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12 Tourism and Travel Related Services 1 INTRODUCTION Tourism and travel-related services sector is regarded as the world’s largest industry and one of the fastest growing, accounting for over one-third of the value of total world-wide services trade. According to WTTC, travel and tourism can bring prosperity to host communities, creating jobs in deprived or rural areas, where there are often few viable alternatives (WTTC 2003–04). It employs a relatively high proportion of women, minority groups and those with a low skills level, and encourages entrepreneurship with few barriers to setting up in business. The most striking feature of South Asian tourism is its one of the lowest share in total international tourist arrivals. In 2006, South Asia received merely 8.9 million foreign tourists, which was barely 1.1% of the total world tourist arrivals (World Tourism Oganisation 2007). In fact, in the Asia and the Pacific region South Asia receives the least number of foreign tourists (Table 12.1). However, one positive sign is that in 2006 the growth rate of arrivals has been the highest at 11.7% in South Asia from all regions in Asia and the Pacific. Similarly, in terms of international tourism receipts, the share of South Asia in the world in 2006 was 1.6% (Table 12.2) and the growth rate was the highest – almost 14% – in the region. Another positive sign was that the receipts per arrivals were the second highest after Oceania. Nevertheless, all this is happening at a fairly low base and South Asia has to take a number of drastic measures if it is to attract a sizeable number of tourists commensurate to its potential. This is also a region consisting of countries like the Maldives, Nepal and Bhutan whose economies, to a large extent, are dependent on tourism. According to the World Tourism Organisation (WTO), from the South Asian region India is the only 1 The chapter is based on the report authored by Shailendra Kumar. country that figures in the list of the top 50 countries in terms of international tourist arrivals by country of destination and ranked 42nd with 4.4 million tourist arrivals in 2006. Similarly, in terms of international tourism receipts too India is the only country from this region that figures in the list of top 50 countries of the world and India did much better in terms of receipts by earning $8.9 billion and ranked 21st in 2006. This seems to be chiefly because the number of days spent by an average tourist is relatively high for India suggesting the country has enormous tourism potential. In regard to outbound tourism also India does fairly well as its tourists spent $7.4 billion in 2006 and the country ranked 23rd among the top 50 countries of the world spending the highest amount of money on tourism. It is indeed interesting to see that Pakistan is the only other country form South Asia that has made to the club of top 50 countries in terms of international tourism expenditure implying that it is an important tourism market in the world. From South Asian point of view India and Pakistan offer large markets and even if other countries could grab a small pie of it, it could change the landscape of tourism in other countries. According to the WTTC (2005), on an absolute scale, India is one of those countries where the travel and tourism demand is expected to grow the most between 2006 and 2015. India is expected to grow its demand to about $57 billion and should be ahead of Canada and behind eight countries in the list of top 10 countries expecting the highest tourism demand. Moreover, on an employment scale, India is expected to perform better than the absolute scale as by the year 2015 it is likely to generate almost two million new jobs thereby becoming the fifth largest country in terms of job creation. Interestingly, in the list of top 10 countries expected to generate the maximum number of jobs in the tourism sector there is one more country
T OURISM AND TRAVEL RELATED SERVICES 119 from South Asia – Pakistan – which is likely to create a little over one million jobs. In the WTTC study of 2003, Bangladesh too figured as one of the 10 countries that were likely to generate maximum number of travel and tourism jobs. However, it does not find its place in the studies of later years whereas India and Pakistan have consistently maintained their positions. On a relative scale India with an annualised growth rate of 8.6% ranks third in the list of top ten countries of the world expected to grow their travel and tourism demand fastest between 2006 and 2015 (WTTC 2006). Even when the WTTC took the projection until 2017 instead of 2015 there was not much change in the India’s position and the results show that the People’s Republic of China, Montenegro and India are at the top of the