Indian Tourism Industry Emerging Challenges and Opportunities:

A Conventional Study
Dr.A.Raghu
Assistant Professor
Indira Gandhi National Tribal University
Madhya Pradesh,

India is the cradle of the human race, the birthplace of human speech, the mother
of history, the grandmother of legends, and the great grandmother pf tradition. Our most
value and most instructive materials in the history of mans are treasured up in India
only.
-

Mark Twain

We must welcome visitors from abroad for economic reasons, for tourism brings
foreign exchange, but even more so because this leads to greater understanding and
mutual appreciation. There is nothing that the world needs today more than mutual
understanding.
-

Jawaharlal Nehru

Tourism has emerged as one of the worlds largest industries. It is expanding very
rapidly day by day and it is providing the tremendous job opportunities to the millions of
people. In positive term it has termed as Smokeless Industry. India tourism is one of the
most diverse products on the global scene. This article studies the growth of foreign
tourist arrivals and foreign exchange earnings into India through the Indian tourism
industry. It also examines Challenges and Opportunities faced by the tourism industry.
The article suggests measures for increasing the growth of foreign tourist arrivals and
foreign exchange earnings into India via it tourism. It is evident from this study that the
India Tourism Industry is growing significantly each year at a rate of 7% in foreign
tourist arrivals.

Twenty first century is witnessing Globalization Information Technology made

the world a Global village. Communication network is fast undergoing a radical change
day by day. Similarly is the historical and cultural understanding of the world. Tourism
has been pivotal in social progress as well as an important vehicle for widening cultural,
sociological, economic contract throughout human history. Tourism spreads information,
cultural and fraternity develops harmony the people which ultimately leads to national
integration.
Communication network and information channels are fast undergoing a radical
change. Similarly, the historical and the cultural understanding of the world are
enormously changing. Environment, neat and clean neighborhood is gaining prominence.
Under the changing scenario people are eagerly trying to understanding the history of
various countries their people and culture. These bonds of historical understanding have
been further strengthened by the new and emerging area i.e. Tourism. Therefore Tourism
is the emerging industry world over. Hence history and tourism go hand in hand.
***************
Tourism Meaning:
The International Dictionary of Tourism published in 1953 by the International
Academy of Tourism of Monte Carlo, points out that tour in English and French means a
journey, a circulative trip. The Nineteenth Centaury dictionary defines tourist as People
who travel for pleasure of traveling, out of curiosity, and because they have nothing better
to do, and even for the joy of boasting about it after words.
The International Union of Official Travel Organization (IUOTO), how called
world Tourism Organization (WTO) has defined tourist as temporary visitor staying for at
least twenty four hours in a country visited when the purpose of the journey can be
classified under one of the following headings: (a) leisure recreation, health, study,

religion and sports, or (b) business, family, mission, meetings, travelers staying less than
twenty four hours according to WTO are excursionists. The United National accepted
the above definition of a tourist provided by IUOTO in their conference on International
Travel and Tourism in 1963.
Introduction:
Tourism is taking a vigorous upswing as an area for studies with globalization
process in full swing. Information Technology made the world a global village.
Communication network is fast undergoing a radical change day by day. Similarly is the
historical and cultural understanding of the world.
Tourism has been pivotal in social progress as well as an important vehicle for
widening cultural, sociological, economic contract throughout human history. Tourism
spreads information, cultural and fraternity develops harmony the people which
ultimately leads to national integration.
India is a tourist paradise and has all unique features of modernity and traditional
hospitality. Each state has its own cultural glory and historical monuments to visit.
Andhra Pradesh is a confluence of many a cultural stream. Assam state has several resorts
and beautiful areas to visit. West Bengals contribution to Indian life is unique and
unforgettable. Bihar State is with glamorous pas and presents prestigious places to visit.
Gujarat is an industrially developed state and offers many products to the visitor.
Himachal Pradesh state is a beautiful picnic centre and offers may attractions. Jammu &
Kashmir is a diamond studded with many beautiful gardens and lakes in the crown of
Indian and a visit to Jammu & Kashmir gives most enjoyable experiences. Kerala is the
most densely populated state in India and offers many attractions to visitors. Tamilnadu is
with ancient temples and with modern industrial achievement. Madhya Pradesh is the
meeting place of different races and offers many tourist places. Maharastra is the cradle
of Indian freedom and an industrially advanced state having many a splendid picnic spots
to visit. Orissa is a state immortalized by art. Punjab is both industrially and agriculturally
advanced state and spearhead in our history. Rajasthan is a state with many great forts,

