Indian Tourism Industrial Analysis

INDUSTRIAL ANALYSIS

TOURISM

(2008-2010)

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Declaration

I here by declare, to the best of my knowledge and belief, that this

project titled “Industrial Analysis on Tourism” is an original project

done by me, submitted to the Department of Business Administration,

in partial fulfillment of the requirements for the award of the degree of

Master of Business Administration, in the academic.

I also further declare that this project work has neither been reproduced

nor submitted else where to any other university for any other purpose,

to the best of my knowledge and belief.

Place:

Date:

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INDEX

Particulars Page No

Chapter 1- DEMAND DETAILS 41.1 Product details1.2 Technology details1.3 Investments1.4 Other Points

Chapter 2 – INDUSTRY STRUCTURE 162.1 Structure2.2 Barriers in industry

Chapter 3 – INDUSTRY ENVIRONMENT 283.1 Fragment3.2 Emerging3.3 Decline

Chapter 4 – INDUSTRY PARTIES 374.1 Policies4.2 Research and Development4.3 Role of Service and Advertising

Chapter 5 – INDUSTRY ATTRACTIVENESS 465.1 Potential5.2 Industry Growth5.3 History5.4 Life cycle stages

Chapter 6 – INDUSTRY PERFORMANCE 556.1 Sales6.2 Profitability6.3 Technological Advancement

Chapter 7 – Conclusions & Suggestions 60-63

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Chapter-1

DEMAND DETAILS

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1.1 Product Details:

The tourism product which is mainly destination (tangible) can only be

experienced (intangible). The panoramic view of the location (destination),

travel to the destination, the accommodation & facility as well as

entertainment at the destination all forms the tourism product. Thus tourism

is a composite product combination of attraction, facilities and

transportation. Each of these components has it is own significance in the

product mix and in absence of even one single component, the product mix

is incomplete.

Attraction of the destination, include:

• Natural site: Beach resorts, hill stations.

• Places of historical interest: Monuments, archeological sites and museums.

• Events: Trade fair, musical festival, games, etc.

• Cultural attractions: History & folklore, theatre, religion, arts, etc.

Facilities compliment attraction. These make it possible for the tourist to

stay & enjoy the attraction.

• Accommodation: Hotel, hostel, campsites.

• Food: Restaurants, cafes, bars.

• Local transport: Taxis, coaches.

• Recreational facilities: Entertainment, sport activity, shopping

facilities.

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Accessibility is the means by which the tourists arrive at the location as

without the transportation facility the attraction is of no use.

• Infrastructure: Roads, rail, airport, etc.

• Equipment: Speed & size of the vehicle.

With increasing number of destinations, travel methods & choice of

accommodations, the firm offers these products in the form of package tours

to facilitate consumers to choose from the combinations. These package

tours cater to varying tastes, economy, attitudes & the need for exclusive

service. The idea that service products are intangible is an important one, but

increasingly firms are trying to make their offering more tangible, and

thereby increasing their recognition amongst the target-buying group.

Tangible gifts such as toiletries, flight bags, even bath robes bearing the

company’s logo or brand name.

Branding plays a very important role in tourism marketing. Hotel chains,

airlines, & travel operators in particular employ tremendous efforts to ensure

that their name is widely recognized & synonymous with quality, value etc.

Product positioning helps in identifying the images & perceptions of the

tourist products as well as tourists organizations, which match the needs of

the tourist customers.

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1.2 Technology Details

The tourism industry is broadly people centric. The work starting from

destination enquiry, selection, booking, ticketing, etc. everything has a

human touch to it. Even now people providing such service sit with their

customer to make them decide on their spots. Now, with the advent of

modern technologies some jobs such as ticketing & hotel reservations are

done through internet and the industry is progressing towards medium

contact.

Technology plays a major part in the promotion of a place. Better

communication facilities are one of the first prerequisites for growth in the

inflow of tourists. This has been made possible with technology. Better

technologies in the field of communication with cheaper costs have seen

many remote and inaccessible areas of the country get connected to the rest

of the world. This connectivity has made these places visible to the world.

Similarly better transportation facilities have led to a dramatic increase in

the number of tourists visiting any particular place. The presence of an

airport and the availability of frequent flights are a great convenience to any

traveller.

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1.3 Investments

Investments by the state:

With a view to encourage flow of investments into development of tourism

infrastructure, the state tourism has formulated the investment subsidy

scheme.This would hinge on the scale of investments and also on the regions

where the tourism projects come up.

The micro tourism units with an investment up to Rs 25 lakh can avail an

investment subsidy of 25 per cent in special tourism zones (STZs) and 20 per cent

in other regions. For the mini tourism units with investments in the range of Rs

25-50 lakh, the investment subsidy would be 20 per cent of the investment

amount or Rs 7.5 lakh for the projects coming up in the STZs. For setting up

projects in other regions, the mini-tourism units are entitled toan investment

subsidy of 15 per cent of the invested amount or Rs. five lakh. Similarly, the small

tourism units pumping in Rs 50 lakh-Rs one crorecan enjoy an investment subsidy

up to 10 per cent of the invested amount or Rs 7.5 lakh. In case of projects being

developed in STZs, they can avail an investment subsidy of 15 per cent or Rs 10

lakh.The medium as well as large tourism units are also eligible for interest

subsidy on term loans. The medium tourism units who invest in the range of Rs 1-

10 crore are eligible for an interest subsidy of five per cent on term loans while

the large tourism units with investments from Rs 10-50 crore can get an interest

subsidy on term loans. In case of mega tourism projects with capital investment

exceeding Rs 50 crore, the state government may consider a special package,

excluding the tax based incentives, on a case to case basis. The interest subsidy

would be paid only for the first five years from the commencement of commercial

operations of the project.

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Foreign Direct Investment:

Government of India is allowing 100% FDI in Hotels and Tourism, through the

automatic route and alsoidentified the investment opportunity of about $8-10

billion in the next 5 years in tourism sector. India hassignificant potential for

becoming a major global tourist destination. It is estimated that tourism in India

could contribute Rs.8,50,000 crores to the GDP by 2020 ( approx. 1800 million

USD) if you properly planto develop and invest on Connectivity Infrastructure,

Tourism Infrastructure, Tourism Products, CapacityBuilding and Promotion &

Marketing (WTTC report). It is estimated there is a need of around 10 BillionUS

$ required for development of tourism as per the different state tourism estimates

for the next fiveyears. When you think about the long term capital requirement of

all states, it is estimated around 56billion US $ for the next 20 years.

