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Mr. Gour Kanjilal - Professional being, Developing Tourism in India from Outside India
You are here » Gour Kanjilal » New Trends » outbound tourism    

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  • New Trends

  •   :: Eco Tourism India
      :: Scene of India Tourism
      :: India Destinations
      :: Outbound
      :: Tenth Plan
      :: Tourism Surge
      :: Boom Time in India
      :: Incredible Medical India
      :: Medical Tourism India
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    India's travel and tourism market was valued at US$42 billion in 2005, and is growing rapidly. India emerged as the fifth most preferred destination by the world's travellers in a survey conducted across 134 countries. India also figures in the Annual Readers' Travel Awards 2005, which were announced by the prestigious magazine Conde Nast Travellers UK in its September 2005 edition. A 5,000 year history, culture, religion and alternative medicine fascinate both budget and luxury travellers alike.

    The Department of Tourism's resolve in promoting Indian tourism has strengthened as it recognises its potential. Tourism in India is the third largest foreign exchange earner, accounting for 2.5% of GDP. It also makes a direct contribution to economy with significant linkages with agriculture, horticulture, handicrafts and construction. The outlay on tourism development rose to Rs. 7,860 million in 2005/2006, from Rs. 3,500 million in 2003/2004, and continued to focus on the "Atithi Devo Bhavah" campaign, targeted at the inbound foreign tourists in the country. Translated literally this means "Guest is God".

    Domestic Tourism Driving the Industry
    With 390 million Indians on the move in 2005, it is little wonder that it is domestic travellers that sustain the travel and tourism business. Domestic business travel and visiting family/friends, as well as pilgrimages, contributed to the 13% growth in number of trips within the country that year.

    Outbound Gets Interesting
    The number of outbound travellers from India grew by 15% to 6.2 million in 2005. This was almost twice the number of arrivals witnessed by the country. A booming economy, with GDP growth of more than 7%, rising disposable incomes, higher aspirations, cheaper air travel to countries such as Malaysia, Thailand and Singapore and better products from the industry enticed Indian travellers. This has prompted a number of global tour operators to enter the Indian tourism market either directly or through strategic alliances.

    Arrivals and Tourism Earnings Growth Slow Down
    Growth in arrivals and incoming tourism earnings slowed down substantially in 2005, to 14% and 19%, respectively. The slowdown followed a particularly good performance in 2004, with global travel recovering from various health and natural disaster scares in the previous two years. Returning Indians constitute a significant proportion of incoming arrivals and as both the country and long haul travel became more expensive, they chose other holiday destinations instead of returning to their home country.

    Destinations With Overseas Indians Top List of Arrivals
    The UK and the US lead arrivals into the country. Combined, they accounted for 33% of total arrivals in 2005. The Middle East, including Dubai, the UK and the US were the favourite destinations in terms of departures. Popular new destinations for Indians include Southeast Asian countries such as Singapore, Thailand, Malaysia and Hong Kong. Cheaper airfares and competitive holiday packages have made these favoured vacation spots.

    US Popularity Diminishes
    The US Patriot Act has led to a number of changes, as the American government becomes more stringent about its visa rules. As a result, there were huge delays and backlogs for visa processing, with some instances of visa call dates for tourist visas being given four months after the travel date. Hence the country's popularity as an outbound destination diminished in 2005, with European destinations, particularly the UK, favoured instead. However, the number of departures to the US still remained ahead of those to the UK.

    Budget Airlines New Kid on the Block in Air Travel
    At Rs1,103 billion in 2005, India's transportation industry is the largest sector of the travel and tourism industry. The sector outperformed the review period CAGR performance in 2005, with 15% sales value growth. Investment in international quality roads, the launch of low cost carriers as well as the expansion of the railways were responsible for driving growth.

    Six new low cost carriers were launched in India in 2005, and there seemed to be room for more. SpiceJet Ltd was the outstanding success during the year. As competition heated up, prices came down, making the Indian consumer the winner in all respects. Promotional fares as low as Rs1 were launched, but this was limited to short periods, as fuel price hikes and taxes made it difficult for companies to sustain these fares. Tier II city routes that were earlier sidelined or ignored were taken note of and serviced. The airline subsector outperformed the growth of the transportation sector as a whole in 2005.

    After Low Cost Carriers it is Budget Hotels Next
    Travel accommodation in India accounts for only 12% of the travel and tourism industry in value terms. The skewed nature of hotel accommodation in India is evident from the fact that it constituted 5% of the accommodation market in terms of number of outlets, but accounted for 28% of sales value. The hotel subsector achieved growth of 18% in current value terms in 2005, which was driven by increasing demand, notably in business travel.

    The huge gap between demand and supply of hotel rooms drove up occupancy levels and average room rates (ARRs) to new highs during the review period. Hotels generally cater to foreign visitors, corporate business clients and high-end Indian travellers, as hotel accommodation is out of the reach of the average Indian. Indians are increasingly seeking world-class facilities, such as clean and comfortable accommodation, Internet connection, and perhaps even fitness facilities, at local prices. In response to changing consumer needs, leading luxury and business hotels player Indian Hotels Company Ltd shifted its focus to budget hotels and rolled out the first indiOne hotel, its budget brand, in Bangalore in South India. Interglobe Enterprises signed a joint venture with Accor, in March 2005, to develop budget hotels in India under the brand name Ibis.
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