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I. THE IMPORTANCE OF TOURISMA. International tourism development

1.Tourism has become one of the world’s largest and fastest growing industries. Over the period1995-2005, international tourist arrivals grew at an average annual rate of 4.1 per cent, exceeding the800 million mark in 2005. This outstanding performance can be attributed to several factors,including the following: rising levels of disposable income; improvements in transportation and theintroduction of low-cost airline services; easier access to destinations by tourists from traditional source markets and the emergence of new source markets such as China and India; and the diversification of the industry with new market niches, such as cultural tourism, ecotourism and adventure tourism.

2.During the 10-year period, the Asian and Pacific region outperformed the rest of the world, withincreases in arrivals averaging 6.5 per cent annually, raising its global share of the tourist market from15.3 per cent in 1995 to 19.2 per cent in 2005. By contrast, the two more mature regions, Europe andthe Americas, saw their global shares decrease from 58.3 per cent to 54.8 per cent and from 20.2 per cent to 16.6 per cent respectively.

II. THE ECONOMIC IMPACT OF TOURISM

1.The economic impact of the tourism industry can be seen in its contribution to a country’s GDPand exports. The largest contributions to GDP are seen in the island States of Fiji, Tonga and Vanuatu.Indeed, many small island economies are highly dependent on tourism, as evidenced by the significant share of tourism in their total export earnings. In 2006, tourism alone contributed 43.5 per cent of the total export earnings of Fiji and one third of its GDP. Other small islands, such as Tonga and Vanuatu, are dependent on tourism for half or more of their export earnings.

2.Tourism in China has also provided a substantial contribution to its GDP, amounting to 13.7 percent in 2006. Taking full advantage of the potential of their natural and cultural tourism resources,countries in the Greater Mekong Subregion are benefiting from the tourism industry. In 2006, tourism in Cambodia and the Lao People’s Democratic Republic accounted respectively for 22.3 and 21.4 per cent of their total export earnings and contributed 19.6 and 9.3 per cent respectively of their GDP.

3.In the other countries of the region, the contribution of tourism to GDP and to total exportsaveraged between 7 and 10 per cent, mainly because their economies are much more diversified. However, in the light of the expected continuing growth of the tourism industry in the foreseeablefuture, it can be assumed that the share of tourism in the region’s economy will become moresignificant.

III. THE SOCIAL IMPACT OF TOURISM

4.While there are various definitions of social development, most of them converge around theconcepts of improving the well-being of a country’s citizens, promoting higher standards of living,employment and conditions of economic and social progress. Therefore, in the absence of betterindicators to measure the social impact of tourism, its importance for employment has been used in the present document.

5.The tourism industry contributes significantly to the creation of employment, both directly andindirectly. In 2006, the industry in the Asian and Pacific region provided jobs for about 140 millionpeople, representing an average of 8.9 per cent of total employment. Tourism employment inNorth-East Asia is estimated at 86 million jobs, or 10.1 per cent of total employment. This situation is attributed mainly to China, where 1 out of 10 persons works in a tourism-related industry. In Oceania,the workforce in the tourism sector accounted for 14.5 per cent of total employment, or 1 in every 6.9jobs. The importance of tourism becomes more significant when the structure of the workforce inselected Pacific island economies is analysed. For instance in 2006, 1 in every 3.2 persons wasemployed in the tourism sector, while in Vanuatu the ratio was 1 in every 2.4 jobs.

6.A comparison with countries in other subregions indicated that the share of total employment inthe tourism sector in 2006 varied from 5.4 per cent in India to more than 10 per cent in both thePhilippines and Thailand.

7.Fueled by sustained growth, the tourism industry has managed to become a significant providerof employment in countries of the Asian and Pacific region, thereby improving the economic situationof the people of those countries. In addition, revenue generated from tourism has enabled Governmentsto allocate financial resources for improving education and health conditions. For example, inMaldives, where tourism activity is the economic mainstay, almost 100 per cent of the population isnow literate. The infant mortality rate has improved from 121 per 1,000 in 1977 to 38 per 1,000 in 2004.Over the same period, the average life expectancy at birth increased from 47 years to 67 years.IV. ASSESSING THE SOCIO-ECONOMIC IMPACTS OF TOURISM18.A full assessment of the socio-economic impacts of tourism requires that the linkages betweentourism and socio-economic development be clearly identified. Having established the linkages,policymakers are then in a better position to consider specific interventions that can raise standards ofliving and reduce poverty.19.Techniques to assess such impacts fall into two broad categories: “top-down”, aggregate ormacrolevel approaches; and “bottom-up”, project or microlevel approaches.20.Aggregate approaches include the related tourism satellite accounts, input-output tables,1 socialaccounting matrices and computable general equilibrium models, as well as econometric and regressionanalysis.21.Among the aggregate approaches, satellite accounts were used in the previous section todescribe the importance of the tourism sector. The leading organization in generating the relevant datais the World Travel and Tourism Council, which produces annual data on the sector’s contribution toGDP, employment and exports. Since 1998, the Council has developed tourism satellite accounts for173 countries; of that number, 31 are members or associate members of ESCAP. In addition to theactivities of the Council, countries are producing their own satellite accounts (for example, India, thePhilippines and Thailand). These accounts distinguish between the “travel and tourism industry” and1 During the first half of the 1990s, ESCAP undertook separate studies on the economic impact of tourism in 11 membercountries using input-output table methodologies. Publications relating to these studies can be found at <www.unescap.org/ttdw/index.asp?menuname=PublicationArchives>.

Page 9E/ESCAP/63/14Page 6the “travel and tourism economy”. Essentially, the term “industry” includes all activities in directcontact with visitors, whereas the term “economy” refers to the suppliers of goods and services to theindustry. Once constructed, the accounts can be used to answer questions such as the following: Whatare the direct (industry) and indirect (economy) impacts of tourism on GDP and employment? Howstrong are the linkages between tourism and other sectors of the economy? What are the multipliers (thechange in income and employment resulting from a change in expenditure) and the leakages (theproportion of tourist expenditure that does not remain in the economy)?22.One example of a computable general equilibrium model was developed by Adam Blake forBrazil. He and his co-authors concluded:The results also show that tourism benefits the lowest income sections of (the) Brazilianpopulation and has the potential to reduce income inequality. The lowest income householdsare not, however, the main beneficiaries of tourism and we have also shown that alternativerevenue distribution by the government could double the benefits for the poorest householdsand give them around one-third of all the benefits from tourism.2

23.Among the project-level approaches to assessing the impacts of tourism are traditionalcost-benefit analyses, including their extensions to social impact analysis and environmental impactanalysis, livelihood analysis, accountancy-based lodging and enterprise assessments, local economicmapping, tourism value chain analyses and ex-post documentation of specific case studies. Becausethese types of analyses are done at the micro level, it is often easier to hypothesize and test linkagesbetween particular interventions and improved standards of living.24.These analytical techniques are all ways of identifying those who benefit from tourisminterventions and of evaluating the level of their benefits. For example, interventions that provideinfrastructure for tourists (roads, communications, electricity, water, waste treatment and disposal, andmedical services, including clinics and hospitals) can also be designed to benefit local communities. Ina longer causal chain, investment in physical access for tourists also makes the provision of health,education and extension services easier for the organizations and employees providing such services. Some of these analyses are obligatory when projects are financed by international financial institutionsand bilateral donors.25.One technique that has become increasingly popular in the current era of globalization is valuechain analyses. In essence, this type of analysis can enable policymakers to consider each of theelements of a touristic experience and look at how the product is produced, distributed and sold, that is,the value added by each element. By analysing the value chain and working to retain value in the localeconomy, the positive impact of tourism on local economic development and poverty reduction can beenhanced. In 2006, the technique was used in the city of Luang Prabang, Lao People’s DemocraticRepublic, where opportunities to increase earnings were identified by assessing value chains foraccommodations, handicrafts, excursions and

Contribution of tourism1. Eradicate extreme povertyand hunger(a) Tourism stimulates economic growth both at the national andlocal levels and promotes the growth of the agricultural,

industrial and service sectors; (b) Tourism provides a wide range of employment opportunitieseasily accessible by the poor. Tourism businesses and touristspurchase goods and services directly from the poor orenterprises employing the poor. This creates opportunities formicro, small and medium-sized enterprises in which the poorcan participate;(c) International and domestic tourism spreads development topoor regions and remote rural areas of a country that may nothave benefited from other types of economic development;(d) The development of tourism infrastructure can benefit thelivelihood of the poor through improvement in tourism-linkedservice sectors, including transport and communications,water supply, energy and health services.2. Achieve universal primaryeducation(a) The construction of roads and tracks to remote areas fortourists also improves access for school-age children and forteachers;(b) Tourism can help local resource mobilization, part of whichcan be spent on improvement of education facilities.3. Promote gender equality andempower women(a) The tourism industry employs a high proportion of womenand creates microenterprise opportunities for them. Itpromotes women’s mobility and provides opportunities forsocial networking.4. Reduce child mortality5. Improve maternal health6. Combat HIV/AIDS, malariaand other diseases(a) The construction of roads and tracks to remote areas fortourists also improves access to health services;(b) Revenues accruing to national and local governments throughtaxes on the tourism industry can be used to improve healthservices and nutrition for young children and their mothers;(c) Tourism raises awareness about HIV/AIDS issues andsupports HIV/AIDS-prevention campaigns;

GoalContribution of tourism(d) Tourism aggravates the spread of HIV/AIDS (negative effect).7. Ensure environmentalsustainability(a) Tourism can generate financial resources for conservation ofthe natural environment;(b) Tourism raises awareness about environmental conservationand promotes waste management, recycling and biodiversityconservation;(c) Uncontrolled tourism may generate negative externalities as aresult of pollution, congestion and depletion of naturalresources (negative effect).

8. Develop a global partnershipfor development(a) Tourism contributes to the socio-economic development ofleast developed countries, landlocked countries and islanddeveloping countries through foreign exchange earnings andthe creation of job opportunities;(b) Tourism stimulates the development of the transportinfrastructure, which facilitates access to and from the leastdeveloped countries, landlocked countries and islanddeveloping countries;(c) Tourism stimulates internal and external trade and strengthenssupply chains;(d) Tourism promotes the integration of isolated economies withregional and global flows of trade and investment;(e) Tourism reduces the burden on the public exchequer throughimplementation of public-private initiatives;(f) Tourism creates decent and productive work for youth;(g) Tourism provides opportunities for bilateral, multilateral andsubregional cooperation among countries;(h) Information technologies play an important role in integratingtourism enterprises into global tourism markets.

VI. THE ROLE OF GOVERNMENT31.Government intervention may be necessary to enhance the contribution of tourism tosocio-economic development and poverty reduction. One of the principal roles of Governments is to setpolicy and legislative frameworks for tourism. For instance, several articles of the 2006 law on tourismof Viet Nam have been designed to facilitate pro-poor tourism.32.Real progress can be facilitated by using a wide range of instruments. A number of these havebeen identified by the World Tourism Organization and the United Nations Environment Programmeand are categorized into measurement instruments (sustainability indicators and monitoring;identification of limits), command and control instruments (legislation, regulation, rules and licensing;land-use planning and development control), economic instruments (pricing, charges and taxation;property rights and trading; financial incentives; and voluntary contributions), voluntary instruments(guidelines and codes of conduct, reporting and auditing, and voluntary certification), and supportinginstruments (infrastructure provision and management, capacity-building, and marketing andinformation services). The precise mix of policies and instruments will vary depending on thesituation, objectives and government structures.A. Tourism ministries33.As tourism moves up the national agenda, the government departments dealing with tourismmay be upgraded and strengthened. However, to manage tourism sustainably, ministry staff need thesupport of their colleagues in other ministries and in a range of subnational administrations. This arisesbecause the administration and governance of tourism takes places in the localities where tourists andhost communities interact, while regulations and incentives are applied within a framework laid downby the national Government. B. Tourism plans34.

Tourism master plans are useful tools for identifying areas with tourism potential, determiningtourism strategy and structuring the provision of infrastructure, investment promotion and financial andother incentives. Governments need to ensure that master plans and tourism development strategiesaddress local economic development, the distribution of tourism and poverty reduction.C. Empowerment of poor communities, property rights and development control35.Government agencies can promote the empowerment of communities in planning andmanaging tourism assets by initiating partnership approaches that include poor people. Engaging thepoor is particularly important in order to identify opportunities that fit their livelihood strategies and thebarriers to employment and enterprise. 36.In Viet Nam, provincial and district-level governments have been allocated greaterresponsibility for tourism planning and development in line with the overall decentralization of

Page 15E/ESCAP/63/14Page 12governance. Provincial and district governments have the statutory duty to consult and collaborate withother government agencies, as well as with other tourism stakeholders, such as businesses and localcommunities. Overall, this decentralized and more integrated approach to tourism planning is asignificant step towards enhancing opportunities for incorporating poverty reduction and other localdevelopment priorities into tourism development.D. Legislation and regulations 37.Several areas of legislation have an impact on the capacity of small-scale producers to developtourism-related enterprises. These include access to credit, business licensing, employment legislation,environmental health, and health and safety regulations as well as the regulation of micro, small andmedium-sized enterprises. Governments need to ensure that people engaged in tourism are remuneratedfairly and receive adequate social protection in areas such as the minimum wage, policies on equalopportunities, holiday entitlement and security of employment. E. Training, capacity-building and certification38.The needs and existing capacity of local people have to be assessed to ascertain where traininginterventions will be most useful. There is a need to strengthen informal learning methods and in placeon-the-job training. The certification of guides has been used in several places to control quality andsupply, and to ensure minimum standards of service and knowledge. In Viet Nam, a new category of“narrator guide” has been introduced, which enables people without a formal education to work as localguides, and at Keoladeo National Park, in India, local rickshaw drivers are registered with the park totake tourists around the site. F. Taxes and levies39Taxes on goods, services and transactions, which provide funds for local or nationalgovernments can be used specifically to support either poor communities or the environments thatprovide their livelihood. For instance, Bhutan levies a high daily royalty on tourists, which is used tofund education and health programmes in remote rural areas. G. Microfinancing and facilitating market access and linkages

40.The poor have limited access to the tourism market for several reasons, including lack ofbusiness skills, low educational levels, demanding regulations, incapacity to exit deep poverty, poorhealth and social exclusion. Governments can reduce the bureaucracy that small enterprises face, andcreate advisory services on business development, provide seed-funding for entrepreneurs, developbusiness linkages with established operators, assist micro, small and medium-sized enterprises to formproduction or marketing cooperatives and provide educational, technical and professional trainingprogrammes to improve quality and business standards. The cluster mechanisms outlined below canassist in these respects.