lakes and the desert life is so vivid a visit to the state is a unique experience. Uttar
Pradesh is the valley of Ganga having unique place in Indian Politics and offers many
interesting holy and picnic places to visit. Thus India offers every thing to anybody.
Tourism Development in this country has been started in the early sixties. Since then
tourism has been developing by leaps and bounds.

Tourism is travel for predominantly or leisure purpose or the provision of

service to support this leisure travel. The World Tourism Organization defines as people
who travel to and stay in places outside their usual environment for not more than one
consecutive year for leisure, business and other purpose not related to the exercises of an
activity remunerated from within the place visited Tourism has become a popular global
leisure activity.
Tourism plays pivotal role in Economic Development. After the
globalization world comes under one roof. The human being life has become
mechanized. In the materialistic man has to work round the clock. So number of surveys
are depicts saying that majority of the people are still suffering due to the lack of good
entertainments and also extending suitability life of human being.
Tourism is vital for many countries, due to the income generated by the
consumption of goods and services by tourists, the taxis levied on business in the tourism
industry, and the opportunity for employment in the service industries associated with
tourism. These services industries include transportation services such as cruise ships and
taxis, accommodation such as hotel, restaurants, bars, and entertainment venues, and
other hospitality industry services such as spas and resorts.
Tourism is playing an important role in the global economy. In view of the
succulent benefits, the developed and developing countries have given due importance to
the tourism industry in their national development plans. Today tourism has become a
white collar, environment friendly industry and one of the largest and fastest growing
industries employing the largest number of labor force. According to the World Tourism
Organization (W.T.O) more than 700 million tourists travel internationally every year
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spending more than 300 World exports, 30 percent of International trade in service and
more than one billion jobs.
Tourism in India is expanding the fastest and is the most recording industry in the
country. In recent years, the country has woken up to this great reality and consented
efforts are being made to develop and promote this foreign exchange earning industry in
a big way, India, with its rich cultural heritage, ancient monuments, world famous
temples architectural master pieces, wild animals sanctuaries and scenic spots, holds a
great attraction for the tourists on the move Indian Governments has also recognized the
economic and other benefits of tourism and promoting the tourism with large budget
allocations.
Various Aspects in Tourism:
Tourism contains major thrust like Beaches, Lakes, Dams, Hill Stations, Parks,
Planetariums, Picnic Spots, Water Falls, Historical Places, Temples, Monuments and
Museums.
In India as 28 states these have various aspects. They are Cultural Tourism,
Pilgrimage Tourism, Eco Tourism, Wildlife Tourism, Tribal/Ethnic Tourism, Rural
Tourism, Beach Tourism, Leisure Tourism, Adventure Tourism, Health Tourism and
Spiritual Tourism.
A Catalyst for Economic Development:
It is a fact that tourism is key factor for accelerated development, education,
employment and dignity for the worlds fastest countries. Tourism can help reduce
poverty with fair and progressive liberalization. The World Tourism Organization is
calling for Liberalization with a Human Face a progressive asymmetrical loosening of
restrains with special benefits foreign exchange, promoting entrepreneurship, stimulating
infrastructure investment and creating millions of skilled jobs in tourism.