A rapidly growing middle class, the advent of corporate incentive travel and the

multinational companiesinto India has boosted prospects for tourism. India's easy

visa rules, public freedoms and its manyattractions as an ancient civilization

makes tourism development easier than in many other countries. Inorder to attract

more visitors, India needs to increase room supply, open further its skies to

increase aircapacity, and upgrade its airports, roads and other infrastructure to

global standards. Also tourismdevelopment needs to be pursued with a focus on

sustainability.

Though the Government of India is allowing 100%FDI in automatic route to India

in tourism sector andthere is a wide gap between the demand and supply of hotel

rooms and other tourism infrastructureprojects, we have attracted the FDI for a

volume of 660.87 million US $ which is 1.46% of the totalFDI inflow into our

country from April 2000 to December 2007.

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Reasons for FDI investment in Tourism:

• Economic liberalization has given a new impetus to the hospitality industry.

• The Indian hospitality industry is growing at a rate of 15% annually. The current

gap betweensupply and demand expected to widen further as the economy opens

and grows.

• The government forecasts an additional requirement of 200,000 rooms by the

turn of the century.

• The travel and hospitality industry continues to be the sector, which has largely

profited from the fastgrowing economy of India. This has largely been due to the

3.9 m tourist arrivals in FY06 (15%growth) over the previous period. The

compounded growth in tourist inflow over the last ten years(FY89-FY09) has

been 8.2%, while in the last five years, growth stands at 9.1% per annum.

• This increase in the number of tourist arrivals in the country lifted the country’s

standing in the worldof tourist destinations. The country is ranked fourth among

the world’s must see countries. Thesector continues to face certain problems.

• The country continues to be marred by poor infrastructure facilities like poor

road management, rail and air and sea connectivity. However, the present

government in its endeavor has taken a few initiativeslike opening of the partial

sky policy. This allows private domestic airline operators to fly on theIndian

skies. Some states continue to be in political uncertainties.

• As per the 2004 findings, the total number of approved rooms by the

Government of India stands ataround 99,000 (estimated). These rooms are further

classified into various segments out of which,five star and five star deluxe hotels

account for around 27% of the total capacity, three star hotels(22%), four star

(8%), two star (9%), one star and Heritage hotels (2% each) and the rest is

dividedbetween unclassified and unapproved hotels.

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• A rapidly growing middle class, the advent of corporate incentive travel and the

multinationalcompanies into India has boosted prospects for tourism. India's easy

visa rules, public freedoms andits many attractions as an ancient civilization

makes tourism development easier than in many othercountries.

• The five star hotel segments have grown the fastest during the last five years at a

CAGR of 12%.Further, this segment can be divided into 3 sub-segments Luxury,

Business and Leisure. The growthin this segment indicates the genre of travelers

coming into the country. Over the last few years thecountry has witnessed a large

influx of business travelers in the country owing to relaxation of thegovernment’s

stand on Foreign Direct Investments (FDI) for most of the sectors in the country.

• Many foreign companies have already tied up with prominent Indian companies

for setting up newhotels, motels and holiday resorts. The entry of McDonald’s,

PepsiCo’s Kentucky Fried Chicken,Domino’s and Pizza Hut has given an

international glitz to the hospitality sector.

• It costs an average of US$50-80 million to set up five-star hotels with 300

rentable rooms in India.The gestation period is usually between three and four

years.

Reasons for Low FDI in Indian Tourism

The following are the some of the reasons for low foreign direct investment in this

sector. They are:

• Multitude of taxes: Ours is the highest tax structure on tourism projects in

the Asia Pacific region. Multitude of central and state taxes- luxury tax,

expenditure tax - is the fundamental problem plaguing the tourism sector. There is

no national wide tax policy there by some international hotel chains are hesitating

to establish their subsidiaries in the India.

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High Taxes: One of the fundamental problems plaguing the Indian tourism sector

is a multitude of Central and State level taxes, which lead to an increased cost to

the tourists. A comparison of the Corporate Tax level in India, which affects the

hospitality sector, in comparison with our neighbours, shows India’s poor

competitive positioning.

On the indirect taxes front also, India fairs poorly as compared to competing

destinations. The followingtable and figure showcases tourism related major

indirect taxes benchmarked across comparable locations.

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• Delay in FDI Approvals & Govt. Policies: Huge delay in Foreign Direct

Investment approvals in Hotel & Tourism sector. Due to delay in approvals and

lack of guidelines in the tourism policy, the Alfred Ford’s proposed Himalayan

Sky Village is pending since last three years. If it is approved it is one of the

highest FDI in the country in tourism sector with US$ 300 million which also

provides employment to around 3000 people.

• Highest import duty on imported liquor used in hotels: Under the WTO

Negotiations for Market Access under the Agreement of Agriculture (AoA), India

had bound its tariffs at 100% for primary products, 150% for processed products

(this is the relevant category for liquor) and 300% for edible oils, except for

certain items (comprising about 119 tariff lines), which were historically bound at

a lower level in the earlier negotiations.

With the additional duties and sales tax levied by the State Governments the cost

of alcoholic spirits sold in hotels to bonafide guests is exorbitant. The

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international precedence for liquor related levies also do not substantiate the

current level of taxes. Rationalization of the tax on liquor is therefore important to

make.

• Service Tax on Tour Operators: The services provided by a tour operator

typically includes a wide range of services covering transportation, boarding and

lodging arrangements, local sight-seeing and guide services, etc. which are

procured through sub-agencies. Even though 60% abatement is provided, taxation

of the gross service amount leads to double taxation and increases the burden for

the tourists.

• Inland Air Travel Tax:Air connectivity and Pricing are proven to be critical

barriers in India’s ability to become competitive in the global tourism market. In

the current context, domestic air travel is much more expensive than international

destinations located at a similar distance. The disparity between Foreign Travel

Tax (FTT) and Inland Air Travel Tax (IATT) is one of the major factors. FTT

constitutes between 2%- 3% of the ticket price while IATT effectively constitutes

12%-13% of the total ticket price, except for north-eastern states where the latter

has been exempted. The cost of domestic air travel is too high in India as

compared to international standards. The primary reason for this is costly

Aviation Turbine Fuel, which constitutes close to 40% of an airlines operating

cost. This in turn is due to the structure of duties and levies prevalent in India. The

basic customs duty of 20% with a CVD of 16% results in a total tax of 39.2%.

The differential rates of sales tax being charged by state governments further

complicate the duty structure. This has led to increased costs to the airlines, which

in turn gets passed on to the consumer.