E/ESCAP/63/14Page 13Box 3. Creating microenterprise opportunities for the poor: two examples from NepalThe Explore Nepal GroupThe Explore Nepal Group spent approximately US$ 57,000 on constructing and furnishing theKoshi Tapu Wildlife Camp. All materials except the toilet were sourced from local entrepreneurs of theKoshi Tapu area. For Bhojan Griha Restaurant in Kathmandu, another business of the Explore NepalGroup, each year the group expends approximately US$ 5,700 in renovating or replacing the “softfurniture” of the restaurant, items such as candles, arts and crafts, tables and mats. This furniture isacquired only from women’s handicraft associations such as Dhukuti and Sano Hastakala.The Tiger Mountain Group In order to support local entrepreneurs while minimizing distortions in the local market, such asprice rises that would have an adverse impact on local people, the Temple Tiger Jungle Lodges andWildlife Camp in Pokhara buys its supplies from local markets but at established retail prices. Buyinglocally has the added benefit of significantly reducing the company’s transport costs. Ensuring that the sources of supply are diverse and the benefits within the community widespreadalso proved to be a challenge because of the tendency of lodge employees to favour local businesseswith connections to their relatives. To overcome this tendency, the lodge identifies the services andsupplies that it needs in an open, accountable and transparent manner. It develops clear criteria for thesupplies and services sought and ensures that the criteria are widely disseminated among communitymembers.Source: The Netherlands Development Organization (SNV) Nepal, 2006.H. Marketing41.Destination marketing is increasingly the remit of the private sector, private-public sectorpartnerships or clusters (see below). This means that micro, small and medium-sized enterprises andpoorer producers may be excluded from the formal marketing processes and distribution channels. Toaddress this problem, Governments can encourage discussions between national and regional touristboards and the institutions involved in local economic development and resource conservation. They can also encourage the organization of marketing campaigns to promote responsible tourism practicesand suppliers, and give preferential marketing terms to suppliers that adopt sustainable, responsible,poverty alleviation practices. 42.Much can be done through careful marketing to alleviate the uneven geographic distribution oftourists and to spread the benefits of the industry. For instance, the Nepal Tourism Board has givenparticular promotional emphasis to areas of the country that traditionally receive fewer visitors, such asthe Chitwan hills. Promotion builds on extensive product development, which has improved facilities

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and enhanced the visitors’ experience, and has succeeded in extending the range of tourism productsand the tourism season in Nepal.

VII. THE ROLE OF THE PRIVATE SECTOR 43.A climate characterized by increasing levels of corporate social responsibility has resulted inawareness that economic instruments can be manipulated for altruistic ends as well as commercial gain,and that the private sector can contribute to local economic development and poverty reduction bychanging the way that it does business and through philanthropic activity. 44.There are strong commercial motivations for private sector engagement in local economicdevelopment and poverty reduction, principally the creation of an enhanced product range, which addsmarket advantage, and of a better business environment, which fosters favourable staff attitudes andmorale. These factors will, in turn, help to enhance the tourist’s experience.45.Particular areas where the private sector can foster local socio-economic development are inrecruiting and training local people, procuring goods and services locally and shaping localinfrastructure development to include benefits for the poor. The private sector can also encouragetourists to purchase products that are complementary to the core holiday, such as handicrafts, art andlocal food and beverages, and services such as guide services, music and dance. These add to theholiday experience and provide economic opportunities for local providers. Complementary productsoften draw on local culture, including the way that the people’s way of life has evolved in relation totheir history and environment.VIII. ALLIANCES AND PARTNERSHIPSA. Regional and subregional marketing alliances46.Subregional touristic cooperation at the government level is now being pursued betweencountries in several subregions. The ASEAN Tourism Agreement (concluded in Phnom Penh on4 November 2002) committed the members of the Association of Southeast Asian Nations to worktogether to facilitate travel into and within ASEAN countries, to undertake joint marketing andpromotion, to liberalize trade in travel and tourism, to enhance cooperation in raising the quality andsustainability of tourism in the region and to ensure tourist safety and security and human resourcesdevelopment. In the Pacific subregion, the South Pacific Tourism Organisation is charged withfacilitating the sustainable development of tourism, strengthening regional capacity, and planning,marketing and managing the tourism sector on a sustainable basis. In January 2007 Brunei Darussalam,Indonesia and Malaysia agreed to conserve areas of high biodiversity along common frontiers on theisland of Borneo; that tripartite agreement has a focus on ecotourism. Other economic groupingsactively engaged in cooperative tourism development include the Working Group on the GreaterMekong Subregion Tourism Sector, the Ayeyarwady-Chao Phraya-Mekong Economic CooperationStrategy, the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation, the SouthAsian Association for Regional Cooperation and the South Asia Subregional Economic Cooperation. Subregional cooperation can achieve efficiencies in marketing, information-sharing, destination access,human resources development and capacity-building, and synergistic product development.B. Networks, clusters and ICTThe “story” of globalization is essentially one of technological change coupled with thedevelopment and organization of interacting physical and non-physical networks designed to takeadvantage of the change.3

47.Networks clusters and ICT provide mechanisms by which the role of tourism in socio-economicdevelopment can be enhanced.The interrelationship between tourism networks and technology [ICT] is not a recentphenomenon. … Computerised Reservation Systems (CRS), developed and operated byairline companies in the 1960s to manage their increasing volume of passengers andrelated logistics, were among the first integrated global information technologynetworks. In due course, proprietary CRS were made accessible to travel agents andsubsequently expanded to include hotels and car rental companies…. In the 1980s, CRS3 ESCAP and Asian Institute of Transport Development, Towards an Asian Integrated Transport Network(ST/ESCAP/2399), accessed from <www.unescap.org/ttdw/PubsDetail.asp?IDNO=182>, on 28 February 2007.

Page 20E/ESCAP/63/14Page 17started to integrate with other technology networks to form Global Distribution Systems(GDS), examples of which are Amadeus, Galileo, Sabre, Worldspan and the AustralianETAS system.4

48.Advances in information technology are giving micro, small and medium-sized enterprisesunprecedented access to markets, and the Internet is being used to facilitate information exchange andthe booking process. An example is Worldhotel-linkcom Limited, an e-marketplace which acts as theinterface between accommodation providers in several Asian countries (initially Cambodia, the LaoPeople’s Democratic Republic and Viet Nam) and independent travellers.49.A cluster, as popularized by Michael Porter,5 is broadly defined as a geographic concentrationof competing and cooperating companies; suppliers; service providers; government, education andtraining institutions; and other associated organizations. One of the central propositions underlying theformation of clusters is that, while a sound macroeconomic, political, legal and social environmentcreates the conditions for increased competitiveness, competitiveness itself ultimately depends onimproving the microeconomic capability of the economy and the sophistication of local companies andlocal competition.50.The cluster concept is being used widely in the tourism sector in both developed and developingcountries. For example, in Sri Lanka, there are eight clusters in that country’s “competitivenessprogramme” (ceramics, coir, ICT, jewellery, rubber, spices, tea and tourism), while in Thailand thereare five clusters (automotive industry, fashion, food, tourism and software). An example of the workof a cluster is, in the jargon of the tourism industry, “destination marketing” whereby the variousstakeholders in the cluster work together to generate a “total tourism experience”. Subject to theconsensus of the members of a cluster, special emphasis can be placed not only on supporting andpromoting micro, small and medium-sized enterprises but also on the special needs of poorer sectors ofthe community in providing tourism services.51.In addition to facilitating the marketing of the tourism product, ICT has an important role toplay in capacity-building through distance learning, the sharing of experiences and virtual networking.52.In drawing upon the lessons and experiences in other sectors, ICT may provide the opportunityfor “scaling-up” or at least “replicating” (with modifications to reflect local circumstances) thesuccessful elements of particular interventions or pilot projects. The principal area of difficulty in such“replication” relates to governance, standardization and the transfer of implicit and tacit knowledge. In

this respect, ICT may offer a way forward. One example from a different sector is the Prime Minister’sRural Road Project in India. The project is a very large one that is aimed at providing all-weather accessfor villages of more than 1,000 people (500 people in some tribal areas) to the main road network. The4 Patrice Braun, “Creating value to tourism products through tourism networks and clusters: Uncovering destinationvalue chains”, paper presented at the Conference on Global Tourism Growth: A Challenge for Small and Medium-sizedEnterprises, in Gwangju, Republic of Korea, 6-7 September 2005.

Page 21E/ESCAP/63/14Page 18project is being financed from the proceeds of a federal tax on diesel sales and it is being implementedby individual states. ICT has played a major role in a number of aspects of the project: engineering,administration, monitoring of project implementation and other governance matters. One of the keyelements in this application would appear to have been the ability to “standardize” many of the project’sactivities.53.Another concept that has close tourism connections is the “one village, one product”programme, which was started in Japan in 1979, and later introduced in other countries, for example the“1K1P” programme in Malaysia and the “one tambon (subdistrict), one product” (OTOP) programmein Thailand. The latter programme was started in 1999 to promote entrepreneurs at the village levelthrough the manufacture of local specialty products based on the abundant native culture, tradition andnature.6 The OTOP type of programme has considerable potential for developing the local economyand can also promote tourism. However, any successful large-scale replication and upscaling of localinitiatives requires that the local entrepreneurs be assisted in product development, guidance andsupport (concept, design, prototype-making, finance, manufacturing and business operations);standardization (including branding, product rating and classification); and marketing.54.ICT can be an appropriate tool for providing these support services to entrepreneurs and for themanagement of the programme, in a manner similar to that of the Prime Minister’s Rural Road projectin India. Through the use of standardization and Internet technology, the government agenciesconcerned, with helping private organizations, can provide the services and manage the programme,thereby achieving the economies of scale enjoyed by larger organizations. An Internet site can be aresource and e-business centre for the local producers, and can also help in fostering local tourism byproviding tourists with the necessary information. Currently, an Internet site <ThaiTambon.com> ishelping in the marketing of OTOP products and the networking of entrepreneurs. It also providesinformation on local tourism. Such efforts could be further extended to include other services and couldbe used as a tool for management of the programme by the Government.IX. IMPLEMENTATION AND MONITORING OF THE PLAN OF ACTION55.As requested by the Commission in paragraph 3 (c) of resolution 62/3 of 12 April 2006 on theimplementation of the Plan of Action for Sustainable Tourism Development in Asia and the Pacific,phase II (2006-2012) and the Regional Action Programme for Sustainable Tourism Development, thesecretariat has developed a common approach to monitoring their implementation.56.The proposed analytical framework is based on a widely applied analytic hierarchy process thatallows consideration of both qualitative and quantitative assessment of the extent to which an elementof a plan is completed. In order to operationalize the monitoring system, some rearrangement and5 Michael Porter, The Competitive Advantages of Nations (New York, Free Press, 1990).6 The programme has been recently renamed “local and community product”, but the OTOP brand name has been

retained.

Page 22E/ESCAP/63/14Page 19reformulation of the objectives and actions under each theme of the previously mentioned Plan ofAction have been proposed. However, a direct correspondence between the items in the monitoringsystem and the Plan of Action has been fully retained. In addition, a fourth element labelled “activity”has been introduced into the monitoring system. Consequently, the proposed monitoring system hasfour hierarchical levels, namely the five themes of the Plan of Action; a number of objectives thatcontribute collectively to the overall objective of the theme; a set of actions that broadly correspond tothe actions in the Plan of Action and contribute to the achievement of the objective; and a set ofactivities that are required to be carried out in order to complete the action.57.In assessing the extent to which the Plan of Action has been completed, the analyst is requiredonly to assess either quantitatively or qualitatively the extent to which each of the activities iscompleted. A set of weights, reflecting the level of importance of the activity, action, objective andtheme at the country level, are then applied to ascertain the degree (in percentage terms) to which thePlan of Action is completed at each of the hierarchical levels.58.The monitoring system can be implemented with readily available spreadsheet software. Outputs include time-series graphs of planned versus actual completion for each of the activities,actions, objectives and themes as well as radar (or spider) diagrams for each action, objective andtheme. Presentation of information in these forms enables policymakers to readily visualize theprogress being made in implementing the Plan of Action.59.In order to further support the monitoring of the Plan of Action, a separate reporting form hasbeen developed for each action. A copy of the suggested form is contained in the annex to the presentdocument.X. CONCLUSIONS AND RECOMMENDATIONSA. Summary and conclusions60.The results of the foregoing study have clearly demonstrated that tourism is playing a major rolein socio-economic development. Among other observations, it has shown that, for many countries ofthe region, the economic significance of tourism is very large when measured against GDP and exports.For many countries in general and the least developed countries in particular, tourism is a sector inwhich they have comparative, if not competitive, advantages for which they can efficiently convertdomestic resources into foreign exchange. If appropriately used, such foreign exchange can purchasethe investment goods necessary to support more broadly based economic development policies.61.The study has demonstrated that the social significance of tourism, measured in terms ofemployment (especially unskilled labour), is very large. It has also illustrated that appropriatetourism-related interventions can play a role in raising the standard of living and in reducing poverty inlocal communities.62.It is often necessary, however, to develop and implement policies that take advantage of the

E/ESCAP/63/14Page 20potential benefits of tourism in socio-economic development. In some cases, this is simply a matter of

increasing awareness so that the joint benefits to tourists and local communities can be “factored-in” atthe planning stage. In other cases it may involve reducing leakages (or retaining tourist spending). Inyet other cases “affirmative action” may need to be taken to capture the benefits.63.In any event, there is a strong case for considering tourism as an important sector insocio-economic development. Towards this end, the following recommendations have been preparedfor the consideration of the Commission.B. Recommendations for consideration1. Planning64.National tourism master plans need to be prepared, with specific objectives to be integratedwithin a country’s overall economic and social development objectives. The plans need to includecomprehensive strategies, implementation plans and priorities to enhance the role of tourism insocio-economic development and poverty reduction. In developing a master plan, countries may wishto consider incorporating the recommendations below as well as those contained in Commissionresolution 62/3.2. Information for decision-making65.Governments should consider stepping up their efforts to assess the socio-economic impact oftourism. The formulation of national tourism development policies is often hindered by a lack of dataon the scope and extent of tourism’s economic impact. In the absence of such data, tourism has oftenbeen given an unduly low priority in the allocation of domestic resources and foreign assistance. Tourism satellite accounts and other quantitative and qualitative analytical techniques help to remedythis situation, enabling tourism to be compared with other economic activities measured in nationalaccounts.3. Coordination and monitoring66.Governments should consider establishing inter-ministerial committees that includerepresentatives of the tourism industry in order to coordinate and monitor the implementation of thePlan of Action, including the development of tourism-related infrastructure and the facilitation ofinternational travel, through improvements in procedures for visa issuance, border formalities andcustoms regulations. Governments may also wish to consider the common approach to the monitoringof the implementation of the Plan of Action, as outlined above.4. Private sector participation(a) Public-private partnerships67.Private sector participation and public-private partnerships should be strengthened in a numberof areas: (a) tourism development planning, policy formulation and implementation, monitoring and

Page 24E/ESCAP/63/14Page 21evaluation; (b) infrastructure development and investment for the tourism sector; (c) tourismpromotion, marketing and product development; (d) environmental management of tourism and thepreservation of the cultural heritage; (e) human resources development; (f) facilitation of travel; (g) riskmanagement in tourism; (h) pro-poor tourism initiatives; and (i) awareness creation about the role oftourism in socio-economic development.(b) Development of micro, small and medium-sized enterprises and employment generation68.Special efforts should be made to foster micro, small and medium-sized enterprises to ensurelocally based opportunities for engagement in tourism.

(c) Mainstream tourism and corporate social responsibility69.The contribution of mainstream tourism to local economic development needs to be betterunderstood and its role further expanded. There is also a need to foster a climate characterized bycorporate social responsibility in the tourism industry.5. Networking, clusters and ICT70.Governments should consider fostering tourism networks and clusters as part of a bottom-up,business-oriented approach to developing the sector.71.Advances in information technologies can contribute significantly to the expansion of tourism.The public and private sectors should build up ICT infrastructure and services as well as strengthencapabilities to utilize ICT in tourism.6. Improving living standards and poverty reduction72.The role of tourism in socio-economic development and in achieving the MillenniumDevelopment Goals should be clearly identified. To increase the positive impact on local economicdevelopment and poverty reduction, linkages to poor communities need to be strengthened through,among others, the above-mentioned initiatives.7. Domestic tourism73.Governments should consider making special efforts to promote domestic tourism in view of itspotential size, spatial density, cultural affinity, language commonality or similarity, and role in arisk-management strategy.8. Environmental and sociocultural considerations74.Environmental and sociocultural considerations should be integrated into policies and plans fortourism development. Collaborative approaches that include the public sector, the private sector andstakeholders can internalize some of the external costs of tourism, thereby preserving the culturalheritage and protecting the environment.9. Human resources development

Page 25E/ESCAP/63/14Page 2275.Countries should consider undertaking surveys to assess workforce requirements by requiredskill level and current and future training requirements in the tourism sector, and develop a nationaltourism training plan. Governments may also wish to consider establishing national tourism-trainingcommittees, consisting of representatives of the Government, training institutions and the tourismindustry. At the regional level, the Network of Asia-Pacific Education and Training Institutes inTourism provides a useful mechanism for cooperation in tourism education and training.10. Regional economic cooperation76.Bilateral, multilateral and subregional cooperation in tourism development should be furtherstrengthened. In particular, countries in Central Asia and South-West Asia should step up their effortsto strengthen subregional cooperation in tourism. Overland travel has great potential for expanding inthe region and can contribute to local economic development. Countries linked by the Asian Highwayand the Trans-Asian Railway share a wealth of historical and cultural heritage as well as unspoilednatural beauty. These countries could jointly promote tourism along the Asian Highway and theTrans-Asian Railway.

