To have a better understanding of the current ground reality and expected growth of tourism in the year 2020 Whereabouts interacted with the industry representatives and the heads of prominent travel companies to know their views.
There has been a paradigm shift in Government policies across all sectors in the second half of 2019 and that eventually made this period of the year very eventful. A bunch of initiatives such as reducing GST on hotels, reduction of Visa Fee, improving India’s rank from 142 to 63 in ease of doing business, separating Ladakh from Jammu & Kashmir which opens up new opportunities for the UT to grow in tourism sector, releasing funds of Rs 2,482.07 crore for the development of infrastructure and tourist amenities, opening up new peaks for adventure enthusiast and much more have given tourism industry and its stakeholders a ray of hope to grow faster and get its deserving number of share from national and international front.
However, at the other hand there have been several other events such as revocation of Article 370 and 35 A in Jammu & Kashmir, implementation of National Register of Citizenship (NRC) in Assam and the recent Citizenship Amendment Act (CAA) etc. which attracted a lot of protest across the country and impacted the activities of tourism and its business in many ways. States like Assam and Jammu and Kashmir have recorded a huge lose in tourism as compare to the same period of 2018.
To have a better understanding of the current ground reality and expected growth of tourism in the year 2020 Whereabouts interacted with the industry representatives and the heads of prominent travel companies to know their views. Here we go.
Pronab Sarkar, President, IATO
Kindly elaborate on the growth of tourism in the second half of 2019 as it has been very eventful for various reasons? The growth though not substantive, but it is positive and that sets the tone for 2020. Key news points flowed in.
India secured 34th position on World Economic Forum’s travel and tourism competitiveness Index 2019 registering an improvement of 6 ranks from 2017.
Ladakh’s Tourism Policy is on the anvil The GST Council has lowered tax rate on hotel tariffs to make India a more viable tourist destination. The GST on hotel room tariff between Rs 2500 to Rs 7500 has been reduced from 18% to 12% and GST on hotel room tariff above Rs 7500 has been reduced from 28% to 18%. This is good news for inbound MICE, where India has been losing out to neighboring countries. This move is expected to give boost to the tourism industry of the country. With this, the hotel industry has been removed from the 28 per cent tax slab, the highest under the GST regime.
The reduction of Visa fee from USD 25 to 10 during the lean season (April –June), A short duration of E Visa for tourists with one-month validity and a Visa Fee of USD 25 has also been introduced for the peak season (July- March). This is a steep drop from the current e-visa fee of about USD 80 to USD 100. A 5-year e-tourist visa for a fee of $80 and 1-year visa for a fee of $40 for Japan, Singapore and Sri Lanka.There will be no visa fee for tourists from 14 pacific island nations belonging to the Forum for India-Pacific Island Cooperation (FIPIC).
The Union Cabinet has given its approval to release funds to the tune of Rs 2,482.07 crore fund for the development of infrastructure and tourist amenities under the Swadesh Darshan Scheme project. Out of this, Rs 627.40 crore has been sanctioned for the 10 Swadesh Darshan Scheme.
Thus the industry is forward-looking with the government of India striving to support this sunrise sector in all its manifestations.
How do you look at the remaining season of Inbound Tourism? Good, however certain impediments need to be addressed in their true perspective. The recent reduction in E visa fees and reduction in GST has given a boost to tourism industry to compete with the neighboring countries. We are also hopeful with the effect of new International media campaign by the Ministry of Tourism shall give new boost to grow numbers of International tourists arrivals and we see some bright future for the coming season.
What are your suggestions to the Government or Representative of the Tourism Industry (FAITH, IATO, TAAI, ADTOI etc) to deal with the situation? My answer to this question is a continuum of Question Number 2. Our suggestions are always in sync with the needs of our industry and to facilitate the stakeholders. The major ones encompass: 1. Every association has their own problems and they should deal themselves as per their needs.
2. Faith should deal with problems of the entire common industry needs and take up such issues on the whole.
As a industry stakeholder have your company suffered any loss as compare to the previous season, would you like to elaborate on that? Do you have any idea of the estimated loss to the Indian tourism industry? As far as our company is concerned we were going good till such time the present crisis of CAA and NRC started and with the present circumstances our business is having some cancellations which shall result in negative growth for the current year business.
There are always ups and downs in the books of accounts of the members of the industry, like any other sector. The overall scenario has to be one of growth with positivity built in and that’s what matters. The trends of the past indicate a movement northward.
Rakesh Bansal, Chief Executive Officer, Amadeus India
Kindly elaborate on the growth of tourism industry in the second half of 2019 as it has been very eventful for various reasons? According to the latest reports, Indians are travelling more than ever. India moved up six places to the 34th position in the global Travel and Tourism Competitiveness Report 2019 published by the World Economic Forum (WEF) in September 2019. Travel has been strong against the economic slowdown in India, the Tourism industry is one of the fastest growing sectors in India, making significant contribution to the GDP around 9.4%, nearing the same level as developed markets like the UK. In addendum, the various initiatives/campaigns and steps taken by the government have fairly contributed to the growth of the sector.