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1.4 OTHER POINTS (if any)

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Chapter-2

INDUSTRY STRUCTURE

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2.0 Indian Tourism Corporate Chart:

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2.1 Travel agents and tour operators

These men act as a fuel making the industry an run for money by providing the

customers a complete satisfaction and also play a major role in bridging the gap

between the customers and other players(countries).

Following diagram shows the channel of distribution in tourism industry:

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Tourism Product

TransportAccommodationAttraction

Travel Agent

Tour Operator

Customer

Composition and Channel of Distribution (Structure)

Major industries that support tourism industry are depicted in the diagram below.

These facilities decide the status of a place in a tourist's portfolio. They on one

hand attract tourists to a particular destination and on the other act as a major

demotivating factor if they are unable to fulfill the expectations of the visitors.

The middleman may be a tour operator, who is the wholesalers, who buy tourism

products in bulk and make them available to travel agents who are retailers. The

range of tourist products which are bought by the tour operators are airline seats,

hotel accommodation, bus for local sight-seeing, etc. They may also sell directly

to customers.

Airline Industry

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HOTELSHOTELS

TRAVEL AGENTS & TOUR OPERATORS

TRAVEL AGENTS & TOUR OPERATORS

AIRLINEAIRLINE

DESTINATIONSDESTINATIONSCOMPOSITIONCOMPOSITION

Airports are the primary infrastructure facility that a country has to offer to the

international tourists. It would be surprising to note that renowned tourist

destinations like Jaipur and Goa do not have an international airport.

Foreign guests, who constitute more than 60% of the tourists destined for these

cities, currently have to travel via Mumbai, unless they are ready to charter a

flight. This makes things cumbersome and time consuming, thus discouraging

many time conscious tourists from visiting these places. Similar is the case of

cities like Agra, Udaipur and Varanasi where foreign tourists account for

approximately 50% of the total tourists arrival.

SWOT ANALYSIS – Airline Industry

STRENGTHS

Airline is the most preferred mode of transportation by the foreign tourists as the convenience provided by the airlines is higher.

The savings in time that this mode of transport offers is immense.

WEAKNESSES

Inefficiency of the domestic airlines- there are number of instances of flight being cancelled or delayed.

Lack of basic facilities at the airport.

Government does not allow the capacity of existing airports to increase private and foreign operators are not given clearances to operate in the country.

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OPPORTUNITIES

As the tourism industry expands the airline industry is also in for a boom.

Development and up gradation of the present airports

India's geographic location makes it an ideal location to serve as a link between the East and the West.

THREATS

Domestic airlines (Air India and Indian Airlines) face major competition from other transnational airlines.

Other countries like Singapore and china also try to grab potential tourists.

Hotel Industry

Hotel industry is an essential part of tourism. The expansion of tourism is well

inevitable bringing out development of the hotel industry. Hotel industry is so

closely linked with the tourism industry that it is responsible for about 50% of the

foreign exchange earning form tourism trade and enterprises. The rising volume

of tourism influx brought into light, the shortage of hotels in important tourists

centres’. Keeping in view the changing standards in the international hotel

keeping,the Indian industry has to make a number of improvements. It’s not

enough to have adequate hotel accommodations, it is equally necessary to have at

various levels, low priced, moderately priced, high priced, and a few luxury

hotels.

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Hotels may be categorized depending upon factors such as:

Locations

Categorization according to plan

Categorization according to number of rooms.

Categorization by type of clientele.

Categorization by the length of stay of guests.

Categorization by the facilities that the hotel offers.

The Indian hotel business focuses largely on foreign tourists with only 30% of the

business coming from the domestic business and the leisure travels. The tourist

arrivals in India are seasonal in nature, with the best season being from September

to December followed by a steep fall till May. The period June to September

gains momentum once the monsoons are over. The slack season is generally used

for renovation work and the period is characterized by discounts to attract clients.

Hotels form one of the most important support service that affect the arrival of

tourist to a country. The major players in the industry are Indian Hotels Company

Ltd (IHCL) operating under the Taj brand, the Oberoi, Oriental Hotels, Hotel

Leela Venture and the Ashoka chain of hotels, owned and operated by the Indian

Tourism Development Corporation (ITDC).

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SWOT ANALYSIS – HOTEL INDUSTRY

STRENGTHS A very wide variety of hotels is

present in the country that can fulfill the demand of the tourists.

There are international players in the market such as Taj and Oberoi. Thus, the needs of the international tourists travellers are seen to while they are on a visit to India.

Manpower costs in the Indian hotel industry are one of the lowest in the world. This provides better margins for Indian hotel industry.

India offers a readymade tourist destination with the resources it has. Thus the magnet to pull customers already exists.

WEAKNESSES The cost of land in India is high at

50% of total project cost as against 15% abroad. This acts as a major deterrent to the Indian hotel industry.

The hotel industry in India is heavily staffed. Indian hotel companies have a staff to room ratio of 3:1, this ratio is 1:1 for international hotel companies.

In India the expenditure tax, luxury tax and sales tax inflate the hotel bill by over 30%. Effective tax in the South East Asian countries works out to only 4-5%.

Only 58,000 hotel rooms are available in India today, which is less than the Bangkok hotel capacity.

The services currently offered by the hotels in India are only limited value added services.

OPPORTUNITIES

Demand between the national and the inbound tourists can be easily managed due to difference in the period of

THREATS

Guesthouses replace the hotels. This is a growing trend in the west and is now catching up in India also, thus diverting

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holidays. For international tourists the peak season for arrival is September to March when the climatic conditions are suitable whereas the national tourist waits for school holidays, generally the summer months.

In the long-term the hotel industry in India has latent potential for growth. This is because India is an ideal destination for tourists as it is the only country with the most diverse topography. For India, the inbound tourists are a mere 0.4% of the global figures. This number is expected to increase at a phenomenal rate thus pushing up the demand for the hotel industry

the hotel traffic. Political turbulence in the area reduces

tourist traffic and thus the business of the hotels. In India examples of the same are Insurgency in Jammu Kashmir and the Kargil war.

The economic conditions of a country have a direct impact on the earnings in hotel industry. It can see that the present economic slowdown in India has led to a 51.6% fall in the industry average net profits for the second quarter of the current financial year, 2000.

Destinations

These include the several religious, historical and trade places in India like Delhi,

Agra (TajMahal), Rajasthan, Tirupathi, Mumbai, Hyderabad, Manali, Goa etc.

which are not just tourist hot spots but also business Centre’s for tourism industry.

