This may not be the best time to write about tourism. Arrivals and earnings are down, cancellations are up and the outlook is far from inspiring. But this may well be the right time to take stock and formulate long-term strategies because tourism has the potential of earning more foreign exchange for this country than any other industry or activity.

Unfortunately tourism has always got short shrift for the simple reason that it is not a vote catcher like agriculture, textiles or railways. The benefits of tourism have not percolated down far enough, because the ordinary villager cannot make the mental connection between a rich tourist staying in a five-star hotel with the price he gets for the cotton and silk that he weaves. If the economic forces of tourism can be unleashed, the farmers would be as supportive of tourism as they are of the fertiliser subsidy!

We would have to accept the fact that India is not a favourite destination among international tourists quite to the contrary. Hence if we want to earn dollars from our tourism product we will have to get rid of our pompousness and stop making hyperbolic statements about India’s attractions that nobody believes in. We can hardly be justified in boasting about what nature gave us, when we ourselves have done little to enable travellers from abroad to see India in comfort, security and a hassle-free manner.

Seeing it whole

A successful tourism product demands the involvement of many agencies ranging from state governments to transporters. Unless there is a master plan that defines the responsibilities of every agency, one out-of-synch segment can throw a monkey wrench into the whole works. The plan must view the “whole” tourism product, including the infrastructure (eg roads, airlines, water, telecommunications), facilitation (eg, immigration). It must also identify the long-term strategy of our tourism marketing. So that we do not promote the destination in a whimsical fashion — marketing India today as a cultural destination, tomorrow as a stay-put beach destination, and the third day as an adventure destination.

Planning must take into account the unique dynamics of this industry; it is by and large capital-intensive with a long gestation period. The asset turnover ratio in the initial years is low, with the result that higher debt-equity ratios on softer terms are necessary to attract capital and then support the investment during the initial years.

Twin problems

This industry has to cope with twin concurrent problems — high demand and shortage of capacity in peak periods followed by low demand and spare capacity in lean periods. This capacity cannot be diverted to other areas unlike in most other industries. A well-thought out ten- year-plan is therefore necessary to enable the various segments and arms of the industry and financial institutions to dovetail their own efforts with government policy.

Success in tourism depends greatly on the support of state governments. It is not uncommon for states to levy crippling taxes on hotels, transportation, etc that make a mockery of tourism. (Although very unlikely to be accepted, there is a strong case for putting tourism on the concurrent list, if not making it a central subject outright.) Perhaps the centre should allocate resources to educate state governments on the economic benefits of tourism, so as to secure their cooperation.

We must fully develop the best circuits, places, destinations and take them to economic levels of operation before we open new areas. Similarly our marketing efforts should be well focused on a few countries which have the greatest potential, instead of having 30 tourist offices in 20 countries each office spending most of its budget on administration instead of promotion! Needless to say that this focusing has to be done keeping an eye on the competitive circumstance — an area of great weakness in our tourism panning. There is no short cut to professionalising ever specialised activity, particularly if it has commercial consequences. Tourism is no exception. Until the ministry (or the National Tourism Board, if it is ever setup) has specialists in planning, design, marketing, advertising, servicing and all the other activities n which success in this industry depends, our approach will always be amateurish. The government may like to examine the tourism planning and promotion set-ups in countries like Indonesia, Ireland, Spain, etc and then decide what is most appropriate to us.

Privatisation of hotels

Privatisation is of particular relevance to tourism, It has been accepted that services — especially those of a highly personalised nature — are not suited to being managed by the government. If the ITDC hotels in Delhi were run by the private sector, the degree of guest satisfaction, foreign exchange earnings, and taxes contributed o the exchequer would all be higher. Also, privatisation may actually compel the government to concentrate on policy and governance. The sale of government hotels to the private sector could bring in money which can be well spent on infrastructure development, marketing and training. In the final analysis, the government must be very clear as to what role it has to play in tourism, or for that matter in any industry. Whatever the role it assumes, it must be discharged with the highest degree of professionalism. The time is now for a bold new approach. In fact, since the ideas are not really new. What we need is an “old but bold’ approach.

Nripjit Singh (Noni) Chawla

This article originally appeared in Business India - 28 October 1991