Francesco Frangialli, Secretary general of the World Tourism Organization

underscoring the size of the Worlds largest industry, and he said 763 million trips were
taken with tourist spending US $ 622 billion during the year 2007.
Frangialls continues to insist that tourism trade can be one of the most decisive
factors in achieving the goals of development and sustainability in the global trading
system particularly in the worlds poorest countries. He argues that now is the moment to
carry forward what he refers to as Tourism Liberalization with a human face
prioritizing poverty alleviation along with fair trade and triple bottom line sustainable
development.
Tourism is one of the oldest areas of economic activity covered under the WTOs
General Agreement on Trade in Service (GATS) Tourism and travel related services
account for about 10.8 percent of world GDP and employ about 231.2 million people
world wide.
Indian Tourism & Travel economy, employment is estimated as 25,607,000 jobs
in 2010 and 8.5% to total employment or one in every year19.3 jobs.
The Beneficial Characteristics of Tourism:
Irrespective of its diverse impacts many countries focus on tourism because they
are convinced it has a significant influence not only on the institutions, people and
facilities that are engaged in tourism activities but also on the local host communities.
The key positive characteristics of Tourism include the following.
i)

Tourism is a labor intensive industry, which generates employment

opportunities at semi skills, technical and managerial levels.

ii)

Tourism consists of predominantly small scale business, in spite of

the fact that there has been increasing investment and involvement
in the sector by multinationals and local medium size and some bigsize companies.

iii)

Tourism is a relatively decentralized industry that is highly capable

of diversifying regional economies, and hence is more suitable in
affording the region equitable development.

iv)

Tourism is an important vehicle for promoting cultural exchanges

that enhance international understanding and good will among the
diverse peoples of the world.

v)

Thus the tourism activities act as catalyst for the development of

other sectors of the economy.

Contribution of Tourism to GDP:

The travel & Tourism contributed to 12.8% to world GDP in 2010. In South Asia
it is estimated to contribute 3.25%, on the other hand the industry in India contributed
3.0% in 2010 (INR 938.7 billion). The travel & Tourism is highly growth activity which
is expected to increase its total economic activity by 5.4% p.a. worldwide. It is estimated
at 8.3% growth is South Asia and 8.9% in India.
Employment Creation:
Travel & Tourism is human resource incentive, creating quality jobs across the
full employment spectrum. In 2010, one in 15 jobs was generated by the industry
accounting for 9.3% of global employment. Today, there are 96.1 million Tourism &
Travel economy and these will rise to 96.6 million jobs and 262.6 million Tourism &
Travel economy jobs by 2017.
The industry is labor intensive and hence is expansion generates more job
opportunities than an equivalent expansion in other sectors of the economy. It is
estimated that well over people in the World are currently deriving their livelihood from
tourism.
Tourism Earnings:
According to World Travel & Tourism Council (WTTC), the demand for tourism
is expected to post US $ 8000 billion of economic activity worldwide. Travel & Tourism

demand in South Asia is expected to reach US $ 95 billion by the end of 2010 where as in
India it is expected to reach INR 3500.00 billion of economic activity growing to INR
9472.7 billion by 2017.
Tourism & travel is a major exporter, with inbound visitors injecting foreign
exchange directly into the economy. Tourism & Travel exports in South Asia are expected
to represent 8.5% of total exports in 2010 where as it is expected to generate 7% (INR
674.8 billion). It is interesting to note that the Travel & Tourism Operating expenditure
worldwide represents at 3.8% and it case of India it is just 1% total government spending.
Foreign exchange earnings have been increasing steadily over the past the years
representing an appreciable growth rate. While tourism is sensitive to the level of
economic activity in the tourist generating countries, it provides higher and stable earning
than those from primary products.
Contribution of Tourism to Development of Infrastructure:
The benefits accruing from investments in infrastructure and superstructure as
airports, hotels and restaurants, road networks, communications, power and water supply
as well as other related public utilities are widely shared with other sectors of the
economy, resulting into greater economic efficiency or any country that encourages
tourism.
Tourism and Regional Development:
Tourism has been cited a major promoter of international good will and
understanding as well as prime means of developing social and cultural understanding at
the level. The industry contributes significantly to international commerce and also in
enhancing good relations between the countries of the world.