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The Role of Tourism in IndiaAmong the various service industries, tourism in India is the largest and fastest-growing in the country. It has a vast impact on the national economy and plays a major role in other aspects of the country's growth and development, especially the creation of jobs.

1. National Economyo The Ministry of Tourism in India reported in 2007 that tourism contributed

6.23 percent of the country's gross domestic product (GDP). Tourism was also responsible for 8.78 percent of the country's total employment. This translated to roughly 53 million jobs and recorded earnings of approximately $10.73 billion. These positive numbers contributed to a growth rate of 24.3 percent compared to previous years.

Sector Development

o India's booming tourism industry benefits specific sectors. Traditional crafts are being developed and promoted by the government because crafts are a key component of India's tourism. Artisans, who usually are from rural areas, get to distribute their crafts to a bigger market, hopefully fueling growth in the rural communities to which they belong. Another aspect of tourism is India's flora and fauna. The aim is better organization and administration of India's nature and wildlife sanctuaries. This bodes well for the country's efforts at sustainable development of ecological resources.

Medical Tourism

o The country's medical and health care community is another beneficiary of tourism. People from all over the world have discovered they can get the same quality of medical services in India at a lower cost than in other countries. Medical care in India costs 1/10 of what it is in the U.S. or UK, and the quality of service is similar. Tourists also go to India to learn about or benefit from alternative medicine. Non-Western healing techniques are still actively practiced in the country.

Campaign

o The catch phrase of India's tourism campaign is 'Incredible India." Besides the typical heritage sites from India's past, the campaign defines other niche

markets. Rural tourism focuses on the rich culture to be found in the villages. Nature tourism centers on the country's wildlife and nature preserves. Wellness tourism promotes the various medical and healing systems that are practiced in the country. Adventure tourism pushes for development of outdoor recreational activities.

Future Improvements

o As the industry grows, the Ministry of Tourism and its partners plan to explore other niche markets that can be developed. Efforts also are focusing on infrastructure development. Investments are funneled to road, airport and seaport construction and improvement. The hospitality sector and manpower training are also key targets for development.

Economic Importance of Tourism in Indiaupdated: May 28, 2010

Tourism is an increasingly vital part of the Indian economy. Throughout the world, tourism brings money to cities and countries. Tourism also provides jobs for the local residents, further benefiting the destination. India has realized the profits available from this sector. Thanks to its growing economy and promoting itself as a culturally rich and diverse nation, India's tourism industry now brings billions of dollars into the economy each year.

1. About India

o New Delhi is India's capital.

More than 60 years into its independence from British colonial rule, India has developed into a strong player on the world economic stage. As of 2010, more than 1.1 billion people live in India, making it the second most populated country after China. New Delhi is the political capital of India, although Mumbai is the country's the financial center.

2. India's Economy

o Tourism is becoming more and more a vital part of the Indian economy.

Even though most of the population is rural and still works in agriculture, India's service-based economy has rapidly brought about a thriving development, especially in the last 20 years when India liberalized its markets. The services sector employs about 30 percent of India's workforce, yet provides about half of its output. India depended on its large English-speaking, well-educated workforce to develop a burgeoning technology sector, as well. Tourism is a growing portion of India's economy with an earnings increase of more than 17 percent from 2009.

3. Reasons for Growth

o The Indian government played an important role in promoting tourism.

India's government, through its Tourism Ministry, developed a National Action Plan for Tourism to develop this portion of the economy. The plan sought to promote tourism as a way to boost socio-economic development, increase employment, preserve the nation's heritage and environment and promote international and domestic tourists to visit India as a way to increase its share of global tourism. Through this plan, the ministry began advertising campaigns at home and abroad. The successful campaign has brought more tourists--and their money--to the country and boosted employment in this sector to more than 20 million people by 2006.

4. Foreign Tourism to India

o The Taj Mahal is one of India's most famous attractions.

In 2006, more than 4 million tourists visited India and spent the equivalent of $8.9 billion U.S. dollars, and this figure rose by about 22 percent each year from 2006 to 2009. Thanks again to its technology and service sectors, foreign business travelers are descending on India in large numbers. Many extend their trips, adding more tourist money to the economy. In fact, foreign tourists from all over the world spend more in India than almost any other country worldwide, according to Economy Watch. Tourists are attracted by India's cultural diversity, temples, scenery and festivals. Each region of India offers something for foreign visitors, from the Taj Mahal and New Delhi in the north, bustling Mumbai in the West to the religious center of Varanasi in central India and any number of its beaches and coastal cities.

5. Indian Travelers Abroad

o Indians are a growing part of their country's tourism sector.

Not only are foreign tourists traveling in India, its own citizens are taking more vacations, as well. The country's economic growth increased its middle-class population. This group is contributing the most to domestic travel thanks to an annual 10 percent increase in disposable income between 2001 and 2006.

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European Journal of Social Sciences – Volume 18, Number 4 (2011)518

Causality between Tourism and Economic Growth: AbstractTourism is one of the most important sectors in the world economy. It is now considered asan efficient tool for promoting economic growth of the host country. Since last fewdecades, tourism industry in India has been growing at a rapid pace and it has vast potentialfor generating employment and earning large amount of foreign exchange besides giving afillip to the country’s overall economic and socio-cultural development. It is thusimperative to examine the dynamics of the relationship between tourism sector expansionand economic growth in India. The study usingpopular time series models for the period spanning from 1978 to 2009, provides theevidence of long-run unidirectional causality from tourism activities to economic growth ofthe country. Therefore, as a part of the policy implications it is necessary that all wings ofthe central and state governments, private bodies and voluntary organisations shouldbecome the active partners in the endeavour to attain sustainable growth in tourism andoverall economy as well.

I. IntroductionIn recent years, the role of tourism in the economic development of a country has been the focus ofstudy and research. It is the general consensus that tourism has been pivotal in social progress as wellas an important vehicle of widening socio-economic and cultural contacts throughout human history.Over the past years, many developing and developed countries have considered tourism as an optionfor sustainable development of their nations. The importance of tourism as a contributor to economic

growth is so widely accepted that year after year throughout the world a massive investment continuesto pour in its development.Tourism has emerged from being a relatively small-scale activity into one of world’s largestindustries and a fastest growing global economic sector of the world economy from the 1960s onwards.The international tourist arrivals have shown an uninterrupted growth from 25 million in 1950, to681million in 1980, to 438 million in 1990 and to 681million in 2000. The international tourist arrivals

Page 2European Journal of Social Sciences – Volume 18, Number 4 (2011)519were 880 million and the corresponding international tourism receipts was US$ 852 million in 2009.The tourist arrivals in Asia and the Pacific were 181 million and corresponding tourism receipt wasUS$ 204 million. As per UNWTO estimates, the worldwide international tourist arrivals increased by 7per cent between January and June 2010. For the full year 2010, UNWTO projects a growth ininternational tourist arrivals of between 3 to 4 per cent. In 2010, tourism is expected to generate 21.7per cent of world gross domestic product; 10 per cent of global capital investments; 9 per cent ofworldwide employment; and 22.2 per cent of worldwide exports of goods and services. All these castfor a significant role of tourism sector in the long-run growth of host countries across the globe.It was in 1945 that the first ever step was taken to popularize the concept of tourism in India, byappointing the Sir John Sargent Committee which in 1946 submitted the report with suggestions of theformation of regional offices at Bombay, Delhi, Calcutta and Madras. And, it came into being in 1949with the set up of a Tourist Traffic Branch along with two regional offices in Bombay and Delhi. It washowever, on 1 March 1958, that a separate Tourist Department in the ministry of Transport andCommunication was established in place of Tourist Traffic Branch in the same ministry. In 1967,tourism elevated to the Ministry of Tourism and Civil Aviation. And, since then the concept of tourismdeveloped and gathered momentum in India.Tourism today has become an important segment of India economy contributing substantially

to sustainable development of the country. India has succeeded in becoming the most preferred placeamongst domestic and overseas travellers. Tourism exposes international travellers to India’s diverseculture. The tourism sector has been instrumental in generating foreign exchange, employmentopportunities and household income for Indians, as it has in many other developing economies. Thus,the development of the tourism sector appears to have been as important as the development of othersectors of the Indian economy.The biggest advantage of the tourism industry is that it can generate maximum employmentopportunity. Tourism helps in regional and economic development. Recent study shows that theglobalisation and open economy helped tourism to emerge as one of the biggest forex earners for India.It brings the opportunity of infrastructure development.The overall development of any country depends especially on the improvement of road,vehicles, communication, water supply, airports and railway stations. Economic progress and industrydevelopment depend completely on the overall development of country. And tourism plays a majorrole in this overall infrastructural advancement. Tourism helps agriculture and other industries directlyand indirectly. In India, the tourism industry helped generate about five million jobs; the foreigntourists buy handicrafts worth around Rs. 10 billion a year; the total income from this smokelessindustry is around Rs. 200 billion; and the regions like Aurangabad in Maharashtra, Khajuraho in MP,Jammu & Kashmir, and Raghurajpur in Orissa have emerged with the help of tourism only.Tourism is therefore, a major engine of growth for Indian economy. Today tourism is thelargest service industry in India, with a contribution of 6.23 per cent to the national Gross DomesticProduct (GDP) and providing 8.78 per cent of the total employment. India witnesses more than 5million annual foreign tourist arrivals and 562 million domestic tourism visits. The tourism industry inIndia generated about US$100 billion in 2008 and that is expected to increase to US$275.5 billion by2018 at a 9.4 per cent annual growth rate. According to World Travel and Tourism Council, India willbe a tourism hotspot from 2009-2018, having the highest 10-year growth potential.As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum,India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of

the world's attractive destinations. It is ranked the 14th best tourist destination for its natural resourcesand 24th for its cultural resources, with many World Heritage Sites, both natural and cultural, richfauna, and strong creative industries in the country. India also bagged 37th rank for its air transportnetwork. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and isexpected to be the second largest employer in the world by 2019. Tourism sector in India is, therefore,

Page 3European Journal of Social Sciences – Volume 18, Number 4 (2011)520growing and it has vast potential for generating employment and earning large amount of foreignexchange besides giving a fillip to the country’s overall economic and social development.It is with this backdrop, this paper is an attempt to investigate the dynamics of the relationshipbetween tourism sector development and economic growth of India for the sample period of 1978 to2009. The study purports to answer the questions: Is there holds a long-run equilibrium relationshipbetween tourism sector development and economic growth in India? And, if a long-run relationshipexists, what is the direction of the causal relationship between them?Above stated the research problem, the rest of the paper is organised as follows: Section IIreviews the related studies, Section III discusses the data and methodology, Section IV makes theanalysis, and Section V summarizes and concludes.

II. Literature ReviewThere exists plenty of literature about the impact of tourism sector expansion on the host country, butthe literature on whether it actually produces any significant economic growth is limited and that toofor emerging countries like India, the empirical researches and evidences are almost non-existent.The researchers and analysts hold the view that the rapid growth of tourism sector causes anincrease of household incomes and government revenues through its multiplier effects, improvementsin the balance of payments, and growth of the tourism industry by itself. As such, the development oftourism has usually been considered a positive contribution to economic growth (Khan et al, 1995; Leeand Kwon, 1995; Lim, 1997 and Oh, 2005).Keeping in view such positive impact of tourism on economic growth many researchers have

investigated the relationship between tourism sector development and economic growth in a country.Using Spain’s economic data, Balaguer and Cantavella-Jorda (2002) examine the role of tourism sectorin the long-run economic development of the country. The hypothesis of tourism-led economic growthwas confirmed by applying cointegration and causality tests. In Turkey, Tosun (1999), Guduz andHatemi (2005) and Zortuk (2009) have also found empirical support for the tourism-led growthhypothesis. Durbarry (2002) also provides the evidence of the tourism-led economic growth by usingthe cointegration and causality tests for Mauritius.Dritsakis (2004) shows that tourism has a long-run economic growth effect for Greece. Oh(2005) on Korean tourism concluded that the increase in tourism income influences the economicgrowth. Kim et al (2006) examine the causal relationship between tourism development and economicgrowth in Taiwan and find a reciprocal relationship between tourism development and economicgrowth.Khalil et al (2007) examines the role of tourism in the short-run economic development in caseof Pakistan through error correction model, and the Causal relationship between tourism receipts andeconomic expansion. The results points out that there is strong relationship among tourism, receiptsand economic expansion which means that economic expansion is necessary for tourism developmentin Pakistan.Wickremasinghe and Ihalanayake (2006) investigate the issue that tourism industry leads toeconomic development for a developing country - Sri Lanka, using annual data from 1960 to 2000. Theresults of the study suggest that there is a significant causal relationship from tourism receipts to theGDP of Sri Lanka.Razaq and Masarwah (2006) discussed the effects of tourism sector on the Jordanian economy.The dimensions of the study clarified causal relationship between the tourism revenues and theeconomic growth, and employment in the tourism sector, and domestic private consumption. JohansenCo-Integration Approach clarified, that there is balanced relation in long-run among the variables ofthe study, while the findings of the short-run analysis pointed out that tourism revenues played basicrole in the most important economic variables.

Page 4European Journal of Social Sciences – Volume 18, Number 4 (2011)521Eugenio-Martin et al (2004) investigate the relationship between tourism and economic growthfor Latin American countries from 1985 through 1998. The empirical results show that tourismdevelopment can contribute to the economic growth of medium or low-income countries, while such arole is unclear for developed countries. Lee and Chang (2008) reached the conclusion that there is aunidirectional relationship running from tourism towards growth for OECD countries whereas abidirectional causal relationship exists for non-OECD countries. Skerritt and Huybers (2005)investigate the effect of international tourism on GDP per capita of 37 developing countries, the resultsindicate that tourism positively affect economic development in these countries.Comparing the relative growth performance of 14 “tourism countries” within a sample of 143countries, Brau, Lanza, and Pigliaru (2003) and Lee and Chang (2008) document that, on the average,tourism enhances the economic growth process; i.e. tourism countries tend to grow faster than all theother sub-groups (OECD, Oil Exporting, LDC, Small). Many developing countries have, thus started toregard tourism as an integral part of their economic growth and development strategies since it servesas a source of scarce financial resources, job creation, foreign exchange earnings, and technicalassistance (Sinclair, 1998; Dieke, 2004).Fayissa et al (2007) using a panel data of 42 African countries, showed that receipts fromtourism industry significantly contribute to economic growth of Sub-Saharan African countries. Inanother study, Fayissa et al (2009) using a panel data of 17 Latin American countries for the years thatspan from 1995 to 2004, investigated the impact of the tourism industry on the economic growth anddevelopment Latin American countries within the framework of the conventional neoclassical growthmodel. The empirical results show that revenues from the tourism industry positively contribute to boththe current level of gross domestic product and the economic growth of Latin American Countries asdo investments in physical and human capital.Kreishan (2010) examines the causality relations between tourism earnings and economicgrowth for Jordan, using annual data covering the period 1970-2009. The findings of the study showed

that there is a positive relationship between tourism development and economic development in thelong-run. Moreover, the Granger causality test results revealed the presence of unidirectional causalityfrom tourism earnings to economic growth.Aliqah and Al-rfou' (2010) attempted to determine the impact of the tourism sector oneconomic growth in Jordan during the period 1990 to 2008 by using descriptive statistical approach.The study concluded that the tourism sector witnessed significant growth in tourism services, tourisminfrastructure, tourism legalisations, institutional framework, and the number of tourist arrivals. Thestudy also revealed that the contributions of the tourism sector in GDP for the years 1990-2008 haveseen variation ranged between 12.3 to 14.6 per cent and increase in the contributions of tourism sector,in the field of employment to become 2.5% of the total manpower recruitment.It is at least inferred from the literature review that developing countries have startedconsidering tourism as an important and integral part of their economic growth and developmentstrategies. It is in this context worthwhile to mention that the literature is almost silent about a causalitystudy between tourism sector development and economic growth in case of India. The current study isan attempt to bridge this research gap.

