a quarterly report by - Technopak

perspective
a quar terly repor t by
Volume 02 / 2009
| Volume 02
Background
Travel and Tourism is an inseparable part of the world in which we live making a significant contribution to
the country’s economy, as well as to the quality of life of its citizen’s.
Globally, travel and tourism, accounts for 10% of the GDP, 8% of jobs and 12% of investment annually. It
also has the highest potential for growth with the industry, currently growing at more than 4% per annum
with an average of 3% in developed economies and more than 7% in emerging markets. In India, travel &
tourism is currently contributing 2.2% directly to the GDP and is expected to grow at 6.6% as compared to
the retail industry, which despite its high contribution of 35% to the GDP, is expected to witness a growth,
which is marginally higher than the hospitality sector, at 8%.
Travel makes a positive contribution to the planet and its people, assuring human contact, providing
pleasure, expanding business opportunities, easing diplomatic relations and opening eyes to new horizons
and perspectives. The resilience of tourism – with demand repeatedly bouncing back despite successive
high profile challenges ranging from terrorism to disease – shows how keenly and widely it is appreciated
by its customers. Tourism is appreciated by all – so much so that they compete for the benefits it can bring,
economically, socially, and environmentally. It is helping build economies emerging from poverty, conflict
and confusion. It stimulates infrastructure development, secondary economic activity and gives value to
natural and built heritage that would otherwise be under threat.
Tourism – Growth Drivers
Tourism acts as a unifying force as people travelling can witness the dynamism of their own country at work
and learn about their own nation. This experience helps in fostering goodwill and understanding between
various linguistic, religious and communal groups living in different parts of the country.
Development of the tourism industry provides employment for many and has helped build stronger
economic structures which in turn have helped in attracting international tourists and the foreign exchange
they bring in. Tourism also contributes to the development of the local handicrafts and cottage industries.
It is said that with every 40 Km drive from a state premise, one witnesses vast changes in the topography,
the dialect, the food habit and the attire in a united Exhibit 1
and diverse India, which presents a multi-faceted
tourism product ranging from 27 world heritage
Indian Tourism Industry - Market Size
sites, mountains, beaches and deserts intermingled
with an opportunity to experience diverse cultures
and religions.
250
200 79%
46
78%
85
81
With both Indians and foreign nationals travelling
within the country, the tourism industry is estimated
to be worth US$ 43 Bn in 2008 with close to 612 Mn
tourist visits during the year. Currently, the industry
experiences a healthy growth of 17% in value terms
and 14% in volume terms. Approximately 75%
of the tourism spend in the country is fuelled by
domestic travelers (shown in Exhibit 1).
Traditionally, mankind has been extremely inquisitive and very travel friendly, the quest for knowledge and
to walk the unknown has encouraged travelers from far and wide to experience the wonderful and diverse
nature of the country. Although the industry and the government have taken strong measures to boost
the inflow of foreign travelers in India by effective marketing strategies, it is the domestic traveler who has
contributed to the overall growth of tourism as a sector in India. The growth rates in both international and
domestic travel are extremely encouraging.
57 | Indian Tourism : Managing Growth by Breaking Barriers
Market Size ( US$ Bn)
150
100
50
0
4
15
2003
74%
77%
22
164
11
32
73
2008E 2013F 2018F
Domestic Tourist Spends International Tourist Spends % Domestic
Source: Euromonitor, Tourism Statistics 2007, Ministry of Tourism–Government of India, Technopak analysis
77
73
69
65