Some of the most Popular tourist destinations in India:

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Dal lake-Kashmir Taj Mahal-Agra

Kerala Charminar-Hyderabad

2.2 Barriers in Industry

Government:

The government is the most important player in this industry and all the other

players have to follow the lead taken by it. However, the actions of the

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government have not been proactive. Rather it has been late in rising to the

opportunity that the tourism industry offers. There are not enough incentives

being offered to the other players like Hotels and the travel agencies. The

government should be taking the lead and attracting the industry to places that

have vast tourist potential but have still not fully developed. There are various

restrictions in areas like Sikkim and the Northeast that should be relaxed so that

more people can visit those places.

• Poor Infrastructure:

Delayed or absence of connectivity to different locations, lack of proper

accommodation facilities, bad roads and no communication facilities are some of

the factors that are stopping people from visiting many places. Unless the

infrastructure is properly developed, a large majority of tourists will give the

country a skip.

• Apprehensions about the law and order situations:

The lack of security that is faced by a lot of tourist is also a major cause for

concern. There have been many instances where tourist have been physically

assaulted, robbed and sexually harassed. Any such incident reflects badly on the

country and creates a negative image.

• Misconception about the Country:

The image of the country has taken a long time for the change from the old image

of the land of snake charmers. There are many places where the image of India is

one of poverty, superstition, and diseases. One of the main reasons why tourist do

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not visit the country has been the fear of been infected by some exotic disease.

The case of Plague in Surat in 1994 led to a decrease of 36% in arrival of foreign

tourists in India All these misconceptions unless addresses immediately will

create a problem for the growth of the industry.

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Chapter-3

INDUSTRY ENVIRONMENT

3.1 FRAGMENTATION

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Core product

Formal

Augmented

FutureTotal Product Concept:

The Destination Product :

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Core product

The basic

benefit

An experience providing an insight into a different

culture, tradition and lifestyle.

Formal The

expected

• Comfort during the tour

• Instruction manual provided for better understanding of

the places of visit; brand name – e.g. Kerala known as

“God’s own country”

• Quality assurance and TQM – e.g. Kerala has quality

assurance and TQM implemented for all its products

(backwater life and habitats and traditional houseboats),

services and facilities. This implies it has complete

cleanliness in its surroundings and eco-tourism is also

assured.

Augmented

In addition

to the

expected

benefit

Providing the tourist with guide cassettes and also an

interpreter to increase interactivity and understanding.

Eg – tours to historical and archeological sites requires

elucidation, which can be ensured through the

mentioned means; serving multi-purpose tourism, i.e.

forming a chain of destination, circuit theme by

cuddling different states. Eg 1 – educational circuit,

business circuit, pilgrimage circuit, beach circuit –

Kerala backwaters, Goa ,TamilNadu. Eg 2 -

Rendezvous with Maharashtra and the Mughals.

Future Beyond the

usual,

serendipity

An experience through which a tourist gets physically

invigorated, mentally rejuvenated, culturally

enriched and spiritually elevated. E.g. – The New

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(pleasant

surprise)

Rajasthan Gift: ‘Palace On Air’. British Airways will

convert its 70-seater Boeing into a ‘flying palace’ with

all possible luxuries flavored with the Rajasthani

ambience. Tourists (who will be treated as Kings) will

tour Rajasthan in Limousines (one for each) and will

have personal assistants – ‘Darbaris’ to take care of

every need.

The Airline Product:

Core product The basic benefit

Transportation, serving food drinks, staff

FormalThe expected

Cleanliness, timely flights, polite and courteous behavior, safety

AugmentedIn addition to the expected benefit

Comfortable seats, smiling employees, on par with international standards

FutureBeyond the usual, serendipity (pleasant surprise)

Welcome flowers, managers word of thanks, entertainment shows to delight and surprise the travelers on the flight

The Hotel Product:

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Core The basic benefit Serving rooms, food, kitchen

and staff.

FormalThe expected

Cleanliness, timely service,

polite and courteous behavior,

menu availability, music.

AugmentedIn addition to the expected

benefit

Sparkling floors, ambience,

smiling employees, music of

choice, Welcome flowers,

welcome drink.

Future Beyond the usual,

serendipity (pleasant

surprise)

Cookies in the room,

manager’s word of thanks,

giving surprise parties to the

guest and delight the guest.

The emphasis is on

relationship marketing.

TOUR-OPERATOR PRODUCT:

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Core product

The basic benefit

Packaged tour which includes travel guidance, planning, pricing, accommodation, local travel and sight seeing

Formal The expected Insurance, airport pick-ups, foreign exchange assistance (Raj Travels), airline ticketing, safe travel guide, branding the product for easy identity. Eg – SOTC, Cox & Kings, etc

Augmented In addition to the expected benefit

Payment option – ‘travel now, pay later’ (on the basis of bank affiliations), tourism on credit card (Raj Travels); premium offers – special package deals; guarantees – in case of cancellation of flights, tour failures, bad weather, etc. ; loyalty schemes; weather reports – of different countries, with month wise – maximum, minimum temperature, humidity and rain; recommended tours – for every age group and interests; take away gifts (souvenirs) - at the end of every tour

Future Beyond the usual, serendipity (pleasant surprise)

Make your own package (customized packages); free photo sessions; video shooting – of the entire trip by the tour operators; incentives – with every tour package, one more, at half the price.

3.2 Industry Trend (Emerging or Declining)

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The tourism industry not unlike the other industries grows with the increase in the spending of the people. The more the people spend the more the industry grows. The spending power of the people has been increasing in the country and all over the world.

Since India is concentrating on the international tourists, the large increase in the spending power in most developed countries has left a large amount of idle cash in their hands. This has led to the tourism boom the world over and India has been no exception.

The tourism industry has been growing steadily. Below are the charts depicting the growth in of the tourism industry various dimensions - Foreign tourist arrivals, Foreign exchange earnings, etc.

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Chapter-4

INDUSTRY POLICIES

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4.1 Policies

High capital expenditure acts as an entry barrier in the industry with the

availability of prime land at economically viable rates being a major constraint.

The gestation period is long and break even normally takes five to eight years to

happen. Due to this the established players like Indian Hotels, E.I.H, etc. have an

advantage over foreign majors as they already have well establishments at prime

locations.