III. Data and MethodologyThe objective of this paper is to investigate the dynamics of the causal relationship between tourismsector development and economic growth in India for the period spanning from 1978 to 2009. Thisstudy uses annual data on variables – Real Gross Domestic Product (RGDP) which measures theoverall economic growth of the country, and Tourism Foreign Exchange Earnings (TFEE) and ForeignTourist Arrivals (FTA) as measures of tourism sector expansion (Wang and Godbey, 1994; Gunduzand Hatemi-J, 2005; Kim et al, 2006). The time-series data of RGDP, TFEE and FTA variables on

European Journal of Social Sciences – Volume 18, Number 4 (2011)522annual basis have been collected from the RBI database on Indian economy, Bureau of Immigration,and from tourism statistics published by Ministry of Tourism, Government of India.All the variables of the study have been transformed to their natural logarithms to avoid theobvious problems of heteroscedasticity. Then, the stationarity of the variables have been tested by

Augmented Dickey-Fuller unit Roots Test. In the second step, the Johansen’s cointegration test hasbeen performed to assess whether a long-run equilibrium relationship holds between the researchvariables. Finally, the Granger causality test has been applied in the vector error correction frameworkto find out the direction of causal relationship between the cointegrated variables.

IV. Results and DiscussionAt the outset, the Pearson’s correlation coefficient between real GDP and Foreign Arrivals (FTAs) inIndia, and between real GDP and Foreign Exchange Earnings (FEEs) from tourism have beencalculated over the sample period and their significance have been tested by the t-test. The value ofPearson’s correlation coefficient (r) between real GDP and FTAs is 0.985. Similarly, the correlationcoefficient between real GDP and FEEs is 0.988. It shows that these three variables are positivelyrelated over the sample period in India and that to a very high degree of correlation is evident betweenthem. To test whether these values of ‘r’ shows significant relationships between three time series,student’s t-test has been used. The null hypothesis of the test is r = 0 against the alternative of r ≠ 0 forboth the correlations. Since the t-statistic at 30 degrees of freedom exceeds the critical value of ‘t’ at5% level of significance, the null hypotheses are rejected. So, it can be said that the correlationbetween the variables of the study are statistically significant. Correlation, however, does not sayanything about long-run relationship and thus, leaves unsettled the debate concerning the long-runrelationship between tourism sector expansion and economic growth in India.As an essential step of time series empirical analysis, it is first, required to determine the orderof integration for each of the three variables used in the analysis. The Augmented Dickey-Fuller unitroot test has been used for this purpose and the results of such test are reported in Table-1. And, it isclear that the null hypothesis of no unit roots for all the time series are rejected at their first differencessince the ADF test statistic values are less than the critical values at 1%, 5% and 10% levels ofsignificances. Thus, the variables are stationary and integrated of same order, i.e., I(1).In the next step, the cointegration between the stationary variables has been tested by theJohansen’s Trace and Maximum Eigenvalue tests. The results of these tests are shown in Table-2. The

Trace test indicates the existence of one cointegrating equation at 5% level of significance. And, themaximum eigenvalue test makes the confirmation of this result. Thus, the three variables of the studyhave long-run equilibrium relationship between them. But in the short-run there may be deviationsfrom this equilibrium and we have to verify whether such disequilibrium converges to the long-run

European Journal of Social Sciences – Volume 18, Number 4 (2011)523equilibrium or not. And, Vector Error Correction Model can be used to generate this short-rundynamics. Error correction mechanism provides a means whereby a proportion of the disequilibrium iscorrected in the next period. Thus, error correction mechanism is a means to reconcile the short-runand long-run behaviour.The estimation of a Vector Error Correction Model (VECM) requires selection of anappropriate lag length. The number of lags in the model has been determined according to SchwarzInformation Criterion (SIC). The lag length that minimizes the SIC is 1. Then, an error correctionmodel with the computed t-values of the regression coefficients is estimated and the results arereported in Table-3.The estimated coefficient of error-correction term in the LGDP equation is statisticallysignificant and has a negative sign, which confirms that there is not only any problem in the long-runequilibrium relation between the independent and dependent variables in 10% level of significance, butits relative value (-0.063929) for India shows the rate of convergence to the equilibrium state per year.Precisely, the speed of adjustment of any disequilibrium towards a long-run equilibrium is that about6.39 per cent of the disequilibrium in real; GDP is corrected each year.Furthermore, the existence of cointegration implies the existence of Granger causality at least inone direction (Granger, 1988). The negative and statistically significant value of error correctioncoefficient indicates the existence of a long-run causality between the variables of the study. As is evidentfrom Table-3, there exists unidirectional causality running from foreign exchange earnings from tourism toreal GDP in the long-run. However, no short-run causality between variables is indicated. In order to

European Journal of Social Sciences – Volume 18, Number 4 (2011)

524confirm the result of the short-run causality between the ΔLGDP, ΔLFTA and ΔLFEE based onVECM estimates, a standard Granger causality test has been performed based on F-statistics.Table 4: Results of Granger Causality TestThe result in Table-4 indicates that all the null hypotheses are accepted at 5% level ofsignificance. These results support the previous results obtained from VECM about the non-existenceof short-run causality at the 5% level of significance.

V. Summary and ConclusionIn this paper, the relationship between real GDP, foreign tourist arrivals and foreign exchange earningsfrom tourism in a developing country like India has been investigated using popular time seriesmethodologies. The data properties are analyzed to determine the stationarity of time series using theAugmented Dickey-Fuller unit root test which indicates that all the three series are I(1). The results ofthe Cointegration test based on Johansen’s procedure indicate the existence of the cointegrationbetween variables. Therefore, the variables have a long-run equilibrium relationship between them,although they may be in disequilibrium in the short-run. The estimation of vector error correctionmodel based on VAR indicates the existence of long-run unidirectional causality running from foreignexchange earnings from tourism to real GDP in the long-run. However, no short-run causality betweenvariables is indicated.The findings of this study confirms the tourism-led growth hypothesis maintained earlier forother countries that tourism has a positive impact on the economic activity and hence, the GDP growthof India. The study also validates the stable long-run relationship between tourist activities and GDPgrowth rate. It means that if tourists activities increase, the GDP growth rate improves via increase inforeign exchange earnings. It provides the rationale of government role for providing and generatingthe tourism facilities in India. Fortunately, India has several unique opportunities for different types oftourism including traditional tourism, rural tourism, medical tourism, cruise tourism, adventuretourism, and wellness tourism. Its geographical location has made it a historical and cultural hub forthe tourism. The country has great potential in coastal tourism, mountain climbing and layout tourismadventures trip and tremendous opportunities in the areas of echo and safari tourism.

Some of the recent initiatives taken by the Government of India to boost tourism include grantof export house status to the tourism sector and incentives for promoting private investment in the formof income tax exemptions, interest subsidy and reduced import duty. The hotel and tourism-relatedindustry has been declared a high priority industry for foreign investment which entails automaticapproval of direct investment up to 51 per cent of foreign equity and allowing cent per cent non-resident Indian investment and simplifying rules regarding the grant of approval to travel agents, touroperators and tourist transport operators. The government joined hands with leading airlines, hoteliers,holiday resorts and tour operators, and offered them a wide range of incentives and bonuses during theperiod between April and December, 2009.In spite of the aforesaid initiatives, the major constraints in the development of tourism in India isthe non-availability of adequate infrastructure including adequate air seat capacity, accessibility to touristdestinations, accommodation, and trained manpower in sufficient number. Besides, the poor visitor

European Journal of Social Sciences – Volume 18, Number 4 (2011)525experience is another obstacle in the growth of tourism sector which is due to inadequate infrastructuralfacilities, poor hygienic conditions and incidents of touting and harassment of tourists in some places.So the following suggestions may be put forward for the growth of tourism sector in India:First, the Government of India should concentrate on the means of transportation, communication andpower for the promotion of tourism industry in the country; Second, to attract the foreign tourist, thesecurity issues should be handled in the best possible manner; Third, as the tax structure plays a vitalrole in industrialization process, the government should give tax incentives to the air fares, hotels andother tourism related industries; Fourth, the cultural and traditional festivals should be organized tocreate attractions for foreign tourists; Fifth, the journals, brushers with maps and proper guidanceshould be placed in all important hotels and tourists gateways so that the tourist from any corner of theworld can benefit from it without any communication barrier; Sixth, both the electronic and print

media should be encouraged to play an important role in enhancing the demand for tourism in Indiathrough aggressive advertisement; Seventh, the eco-tourism needs to be promoted so that tourism inIndia helps in preserving and sustaining the diversity of the country's natural and culturalenvironments; Last but not the least, tourism in India should be developed in such a way that itaccommodates and entertains visitors in a way that is minimally intrusive to the environment andsustains and supports the native cultures in the locations it is operating in.tourism dimension. In terms of lending, direct Bank operations have invested in infrastructure, which facilitates tourism development. Others that have tried to mitigate the negative impacts of tourism, such as the spread of diseases such as HIV/AIDS. In terms of strategic and policy advice, the Bank has supported projects that were environmentally and socially sustainable and that helped reduce poverty. The assessment looked at projects that focus on economic development through infrastructure provision. Among the 1,500 or so projects that were appraised, 32 had tourism as a central or significant feature. Only eight of the 32 provided any real quantification of the benefits of tourism. A careful look at these eight revealed that larger infrastructure investment projects were effective in providing benefits from tourism. Smaller projects with investment in improving facilities and providing technical assistance were more effective and yielded higher returns. Projects involving cultural site development and promotion were also effective in yielding large benefits. In terms of environmental impacts, the projects generally followed good practice and ensured that negative environmental impacts were avoided or mitigated. Social impacts were studied in less detail, according to the study. 68 VII. THE ROLE OF GOVERNMENT Government intervention may be necessary to enhance the contribution of tourism to socio-economic development and poverty reduction. One of the principal roles of Governments is to set policy and legislative frameworks for tourism. Two main reasons why governments should formulate tourism development strategy are: 68 Anil Markandya, Tim Taylor and Suzette Pedroso, “Tourism and Sustainable Development: Lessons from Recent World Bank Experience”, (Washington, D.C.: IBRD, 2003), pp. 20-21. http://info.worldbank.org/etools/docs/library/107771/SD_Communication/epublish/zip_files/b iodiversity_russia2003/pdf/TourismSDMarkandya-Taylor.pdf

Page 2-84- (1) the tourist industry has many negative externalities, in particular negative social and environmental impacts that need to be regulated and managed at national or local levels, and (2) tourism can offer major opportunities for local economic development, which can enhance the positive effects of tourism on local socio-economic development and poverty reduction. In India, the Planning Commission has identified tourism as one of the major vehicles for generating employment and promoting

sustainable livelihoods. Real progress can be facilitated by using a wide range of instruments. A number of these have been identified by the World Tourism Organization and the United Nations Environment Programme and are categorized into measurement instruments (sustainability indicators and monitoring; identification of limits), command and control instruments (legislation, regulation, rules and licensing; land- use planning and development control), economic instruments (pricing, charges and taxation; property rights and trading; financial incentives; and voluntary contributions), voluntary instruments (guidelines and codes of conduct, reporting and auditing, and voluntary certification), and supporting instruments (infrastructure provision and management, capacity-building, and marketing and information services). The precise mix of policies and instruments will vary depending on the situation, objectives and government structures. A. Tourism ministries As tourism moves up the national agenda, the government departments dealing with tourism may need to be upgraded and strengthened. In order to achieve sustainable management of tourism, tourism ministry staff need coordination, networking and support of colleagues in other ministries and in a range of subnational administrations. These needs emerge because the administration and governance of

Page 3-85- tourism takes places in localities where tourists and host communities interact, while regulations and incentives are applied within a framework laid down at the national level. Tourism ministries have to be alert to the impact of institutional fragmentation on the governance of tourism. Major decisions about planning, management of cultural and natural assets, labour regulations, environmental impact assessments, financial incentives and taxation policy are often the responsibility of other ministries, where there might not be enough awareness about the impact on tourism policies and plans. The functions of tourism ministries should go beyond regulating tourism businesses, marketing and promotion and include wider consultation and coordination. For example, air transport has changed considerably in recent years due in part to policy initiatives, such as deregulation of air services, adding a substantial number of new routes and allowing operations by low-cost carriers; all of which would aim to increase the number of tourists. While the economic benefits of tourism are now explicitly evaluated in aviation policy in countries such as Singapore, tourism ministries also have to consider the implications for tourism strategies, policies and plans. Tourism ministries can provide the government and its agencies with good quality, systematic data, particularly about the effects of different types of tourism on local socio-economic development. Provision of such data can help to substantiate the contribution of tourism and convince policy makers. B. Tourism plans Tourism master plans are useful tools for identifying areas with tourism

potential, determining tourism strategy and structuring the provision of infrastructure,

Page 4-86- investment promotion and financial and other incentives. Governments need to ensure that master plans and tourism development strategies address local economic development goals, the geographic distribution of tourism activities and poverty reduction. Many governments have been increasing their efforts to identify and plan tourism development located in areas that can help poor communities. In addition to planning based on inventories of natural and cultural assets, information about the spatial distribution of poverty should also be used when planning tourism infrastructure and related tourism development projects. Such information can help with plans to develop clusters of activities and attractions and tourism routes, as well as stimulate cooperation and partnerships within and between local areas. Plans based on clustering assume that tourists need a range of complementary tourism services and attractions supported by infrastructure to make the area accessible. C. Empowerment of poor communities, property rights and development control Government agencies can promote the empowerment of communities in planning and managing tourism assets by initiating partnership approaches that include poor people. Engaging the poor is particularly important in order to identify opportunities that fit their livelihood strategies and overcome barriers to employment and enterprise. Policy makers need to consider the appropriate mix between promoting the formal and informal sector as this is a key variable for maximizing local economic development and poverty reduction. One example of development control and empowerment in Nepal is described in box 9. This activity in Lumbini is

Page 5-87- part of the government’s Tourism for Rural Poverty Alleviation Programme (TRPAP). Box 9. Nepal: Organizing local opportunities in Lumbini The Tourism for Rural Poverty Alleviation Programme (TRPAP) implemented by the government and the Nepal Tourism Board has been working with local communities in and around Lumbini, the birthplace of Lord Buddha, to create more benefits from the large number of tourists visiting the area. The TRPAP facilitated the organization of functional groups involving various tourism-related activities. The Rickshaw Pullers Functional Group is example. The group has 70 members (rickshaw owners) and TRPAP has supported the following activities: • Form the Rickshaw Puller Group • Lobby for a policy of “No Four-Wheel Entry into the Area”

• Fix the price of rickshaw services • Introduce a queue system to provide equal opportunity to all members • Introduce a compulsory identity card for all group members • Provide training on cleanliness and hygiene • Training in customer behaviour and guest relations • Training in English for basic communication • Provide a uniform • Provide venture capital funds (soft loans) to purchase, decorate and repair rickshaws. The following good practices resulted: • Collaboration with the main local stakeholder to monitor the local transportation system, standardize services and orient the rickshaw pullers made monitoring and control easier. • Identification cards with the local stakeholder’s stamp helped give the rickshaw pullers recognition by tourists. • A sense of ownership was created by the Rickshaw Pullers Functional Group along with continuous awareness about the benefits of being in the group. • Local transportation services were promoted, which increased economic opportunities for local poor people. Penalties were introduced for rickshaw pullers who break the rules. 70 to 100 rickshaw pullers have benefited as follows:. • Their monthly income increased by more than 70 per cent • They earn US$7 to US$11 a day during the high season (4 months per year) and US$3 to US$5 a day during the low season (4 months per year). Another four months is the rainy season, when there is almost no business. • More tourists are using rickshaws. • There are visible changes in family income. • They can receive soft loans to buy, decorate and repair rickshaws. • They have increased awareness of economic opportunities offered by tourism. • Services and communication have improved for them. • They are recognized by all local stakeholders in Lumbini. Source: SNV Nepal, ‘Lessons Learned on Pro Poor Sustainable Tourism in Nepal’, SNV Nepal, 2006.

