Arvind Singhal: The tourism impact

MARKETMIND

The recent extended weekend that started on Friday evening for many and concluded on Wednesday for some gave yet another insight into the changes undergoing in India. The first realisation occurred a week before the long weekend. A set of European friends decided to take a holiday at short notice and entrusted us with the bookings. Believing that August is probably the leanest month for travel in India, I thought that it would be a cinch to get a number of options in place for these friends to choose from. It came as a shock to discover that all flights to Leh (their first preference) were booked solid and while flights to Kerala were not a problem, the preferred hotel options were just not available. With considerable difficulty, a Kerala option worked out for them. On their return from Kerala, we then drove together to Jaipur and this is where I could see the more changes in the making. The drive to Jaipur was marked by hundreds of car loads of Indian families taking their long weekend out. As expected, the city was teeming with tourists. While there were many international visitors at the various city landmarks, what was surprising (to me) was to see the sheer diversity of the Indian tourist. From relatively low-income groups to the very high ones, from small-town India to the metro India, from one ethnic community to another, and from one part of India to another""this diversity was just incredible. On chatting with one of the guides at the majestic Amber fort, he informed that the trend of getting a larger number of Indian tourists in the low season months (August in this instance) was a new one and that such mini peaks enabled guides (and many other local businesses) to manage a more decent living than ever in the past.

Back in Delhi, a series of news reports has recently come out with the warning that a young India can be a mixed blessing, and that at the current pace of job creation, India could add as many as 100 million more to the ranks of the unemployed by the year 2020. While manufacturing, infrastructure, and retail are some of the sectors that will collectively create millions of new jobs in the coming years, tourism can also deliver millions of new employment opportunities and hence has to be seen in a much more holistic manner than it currently is.

Indian domestic tourists are estimated to be about 375 million in 2005 while international arrivals about 4 million, generating about $8 billion in economic output. China, by comparison, had over 1.2 billion domestic tourists and over 45 million international tourists, generating as much as $85 billion in economic output and creating over 7 million direct and over 35 million indirect jobs. More importantly, tourism-related jobs are largely semi-skilled in nature and are created not only in the metros and major urban centres but also in rural and small-town India. Likewise, tourism-related spending largely reaches out directly to hundreds of thousands of small businesses spread all across the country rather than a slow trickledown (if any) from the overall GDP growth.

Beyond stating the obvious, i.e. improved infrastructure by way of airports and hotels, and more marketing spend in the "Incredible India" and other such initiatives, both the government and the private enterprise have to see tourism as an incredible multifaceted opportunity that can only be fully exploited with a strong public-private partnership. Our guide at Amber fort at Jaipur informed us that there were about 100 of his ilk that made a living from the tourist traffic to this single monument alone. Can the ministry of tourism (or ASI and other entities) think about outsourcing the entire "guide" effort to a professional organisation that can hire, train (or retrain), and monitor the quality of over 50,000 Indian men and women who can potentially be employed as guides alone across India? The upkeep of major monuments and tourist attractions can be entrusted to transparently selected private entrepreneurs who, in lieu of intelligently earmarked advertising, parking, and retail space, can provide far better care of such sites while offering substantially superior experience to the tourists and, at the same time, create hundreds of secondary local jobs in the vicinity. Licensing memorabilia and printed/electronic literature related to select heritage locations can further generate more revenues for licensors (the central or the state governments) while more business opportunity for the licensees. The revenues from such activity can be used by the state government for investing in the overall quality of the infrastructure, which can bring in more visitors and encourage them to extend their stay when they have arrived.

We can all be proud about the rich heritage and the sheer diversity offered by India for even the most jaded, well-travelled tourist. What we need is to convert this into yet another really big engine of growth for meeting our biggest current challenge""creation of employment and economic activity at the grassroots level!

arvind.singhal@technopak.com