Tourist Arrivals Worldwide:

The 946 million international arrivals currently estimated represent an additional

43 million over 2010s level marketing a new record year for the industry. Of these 43
million, 22 million were for Europe 12 million for Asia and the Pacific and 3 million for
each of the remaining regions the Americas, Africa and the Middle East.
Travel Motivations:
In 2006 just over half of all international tourist arrivals were motivated by
leisure, recreation and holidays (51%) a total of 530 million. Business travel accounted
for some 16% (131 million), and 27% represented travel for other purposes, such as
visiting friends and relatives (VFR) religious reasons / pilgrimages, health treatment, etc
(225 million). The purpose of visit for the remaining 6% of arrivals was not specified.
Transport Preferences:
Air Transport (46%) and transport over land whether by road (43%) or train
(4%) generate roughly equal shares of all arrivals, while arrivals over water accounted
for 7% in 2010. for the past three years, the trend has been for air transport to grow at a
faster pace than ground and water transport.
Receipts from International Tourism Worldwide:
For many destinations, visitor expenditure on accommodation, food and drink,
local transport, entertainment, shopping etc.., is an important pillar of their economics,
creating much needed employment and opportunities for development. Some 75
countries earned more than US $ 2 billion from International Tourism in 2010.
UNWTO estimates that world wide receipts from international tourism reached
(US $ 833 billion Euros) in 2010. In absolute terms, international tourism receipts
increased by US $ 67 billion (40 billion Euros) in 2010 an amount well above the
receipts of the worlds second biggest tourism earner Spain, or the combined receipts of
the Middle East and Africa.

Challenges Faced by Tourism Industry:

Climate Change:
The theme will contribute in putting forward the global campaign to implement
the Davos Declaration (Climate Change and Tourism responding top Global
Challengers), and builds on the tourism sectors strong relationship with climate as well
as its role in sustainable development.
Spending Fuelled by Debt:
This spending is underpinned by some very slow but fundamental shifts emerging
in the Traveler psyche; people are becoming more open to new things. Now more
travelers consider themselves attracted to new things and they are performing tours using
smart money generated through credit cards.
Materialism Driven by Desire for Style and Status:
There is also evidence of a change in the pattern of leisure, with increasing work
demand; flexibility is driving the choice of leisure activities with a move to more self
selecting / personal activities as opposed to group controlled and scheduled leisure.
Increase in Oil (Petrol):
Rising petrol prices are also having an adverse effect on tourism. Regional touring
is suffering as the rising cost of petrol pushes travelers to look at other options. People are
no longer visiting friends and relatives in the same numbers. Customers are now choosing
capitalize on the cheap airfares and let the airlines pricing dictate their destinations.
Impact of Terrorism:
Tourism is fourth largest industry that is being affected by terrorism. Tourism is
highly vulnerable, as it attracts media attention and creates mass fear due to many factors
thereby affecting the foreign exchange and national income.
India ranks third in the number of civilians being killed due to terrorism. Steps
need to taken by the government policy makers, public and NGOs to create a climate of
safety and security to encourage tourism industry as it affects livelihood of local people
whose economies are tourist dependent.

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Sustainability of Tourism:
Another big issue for the world of tourism is its very survival the sustainability of
tourism. Increasing urbanization and growing world population pose challenge tourism
a challenge that is separate to the big climate change / global warming situation that has
implications for every part of our society.
Travel Agents are struggling:
More dramatically, we see in the domestic market travel agents havent been able
to capitalize on the growth in the industry where again the internet continues to grow
rapidly as a preferred booking method resulting a low yield for Travel Agents worldwide.