Page 6-88- In Viet Nam, provincial and district-level governments have been given greater responsibility for tourism planning and development in line with the overall decentralization of governance. Provincial and district governments have the statutory duty to consult and collaborate with other government agencies, as well as with other tourism stakeholders, such as businesses and local communities. Overall, this decentralized and a more integrated approach to tourism planning is a significant step towards enhancing opportunities for incorporating poverty reduction and other local development priorities into tourism development. D. Legislation and regulations

Several areas of legislation have an impact on the capacity of small-scale producers to develop tourism-related enterprises. These include access to credit, business licensing, employment legislation, environmental health, and health and safety regulations as well as the regulation of micro, small and medium-sized enterprises. Governments need to ensure that people engaged in tourism are remunerated fairly and receive adequate social protection in areas such as the minimum wage, policies on equal opportunities, holiday entitlement and security of employment. In Viet Nam, for example, the Tourism Law was designed to create more opportunities at the local level. Box 10 outlines some of the articles of the Tourism Law, as well as the opportunities created and the expected results at the local level in terms of empowerment, property rights and control over development. Article 6: Tourism Development Policy 6.2. The State shall undertake incentive and prioritized policies on land, finance, credits for foreign and domestic individuals and organizations investing in the following fields: g) Development of tourism whereby having potentials in remote and isolated areas, and in areas with socio-economic difficulties so as to make use of the labour force, consume goods and services on the spot, contributing to raising intellectual level of the people, and to hunger elimination and poverty reduction. Results: Incentives and directives are to be made available for developing tourism in disadvantaged areas that address poverty reduction and hunger eradication. Further incentives such as local hiring and training, purchasing from local suppliers could also be included in the sub-decrees that guide implementation. Opportunity: Enhance greater opportunities for local involvement in tourism planning. Article 7. Participation of Local Community in Tourism Development 7.1. The local community shall have rights to participate in and benefit from tourism activities; be liable to preserve tourism resources and nurture local cultural identity; maintain security, safety, social orders and environmental sanitation to create the attractiveness of tourism. 7.2. The local community shall be enabled to participate in the investment of tourism development, restoration and enrichment of various types of traditional cultures, folklore arts, crafts, goods production in service of tourists, contributing to uplift the material and spiritual life of the local people. Results: Local communities are now provided with a strong and clear legal position to participate and benefit from, tourism development. Opportunity: Avoid inadvertent barriers to poor peoples’ participation Article 62. Types of Tourism Accommodation Establishments Tourism accommodation establishment now includes the legal recognition of “Household room for tourist lease”. For the first time, individual families can have legal recognition as

accommodation providers for tourists. Article 78. Narrator: This is a new category of guide. Tour guides are required to hold university degrees, but a “narrator” is defined as a “person who delivers on-site interpreting services to the tourists at the tourist resort and tourist attraction.” A higher education degree is not required to work in this capacity. This is extremely significant as the vast majority of rural poor do not have the opportunities for higher education, but they are the most appropriate interpreters of their culture. Results: Some barriers to poor peoples’ participation under the old Tourism Ordinance have now been removed by broadening the types of tourism products and services that may now be officially recognized. Source: Douglas Hainsworth, Senior Tourism Advisor, SNV-Vietnam, no date.

Page 8-90- E. Training, capacity-building and certification The needs and existing capacity of local people have to be assessed to ascertain where training interventions would be most useful. There is a need to strengthen informal learning methods and in-place on-the-job training. The certification of guides has been used in several places to control quality and supply, and to ensure minimum standards of service and knowledge. In Viet Nam, a new category of “narrator” has been introduced, which enables people without a formal education to work as local guides. (See box 7.) At Keoladeo National Park, in India, local rickshaw drivers are registered with the park to take tourists around the site. The government is often required to play the lead role when issues of women’s participation and empowerment in the tourism industry are involved. One example is the government-run TRPAP in Nepal. TRPAP has been running different empowerment schemes for women and has emphasized their participation in various tourism activities. The programme has given training to local women on craft skills to make souvenir items. Women are also ready to be trained in order to provide several tourism services, such as running a grocery store and serving as tour guides. In such a case, TRPAP can help provide financing to increase capacity as well as training. 69 National and local governments can provide incentives, pre-employment training and continuing education programmes to promote employment of local people in private tourism enterprises. F. Taxes and levies Taxes on goods, services and transactions, which provide funds for government at the local or national level can be used specifically to support either poor communities or the environments that provide their livelihood. For instance, 69 Nepal Tourism Board, E-Newsletter, 18 February 2005, p. 5.

www.anmausa.org/tourism/2005_02_18.pdf

Page 9-91- Bhutan levies a high daily royalty on tourists, which is used to fund education and health programmes in remote rural areas. Government policies on tourism taxation must be evaluated and designed in ways that are comprehensive and integrated in order that the necessary revenues are balanced against the affect on tourism markets and the profits of tourism businesses. G. Microfinancing and facilitating market access and linkages The poor have limited access to the tourism market for several reasons, including lack of business skills, low educational levels, demanding regulations, inability to escape severe poverty, poor health and social exclusion. Governments can reduce the bureaucracy that small enterprises face, and create advisory services on business development, provide seed-funding for entrepreneurs, develop business linkages with established operators, assist micro, small and medium-sized enterprises to form production or marketing cooperatives and provide educational, technical and professional training programmes to improve quality and business standards. Examples of linkages and cluster mechanisms described in box 11 can assist in market access.

Page 10-92- H. Marketing Destination marketing is increasingly the remit of the private sector, private- public sector partnerships or clusters. (See chapter VIII.) This means that micro, small and medium-sized enterprises and poorer producers may be excluded from the formal marketing processes and distribution channels. To address this problem, Governments can encourage discussions between national and regional tourist boards and the institutions involved in local economic development and resource conservation. They can also encourage the organization of marketing campaigns to promote responsible tourism practices and suppliers, and give preferential marketing terms to suppliers that adopt sustainable, responsible, poverty alleviation practices. Box 11. Nepal: Two examples of creating microenterprise opportunities for the poor The Explore Nepal Group spent approximately US$ 57,000 on constructing and furnishing the Koshi Tapu Wildlife Camp. All materials, except the toilet, were sourced from local entrepreneurs of the Koshi Tapu area. Each year approximately US$ 5,700 is spent for Bhojan Griha Restaurant in Kathmandu, another business of the Explore Nepal Group, in order to renovate or replace the “soft furniture” of the restaurant, including items such as candles, arts and crafts, tables and mats. This furniture is acquired only from women’s handicraft associations such as Dhukuti and Sano Hastakala. The Tiger Mountain Group supports local entrepreneurs while minimizing distortions in the local market, such as price rises that would have an adverse impact on local people. The Temple Tiger Jungle Lodges and Wildlife Camp in Pokhara buy supplies from local

markets but at established retail prices. Buying locally has the added benefit of significantly reducing the company’s transport costs. Ensuring that the sources of supply are diverse and the benefits within the community widespread has proven to be a challenge because lodge employees tend to favour local businesses with connections to their relatives. To overcome this tendency, the lodge identifies services and supplies in an open, accountable and transparent manner. It develops clear criteria for the supplies and services sought and ensures that the criteria are widely disseminated among community members. Source: The Netherlands Development Organization (SNV) Nepal, 2006.

Page 11-93- Tourism market analysts have identified a number of market trends which should inform the strategies and marketing decisions of policy-makers and investors in Asia and the Pacific. One important trend is that tourists are increasingly willing to travel long distances for longer periods and to take more frequent holidays. There is growing demand for nature, adventure, activity and health-related holidays, with more emphasis on individualism and flexibility. This leads to more independent travel and tailor-made packages which enable tourists to seek authenticity through enhanced knowledge or more interactions with other cultures. The market is becoming more demanding in standards of service, product and accommodation. Tourists are making greater use of the internet for researching destinations and booking holiday travel and accommodation, often based on growing awareness of the environmental and social impacts of tourism. While keeping up with market trends in international tourism, much can be done through careful marketing to alleviate the uneven geographic distribution of tourists and to spread the benefits of the industry. For instance, the Nepal Tourism Board has given particular promotional emphasis to areas of the country that traditionally receive fewer visitors, such as the Chitwan Hills. Promotion builds on extensive product development, which has improved facilities and enhanced the visitors’ experience, and has succeeded in extending the range of tourism products and the tourism season in Nepal. In other countries, as shown in box 12, unique experiences have been developed and marketed as a tourism niche market.

Page 12-94- Box 12. Mongolia and the Islamic Republic of Iran: Nomadic tourism Nomadic community-based tourism in Mongolia Since 2005, Mongolia has adopted a new approach to community-based tourism, the “ger-to-ger bottom-up approach”.a The country focuses particularly on promoting appropriate socio-economic linkages between the rural nomadic groups in Mongolia, their local communities and the public and private sectors. This initiative has led to the establishment of 12 community routes over 3 regional

provinces and 5 community-based ticketing/information centres. Rural nomadic groups and their communities are gaining valuable knowledge and skills that lead to greater local ownership and management. Instead of competing with tour operators, communities are learning how to cooperate and benefit from mobilizing “ethical” partnerships within the private and public sectors, while maintaining their independence. Such a regional development concept contributes to the empowerment of local communities and their nomadic herders. Apart from the training they receive, the partnerships also help in the development of economically viable travel routes. For example, along the “Dundgovi travel route” the tourist is invited to share the harmonic melodies and natural wonders of the Nobel Rock Palace or Fortress with nomadic herders, while travelling by horseback, in a horse-drawn cart, riding a camel or trekking and staying at one of the community’s ger. Of the revenues from tickets (trail passes), 55 per cent goes directly to families and 10 per cent to their community environmental fund. Nomadic tourism development in the Islamic Republic of Iran In 2006 the Iranian Cultural Heritage and Tourism Organization entered into a memorandum of understanding with the Nomads’ Issues Organization to establish the Nomadic Cooperative Association, which was entrusted with the task of attracting foreign tourists to nomadic regions of the country. Persian society was formerly a nomadic one. Thus, nomads are considered to be a cultural treasure which needs to be preserved. The Department of Tourism Development in Nomadic Regions was thus established to provide economic development for the nomads by carrying out technical and infrastructural studies. Along with the Department, the Nomadic Tourism Institute undertakes measures in marketing, advertising and attracting foreign tourists by organizing tours in nomadic areas, providing posters, catalogues, pictures and other advertising instruments. In addition, a special centre will be established in Tehran to provide an outlet for the sale of nomadic products. The authorities hope that devising appropriate tourism programmes for nomadic regions will lead to an increase in the incomes of the nomadic tribes, which would, in turn, raise their standard of living without harming their social systems and traditional lifestyles.

tourism dimension. In terms of lending, direct Bank operations have invested ininfrastructure, which facilitates tourism development. Others that have tried tomitigate the negative impacts of tourism, such as the spread of diseases such asHIV/AIDS. In terms of strategic and policy advice, the Bank has supported projectsthat were environmentally and socially sustainable and that helped reduce poverty.The assessment looked at projects that focus on economic development throughinfrastructure provision. Among the 1,500 or so projects that were appraised, 32 hadtourism as a central or significant feature. Only eight of the 32 provided any realquantification of the benefits of tourism. A careful look at these eight revealed thatlarger infrastructure investment projects were effective in providing benefits fromtourism. Smaller projects with investment in improving facilities and providingtechnical assistance were more effective and yielded higher returns. Projects involving

cultural site development and promotion were also effective in yielding large benefits.In terms of environmental impacts, the projects generally followed good practice andensured that negative environmental impacts were avoided or mitigated. Socialimpacts were studied in less detail, according to the study.68

VII. THE ROLE OF GOVERNMENTGovernment intervention may be necessary to enhance the contribution oftourism to socio-economic development and poverty reduction. One of the principalroles of Governments is to set policy and legislative frameworks for tourism. Twomain reasons why governments should formulate tourism development strategy are:68 Anil Markandya, Tim Taylor and Suzette Pedroso, “Tourism and Sustainable Development:Lessons from Recent World Bank Experience”, (Washington, D.C.: IBRD, 2003), pp. 20-21.http://info.worldbank.org/etools/docs/library/107771/SD_Communication/epublish/zip_files/biodiversity_russia2003/pdf/TourismSDMarkandya-Taylor.pdf

-84-(1) the tourist industry has many negative externalities, in particular negative socialand environmental impacts that need to be regulated and managed at national or locallevels, and (2) tourism can offer major opportunities for local economic development,which can enhance the positive effects of tourism on local socio-economicdevelopment and poverty reduction. In India, the Planning Commission has identifiedtourism as one of the major vehicles for generating employment and promotingsustainable livelihoods.Real progress can be facilitated by using a wide range of instruments. Anumber of these have been identified by the World Tourism Organization and theUnited Nations Environment Programme and are categorized into measurementinstruments (sustainability indicators and monitoring; identification of limits),command and control instruments (legislation, regulation, rules and licensing; land-use planning and development control), economic instruments (pricing, charges andtaxation; property rights and trading; financial incentives; and voluntarycontributions), voluntary instruments (guidelines and codes of conduct, reporting andauditing, and voluntary certification), and supporting instruments (infrastructureprovision and management, capacity-building, and marketing and informationservices). The precise mix of policies and instruments will vary depending on thesituation, objectives and government structures.A. Tourism ministriesAs tourism moves up the national agenda, the government departments dealingwith tourism may need to be upgraded and strengthened. In order to achievesustainable management of tourism, tourism ministry staff need coordination,networking and support of colleagues in other ministries and in a range of subnationaladministrations. These needs emerge because the administration and governance of