list, with demand in the respective countries growing each year at a rate of 9.1%, 8.6% and 7.9% (WTTC 2007). These countries have consistently ranked in the top three positions over the past four years, consolidating their growth year on year. Their strong foothold in terms of performance is underscored by a sustained expansion in their travel and tourism industries as a result of focused strategic development and targeted investment. From the calculation of RCA of four South Asian countries – Bangladesh, India, Pakistan and Sri Lanka – it is evident that while the average RCA for these countries is 0.7 (which is low by international standard and an RCA less than one reveals the absence of comparative advantage), that of Sri Lanka is 0.8, which is the highest RCA followed by India and Bangladesh (Table 12.3). However, Pakistan has the lowest RCA of 0.2. In the South Asian region while the tourism and travel related services sector play a dominant role in the economies of the Maldives, Nepal, Sri Lanka, and Bhutan, it remains important for India, Pakistan and Bangladesh. Out of seven South Asian countries Bangladesh receives the least number of foreign tourist arrivals after Bhutan (Table 12.4). However, if one looks at the growth in tourist arrivals during 1990–2004 then Pakistan has seen the lowest growth. The Maldives stands out as the country having registered the highest growth in tourist arrivals in the region during 1990– 2004. However, from 2000 to 2004 it is Sri Lanka that has had the highest growth in tourist arrivals. India Table 12.1 International Tourist Arrivals Asia and the Pacific Absolute (million) Change % % Share of World 2005 2006 04/03 05/04 06/05 2006 North-East Asia 87.6 94.1 28.6 10.3 7.4 11.2 South-East Asia 49.3 53.9 30.6 4.9 9.3 6.4 Oceania 10.5 10.5 12.1 3.7 0.6 1.3 South Asia 8.0 8.9 18.5 4.7 11.7 1.1 Source: Based on the figures in UNWTO World Tourism Barometer, Volume 5 No. 2, June 2007 Table 12.2 International Tourism Receipts Asia and the Pacific Change Local Currencies, $ billion Receipts per % Share Constant Prices (%) Arrivals of World 2003-04 2004-05 2005-06 2005 2006 2006 2006 North-east Asia 33.4 8.0 11.6 65.4 75.0 800 10.2 South-East Asia 26.1 -0.7 9.7 33.8 40.7 760 5.5 Oceania 7.6 0.9 1.7 25.6 26.3 2,490 3.6 South Asia 20.1 4.3 13.9 9.6 11.5 1,290 1.6 Source: Based on the figures as given in UNWTO World Tourism Barometer, Volume 5 No. 2, June 2007 Table 12.3 (RCA) in Travel Services for South Asia Region/Country 1980 1990 1998 1999 2000 Average 1998–2000 South Asia 1.7 0.9 0.8 0.7 0.6 0.7 Bangladesh 0.3 0.2 0.7 0.6 0.6 0.6 India 2.0 1.0 0.9 0.7 0.6 0.7 Pakistan 1.0 0.4 0.2 0.9 0.2 0.2 Sri Lanka 1.6 0.9 0.9 0.8 0.8 0.8 Source: South Asia Yearbook of Trade and Development 2005, CENTAD, p. 116
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Preface Our consultations with seni
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viii CONTENTS 7. Revenue and Welfar
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Executive Summary OBJECTIVE This st
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EXECUTIVE SUMMARY xiii Table 1 EAMA
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EXECUTIVE SUMMARY xv India A full S
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EXECUTIVE SUMMARY xix ments on basi
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Part I BENEFITS FROM TRADE, INVESTM
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2 Literature Review and Rationale f
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4 Effective Additional Market Acces
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6 Impact of SAFTA on Member Countri
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7 Revenue and Welfare Implications
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8 Impact of SAFTA on Inward and Out
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APPENDICES
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Appendix 8 Intra SAARC FDI Collabor
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Appendix 11 Table A11.1 On an Emplo
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Appendix 12 Original Commitments/In
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Appendix 14 Table A14.1 Telecommuni
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Appendix 15 REFERENCE PAPER Scope T
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Bibliography Abelson, P. (1996),
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BIBLIOGRAPHY 241 Cuba (2002), Negot
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BIBLIOGRAPHY 243 (2004), Impacts of
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BIBLIOGRAPHY 245 Silva, Patricia an
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BIBLIOGRAPHY 247 (1998), Tourism Se
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