India was late to wake up to the potential of tourism as an industry that is not just

an earner of previous foreign exchange but also one that could generate a lot of

employment through horizontal and vertical linkages. The importance and

significance of tourism could be understood from the observation of UNESCO,

which says, "Tourism is a traditional instrument, which enables culture to the

rehabilitated and made know to the rest of the world". It is said it's a smokeless

industry and has become second to the petroleum industry in world trade.

This great importance was formally acknowledged when the XXIU.N General

assembly designated 1967 as international tourist year with a unanimous

resolution recognizing that "tourism is a basic and most desirable activity

deserving the praise and encouragement of all peoples of government".

When traveling away from home, tourist comes in contact with the places they

visit with their inhabitants and social exchange takes place. Their presence and

social background affect the social structure and mode of life at the destination.

Tourists are in turn affected by the experience and and often carry back home

with them, new habits and new outlook on life.

Tourist has great educational significance. Contact between people of different

races and nationalities widen ones outlook. Tourism, whether domestic or

international has common economies significance in the sense that money earned

in places visited large sums of transferred to the host economies where this money

provided a source of income, a means of livelihood and amenities for the resident

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population. Purchasing power is generated in the receiving areas through the

expenditure of visitors. Money received is spent and resent and this multiplier

process the host country is a beneficiary.

International tourism is of great importance in international trade in the sense that

it enters into the balance of payments of accounts of individual countries

generating tourist traffic and export for countries receiving tourist traffic. For

many countries is a major item in world trade. These countries exhibit faster

growth in tourism than in trade of goods.

Domestic and International Tourism

Usually, a distention is drawn between domestic or internal and foreign of international tourism. In domestic tourism people travel outside their normal domicile to other areas within the country. Barriers like language, currency and documentation are not in the domestic tourism. But in India, since difference estates have different languages;one’s own language may not serve a medium of communication. Domestic tourism has no balance of payment implications.

When people travel to a country other than which they normally live in is known as international tourism, the distinction between domestic and international tourism is now diminishing. The reasons being:

Language barriers are reduced by improving language skills Currency and customs unions are developing in many European countries.

With globalization the free movement of people is growing.

Considering the greater multiplier effect in domestic tourism, domestic tourism would have received greater emphasis in India.

Reliable data on the growth of domestic tourists traffic are not available as not extensive survey has been conducted on a national level by any agency, government or otherwise not given the numerous festivals celebrated throughout out the year, the innumerable tourist's centers in the country, the geographical

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expands and the resource constraints, estimates of documents tourists' traffic through an executive survey is considered impossible.

Domestic tourism if considered separate from the travel for religious and commercial purpose. It is a post-independence phenomenon. Industrial growth, improvement in the standard of living, rise in disposable income and most importantly the improvement of tourist infrastructure search as hotels, air, train and road transport has contributed to the impressive growth in tourist traffic.

The definition of a domestic tourist is a person who travels within the country to a place of residence and stays at hotels or other accommodations establishments run on commercial basis or in dharmashalas, sarais, chaultries etc. for duration of not less than 24 hours.

The factors that govern the magnitude of domestic tourist traffic are the religious and cultural importance of a place. The extent of manufacturing, business and trading activity, the climatic conditions, the infrastructure facilities available and the geographical location etc. the current rough estimate of domestic tourism in India is ten million a year.

4.2 Research & Development:

Effective Market Research to ‘Understand Tourists’

Conducting extensive market research to know about the desired destination

attributes and tourists’ satisfaction might be one part of the overall

‘competitiveness enhancement strategy’ for Indian Tourism Industry. In this

context a research undertaken by Mauritius Tourism can serve as a model. It

conducted a year long survey at their main airport and covered all tourists of their

target market, at the time when they were leaving the country. This research

provided them critical insights about the experience and aspirations of their target

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market which helped in further boosting up their bread and butter industry by

making it more attractive and pleasurable for those who matter. India can

replicate the model after making obvious adaptations.

Restructuring ‘Organization Structure’ and ‘Planning Framework’

Tourism and Melbourne Tourism –

Beginning from the top level, in order to be competitive, a competitive

organizational structure’ and ‘planning framework’ are a prerequisite.

Structural setup at the top of Indian Tourism Industry is not sufficiently business /

industry oriented and is adversely affecting the all important work of framing the

plans, policies and guidelines, which then affect the implementation of the same

at the lower levels. The adverse affects are visible in the structure and working of

the government owned establishments in this industry (tourist bungalows, hotels,

railways and other transport, HR in TDC, destination management etc) who do

not seem to belong to this industry. Till the seventh 5 year plan (1985 – 90)

tourism was never given the importance it deserves and poor planning and lack of

coordination, characterized by ambiguity and vagueness and contradictory

policies, led to an unregulated growth of tourism in India.

In other words the whole structure at the top and the foremost function of

planning are not competitive enough to provide Indian Tourism Industry with a

strong foundation and right direction. In this context, the structural model of

Canada Tourism which is business oriented and suitable for a highly competitive

environment, can be considered after obvious adaptations for Indian requirements.

Canada tourism has specifically chosen 10 destinations and divided them in 3

regions (Asia- Pacific, North America, European / Latin America) as their target

market with separate marketing departments for each and in this way it has

achieved accountability and focus. They research, identify and monitor the ‘key

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trends’ in tourism for each of their target market and on that basis conduct a

thorough SWOT analysis of each region and finally, set specific priorities for

each region as to what to achieve. This structure creates “target market

specialists” who understand the tourists from their target markets and thus are

better equipped to satisfy them. The Marketing Department is engaged in top-

level guidance, planning and research and it is

supported by a sales department that implements marketing development

activities and leads the media and promotion activities.

Effective Destination Management through Encouraging Business Operators

for Adopting Higher Standards - Case of Great Barrier Reef Marine Park

(Australia) –

Destination Management is another area where Indian Tourism Industry has

performed miserably and negatively affects the impression of tourists. The Great

Barrier Reef (Australia) presents a remarkable case of destination management

and it falsifies the great Indian myths about destination management that ‘large

number of tourists and large areas are tough to manage’. This marine park has a

boundary of 2300 kms. and it welcomes 2 million tourists and 4.9 million

recreational visitors every year. The Great Barrier Reef Marine

Park Authority (GBRMPA) has been created by Australian Tourism to manage

this destination and the marine park has recently won the ‘best destination’ prize

GBRMPA encourages tourism business operators to take up – “The

EcoCertification Program” (developed and operated by Ecotourism Australia, for

ensuring, identifying and monitoring high standards in ecologically sustainable

tourism operations and thereby helping in protecting and managing the

destination) and it rewards business operators, if they adopt high standards or

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improve their performance in ecotourism through lucrative incentives, like –

extending duration of their work permits, listing them on official website and

publications (Australian Ecotourism Directory etc), showcasing them at various

important tourism related events (exhibitions etc).