Page 3-85-tourism takes places in localities where tourists and host communities interact, whileregulations and incentives are applied within a framework laid down at the nationallevel. Tourism ministries have to be alert to the impact of institutional fragmentation

on the governance of tourism. Major decisions about planning, management ofcultural and natural assets, labour regulations, environmental impact assessments,financial incentives and taxation policy are often the responsibility of other ministries,where there might not be enough awareness about the impact on tourism policies andplans. The functions of tourism ministries should go beyond regulating tourismbusinesses, marketing and promotion and include wider consultation andcoordination. For example, air transport has changed considerably in recent years due in partto policy initiatives, such as deregulation of air services, adding a substantial numberof new routes and allowing operations by low-cost carriers; all of which would aim toincrease the number of tourists. While the economic benefits of tourism are nowexplicitly evaluated in aviation policy in countries such as Singapore, tourismministries also have to consider the implications for tourism strategies, policies andplans. Tourism ministries can provide the government and its agencies with goodquality, systematic data, particularly about the effects of different types of tourism onlocal socio-economic development. Provision of such data can help to substantiate thecontribution of tourism and convince policy makers. B. Tourism plansTourism master plans are useful tools for identifying areas with tourismpotential, determining tourism strategy and structuring the provision of infrastructure,

Page 4-86-investment promotion and financial and other incentives. Governments need to ensurethat master plans and tourism development strategies address local economicdevelopment goals, the geographic distribution of tourism activities and povertyreduction.Many governments have been increasing their efforts to identify and plantourism development located in areas that can help poor communities. In addition toplanning based on inventories of natural and cultural assets, information about thespatial distribution of poverty should also be used when planning tourisminfrastructure and related tourism development projects. Such information can helpwith plans to develop clusters of activities and attractions and tourism routes, as wellas stimulate cooperation and partnerships within and between local areas. Plans basedon clustering assume that tourists need a range of complementary tourism servicesand attractions supported by infrastructure to make the area accessible. C. Empowerment of poor communities, property rightsand development controlGovernment agencies can promote the empowerment of communities inplanning and managing tourism assets by initiating partnership approaches thatinclude poor people. Engaging the poor is particularly important in order to identifyopportunities that fit their livelihood strategies and overcome barriers to employmentand enterprise. Policy makers need to consider the appropriate mix betweenpromoting the formal and informal sector as this is a key variable for maximizinglocal economic development and poverty reduction. One example of development

control and empowerment in Nepal is described in box 9. This activity in Lumbini is

Page 5-87-part of the government’s Tourism for Rural Poverty Alleviation Programme(TRPAP).Box 9. Nepal: Organizing local opportunities in LumbiniThe Tourism for Rural Poverty Alleviation Programme (TRPAP) implemented by the governmentand the Nepal Tourism Board has been working with local communities in and around Lumbini, thebirthplace of Lord Buddha, to create more benefits from the large number of tourists visiting the area.The TRPAP facilitated the organization of functional groups involving various tourism-relatedactivities. The Rickshaw Pullers Functional Group is example. The group has 70 members (rickshaw owners) and TRPAP has supported the following activities:• Form the Rickshaw Puller Group• Lobby for a policy of “No Four-Wheel Entry into the Area”• Fix the price of rickshaw services• Introduce a queue system to provide equal opportunity to all members• Introduce a compulsory identity card for all group members • Provide training on cleanliness and hygiene • Training in customer behaviour and guest relations• Training in English for basic communication• Provide a uniform • Provide venture capital funds (soft loans) to purchase, decorate and repair rickshaws. The following good practices resulted:• Collaboration with the main local stakeholder to monitor the local transportation system,standardize services and orient the rickshaw pullers made monitoring and control easier. • Identification cards with the local stakeholder’s stamp helped give the rickshaw pullersrecognition by tourists. • A sense of ownership was created by the Rickshaw Pullers Functional Group along withcontinuous awareness about the benefits of being in the group. • Local transportation services were promoted, which increased economic opportunities forlocal poor people. Penalties were introduced for rickshaw pullers who break the rules. 70 to 100 rickshaw pullers have benefited as follows:.• Their monthly income increased by more than 70 per cent • They earn US$7 to US$11 a day during the high season (4 months per year) and US$3 toUS$5 a day during the low season (4 months per year). Another four months is the rainyseason, when there is almost no business. • More tourists are using rickshaws. • There are visible changes in family income. • They can receive soft loans to buy, decorate and repair rickshaws. • They have increased awareness of economic opportunities offered by tourism.• Services and communication have improved for them.• They are recognized by all local stakeholders in Lumbini.Source: SNV Nepal, ‘Lessons Learned on Pro Poor Sustainable Tourism in Nepal’, SNV Nepal, 2006.

Page 6-88-In Viet Nam, provincial and district-level governments have been givengreater responsibility for tourism planning and development in line with the overalldecentralization of governance. Provincial and district governments have the statutoryduty to consult and collaborate with other government agencies, as well as with othertourism stakeholders, such as businesses and local communities. Overall, this

decentralized and a more integrated approach to tourism planning is a significant steptowards enhancing opportunities for incorporating poverty reduction and other localdevelopment priorities into tourism development. D. Legislation and regulationsSeveral areas of legislation have an impact on the capacity of small-scaleproducers to develop tourism-related enterprises. These include access to credit,business licensing, employment legislation, environmental health, and health andsafety regulations as well as the regulation of micro, small and medium-sizedenterprises. Governments need to ensure that people engaged in tourism areremunerated fairly and receive adequate social protection in areas such as theminimum wage, policies on equal opportunities, holiday entitlement and security ofemployment.In Viet Nam, for example, the Tourism Law was designed to create moreopportunities at the local level. Box 10 outlines some of the articles of the TourismLaw, as well as the opportunities created and the expected results at the local level interms of empowerment, property rights d control over development.

-89-Box 10. Viet Nam: Empowerment through tourism legislation In 2003, the Vietnam National Administration of Tourism (VNAT) was given responsibility fordrafting the nation’s first law on tourism. VNAT received support from UNWTO and theNetherlands in order to incorporate international best practices when drafting the law. As aresult the Law on Tourism reflects concerted efforts aimed at ensuring that future tourismdevelopment addresses poverty reduction and sustainable development objectives. Someimportant elements of the law are described in terms of the opportunity created and the expectedresults.Opportunity: Provide incentives and directives for developing tourism for poverty reductionpurposesArticle 6: Tourism Development Policy6.2. The State shall undertake incentive and prioritized policies on land, finance, credits forforeign and domestic individuals and organizations investing in the following fields:g) Development of tourism whereby having potentials in remote and isolated areas,and in areas with socio-economic difficulties so as to make use of the labour force,consume goods and services on the spot, contributing to raising intellectual level of thepeople, and to hunger elimination and poverty reduction.Results: Incentives and directives are to be made available for developing tourism indisadvantaged areas that address poverty reduction and hunger eradication. Further incentivessuch as local hiring and training, purchasing from local suppliers could also be included in thesub-decrees that guide implementation.Opportunity: Enhance greater opportunities for local involvement in tourism planning.Article 7. Participation of Local Community in Tourism Development7.1. The local community shall have rights to participate in and benefit from tourism activities;be liable to preserve tourism resources and nurture local cultural identity; maintain security,safety, social orders and environmental sanitation to create the attractiveness of tourism.7.2. The local community shall be enabled to participate in the investment of tourismdevelopment, restoration and enrichment of various types of traditional cultures, folklore arts,crafts, goods production in service of tourists, contributing to uplift the material and spiritual lifeof the local people.Results: Local communities are now provided with a strong and clear legal position toparticipate and benefit from, tourism development.Opportunity: Avoid inadvertent barriers to poor peoples’ participation

Article 62. Types of Tourism Accommodation EstablishmentsTourism accommodation establishment now includes the legal recognition of “Household roomfor tourist lease”. For the first time, individual families can have legal recognition asaccommodation providers for tourists. Article 78. Narrator: This is a new category of guide. Tour guides are required to hold universitydegrees, but a “narrator” is defined as a “person who delivers on-site interpreting services to thetourists at the tourist resort and tourist attraction.” A higher education degree is not required towork in this capacity. This is extremely significant as the vast majority of rural poor do not havethe opportunities for higher education, but they are the most appropriate interpreters of theirculture. Results: Some barriers to poor peoples’ participation under the old Tourism Ordinance havenow been removed by broadening the types of tourism products and services that may now beofficially recognized. Source: Douglas Hainsworth, Senior Tourism Advisor, SNV-Vietnam, no date.

Page 8-90-E. Training, capacity-building and certificationThe needs and existing capacity of local people have to be assessed toascertain where training interventions would be most useful. There is a need tostrengthen informal learning methods and in-place on-the-job training. Thecertification of guides has been used in several places to control quality and supply,and to ensure minimum standards of service and knowledge. In Viet Nam, a newcategory of “narrator” has been introduced, which enables people without a formaleducation to work as local guides. (See box 7.) At Keoladeo National Park, in India,local rickshaw drivers are registered with the park to take tourists around the site. The government is often required to play the lead role when issues of women’sparticipation and empowerment in the tourism industry are involved. One example isthe government-run TRPAP in Nepal. TRPAP has been running differentempowerment schemes for women and has emphasized their participation in varioustourism activities. The programme has given training to local women on craft skills tomake souvenir items. Women are also ready to be trained in order to provide severaltourism services, such as running a grocery store and serving as tour guides. In such acase, TRPAP can help provide financing to increase capacity as well as training.69

National and local governments can provide incentives, pre-employmenttraining and continuing education programmes to promote employment of localpeople in private tourism enterprises. F. Taxes and leviesTaxes on goods, services and transactions, which provide funds forgovernment at the local or national level can be used specifically to support eitherpoor communities or the environments that provide their livelihood. For instance,69 Nepal Tourism Board, E-Newsletter, 18 February 2005, p. 5.www.anmausa.org/tourism/2005_02_18.pdf

Page 9-91-Bhutan levies a high daily royalty on tourists, which is used to fund education andhealth programmes in remote rural areas.

Government policies on tourism taxation must be evaluated and designed inways that are comprehensive and integrated in order that the necessary revenues arebalanced against the affect on tourism markets and the profits of tourism businesses.G. Microfinancing and facilitating market access and linkagesThe poor have limited access to the tourism market for several reasons,including lack of business skills, low educational levels, demanding regulations,inability to escape severe poverty, poor health and social exclusion. Governments canreduce the bureaucracy that small enterprises face, and create advisory services onbusiness development, provide seed-funding for entrepreneurs, develop businesslinkages with established operators, assist micro, small and medium-sized enterprisesto form production or marketing cooperatives and provide educational, technical andprofessional training programmes to improve quality and business standards.Examples of linkages and cluster mechanisms described in box 11 can assist in marketaccess.

Page 10-92-H. MarketingDestination marketing is increasingly the remit of the private sector, private-public sector partnerships or clusters. (See chapter VIII.) This means that micro,small and medium-sized enterprises and poorer producers may be excluded from theformal marketing processes and distribution channels. To address this problem,Governments can encourage discussions between national and regional tourist boardsand the institutions involved in local economic development and resourceconservation. They can also encourage the organization of marketing campaigns topromote responsible tourism practices and suppliers, and give preferential marketingterms to suppliers that adopt sustainable, responsible, poverty alleviation practices. Box 11. Nepal: Two examples of creating microenterprise opportunities for the poorThe Explore Nepal Group spent approximately US$ 57,000 on constructing andfurnishing the Koshi Tapu Wildlife Camp. All materials, except the toilet, were sourcedfrom local entrepreneurs of the Koshi Tapu area. Each year approximately US$ 5,700 isspent for Bhojan Griha Restaurant in Kathmandu, another business of the Explore NepalGroup, in order to renovate or replace the “soft furniture” of the restaurant, includingitems such as candles, arts and crafts, tables and mats. This furniture is acquired only fromwomen’s handicraft associations such as Dhukuti and Sano Hastakala.The Tiger Mountain Group supports local entrepreneurs while minimizing distortions inthe local market, such as price rises that would have an adverse impact on local people.The Temple Tiger Jungle Lodges and Wildlife Camp in Pokhara buy supplies from localmarkets but at established retail prices. Buying locally has the added benefit ofsignificantly reducing the company’s transport costs. Ensuring that the sources of supply are diverse and the benefits within the communitywidespread has proven to be a challenge because lodge employees tend to favour localbusinesses with connections to their relatives. To overcome this tendency, the lodgeidentifies services and supplies in an open, accountable and transparent manner. Itdevelops clear criteria for the supplies and services sought and ensures that the criteria arewidely disseminated among community members.Source: The Netherlands Development Organization (SNV) Nepal, 2006.

Page 11

-93-Tourism market analysts have identified a number of market trends whichshould inform the strategies and marketing decisions of policy-makers and investorsin Asia and the Pacific. One important trend is that tourists are increasingly willing totravel long distances for longer periods and to take more frequent holidays. There isgrowing demand for nature, adventure, activity and health-related holidays, with moreemphasis on individualism and flexibility. This leads to more independent travel andtailor-made packages which enable tourists to seek authenticity through enhancedknowledge or more interactions with other cultures. The market is becoming moredemanding in standards of service, product and accommodation. Tourists are makinggreater use of the internet for researching destinations and booking holiday travel andaccommodation, often based on growing awareness of the environmental and socialimpacts of tourism.While keeping up with market trends in international tourism, much can bedone through careful marketing to alleviate the uneven geographic distribution oftourists and to spread the benefits of the industry. For instance, the Nepal TourismBoard has given particular promotional emphasis to areas of the country thattraditionally receive fewer visitors, such as the Chitwan Hills. Promotion builds onextensive product development, which has improved facilities and enhanced thevisitors’ experience, and has succeeded in extending the range of tourism productsand the tourism season in Nepal. In other countries, as shown in box 12, uniqueexperiences have been developed and marketed as a tourism niche market.

Page 12-94-Box 12. Mongolia and the Islamic Republic of Iran: Nomadic tourismNomadic community-based tourism in MongoliaSince 2005, Mongolia has adopted a new approach to community-based tourism, the“ger-to-ger bottom-up approach”.a

The country focuses particularly on promotingappropriate socio-economic linkages between the rural nomadic groups in Mongolia, theirlocal communities and the public and private sectors.This initiative has led to the establishment of 12 community routes over 3 regionalprovinces and 5 community-based ticketing/information centres. Rural nomadic groupsand their communities are gaining valuable knowledge and skills that lead to greater localownership and management. Instead of competing with tour operators, communities arelearning how to cooperate and benefit from mobilizing “ethical” partnerships within theprivate and public sectors, while maintaining their independence.Such a regional development concept contributes to the empowerment of localcommunities and their nomadic herders. Apart from the training they receive, thepartnerships also help in the development of economically viable travel routes. Forexample, along the “Dundgovi travel route” the tourist is invited to share the harmonicmelodies and natural wonders of the Nobel Rock Palace or Fortress with nomadic herders,while travelling by horseback, in a horse-drawn cart, riding a camel or trekking andstaying at one of the community’s ger. Of the revenues from tickets (trail passes), 55 percent goes directly to families and 10 per cent to their community environmental fund.Nomadic tourism development in the Islamic Republic of IranIn 2006 the Iranian Cultural Heritage and Tourism Organization entered into amemorandum of understanding with the Nomads’ Issues Organization to establish theNomadic Cooperative Association, which was entrusted with the task of attracting foreign

tourists to nomadic regions of the country. Persian society was formerly a nomadic one. Thus, nomads are considered to be acultural treasure which needs to be preserved. The Department of Tourism Developmentin Nomadic Regions was thus established to provide economic development for thenomads by carrying out technical and infrastructural studies. Along with the Department,the Nomadic Tourism Institute undertakes measures in marketing, advertising andattracting foreign tourists by organizing tours in nomadic areas, providing posters,catalogues, pictures and other advertising instruments.In addition, a special centre will be established in Tehran to provide an outlet for thesale of nomadic products.The authorities hope that devising appropriate tourism programmes for nomadicregions will lead to an increase in the incomes of the nomadic tribes, which would, in turn,raise their standard of living without harming their social systems and traditionallifestyles.Source: <www.gertoger.com/index.html, http://www.asianews.ir/en/main1.asp?a_id=1394>.a Ger is a traditional Mongolian dwelling, commonly known in English as a “yurt”. The ger has awooden framework covered by large pieces of felt, easily assembled and disassembled. This is the html version of the file http://www.unescap.org/ttdw/Publications/TPTS_pubs/pub_2478/pub_2478_ch7.pdf.Google automatically generates html versions of documents as we crawl the web.

