Trade Pulse | 2017-07-21
Incredible times ahead!

Incredible times ahead!

Focused strategy to set up India tourism for an incredible journey

Rashmi Verma, Secretary, Ministry of Tourism, Government of India, seems to have started her journey on a realistic footing. With a firm strategy and targeted action plan, the dynamic bureaucrat who saw India through its first ‘incredible campaign’ when she was Additional Director General (ADG) tourism, seems all set to lead India tourism through yet another ‘incredible’ period. TravelScapes in a candid interaction with the pragmatic Secretary Tourism finds out about the rewards and challenges of India Tourism and her strategy.







In your opinion, how much of its tourism potential has India achieved?


Looking at the variety of tourism and niche products that India has, we have only touched the tip of the iceberg. We have a mere one per cent of the Global traveller and even if we double that number, we shall go a long way. Our foreign tourist arrivals are growing steadily at a rate of almost 9.5 per cent. However, if we want to have a reputable standing in the global tourism market, we need to, at least, double that growth and India has that potential.



What are the current challenges that India tourism is facing? What is needed to overcome them?


Even though India has immense variety to offer when it comes to tourism, be it in terms of the variety of destinations or niche products such as adventure, tea, eco-or cruise tourism, among others- we are lacking in terms of infrastructure. We need to focus on major tourism destinations and create mega tourism clusters or hubs there, with all kinds of facilities. India is also short by around one-lakh hotel rooms including budget accommodation. We need to focus on infrastructure development in and around tourist destinations. 





Also, a proper strategy in terms of marketing initiatives is needed. We need to identify which are the existing markets that we need to continue to focus on, which emerging markets have potential and what are the kinds of products that we need to market there. We are also behind when it comes to providing basic amenities for tourists. Facilities such as wayside amenities, clean toilets and clean drinking water are lacking. 



Even though connectivity has improved tremendously, over period, through initiatives such as ‘Open Sky Policy’ and ‘Regional Connectivity Scheme’; there are destinations in the North Eastern as well as the other regions, which still lack proper connectivity. As there is a lot of interest in these destinations, this lack of ease of accessibility needs to be addressed. 



Please elaborate on Tourism hubs, have you identified any destinations?


We need to take some of the existing tourism hubs from being stand alone attractions and make them part of a larger scheme. We need to grow beyond this point where states are only focusing on showcasing their own products. Taking the instance of the Buddha Circuit, which spans three to four states including UP and Bihar, we need a strategy that enables us to offer an entire bouquet of offerings to the Buddhist tourist. From the Government of India point of view, we have to adopt a more holistic approach that transcends state boundaries. We are now looking at the holistic development of these destinations with better infrastructure, connectivity and marketing.



What is the strength of India tourism? 


The biggest strength of India is the absolute variety of tourism products it has to offer. It has all kinds of offerings for all kinds of markets, the only thing that is needed is proper development, showcasing and marketing in the right markets. India is one of the biggest domestic markets both in terms of manufacturing and tourism. So our focus is both on looking at Foreign Tourist Arrivals to India as well as on promoting domestic tourism. So while we are looking at attracting more and more foreign tourists, we also need to cater to the domestic tourists who are now looking for new experiences and new destinations to go to. Outbound tourism from India is growing; we need to ensure that instead of going overseas, let’s say, for a beach; Indian tourists explore the exciting beaches within India. It has huge potential, with the growing GDP and growing spending capacity of the Indian consumer.



What initiatives are you taking to promote it?


In the year 2002-03, when I was ADG Tourism, the Incredible India campaign was launched and we managed to create awareness about India. For the first time people, around the world, got to hear about India and what it has to offer. Now a more intensified campaign is needed. The awareness already exists, we need commitment via a more in-depth campaign. We are in the process of finalising the Incredible India 2.0 campaign, which we shall be launching soon in existing and potential markets.



As far as the marketing initiatives are concerned, we are in the process of drawing up a marketing plan and all our marketing initiatives shall be as per that plan. Whether it is the Incredible India 2.0 campaign, which we are in the process of finalising, road shows, FAM tours or any other initiatives, nothing shall be ad hoc; everything shall be according to the marketing strategy that we are going to adopt in terms of the foreign as well as domestic market.


The process of rebranding our website is underway and we shall be launching a very vibrant and dynamic website in the near future. It shall not only provide information but also proactively convert visitors into tourists. The revised Tourism Policy is near finalisation and shall shortly be presented to the cabinet for approval.



All the ticketed ASI monuments are being illuminated and prepared for night viewing. We are seeking the help of the industry, as well as state governments for things like toilets, drinking water as well as cleanliness within and outside, these monuments; which shall go a long way in helping us improve our position. 



What is your opinion on the GST for tourism especially for the hospitality sector?


As far as the tour operators and travel agents are concerned, they have got a fair deal; they have been put at the lowest slab at five per cent. It could not have been any lower and there are very few exemptions in GST and it is almost at par with what they were paying earlier.



I agree that the tax of 28 per cent on hotels with a tariff of above `5000 is a little challenging, looking at the present instance of tax state wise, it is at an average of 20 to 21 per cent. Some are lower and only three states, Manipur, Meghalaya and Delhi are higher than 28 per cent. Another disturbing factor is the fact that GST is not talking about the five star or five star deluxe category, but every accommodation which is above `5000. So everything from houseboats of J&K, the tents in Leh, adventure tour operators offering tented accommodation, who are currently paying five per cent, shall be impacted. This shall hurt the sector as most of them are charging above `5000.



For hotel rooms also, the `5000 threshold is very low and is more of a four star rate rather than that for a five star deluxe. This shall impact tourism as it shall make it non-lucrative for prospective investors in the hotel sector as India is short of around a lakh rooms.


Internationally, a tax rate of 28 per cent shall make our packages unattractive in comparison to our competitors such as Malaysia and Thailand; as we have a very high tax rate and they they have a tax rate of only around six to seven per cent. One major negative shall be the impact on MICE business, which is very lucrative for us as it is a mass movement and a lot of Convention Centres are coming up in the country. With this kind of a high hotel rate, it shall become very difficult for us to attract the international MICE business.


I have already taken it up with the Ministry of Finance and I have written a letter to the Revenue Secretary and forwarded a comparative statement of the recent incidence of tax statewise with the proposed under GST.  Tourism Minister has also forwarded the representation received from FAITH in this regard to Finance Minister. We are hopeful that given the importance of tourism sector in terms of employment generation, our request will be favourably considered by the GST Council. 



Any advice/ message you want to convey to the travel trade community?


I would only say that we together have to work towards promoting India as a tourist destination and work on improving the overall brand quality. There should be a lot of synergy between the industry and the government. 



* Since the TravelScapes interview on June 14, 2017, there has been a revision in the GST rates and the highest tax rate of 28 per cent is assigned to tariffs of `7500 and above, as opposed to `5000 and above.



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