4.3 Role of Advertising

Creation of awareness is an important factor in the formulation of marketing mix

for the tourism industry. The aim of promotion falls into three main categories:

• To inform

• To remind

• To persuade

It will always be necessary to inform prospective customers about new products

and services, new uses, price changes, information to build consumer confidence

and to reduce fears, full descriptions of service offerings, image building (of

destinations) etc.

Some of the important aspects of advertising are-

• Advertising and sales promotion- these activities are very effective when

supplemented by publicity and personal selling. Advertising messages range from

subtly attractive visual messages and symbols designed to appeal and stimulate

travel desires and needs, to simple sales announcements drawing attention to

specific product offers.

• Most travel and tourism advertising is aimed at consumer or the travel trade

aiming specifically on a tourist product but large organizations like airlines and

hotel groups also buy media space to communicate the name and image of the

organization as a whole.

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• Public relations and publicity- This include regular articles and photographs

of the tour attraction, use of TV, radio holiday program and travel journalists to

promote editorial comments.

• Word of mouth- research shows that about 80% of the tourists visited

different places on the persuasion of their friends and relatives and also their own

judgement. This indicates word-of-mouth promotion is an important tool in

tourism marketing.

• Incentives - Incentives to agents, customers and sales force are also given

to induce immediate response like-price cuts, discount vouchers to use certain

facilities in the location, free gifts, price draws etc.

• Brochures- these are provided by the tour operators to stimulate customers

and motivate them to buy. They are used to demonstrate in pictures and words the

image and positioning of the product and organizations.

New concept in promotion - “PIPELINE PROMOTION”

Hotel owners and airlines need to promote their services to tour operators who are

in effect wholesalers of travel services and products as well as promoting their

service to end users and independent travellers. Similarly tour operators will want

to ensure that travel agents sell their services in a positive manner and will

therefore want to advertise to the agents the benefits of selling their tours whilst

advertising a totally different set of benefits to the end user.

The Incredible India Campaign

This campaign which was started in December 2002 is the first intensive initiative

from the tourism department towards increasing tourist inflows to India. The

campaign touts the country’s Mystical, Spiritual and Healing traditions. It focuses

on small, unexplored tourist spots.

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The Department of Tourism won the PATA GOLD AWARD (2003) for BEST

MARKETING in print media category.

Achievements of the campaign:

• Foreign exchange earnings went up by 23 % (2003).

• International tourist arrivals increased by 16 % .

• Total earnings increased from Rs.14000 cr. to Rs.17200 cr.

• INDIA selected among the top 10 preferred destinations: “The Conde Nast

Traveller”.

• Among the top 5 destinations: “The Lonely Planet Travel Guide”.

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Chapter-5

INDUSTRY ATTRACTIVENESS

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5.1 Potential

India is a multi-destination country with a variety of tourist attractions and

facilities. It is the second largest net foreign exchange earner by way of

invisible exports. Tourism creates more jobs than any other sector for every

rupee invested. It has a major role in promoting large-scale employment

opportunities. Keeping this in view, it has been granted the status of an

industry. Several incentives have been made available by the Central and

State governments to this sector. These efforts have largely promoted tourist

arrivals in the country during the first quarter of this year. Foreign exchange

earnings during this year have registered a significance increase of 9.3 per

cent so far. The total earnings up to March 2001 were Rs. 4,430.79 cr. In

dollar terms it was US$ 977.18 million.

In view of the fierce competition in tourist generating markets from several

countries, it becomes necessary for India to strengthen its promotional and

marketing efforts continuously even to maintain its existing marketing share.

Steps are, therefore, being taken to develop and implement strategic

marketing programs based on market segmentation analysis. Efforts are

continuing to focus on cultural heritage as well as pilgrim tourism, extensive

use of technology measures to improve tourist information, laying stress on

NRI and ethnic segments, special campaigns promoting India in summer and

monsoon months and promotion of yoga and Ayurveda for mental, physical

and spiritual health.

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5.2 Industry Growth

India's tourist industry is booming due to a rush of foreign tourists and

increased travel by Indians to domestic and overseas destinations.

Nearly four million foreign tourists visited India in 2008, a 15% increase

over the previous year. Prospects look even better this year, with tourist

arrivals already up nearly 20%.

The visitors are pouring in from all over the world: Europe, Africa,

Southeast Asia and Australia. At the same time, the number of Indians

traveling abroad last year increased by 30%, to 4.5 million.

The boom has come even as global tourism has dropped, due to the

September 11 terrorist attacks in the United States, the outbreak of Severe

Acute Respiratory Syndrome in East Asia, and the Iraq war.

Tourism professionals cite several reasons for the buoyancy in the Indian

industry. The recent surge in the Indian economy has raised middle class

incomes, prompting more people to spend money on vacations abroad or at

home.

At the same time, India's emergence as a global information technology hub

and an aggressive advertising campaign by the government are credited with

changing India's image from that of a land of snake-charmers, and sparking

new interest among overseas travellers.

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5.3 History

ITDC came into existence in October 1966 and has been the prime mover in the

progressive development, promotion and expansion of tourism in the country.

Broadly, the main objectives of the Corporation are:

To construct, take over and manage existing hotels and market hotels, Beach

Resorts, Travellers’ Lodges/Restaurants; To provide transport, entertainment,

shopping and conventional services; To produce, distribute, tourist publicity

material; To render consultancy-cum-managerial services in India and abroad; To

carry on the business as Full-Fledged Money

Changers (FFMC), restricted money changers

etc; and To provide innovating, dependable and

value for money solutions to the needs of

tourism development and engineering industry

including providing consultancy and project

implementation.The authorised capital of the

Corporation is Rs 75 crores and the paid up capital as on 31.3.2005 was Rs 67.52

crores. 89.9748% of the paid up equity capital of the Corporation is held in the

name of President of India.

The Corporation is running hotels, restaurants at various places for tourists,

besides providing transport facilities. In addition, the Corporation is engaged in

production, distribution and sale of tourist publicity literature and providing

entertainment and duty free shopping facilities to the tourists. The Corporation

has diversified into new avenues/innovative services like Full-Fledged Money

Changer (FFMC) services, engineering related consultancy services etc. The

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Ashok Institute of Hospitality & Tourism Management of the Corporation imparts

training and education in the field of tourism and hospitality.