Page 1-83- tourism dimension. In terms of lending, direct Bank operations have invested in infrastructure, which facilitates tourism development. Others that have tried to mitigate the negative impacts of tourism, such as the spread of diseases such as HIV/AIDS. In terms of strategic and policy advice, the Bank has supported projects that were environmentally and socially sustainable and that helped reduce poverty. The assessment looked at projects that focus on economic development through infrastructure provision. Among the 1,500 or so projects that were appraised, 32 had tourism as a central or significant feature. Only eight of the 32 provided any real quantification of the benefits of tourism. A careful look at these eight revealed that larger infrastructure investment projects were effective in providing benefits from tourism. Smaller projects with investment in improving facilities and providing technical assistance were more effective and yielded higher returns. Projects involving cultural site development and promotion were also effective in yielding large benefits. In terms of environmental impacts, the projects generally followed good practice and ensured that negative environmental impacts were avoided or mitigated. Social impacts were studied in less detail, according to the study. 68 VII. THE ROLE OF GOVERNMENT Government intervention may be necessary to enhance the contribution of tourism to socio-economic development and poverty reduction. One of the principal roles of Governments is to set policy and legislative frameworks for tourism. Two main reasons why governments should formulate tourism development strategy are: 68 Anil Markandya, Tim Taylor and Suzette Pedroso, “Tourism and Sustainable Development: Lessons from Recent World Bank Experience”, (Washington, D.C.: IBRD, 2003), pp. 20-21. http://info.worldbank.org/etools/docs/library/107771/SD_Communication/epublish/zip_files/b

iodiversity_russia2003/pdf/TourismSDMarkandya-Taylor.pdf

Page 2-84- (1) the tourist industry has many negative externalities, in particular negative social and environmental impacts that need to be regulated and managed at national or local levels, and (2) tourism can offer major opportunities for local economic development, which can enhance the positive effects of tourism on local socio-economic development and poverty reduction. In India, the Planning Commission has identified tourism as one of the major vehicles for generating employment and promoting sustainable livelihoods. Real progress can be facilitated by using a wide range of instruments. A number of these have been identified by the World Tourism Organization and the United Nations Environment Programme and are categorized into measurement instruments (sustainability indicators and monitoring; identification of limits), command and control instruments (legislation, regulation, rules and licensing; land- use planning and development control), economic instruments (pricing, charges and taxation; property rights and trading; financial incentives; and voluntary contributions), voluntary instruments (guidelines and codes of conduct, reporting and auditing, and voluntary certification), and supporting instruments (infrastructure provision and management, capacity-building, and marketing and information services). The precise mix of policies and instruments will vary depending on the situation, objectives and government structures. A. Tourism ministries As tourism moves up the national agenda, the government departments dealing with tourism may need to be upgraded and strengthened. In order to achieve sustainable management of tourism, tourism ministry staff need coordination, networking and support of colleagues in other ministries and in a range of subnational administrations. These needs emerge because the administration and governance of

Page 3-85- tourism takes places in localities where tourists and host communities interact, while regulations and incentives are applied within a framework laid down at the national level. Tourism ministries have to be alert to the impact of institutional fragmentation on the governance of tourism. Major decisions about planning, management of cultural and natural assets, labour regulations, environmental impact assessments, financial incentives and taxation policy are often the responsibility of other ministries, where there might not be enough awareness about the impact on tourism policies and plans. The functions of tourism ministries should go beyond regulating tourism businesses, marketing and promotion and include wider consultation and coordination. For example, air transport has changed considerably in recent years due in part to policy initiatives, such as deregulation of air services, adding a substantial number of new routes and allowing operations by low-cost carriers; all of which would aim to

increase the number of tourists. While the economic benefits of tourism are now explicitly evaluated in aviation policy in countries such as Singapore, tourism ministries also have to consider the implications for tourism strategies, policies and plans. Tourism ministries can provide the government and its agencies with good quality, systematic data, particularly about the effects of different types of tourism on local socio-economic development. Provision of such data can help to substantiate the contribution of tourism and convince policy makers. B. Tourism plans Tourism master plans are useful tools for identifying areas with tourism potential, determining tourism strategy and structuring the provision of infrastructure,

Page 4-86- investment promotion and financial and other incentives. Governments need to ensure that master plans and tourism development strategies address local economic development goals, the geographic distribution of tourism activities and poverty reduction. Many governments have been increasing their efforts to identify and plan tourism development located in areas that can help poor communities. In addition to planning based on inventories of natural and cultural assets, information about the spatial distribution of poverty should also be used when planning tourism infrastructure and related tourism development projects. Such information can help with plans to develop clusters of activities and attractions and tourism routes, as well as stimulate cooperation and partnerships within and between local areas. Plans based on clustering assume that tourists need a range of complementary tourism services and attractions supported by infrastructure to make the area accessible. C. Empowerment of poor communities, property rights and development control Government agencies can promote the empowerment of communities in planning and managing tourism assets by initiating partnership approaches that include poor people. Engaging the poor is particularly important in order to identify opportunities that fit their livelihood strategies and overcome barriers to employment and enterprise. Policy makers need to consider the appropriate mix between promoting the formal and informal sector as this is a key variable for maximizing local economic development and poverty reduction. One example of development control and empowerment in Nepal is described in box 9. This activity in Lumbini is

Page 5-87- part of the government’s Tourism for Rural Poverty Alleviation Programme (TRPAP). Box 9. Nepal: Organizing local opportunities in Lumbini The Tourism for Rural Poverty Alleviation Programme (TRPAP) implemented by the government

and the Nepal Tourism Board has been working with local communities in and around Lumbini, the birthplace of Lord Buddha, to create more benefits from the large number of tourists visiting the area. The TRPAP facilitated the organization of functional groups involving various tourism-related activities. The Rickshaw Pullers Functional Group is example. The group has 70 members (rickshaw owners) and TRPAP has supported the following activities: • Form the Rickshaw Puller Group • Lobby for a policy of “No Four-Wheel Entry into the Area” • Fix the price of rickshaw services • Introduce a queue system to provide equal opportunity to all members • Introduce a compulsory identity card for all group members • Provide training on cleanliness and hygiene • Training in customer behaviour and guest relations • Training in English for basic communication • Provide a uniform • Provide venture capital funds (soft loans) to purchase, decorate and repair rickshaws. The following good practices resulted: • Collaboration with the main local stakeholder to monitor the local transportation system, standardize services and orient the rickshaw pullers made monitoring and control easier. • Identification cards with the local stakeholder’s stamp helped give the rickshaw pullers recognition by tourists. • A sense of ownership was created by the Rickshaw Pullers Functional Group along with continuous awareness about the benefits of being in the group. • Local transportation services were promoted, which increased economic opportunities for local poor people. Penalties were introduced for rickshaw pullers who break the rules. 70 to 100 rickshaw pullers have benefited as follows:. • Their monthly income increased by more than 70 per cent • They earn US$7 to US$11 a day during the high season (4 months per year) and US$3 to US$5 a day during the low season (4 months per year). Another four months is the rainy season, when there is almost no business. • More tourists are using rickshaws. • There are visible changes in family income. • They can receive soft loans to buy, decorate and repair rickshaws. • They have increased awareness of economic opportunities offered by tourism. • Services and communication have improved for them. • They are recognized by all local stakeholders in Lumbini. Source: SNV Nepal, ‘Lessons Learned on Pro Poor Sustainable Tourism in Nepal’, SNV Nepal, 2006.

Page 6-88- In Viet Nam, provincial and district-level governments have been given greater responsibility for tourism planning and development in line with the overall decentralization of governance. Provincial and district governments have the statutory duty to consult and collaborate with other government agencies, as well as with other tourism stakeholders, such as businesses and local communities. Overall, this decentralized and a more integrated approach to tourism planning is a significant step towards enhancing opportunities for incorporating poverty reduction and other local development priorities into tourism development. D. Legislation and regulations Several areas of legislation have an impact on the capacity of small-scale producers to develop tourism-related enterprises. These include access to credit, business licensing, employment legislation, environmental health, and health and safety regulations as well as the regulation of micro, small and medium-sized enterprises. Governments need to ensure that people engaged in tourism are remunerated fairly and receive adequate social protection in areas such as the minimum wage, policies on equal opportunities, holiday entitlement and security of employment. In Viet Nam, for example, the Tourism Law was designed to create more opportunities at the local level. Box 10 outlines some of the articles of the Tourism Law, as well as the opportunities created and the expected results at the local level in terms of empowerment, property rights and control over development.

Page 7-89- Box 10. Viet Nam: Empowerment through tourism legislation In 2003, the Vietnam National Administration of Tourism (VNAT) was given responsibility for drafting the nation’s first law on tourism. VNAT received support from UNWTO and the Netherlands in order to incorporate international best practices when drafting the law. As a result the Law on Tourism reflects concerted efforts aimed at ensuring that future tourism development addresses poverty reduction and sustainable development objectives. Some important elements of the law are described in terms of the opportunity created and the expected results. Opportunity: Provide incentives and directives for developing tourism for poverty reduction purposes Article 6: Tourism Development Policy 6.2. The State shall undertake incentive and prioritized policies on land, finance, credits for foreign and domestic individuals and organizations investing in the following fields: g) Development of tourism whereby having potentials in remote and isolated areas, and in areas with socio-economic difficulties so as to make use of the labour force,

consume goods and services on the spot, contributing to raising intellectual level of the people, and to hunger elimination and poverty reduction. Results: Incentives and directives are to be made available for developing tourism in disadvantaged areas that address poverty reduction and hunger eradication. Further incentives such as local hiring and training, purchasing from local suppliers could also be included in the sub-decrees that guide implementation. Opportunity: Enhance greater opportunities for local involvement in tourism planning. Article 7. Participation of Local Community in Tourism Development 7.1. The local community shall have rights to participate in and benefit from tourism activities; be liable to preserve tourism resources and nurture local cultural identity; maintain security, safety, social orders and environmental sanitation to create the attractiveness of tourism. 7.2. The local community shall be enabled to participate in the investment of tourism development, restoration and enrichment of various types of traditional cultures, folklore arts, crafts, goods production in service of tourists, contributing to uplift the material and spiritual life of the local people. Results: Local communities are now provided with a strong and clear legal position to participate and benefit from, tourism development. Opportunity: Avoid inadvertent barriers to poor peoples’ participation Article 62. Types of Tourism Accommodation Establishments Tourism accommodation establishment now includes the legal recognition of “Household room for tourist lease”. For the first time, individual families can have legal recognition as accommodation providers for tourists. Article 78. Narrator: This is a new category of guide. Tour guides are required to hold university degrees, but a “narrator” is defined as a “person who delivers on-site interpreting services to the tourists at the tourist resort and tourist attraction.” A higher education degree is not required to work in this capacity. This is extremely significant as the vast majority of rural poor do not have the opportunities for higher education, but they are the most appropriate interpreters of their culture. Results: Some barriers to poor peoples’ participation under the old Tourism Ordinance have now been removed by broadening the types of tourism products and services that may now be officially recognized. Source: Douglas Hainsworth, Senior Tourism Advisor, SNV-Vietnam, no date.

Page 8-90- E. Training, capacity-building and certification The needs and existing capacity of local people have to be assessed to ascertain where training interventions would be most useful. There is a need to strengthen informal learning methods and in-place on-the-job training. The certification of guides has been used in several places to control quality and supply, and to ensure minimum standards of service and knowledge. In Viet Nam, a new category of “narrator” has been introduced, which enables people without a formal education to work as local guides. (See box 7.) At Keoladeo National Park, in India, local rickshaw drivers are registered with the park to take tourists around the site. The government is often required to play the lead role when issues of women’s participation and empowerment in the tourism industry are involved. One example is the government-run TRPAP in Nepal. TRPAP has been running different empowerment schemes for women and has emphasized their participation in various tourism activities. The programme has given training to local women on craft skills to make souvenir items. Women are also ready to be trained in order to provide several tourism services, such as running a grocery store and serving as tour guides. In such a case, TRPAP can help provide financing to increase capacity as well as training. 69 National and local governments can provide incentives, pre-employment training and continuing education programmes to promote employment of local people in private tourism enterprises. F. Taxes and levies Taxes on goods, services and transactions, which provide funds for government at the local or national level can be used specifically to support either poor communities or the environments that provide their livelihood. For instance, 69 Nepal Tourism Board, E-Newsletter, 18 February 2005, p. 5. www.anmausa.org/tourism/2005_02_18.pdf

Page 9-91- Bhutan levies a high daily royalty on tourists, which is used to fund education and health programmes in remote rural areas. Government policies on tourism taxation must be evaluated and designed in ways that are comprehensive and integrated in order that the necessary revenues are balanced against the affect on tourism markets and the profits of tourism businesses. G. Microfinancing and facilitating market access and linkages The poor have limited access to the tourism market for several reasons, including lack of business skills, low educational levels, demanding regulations, inability to escape severe poverty, poor health and social exclusion. Governments can reduce the bureaucracy that small enterprises face, and create advisory services on business development, provide seed-funding for entrepreneurs, develop business linkages with established operators, assist micro, small and medium-sized enterprises to form production or marketing cooperatives and provide educational, technical and professional training programmes to improve quality and business standards.

Examples of linkages and cluster mechanisms described in box 11 can assist in market access.

Page 10-92- H. Marketing Destination marketing is increasingly the remit of the private sector, private- public sector partnerships or clusters. (See chapter VIII.) This means that micro, small and medium-sized enterprises and poorer producers may be excluded from the formal marketing processes and distribution channels. To address this problem, Governments can encourage discussions between national and regional tourist boards and the institutions involved in local economic development and resource conservation. They can also encourage the organization of marketing campaigns to promote responsible tourism practices and suppliers, and give preferential marketing terms to suppliers that adopt sustainable, responsible, poverty alleviation practices. Box 11. Nepal: Two examples of creating microenterprise opportunities for the poor The Explore Nepal Group spent approximately US$ 57,000 on constructing and furnishing the Koshi Tapu Wildlife Camp. All materials, except the toilet, were sourced from local entrepreneurs of the Koshi Tapu area. Each year approximately US$ 5,700 is spent for Bhojan Griha Restaurant in Kathmandu, another business of the Explore Nepal Group, in order to renovate or replace the “soft furniture” of the restaurant, including items such as candles, arts and crafts, tables and mats. This furniture is acquired only from women’s handicraft associations such as Dhukuti and Sano Hastakala. The Tiger Mountain Group supports local entrepreneurs while minimizing distortions in the local market, such as price rises that would have an adverse impact on local people. The Temple Tiger Jungle Lodges and Wildlife Camp in Pokhara buy supplies from local markets but at established retail prices. Buying locally has the added benefit of significantly reducing the company’s transport costs. Ensuring that the sources of supply are diverse and the benefits within the community widespread has proven to be a challenge because lodge employees tend to favour local businesses with connections to their relatives. To overcome this tendency, the lodge identifies services and supplies in an open, accountable and transparent manner. It develops clear criteria for the supplies and services sought and ensures that the criteria are widely disseminated among community members. Source: The Netherlands Development Organization (SNV) Nepal, 2006.

