments collective spending
on the tourism and hospitality sector is
expected to reach USD2.1 billion in
2013
By the end of 2013, spending is
projected to expand at a CAGR of 13.3
per cent over a seven-year period
Collective government spending on tourism
(USD billion)
2.1
CAGR: 13.3%
1.8
1.6
1.6
2010
2011
1.3
1.0
1.0
2007
2008
2009
2012
2013E
Source: World Travel & Tourism Council
2013
FOREIGN ARRIVALS ARE RISING
Foreign tourists arriving in India (million)
Over 6.6 million foreign tourist arrivals were
reported in 2012
6.3
CAGR:7.8%
5.1
Foreign tourist arrivals increased at a CAGR of
7.8 per cent during 200512
6.6
5.8
5.3
5.2
4.4
3.9
1.4
By February 2013, foreign tourist arrivals rose to
1.4 million
2005
2006
2007
2008
2009
2010
2011
Source: Ministry of Tourism
2012
2013*
FOREIGN EXCHANGE EARNING INCREASE
Total foreign exchange earnings from
tourism grew over USD17.7 billion in 2012
Foreign exchange earnings from tourism in India
(USD billion)
17.7
16.6
11.7
11.4
10.7
7.5
By February 2013, foreign exchange
earnings increased by 11.4 per cent to
USD3.4 billion from USD3.1 billion in the
same period in 2012
14.2
CAGR:13.1%
Foreign exchange earnings increased at a
CAGR of 13.1 per cent during 200512
8.6
3.4
2005
2006
2007
2008
2009
2010
2011
Source: Ministry of Tourism
2012
2013*
INCREASING DOMESTIC SPENDING ON TOURISM
Domestic expenditure on tourism (USD billion)
86.1
CAGR:7.9%
73.9
67.5
66.1
2010
2011
58.0
55.6
51.5
2007
2008
2009
2012
Domestic spending on tourism
has grown significantly with the
market size expected to reach
USD86.1 billion in 2013,
representing a CAGR of 7.6%
during 20072013E
2013E
Source: WTTC - Travel & Tourism Economic impact 2013
DOMESTIC CONSUMERS TO LEAD GROWTH
Domestic travel revenues aggregated USD73.8 billion in 2012 and is expected to reach USD175.9
billion by 2023
Foreign visitor revenues reached USD18.2 billion in 2012 and is projected to total USD34.8
billion by 2023 Domestic travellers contributed over 82.2 per cent to total tourism revenues in
2012
Share of tourists by expenditure (2012)
19.7%
Domestic spending
Expected share of tourists by expenditure (2023)
16.5%
Domestic spending
Foreign visitor
spending
Foreign visitor
spending
80.3%
83.5%
Source: World Travel & Tourism Councils economic impact 2013
SEGMENTS OF TOURISM
AND HOSPITALITY
Tourism and
hospitality
Accommodation
and catering
Includes hotel and restaurant businesses
Transportation
Comprises airline companies, cruise services, railways, car
rentals and more
Attractions
Constitutes historical monuments, beaches, sanctuaries,
mountains, festivals and more
Travel agents
A fragmented sector with a number of independent travel
agents and many online businesses
Tour operators
Offers customised tours, including travel and accommodation,
and sightseeing
EMERGING TOURISM AND HOSPITALITY
SEGMENTS
Vast variety of flora and fauna
across various states now
becoming
popular
tourist
destinations
Aims at developing interest in
heritage and culture
Visiting village settings to
experience and live a relaxed
and healthy lifestyle
Rural Tourism
Eco-Tourism
Medical Tourism
Tourists
seek
specialised
medical treatments mainly
Ayurvedic, spa and other
therapies
Attractions
Luxury Tourism
The luxury travel market is
estimated to be around
billion
and
is
USD1.7
projected to grow at an
average rate of 1520 per cent
over the next decade
Heritage Tourism
Tourists visit India
cultural
heritage
various cities
for its
across
MAJOR COMPANIES ACROSS SEGMENTS
Company
Segment
Revenue*
(USD millions)
Other major players
196.5
Online booking
83.6
USD196.6 million
FY10
327.5
Hotel
124.7
FY11
FY12
337.9
320.0
USD377.0 million
FY10
2.3
Airlines
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[Link]
FY11
FY12
2.9
3.0
Kingfisher, Spicejet, Indigo, Indian Airlines
USD3.4 billion
FY10
FY11
68.5
68.9
ITC, Oberoi, Marriot
FY12
75.2
Tour operators
USD12.3 billion
FY10
FY11
FY12
SOTC, Raj Travels
NOTABLE TRENDS IN THE TOURISM INDUSTRY
Online travel operators
Over 70 per cent of air tickets are now being booked online in the country
A number of online travel and tour operators, which provide better prices and options to
consumers, have emerged in India
The widespread practice of Ayurveda, Yoga, Siddha and Naturopathy that is
complemented by the nations spiritual philosophy makes India a famous wellness
destination
Goa has seven casinos and six floating casinos, which attract a large number of tourists
every year
India attracted 163,000 cruise visitors in 2011
The countrys cruise market is estimated to be worth USD300 million
Wellness tourism
Casinos
Cruises
NICHE SEGMENTS OFFER GOOD
OPPORTUNITIES
Medical tourism
The presence of world-class
hospitals and skilled medical
professionals make India a
preferred
destination
for
medical tourism
Medical tourism could earn
India over USD2 billion by
2012
Tour operators are teaming
up with hospitals to tap this
market
Rural tourism
Cruise tourism
Cruise shipping is one of the
most dynamic and fastest
growing components of the
global leisure industry
India has potential to develop
the rural tourism industry as
most of its population resides
in rural areas
India with a vast and beautiful
coastline, virgin forests, and
undisturbed idyllic islands can
be
a
fabulous
tourist
destination for cruise tourists
This can benefit the local
community economically and
socially,
and
enable
interaction between tourists
and locals for a mutually
enriching experience
Source: Ministry of Tourism
REFERENCES
[Link]
arch/Ministry%20of%20tourism%20English%[Link]
world travel and tourism council economic impact 2013 report
THANK YOU