Presently, ITDC has a network of eight Ashok Group of Hotels, six Joint Venture

Hotels, 2 Restaurants (including one Airport Restaurant), 12 Transport Units, one

Tourist Service Station, 37 Duty Free Shops at International as well as Domestic

Customs Airports, one Tax Free outlet and two Sound & Light Shows. Besides,

ITDC is also managing a hotel at Bharatpur and a restaurant at Kosi on behalf of

the Department of Tourism. In addition, it is also managing catering services at

Western Court, Vigyan Bhawan, Hyderabad House and National Media Press

Centre at Shastri Bhawan, New Delhi.

Delhi Declaration:

To promote tourism interests, the World Tourism Organization (WTO) organised,

a South Asian Ministerial Summit on Joint Promotion and Marketing of Tourism’

with support from the South Asia Travel and Tourism Exchange (SATTE), on

April 23,2001 in New Delhi. The Ministerial Summit was presided over by the

Minister for Culture and Tourism, ShriAnanth Kumar. It was held within the

framework of SATTE 2001. The major conclave is yet another manifestation of

the solidarity among the South Asian nations to further promote the region on a

collective basis in the primary source markets. The Summit has also marked the

beginning of a new and lasting relationship between WTO’s Member States in

South Asia and SATTE which has emerged as the premier forum for marketing

South Asian Tourism.

The South Asian Tourism Ministers’ Meet has suggested a joint marketing plan to

promote the region as one tourist destination and to celebrate 2003 as the visit

South Asia year. The three-day meeting was attended by Pakistan, Bangladesh,

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Sri Lanka, Nepal, Bhutan and Iran, besides India. The Ministers participating in

the meeting were of the opinion that despite an overall growth of 9 per cent last

year in the region, the total tourist arrival was less than 1 per cent of the global

marketing share. Inadequate projection and negative perception of South Asia

held by some of the travel trade and prospective tourists in the main tourist

generating markets was one of the factors to be addressed urgently.

The Minister of Tourism, ShriAnanth Kumar, said that a time-bound action plan

would be taken up very soon for marketing the South Asia region as an emerging

destination. WTO’s Expertise would be sought to chalk out the financing, review

and monitoring mechanisms. A coordinating meeting would also be set up as the

organizational link between the Governments and the industry in the region and to

draw a strong public-private partnership program for promotion of tourism, he

said.

After the meeting, the participating countries signed The Delhi Declaration which

suggests their joint commitment to promote the region as one destination. The

Declaration suggested a common logo and slogan, joint participation of South

Asia Tourist village at prominent travel trade fairs the world over, organizations

of South Asia Travel Mart in rotation in member countries, joint advertising and

hosting of multi-country familiarization trips for travel agents, tour operators and

media persons. It also suggested creation of a dedicated regional tourism web site

and development of South Asia Travel Agents’ Accreditation Scheme – based on

an agreed curriculum and testing procedure.

The meeting was attended by the Ministers of Sri Lanka, Nepal, Maldives, Iran

and representatives of Pakistan and Bangladesh. The Secretary General of World

Tourism Organization, President, European Commission, Chairman of Ceylon

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Tourist Board and industry leaders, representatives of airlines, hotels and travel

trade also participated in the meeting.

During the deliberations India and Nepal agreed to set up a working group to

identify areas of cooperation in tourism which may include combined tourism

circuits, cooperation in infrastructure development and joint marketing of tourism

products. Both the countries will also sign a tourism agreement to provide for a

task force for implementation and review progress once in six months. During the

meeting, both the sides decided to form Buddha Circuit including the birth place

of Gautam Buddha in Nepal and the places in Indiawhere he preached. A

Religious Circuit including PashupatiNath and Muktinath in Nepal and Kashi in

India also to be formed. An Adventure Circuit was also proposed in view of the

keen interest in mountains and rivers of both the countries the world over to be

jointly marketed by India and Nepal.

To spread greater awareness about the country’s rich heritage and to encourage

conservation and restoration efforts, South Asia Travel and Tourism Exchange

(SATTE) and Indian National Trust for Art and Cultural heritage (INTACH) have

joined hands to institute awards for excellence in the field. Both SATTE and

INTACH are committed to conservation of India’s natural and cultural heritage,

long-term sustainable tourism and preservation of the living culture of local

communities at heritage sites.

To offer support and promote responsible tourism that is sensitive to the heritage

of the country, SATTE and INTACH have instituted an award in each of the three

categories - a conservation project at a heritage site of excellence in concept and

execution; an innovative heritage tourism project that provides a sound

interpretation of culture and offers the visitors a unique opportunity to understand

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the many layers of India’s heritage and a tourism project that contributes to

protection and enhancement of its natural and cultural environment.

5.4 Life Cycle Stages:

The life cycle of the tourism product 

As in other economic sectors, tourism follows a "product life cycle", with a curve

similar to that of the above graph. In this process several stages can be identified:

STAGE 1:  DISCOVERY

During the early "discovery stage" of the cycle a small number of unobtrusive

visitors arrive seeking "unspoiled" destinations. These early "explorer" tourists

generally speak the language and identify with the local culture. The social impact

in this stage is generally small and resident attitudes are fairly positive towards

tourism.

STAGE 2: LAUNCH

During this stage the number of incoming tourists increases. The host community

responds to the increasing numbers of tourist by providing facilities. Businesses

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remain family based and the visitor-resident relationship is still harmonious. Later

in this stage, visitor numbers increase and the community becomes a tourist

resort. Outside interests become involved developing businesses and tourist

facilities. This is typically the stage during which TNC (Trans-National

Corporations) foreign investment enters the cycle. Migrant workers, attracted by

the prospect of tourist-related jobs, may enter the community and reduce resident

contact with visitors. The tourist-relationship is converted into one of business as

the novelty of new visitor arrivals declines. The more culturally sensitive

"explorers" move on to new "unspoiled" areas and are replaced by the mass

market.

STAGE 3: STAGNATION

The stage in which saturation is reached. The quality of tourist services falls,

demand levels off, and the environmental degradation of the tourist destination

begins to be obvious and worrying. The tourist destination at this stage is said to

have reached 'maturity'.

STAGE 4: DECLINE

which represents the current state of mature tourist destinations on the Costa

Brava in Spain. Falling profits lead to foreign-owned businesses withdrawing and

the community is left to "pick up the pieces".