How do you look at the remaining season of Inbound Tourism? The measures taken for liberalization, simplification and rationalization of the visa regime in India, along with the introduction of new categories of VISA have already resulted in the India-bound tourism growing faster than the world. Banking on such pro tourism initiatives and the tremendous efforts put in by India in promoting its tourism like Incredible India 2.0″ campaign, Regional Connectivity Scheme ‘UDAN’, and the GST rate rationalisation for hotels is an extremely positive development which augurs very well for the tourism industry. Despite the various disturbances due to the new government policies, we are hopeful that the inbound tourism will continue to be on rise in the times to come.
Q3. What are your suggestions to the Government or Representative of the Tourism Industry (FAITH, IATO, TAAI, ADTOI etc.) to deal with the situation? Ans: Government has focused on many strategies in the last few years and has welcomed every initiative to promote travel and tourism in country. Focusing on the online portal to aid tourists coming to India, launch of e-Visa for citizens of 44 countries, Swadesh Darshan Scheme and boosting domestic tourism have been some of its key initiatives in 2019. Prime Minister during his address to nation on Independence Day stressed on domestic tourism, requesting the people to at least visit 15 tourist destinations across the country before 2022. This move will increase the job opportunities for the locals and improve the quality of these destinations, while boosting tourism.
Q4. As an industry stakeholder, have your company suffered any loss as compare to the previous season, would you like to elaborate on that? Do you have any idea of the estimated loss to the Indian tourism industry? Ans: We have signed a number of important strategic deals in India in recent months, such as Spice Jet and Vistara. Both Indigo and Go Air also have their IT agreements with Navitaire, an Amadeus company. In addition, Amadeus has strategic partnerships with some of the largest travel sellers in India, such as MakeMyTrip, Goibibo, Yatra, and PayTM; and some of the major hotel groups and aggregators in India such as Oberoi, Taj, ITC Hotels and The Leela Palaces. From an airport IT perspective, Indira Gandhi International Airport and Rajiv Gandhi International Airport also use Amadeus’ leading airport technology.
Kindly elaborate on the growth of tourism industry in the second half of 2019 as it has been very eventful for various reasons? The 2019 was a challenging year in all aspects for inbound travel in India. The overall numbers to the destination are most certainly down and that has affected companies of all size. Key source markets showed a lot of domestic changes that affected travel to our region.
The second half of the year was exceptionally different due to a number of reasons that we all know about. I think the damage will be more to the first quarter of 2020 as forward bookings have been affected. Fortunately most bookings for 2019 stayed, but new ones have slowed down.
How do you look at the remaining season of Inbound Tourism? Looks tough. We are very little that was done as damage control to counter all the bad press we had on pollution and the Citizenship Amendment Act (CAA) issues. So no doubt about it that the new bookings have slowed down. It will not be a wash out but it will not be a win either.
What are your suggestions to the Government or Representative of the Tourism Industry (FAITH, IATO, TAAI, ADTOI etc) to deal with the situation? Get your heads out of the sand and see what the real state of the industry is. Everyone is living in a fools world and very little cross sector cooperation or conversation is happening. If we worked as one team, private sector associations and with the government, we can do miracles. Unfortunately, person interests and egos don’t allow that. The industry suffers because of that.
As an industry stakeholder, have your company suffered any loss as compare to the previous season, would you like to elaborate on that? Do you have any idea of the estimated loss to the Indian tourism industry? Yes, we will probably miss our targets as will everyone else. I don’t know the industry figures, but the damage is there. 2020 will probably be no better than 2019. There are no signs of any dramatic changes in the government’s policies towards tourism nor are there any signs of any recovery in our key source markets that would make me believe that the coming year would be any better than the past. So all we can do is work hard and strive on to at least ourselves do better than we have in the past.
Pankaj Nagpal, Managing Director, Travstarz Global Group
Kindly elaborate on the growth of tourism in second half of 2019 as it has been very eventful for various reasons? 2019 has been a very turbulent year across industries for India but specifically the tourism industry. It is going through a rough patch right now despite some good initiatives taken by the government like visa on arrival and e-visa etc. With issues like women safety and now the political situation in the country the image of the country has been tarnished internationally due to which many countries have issued advisories to their citizens against travel to India. It will take a very strong push and an image make-over for things to get better. To add, we are among the highest taxed country compared to our immediate rivals and neighbours where tourism is a high priority unlike our country.
Outbound had been growing well but again the government has been putting too many checks in place and that has affected the business badly. I think the government needs to take a re-look at the tourism industry as a whole since it is one of the highest employment generators as well and device strategy to boost the industry. With all due respect to the old guard and veterans of our industry, I think it is time to make way for the young blood to take the lead and engage with the government for the betterment of the business.
