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India: India Tourism Profile 2012

2012/03/13

 

 

 

India Tourism Profile 2012

March 23, 2012

In 2011, India was ranked the twelfth-most attractive tourist destination in the Asia-Pacific region by the World Economic Forum. Furthermore, travel and tourism is the major service industry in India;

During the review period, India’s tourist volumes increased due to a variety of factors, with some of the majority notable being robust world economic increase, government initiatives such as granting of export home status to the Indian tourism industry, and incentives for promoting private investment in the form of income tax exemptions and the provision of interest subsidies. Over the estimate period, India’s total tourist volumes are expected to grow due to India’s rapidly increasing average disposable income, the rising number of business opportunities in the country, vast natural and cultural resources, and increased spending by the government on developing tourism infrastructure. India is as well expected to record high increase in the number of medical tourists arriving from developed nations. Furthermore, the emergence of newer forms of tourism such as cruise tourism, agritourism and eco-tourism has the potential to substantially increase India’s inbound tourist volumes over the estimate period.

India is of the top tourist destinations in the world and tourist volumes have registered strong increase in the last years. Tourist volumes are expected to grow at over 11% annually until 2015, with health and wellness tourism recording particularly strong increase due to the high healthcare costs in Western nations and the high-quality medical facilities offered in India.

There are considerable opportunities for capital investment. Air transport in India is still in the increase phase, and the rising request and increasing buying power has made this sector very attractive. However, infrastructure bottlenecks, poor hygiene standards, delays in policy frameworks and crime rates are part the major challenges that need to be addressed before the full increase potential of India's travel and tourism sector can be harnessed.

Analyse of the sector 29/11/2010

2009 witnessed a decline in inbound traffic
After a slow increase in 2008, tourist inflows dipped further in 2009. The recession, compounded by the Mumbai terrorist attacks, reduced the flow of inbound tourists into the country, with earnings from arrivals falling as a result. The outbreak of the H1N1 flu further aggravated the problems of the already suffering tourism industry in 2009.
 
Airlines and travel accommodation suffer
 
Prior to the world recession, the Indian aviation industry was considered of the fastest growing in the world. However, the current financial downturn generated cut-throat competition and deep discounting, with these problems exacerbated by rising fuel prices and high airport charges. This left the industry in a very poor national. Travel accommodation players are as well suffering because of a steep fall in occupancy rates. RevPar, an significant indicator of hotel performance, fell to an amount-time low in this year. Price sales in the travel accommodation sector are expected to be flat in 2009.
 
Initiatives by the government support tourism in turbulent times
 
During 2009, the government, together with Ministry of Tourism undertook several initiatives to aid the country’s ailing tourism industry. To offset the pressure of the economic downturn, the Reserve Bank of India reduced interest rates and cash reserve ratios significantly, and as well launched stimulus packages to sustain increase. Marketing efforts to promote the India brand to international markets as well increased during 2009, with the year being designated “Visit India” year. Furthermore, with tourist security a major concern, the government made security checks in the country even additional stringent, and formulated policies to ensure the safety of tourists in India.
 
Commonwealth Games at the top of the agenda
 
The government is highly focused on making the 2010 Commonwealth Games, which are being held in Delhi, a huge success. It has made efforts to boost tourism in the country and formulated specific policies to aid developments related to the Commonwealth Games. The games are expected to give a boost to Indian tourism, resulting in strong price and volume increase. Though the development process is running behind schedule, the government is optimistic that amount the deadlines for the games will be met, and that the city will be equipped with world class facilities.
 
Better long-term prospects for Indian tourism industry
 
Despite the economic downturn, the Mumbai attacks and the H1N1 virus, the long-term prospects for the Indian tourism are good. Industry sources expect that the economy will start to recover from 2010 onwards, with a beneficial effect on travel and tourism. In addition, increased promotion and aggressive marketing by the government will increase the influx of tourists in the coming years. To cater to this increased request, innovation and new product development amongst industry service operators (hotels, travel retailers and transportation companies) will be seen.
 

Tourism Statement Q4 2010