Page 11-93- Tourism market analysts have identified a number of market trends which should inform the strategies and marketing decisions of policy-makers and investors in Asia and the Pacific. One important trend is that tourists are increasingly willing to travel long distances for longer periods and to take more frequent holidays. There is growing demand for nature, adventure, activity and health-related holidays, with more

emphasis on individualism and flexibility. This leads to more independent travel and tailor-made packages which enable tourists to seek authenticity through enhanced knowledge or more interactions with other cultures. The market is becoming more demanding in standards of service, product and accommodation. Tourists are making greater use of the internet for researching destinations and booking holiday travel and accommodation, often based on growing awareness of the environmental and social impacts of tourism. While keeping up with market trends in international tourism, much can be done through careful marketing to alleviate the uneven geographic distribution of tourists and to spread the benefits of the industry. For instance, the Nepal Tourism Board has given particular promotional emphasis to areas of the country that traditionally receive fewer visitors, such as the Chitwan Hills. Promotion builds on extensive product development, which has improved facilities and enhanced the visitors’ experience, and has succeeded in extending the range of tourism products and the tourism season in Nepal. In other countries, as shown in box 12, unique experiences have been developed and marketed as a tourism niche market.

Page 12-94- Box 12. Mongolia and the Islamic Republic of Iran: Nomadic tourism Nomadic community-based tourism in Mongolia Since 2005, Mongolia has adopted a new approach to community-based tourism, the “ger-to-ger bottom-up approach”.a The country focuses particularly on promoting appropriate socio-economic linkages between the rural nomadic groups in Mongolia, their local communities and the public and private sectors. This initiative has led to the establishment of 12 community routes over 3 regional provinces and 5 community-based ticketing/information centres. Rural nomadic groups and their communities are gaining valuable knowledge and skills that lead to greater local ownership and management. Instead of competing with tour operators, communities are learning how to cooperate and benefit from mobilizing “ethical” partnerships within the private and public sectors, while maintaining their independence. Such a regional development concept contributes to the empowerment of local communities and their nomadic herders. Apart from the training they receive, the partnerships also help in the development of economically viable travel routes. For example, along the “Dundgovi travel route” the tourist is invited to share the harmonic melodies and natural wonders of the Nobel Rock Palace or Fortress with nomadic herders, while travelling by horseback, in a horse-drawn cart, riding a camel or trekking and staying at one of the community’s ger. Of the revenues from tickets (trail passes), 55 per cent goes directly to families and 10 per cent to their community environmental fund. Nomadic tourism development in the Islamic Republic of Iran In 2006 the Iranian Cultural Heritage and Tourism Organization entered into a memorandum of understanding with the Nomads’ Issues Organization to establish the

Nomadic Cooperative Association, which was entrusted with the task of attracting foreign tourists to nomadic regions of the country. Persian society was formerly a nomadic one. Thus, nomads are considered to be a cultural treasure which needs to be preserved. The Department of Tourism Development in Nomadic Regions was thus established to provide economic development for the nomads by carrying out technical and infrastructural studies. Along with the Department, the Nomadic Tourism Institute undertakes measures in marketing, advertising and attracting foreign tourists by organizing tours in nomadic areas, providing posters, catalogues, pictures and other advertising instruments. In addition, a special centre will be established in Tehran to provide an outlet for the sale of nomadic products. The authorities hope that devising appropriate tourism programmes for nomadic regions will lead to an increase in the incomes of the nomadic tribes, which would, in turn, raise their standard of living without harming their social systems and traditional lifestyles. Source: <http://www.gertoger.com/index.html, http://www.asianews.ir/en/main1.asp?a_id=1394 www.gertoger.com/index.html, http://www.asianews.ir/en/main1.asp? a_id=1394 http://www.gertoger.com/index.html, http://www.asianews.ir/en/main1.asp? a_id=1394>. a Ger is a traditional Mongolian dwelling, commonly known in English as a “yurt”. The ger has a wooden framework covered by large pieces of felt, easily assembled and disassembled.

Economic development in IndiaFrom Wikipedia, the free encyclopediaJump to: navigation, search Main article: Economy of India

The economic development in India followed a socialist-inspired policies for most of its independent history, including state-ownership of many sectors; extensive regulation and red tape known as "Licence Raj"; and isolation from the world economy. India's per capita income increased at only around 1% annualized rate in the three decades after Independence.[1] Since the mid-1980s, India has slowly opened up its markets through economic liberalization. After more fundamental reforms since 1991 and their renewal in the 2000s, India has progressed towards a free market economy.[1]

In the late 2000s, India's growth has reached 7.5%, which will double the average income in a decade.[1] Analysts say that if India pushed more fundamental market reforms, it could sustain the rate and even reach the government's 2011 target of 10%.[1] States have large responsibilities over their economies. The annualized 1999-2008 growth rates for Gujarat (9.6%), Haryana (9.1%), or Delhi (8.9%) were significantly higher than for Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (6.5%).[2] India is the eleventh-largest

economy in the world and the fourth largest by purchasing power parity adjusted exchange rates (PPP). On per capita basis, it ranks 128th in the world or 118th by PPP.

The economic growth has been driven by the expansion of services that have been growing consistently faster than other sectors. It is argued that the pattern of Indian development has been a specific one and that the country may be able to skip the intermediate industrialization-led phase in the transformation of its economic structure. Serious concerns have been raised about the jobless nature of the economic growth. [3]

Although living standards are rising fast, 75.6% of the population still lives on less than US$2 a day (PPP, around US$0.5 in nominal terms), compared to 73.0% in Sub-Saharan Africa.[4] In terms of occupation, two-thirds of the Indian workforce earn their livelihood directly or indirectly through agriculture in rural villages. As a proportion of GDP, towns and cities make over two thirds of the Indian economy.

Favourable macroeconomic performance has been a necessary but not sufficient condition for the significant reduction of poverty among the Indian population. The rate of poverty decline has not been higher in the post-reform period (since 1991). The improvements in some other non-economic dimensions of social development have been even less favourable. The most pronounced example is an exceptionally high and persistent level of child malnutrition (46% in 2005–6). [5]

The progress of economic reforms in India is followed closely. The World Bank suggests that the most important priorities are public sector reform, infrastructure, agricultural and rural development, removal of labor regulations, reforms in lagging states, and HIV/AIDS.[6] For 2010, India ranked 133rd in Ease of Doing Business Index, which is setback as compared with China 89th and Brazil 129th. According to Index of Economic Freedom World Ranking an annual survey on economic freedom of the nations, India ranks 124th as compared with China and Russia which ranks 140th and 143rd respectively in 2010.

GDP growth rate

Since the economic liberalisation of 1991, India's GDP has been growing at a higher rate.[24]

Year Growth (real) (%)2000 5.52001 6.02002 4.32003 4.32004 8.32005 6.22006 8.42007 9.2

2008 9.02009 7.4

Tourism in 10th Five Year Plan

In order to further accelerate the development of tourism in the country, the thrusts during the 10th Five Year Plan has been to:

Position tourism as a major engine of economic growth Harness the direct and multiplier effects of tourism for employment generation

and economic development Provide impetus to rural tourist Provide a major thrust to domestic tourism which will act as a spring board for

growth and expansion of international tourism Position India as a global brand to take advantage of the burgeoning global travel

and trade and the vast untapped potential of India as a destination Acknowledge the critical role of private sector with government working as an

active facilitator and catalyst Create and develop integrated tourism circuits based on India's unique

civilisation, heritage and culture in partnership with states, private sector and other agencies

Ensure that the tourist to India gets physically invigorated, mentally rejuvenated, culturally enriched, spiritually elevated and "feels India within him".

Celebration of Various Tourism Events

A number of events and road shows have been organised during 2005-06 for spreading awareness about India Tourism in domestic and international tourism market to attract more tourists to India. The major events organised by the Ministry in collaboration with various State Tourism Departments are: Golf open tournament, Srinagar; Sindhu Darshan at Leh; Heritage Festival, New Delhi; All India Crafts Mela, Hyderabad; Heritage International Festival, Jaipur; India International Boat Show, Kochi; Paragliding Show and Tourism Conclave in Himachal Pradesh; Mega Folk Festival "Virasat" in Dehradun; Prithivi 05-Global Eco-Meet, Kochi; Domestic and International Photo Exhibition "A Confluence of Cultures" and Essay and Photographic competition on "What Tourism Means To Me" on World Tourism Day on 27 September (every year); India National Tourism Day on 17 March 2006; Designer's Night Bazar, Surajkund Crafts Mela, Haryana; 3 Global Interline Golf Championship, Photo Exhibition, Eco-Tourism Marketing Meet; Mussorie (Uttarakhand), WTTC, Himalayan Run and Trek and Photo Exhibition on Hindu, Buddhist and Islamic monuments of Kashmir.

The Ministry of Tourism also participated in various travel and tourism events, trade fairs and exhibitions in India and abroad. The important fairs and exhibitions are Tourism Travel Fair in New Delhi, Mumbai, Bangaluru, Chennai and SATTE (South Asia

Tourism and Travel Expo), New Delhi. India Tourism offices located in 20 cities in India also participated at local important fairs. The Ministry of Tourism participated in several overseas travel and tourism trade fairs, notably World Travel Market, London; ITB (International Tourism Bourse), Berlin; Arabian Travel Market (ATM), Dubai; EIBTM, Spain; IMEX, Frankfurt; Pata Travel Mart, Malaysia; FITUR, Spain; and World Travel Fair, Shanghai. India Tourism offices located in 13 overseas cities also participated in various travel and tourism fairs.

National Tourism Policy 2002

A National Tourism Policy-2002 was announced by the Government with, inter-alia attempts to position India as a global brand to take advantage of the burgeoning global travel and trade and the vast untapped potential of India as a destination

Tourism

Hotel Management and Food Craft Institutes

The Ministry of Tourism has accorded high priority to the development of manpower to meet the growing needs of Hotels, Restaurants and other Hospitality-based Industries. For this purpose, 21 Institutes of Hotel Management and Catering Technology and 10 Food Craft Institutes (3 of these are now also State IHMS) have been set up in the country. In addition to the above, four more Institutes of Hotel Management are in the pipeline at Uttarakhand (Dehradun), Jharkhand (Jamshedpur), Chhattisgarh (Raipur) and Haryana (Kurukshetra). These Institutes conduct Degree courses in the field of Hotel Management, Catering Technology and Applied Nutrition and Craft Courses in Food and Beverage Services, Accommodation Operations, Dietetics and Hospital Food Service, Food Production and Patisserie, House Keeping, Front Office, etc. IHM's Mumbai, Bangalore and Pusa (New Delhi) have started 2 Years M.Sc Hospitality courses also. Food Craft Institutes conduct Craft Courses for duration ranging from six months to one year for operational staff. All these training Institutes are affiliated to the National Council for Hotel Management Catering Technology and Applied Nutrition (NCHMCT) at apex level which regulates academics for all these Institutes.

Capacity Building for Service Providers (CBSP)

In the year 2002, the Ministry launched a programme called CBSP to train the persons engaged in small hotels, dhabas, eating joints, restaurants, etc., and also handling tourists like Immigration staff, airport staff, security/Police personnel, guides, taxi operators, bus drivers, etc. The objective was to provide short term training to improve their etiquette, behaviour and attitude towards tourists.

The scope of this scheme has been further enlarged and the training programmes of 3/6 months duration have been added for skill development of existing as well as fresh

service providers. Under this scheme, a new programme called 'Project Priyadarshini' was also launched in 2005 aimed at imparting training to women in taxi driving/operation, entrepreneurship like setting up souvenir kiosks, etc, to adopt tourism as their profession.

Hotel Accommodation

The hotel sector forms one of the most important segments of the tourism industry with high potential for employment generation and foreign exchange earnings. To give impetus to this sector, the government provides concessions under EXIM Policy and other incentives. The Industrial Policy has now placed hotels and tourism related activities as a priority industry. Foreign investment and collaborations are now facilitated under the new economic policy. Automatic approval is available for foreign direct investment upto 100 per cent in Hotel and Tourism sector.

Travel Trade

The Department of Tourism has a scheme of approving Travel Agents, Tour Operators, Adventure Tour Operators and Tourist Transport Operators. During 2005, keeping in view the spurt in Domestic Tourism, a new category for the recognition of Domestic Tour Operators has been introduced. The aims and objectives of this scheme are to encourage quality, standard and service in these categories so as to promote tourism in India. The Travel Trade Division also interacts with the travel trade associations like Travel Agents Association of India (TAAI), Indian Association of Tour Operators (IATO), Indian Tourist Transport Operators Associations (ITTA), etc., and other agencies like India Convention Promotion Bureau, Pacific Asia Travel Association (PATA), etc.

The Travel Trade Division also deals with all matters pertaining to the regulation and training of tourist guides at Regional level and also co-ordinates with other Ministries such as Civil Aviation, Culture, Railways, Surface Transport, External Affairs and Home Affairs on various issues to improve the facilities for the tourists visiting various destinations in India.

Role of Tourism Industry in India GDP

Role of Tourism Industry in India GDP has been quite alarming since the past few decades.

Tourism industry has contributed enormously in the flourishing graph of India's economy by attracting a huge number of both foreign and domestic tourists traveling for professional as well as holiday purpose.

The tourism industry in India witnessed a stupendous growth in 2006. The growth in the inflows in India's tourism industry is calculated both in terms of business and vacations.

The number of foreign tourists arriving from all over the world rose from 0.37 percent to 0.53 percent as has been stated by UN World Tourism Organization (UNWTO) in the year 2006. This remarkable growth in the graph of tourism industry in India popularized the entire South Asia as one of the most spectacular tourist terminal. Indian tourism industry contributes to around 5.9 percent of the country's GDP and it provides employment to around 41.8 million of inhabitants.

Some of the most significant features of India's tourism industry or the Role of Tourism Industry in India GDP have been listed below:

The percentage of foreign tourists in India has increased by 12.4 percent in one year, that is, from 2006 to 2007. In 2006, Indian tourist industry witnessed a growth of 14.3 percent, which reached around 3.89 million in 2007

The foreign tourists arrival led to a robust growth in the foreign exchange earnings that increased from USD 5.03 billion during January-October 2006 to USD 6.32 billion during January-October 2007, which is apparently a 25.6 percent rise.

Deeming the growing rate of the tourists arrival in the country, the Indian tourism industry designed a wide spectrum of holiday packages and cheaper airfares to attract more tourists.

Nonetheless, the outgoing graph of tourism industry in India is in no way lagging behind from the inbound one. People traveling from India to abroad or states within India have increased by 25 percent.

The United Nations World Tourism Organization (UNWTO) has estimated the outgoing

tourists to reach around 50 million by the year 2020. According to the European Travel Commission, the average expenditure per trip of

Indian tourists traveling abroad has increased from USD 611 in 2000 to USD 822 in 2006 The booming success of Indian tourism industry has led to a drastic change in the

hospitality department as well. The increase in the ratio of tourists resulted in the increase of room rates and also setting up of a wide range of hotels and other residing areas.

A number of international hotels such as the Hilton, Accor, Marriott International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI) and Inter Continental Hotels groups have professed about making some large-scale investments to append 65,000 additional rooms to suffice the needs

India is most likely to set up forty hotels of global brands by 2011. The hospitality segment in India is assumed to reach USD 11.41 billion in the coming two years

Following are the few benefits ensured by the tourism industry in India GDP in order to boost up the GDP of India:

The Indian tourism industry offers online booking system, one of the basic proofs of technological advancement in this sector. These online bookings are applicable for booking the air tickets via Internet by logging on to the website and also booking the hotel room of the place to be visited

The online tourism industry has accounted for a turn over of USD 800 million which is apparently 14 percent of the entire travel and tourism industry

The Role of Tourism Industry in India GDP also features medical tourism that includes traditional therapies like yoga, meditation, ayurveda, allopathy and other conventional systems of medicines is currently estimated at USD 333 million and is most likely to reach USD 2.2 billion by the year 2012.