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Chapter - 6

INDUSTRY PERFORMANCE

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6.1 Profitability:

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6.2 Technological Advancement:

E–Commerce

 All those web sites and portals launched by government as well as private

organizations would offer a wide range of tourism products and services like

airlines, hotels, restaurants, camp-sites, tours, activity centers, concerts, festivities,

shopping and many more with choicest of assortments of services. 

Plan the tour online through agents’ web sites. Reservation or shopping of

facilities for train, airlines, cruise, hotels, resorts, motels, rental cars and

adventures can be done on line. Still leaving a part of simple web based portal,

which just provides static information & beautiful pictures with less updated

knowledge and data transfer, tourism industry is expecting more practical and

satisfied chain solutions from Information Technology. 

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Advance technologies in Tourism Industry

 Rather than .Com & e-commerce, travel and tourism industry is looking for

solution like E-Business or U-Business (Universal Business) solutions. 

Customer relationship management

 CRM based system enables service provider to provide knowledge, value and

efficient service to its clients. CRM enables service provider to build up a life

time relationship by providing on time solutions. Especially tourism industry

needs excellent CRM solutions to assist visitors or clients before flying on tour,

during tour and always after tour services. CRM solutions can be provided to a

visitor through web, email, call centre, kiosks and travelling information offices

anytime & anywhere. 

What an experience! We are standing at "TajMahal" and we are able to read

history details with all graphics and animated roles on multimedia kiosks. Even

we can check our further travel registration request process through kiosks. So

much beyond our imagination. 

Value chain integration 

Tourism industry is a chain of many service providers. In long term solutions,

cost cutting & effectiveness in data & information transfer, speed in transactions

and looking towards heavy multimedia based services – back end systems need

excellent value chain integration through solutions like SCM, ERP and CRM.

However till today applications of SCM and ERP are not up to the industrial

remarks as tourism industry is kind of service industry. 

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Knowledge Management Systems  

KM and business intelligence systems have wide scope of implementation in

Tourism industry.  Well, well, well we can imagine it. Comparing history

timelines and providing instance knowledge about place on the spot makes eager

to know more about place to a tourist. Even information enables analyst to find

tourist’s behaviour and trends with data and information. To find out customer’s

demand is no more difficult task.

Use of advance technologies

 Interactive Digital Television (IDTV), Mobile technologies and Internet are

carving new faces in customer services for tourism industry. That’s great for

adventure tourist. Where am I? You are in dangerous forest. Beware!! 

Through a mobile, tourist can be guided through cultural heritage through multi –

language voice, text or images. Even it is possible for a tourist to find details on

fees, opening days and timings for nearby places. Find bookshop, cafe, restaurant

or ATM from where ever we are. 

Wishing you a Happy journey :

In advanced countries, e – tourism concept was applied and put in practice in last

decade. However e – tourism is still in growing phase with advance technology’s

application. But for developing countries and underdeveloped countries it is under

utilization phase. 

With application of e-tourism, the travellers would be able to make online

reservation, bookings and receive immediate confirmation; this would remove a

lot of obstacles that are faced by a tourist.

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Chapter - 7

CONCLUSIONS

60

Conclusion:

Tourism Industry is a very dynamic industry and so are its challenges and

strategies, therefore a learning approach towards ‘best-practices’ would yield

better results in enhancing competitiveness of this industry. Also, the need for

sound perspective in planning and “private-public-community” participation is

imperative for this purpose. This paper was an attempt to illuminate the area

through simple yet effective examples and cases collected from around the world,

based on their contribution in making their respective Tourism Industry more

competitive. It leaves a background for further research, as assessing the

implications of using the above mentioned ‘best-practices’ in Indian Tourism

Industry can be another rewarding study.• Foreign exchange earnings went up by 23 % (2003).

• International tourist arrivals increased by 16 %.

• INDIA selected among the top 10 preferred destinations:

“The Conde Nast Traveller”.

• Among the top 5 destinations: “The Lonely Planet Travel Guide”.

The planning framework of Indian Tourism Industry can be redesigned,

taking World Tourism corporation’s recommendations of 2002-07 as a base.

Tourism has adopted an ‘industry oriented outlook’ for making professionally

designed specific plans for responding to changing consumer

demands and other critical and contemporary issues, like:

• Destination marketing;

• Product, branding and competitive positioning,

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• Pricing,

• Market segmentation,

• Promotion and distribution

• Cross agency cooperation

• Site Management

Contemporary and detailed planning, which professionally addresses specific

issues, has added to the competitiveness of their tourism industry and can very

well do the same for Indian Tourism Industry.

Make the business operators realize that - ‘Tourism Survives Till The

Destination Does’:

Tourism business operators realize that for their business, they will ALWAYS

need a healthy Great Barrier Reef. Increasing realization of this interdependence

has led to the development of a strong active partnership

Significantly improving the destination management as well as competitiveness of

Tourism business outcomes at the Marine Park.

Public Private Partnership is critical for enhancing competitiveness:

Enhancing coordination and cooperation between public sector and private sector

undertakings of the industry will help in creating a wholesome experience for the

tourists. In this industry where both play equally important role, it is not possible

for both to perform in isolation. Moreover, it will be a ‘win-win’ situation for both

the sectors as both can benefit by each other’s expertise and resources.

Handover the Funds in Right Hands: Case of Vermont Tourism (USA) has

created “Fund for Tourism Marketing Initiatives (FTMI)” program. Under this, it

awards financial grants (on merit basis) to local organizations for building /

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expanding events, marketing programs, advertising campaigns and public

relations programs that hold significant potential for measurable increase in

travellers to Vermont.

Sensitize the Community for sustainable competitiveness:

Community is an important stakeholder in tourism industry and can play a vital

role in enhancing its competitiveness through sharing the responsibility and thus

easing out the job of sustainability and destination management to some extent,

but unfortunately, in Indian Tourism Ministry this important stake holder of

tourism industry has been rarely involved and sensitized for such efforts.

Effective deployment of ‘Human Resources’:

Although, some private players have opened their own academies to develop

talent, but it is not possible either for the private sector or for the public sector, to

cater to the growing demand single-handedly.

‘Private-Public Partnership’ for development of world class academic,

training and development infrastructure can be a remedy and can enable the

industry to take advantage of this most valuable and most widely available

resource in the country. Government should encourage infrastructure

development in this area as well with a long term vision. It is very simple that

adding more airlines and hotels would not lead to anywhere if there are not

enough people to work for them and high training costs and recruiting from

abroad will push the already high operating costs further.

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