How do you look at the remaining season of Inbound Tourism? At present I do not see any immediate recovery as the government right now seems more into fire fighting mode with the prevailing conditions in the country rather than focusing on the economy or the tourism sector. I see a policy paralysis at least for the next few months and the situation going from bad to worse especially for inbound sector.
What are your suggestions to the Government or Representative of the Tourism Industry (FAITH, IATO, TAAI, ADTOI etc) to deal with the situation? I think a lot of hand holding is required between the tourism bodies and the government and also the tourism bodies need to shed their personal agendas and arrive at a common platform to bring about the problems facing the industry on the forefront and engage with relevant government authorities in rectifying the issues. Like I said earlier, the old guard needs to make way for the younger generation leaders to take over and present a fresh approach in dealing with situations especially with the ever-changing technology and environment.
As a industry stakeholder have your company suffered any loss as compare to the previous season, would you like to elaborate on that? Do you have any idea of the estimated loss to the Indian tourism industry? I would not say that we have suffered losses but yes, the growth has not been as expected and unfortunately I do not see any revival as well at-least in the immediate future.
Rahul Banerjee, VP Operations, Clarks Inn Group of Hotels
Kindly elaborate on the growth of tourism industry in the second half of 2019 as it has been very eventful for various reasons? How would you rate it good/bad? Unfortunately tourism has never been a priority mandate in India despite its immense socio-economic benefits. Take for example foreign tourist arrival in Indian that is expected to grow by an abysmal 3 per cent in 2019, whereas international tourism growth is expected to be in the region of 4 per cent. Thankfully the domestic tourism market is far more resilient.
However, we did have some good news for the industry like a healthy reduction in corporate tax as well as reduction in GST slabs for hotels. But the recent events across the country have taken some toll on tourism industry and hotel businesses as well. Visitor arrivals have gone down a bit. Currently we are looking at scenario where some of our hotels have seen some drop in business.
How do you look at the remaining season of Inbound Tourism? Inbound tourism has grown by a mere 3.2 per cent for the January-November period in 2019 over the same period the previous year, which is far from satisfactory anyway, especially when you look at neighbouring destinations like Thailand, Malaysia, Sri Lanka, who have all recorded double-digit growth. And now looking atthe current scenario, especially around the prevailing events, there would be growth but that would be a marginal growth.If there was hope of any significant growth this season then that has been dashed already.
What are your suggestions to the Government or Representative of the Tourism Industry (FAITH, IATO, TAAI, ADTOI etc) to deal with the situation? The current situation is temporary and market will witness the normalcy return. I am sure government is working in this direction. However what is more important is that for tourism to develop and thrive we, as destination, need to be viewed as safe and secure and clean and not to forget that we can’t be viewed as a country that is always embroiled in issues or is in news for the wrong reasons.
The tourism industry associations need to actively engage on this with both the union as well as the state governments. There is a need to better understand this sector for its socio-economic benefits. Tourism sector worldwide is not only one of the biggest employers but also one of the biggest generators of employment.
As an industry stakeholder have your company suffered any loss as compare to the previous season, would you like to elaborate on that? Do you have any idea of the estimated loss to the Indian tourism industry? Business in Kashmir has come to a halt altogether in the aftermath of the dissolution of Article 370. Our hotel is Srinagar is virtually out of business at the moment. And the protests against CAA and NRC has also affected business in different parts of the country, especially in Uttarakhand, Uttar Pradesh, North East and more recently also at places like Kerala and Goa. We have especially noticed drop in business in holiday locations. We believe that the situation is temporary. We are confident the government
What’s Good
The GST Council has lowered tax rate on hotel tariffs to make India a more viable tourist destination.
MOT launched 11 itineraries under ‘Gandhi Gramin Circuit
India moved up six places to the 34th position in the global Travel and Tourism Competitiveness Report 2019
India climbs to rank 63 from 142 in ease of doing business
The reduction of Visa Fee from USD 25 to 10
Union Cabinet has given its approval to release funds to the tune of Rs 2,482.07 crore fund for the development of infrastructure and tourist amenities
India’s first ‘full-fledged’ global cruise terminal to open in Kochi by February 2020.
New Delhi witnessed a growth of 13% as a MICE destination India ranked 28 in number of meetings and conferences.
Tourist Facilitator Certification Programme to start from 1st week of Jan 2020.
India’s Buddhist Circuit to have Chinese language signs to attract tourists.
What’s Not Good
Considering on the nationwide protest against NRC and CAA seven countries such as The United States, Britain, Russia, Israel, Singapore, Canada and Taiwan have issued travel advisories asking their citizens to either refrain from visiting or to exercise caution when visiting regions embroiled in India’s protests.
About 200,000 domestic, international tourists cancelled or postponed their trip to the Taj Mahal in the past two weeks.
Due to interrupted internet services in J&K and various parts of the country due to nationwide protest against the CAA tourist movement and the tourism business was affected like never before.
