Perhaps in her first media address after joining the Ministry of Tourism as Secretary, Rashmi Verma laid out the vision of the ministry, outlining some of the challenges faced by stakeholders. She noted that to drive investments India needed to create more ROI – which was possible only when the tourism bouquet of India was significantly expanded, making it a year-round destination. Excerpts from her speech at the recently held FICCI Investors Summit in New Delhi.
India has abundance of tourism products
I think Investors Summits like these are the need of the hour. When we look at the tourism scenario, world over, we find that tourism is emerging as one of the largest sectors in almost all the countries. India, also, is no exception. Tourism sector is recognised as one of the main drivers of the economic growth and employment generation in the country. It is given a lot of importance. The PM is in fact making it a focus area.
India with its abundance of tourism products, when we look at the huge variety of products which we have, has a huge advantage over many countries. We have a lot of products to offer to the global market – to international and domestic tourists. That is another plus we have that we do not have to depend only on foreign tourists. We have a huge market of domestic tourists with a growing purchasing power, and a lot of interest in tourism and travel, now, developing in the younger generation.
Make India a 365-day destination
What is it then which is keeping us back in the sector? The growth in numbers has been impressive. We have jumped up many positions in the WTTC and WTA reports. When we look at the growth in the current financial year, or the numbers from January up till now, the numbers have almost doubled in terms of foreign tourist arrival and foreign exchange earnings too. If we look at the growth only in the month of May, I think it is really encouraging. The growth in terms of foreign tourist arrival has been 19.4% which has been the highest achieved growth so far. It is also very encouraging to see this growth in the month of May which is normally considered to be a lean period for tourism in the country. Generally, our tourism period has been a short period – say from October to March – but obviously, it is now extending to summer months as well. This is a dream which we have had for many years that we make India a year-round destination. Then only we will be able to make it a viable destination for investment in our country.
Lack of consistent occupancy detrimental to growth of hospitality
One of the big reasons why the hotel industry, or other investors are not coming forward, apart from many other challenges which we find, in terms of land prices being very high and non-availability of land, and many other issues, was that our hotel rooms were occupied only for 4-5 months while the occupancy rates were very low in the rest of the period, making it an unviable project to invest in. I have seen that many hotels which close down during the summer months, therefore they find it unviable to run the hotel and pay salaries of the staff. This is one reason that has kept us back, and if we look deeply at other challenges which the sector is facing is that despite the huge variety of tourism products and destinations, the gaps that we face in terms of infrastructure development, and when I talk about infrastructure development, I am talking about world-class infrastructure which is missing at our destinations.
We find that even after so many years of working together, state governments and various ministries of the government of India, and the industry too, we have not been able to provide the basic amenities which are required by tourists – domestic or foreign. Even a basic amenity like a clean toilet is not available. Wayside amenities in our major tourism circuits are still missing. Why is it that people are not coming forward? I would say that we have crossed many bridges and many developments have taken place since the time I was the Additional Director General, GOI between 2002-2004. There were issues that kept us back at that time.
New initiatives addressing bottlenecks
Many of those issues have been addressed now, in terms of connectivity, visa-on-arrival and e-visa facility – which is being offered becoming very popular – and now we have the Regional Connectivity Scheme (RCS) that the aviation ministry has come up with. Many such similar steps of opening up and deregulating many sectors which were keeping the tourism sector behind have now happened, by different ministries. The ministry of environment is working towards relaxing the coastal regulation norms. These are issues that should encourage and take our tourism industry forward.
However, investment is still not coming. The government of India has made FDI possible in many sectors related to tourism, like real estate, aviation and others. We have also gone for ease of doing business with single-window clearances. In fact, there is an inter-ministerial committee chaired by no less than the Cabinet Secretary himself. All the stakeholders and secretaries are there. Any issue which is coming in the way of tourism development in our country are discussed there and steps are taken to iron out those issues. That committee is doing a lot in converging the efforts of many ministries. Yet we are not there where we want to reach.
States taking the lead, making land available for projects
We have many steps to take and as the Managing Director of Madhya Pradesh mentioned, the action really lies in the state. There are many reasons for that. Land plays a key role in investment, whether it is the hotel industry, amusement parks, or a convention centre. Unless land is made available to the investor, it does not happen, but I am very happy to note this that many state governments are coming up with very investor-friendly policies and coming up with many such proposals where the land is also made available. Many other facilities and incentives are being offered to investors who are coming to the states, and a lot of activity is happening in and around tourism destinations in states. But there are states which are still lagging behind and from the point of view of the government of India, we are trying to take everybody along. The best thing about the tourism sector is that states do not really have to compete with each other. Generally, when we take a look at the manufacturing sector or any other sector, each state is competing with each other, but as far as tourism is concerned, each state of our country has such an endowment of tourism products that they do not really need to compete with each other. There is a potential of investment in each state and if the state governments adopt an investor-friendly policy, then I am sure that investors can find ways of investing in various sectors.
In terms of infrastructure, we are short of about one lakh classified hotel rooms in our country. We are promoting home stays and Airbnb kind of facilities which is going a long way, some states are doing really well. Sikkim has done very well in this regard, but hotel rooms are required and there is a lot of potential, and like Madhya Pradesh, other states are also opening up and offering land on the PPP mode, as well, for investment in the hotel industry.
When we look at foreign tourists, they are more interested in experiential tourism, rather than seeing a destination and going back. I think the industry and states need to work on that front and create products that are niche in nature, like adventure tourism, cruise tourism and eco-tourism etc.