Prospects and Challenges in Indian Tourism:

Indias size and massive natural, geographic, Cultural and artistic diversity offers
enormous opportunities for the travel and tourism industry. Thus the tourism products are
varied nature in India in providing a mix of nature richness of architecture, wild life etc.
where few countries only can provide such experience to tourists. Thus for all ages and
all budget tourists Indian tourism provides a real experience. 65 years of independent
India is walking ahead with challenges and opportunities. In earlier days it was difficult
to reach to India due to existence of lack of transport facilities including few airlines, but
now the scene is changed with over 70 international airlines which are providing a direct
connectivity to spots. The quality and quantity of Indian tourism products has been
changed. It also recognized in national five year plans from 2 crores in fifties to budget to
10,000 in 11th five year plan. The policy makers and Public in general attitudes has been
changed towards tourism, earlier days it thought as narrow activity but now they realized
the value of tourism in creating jobs, earning foreign exchange for the country, better
global understanding of India and all the more its contribution for poverty alleviation,
enlistment of the women power and National Integration.
Methodology:

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The study was based on a range of secondary data from various government
sources such as ministry of tourism organization and other relevant websites etc. For
analyzing secondary data simple statistical tools like percentages and averages have been
used to interpret the data. A part from these tables, charts, graphs, pictures have been
chosen for responding the data at relevant places.
Conclusion:
There is no doubt that tourism will continue to play a major role in the world
economy. We must have faith the property panned tourism will be a positive factor in
national development, creating challenging employment and distributing wealth to all
sectors of society. It will have flow through effects and will serve as a catalyst for growth,
in other sectors such as a catalyst for growth in other sectors such as agriculture,
transportation and construction. These positive effects will be substantiality enhance if
tourism is planned and coordinated on a regional basis.

Appendix
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Tables
TABLE-1
FEE from Tourism in India (in Rs. Crore) (1997-2011)
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006

FEE from Tourism in

India (in Rs. Crore)
10511
12150
12150
12951
15626
15083
15064
20729
27944
33123
39025
44360
51294
64889
35163

Percentage (%) Change over the previous years

2007
2008
2009 #
2010 #
2011 #
(Jan June)
# Advance Estimates, @ Growth rate over Jan-June 2010
Source: i) Reserve Bank of India, for 1997 to 2008 2)MTM1997-2011

13

4.6
15.6
6.6
20.7
-3.5
-0.1
37.6
34.8
18.5
17.8
13.7
15.6
7.1
18.1
12.1 @

TABLE- 2
Foreign Tourist Arrivals (FTAs) in India, 1997-2011
S.No

Source Country

FTAs (in Million) (P)

1
2
3
4
5
6
7
8
9
10

USA
UK
Bangladesh
Canada
Germany
Sri Lanka
France
Japan
Australia
Malaysia
Total of top 10
countries
Others
All countries

0.916
0.755
0.381
0.240
0.224
0.219
0.218
0.165
0.164
0.160
3.442
2.142
5.584

(P) Provisional, @ Growth rate ave Jan-June, 2010

Source: (i) Bureau of Immigration, Govt of India, for 1997-2009
(ii) Ministry of Tourism, Govt. of India, for 2010 & 2011

References:
1. Reserve Bank of India, for 1997 to 2008
14

Percentage (%)
Share
16.4
13.52
6.82
4.3
4.01
3.92
3.9
2.95
2.94
2.87
61.64
38.36
100.00

2.

Bureau of Immigration, Govt of India, for 1997-2009

3.

Bound, John and Timothy Waidmann, (2000), Accounting for Recent Declines in

4.

Employment Rates among the Working Aged Disabled, NBER Working Papers

5.

Ministry of Tourism, Govt. of India, for 2010 & 2011

6.

UNWTO Tourism Market Trends 2007 edition, for the years upto 2005

7.

UNWTO Barometers June 2010 for 2006 and January 2011 for 2007 and UNTO

8.

Dredger, D, (1987), Disabled People and International Air Travel, Journal of Leisurability, 14, pp.1319.

9.

Miller, G. A., & Kirk, E, (2002), The Disability Discrimination Act: Time for the stick? Journal of
Sustainable Tourism, 10(1), pp.8288.

10. McKercher,B.,T McKercher, B., T. Packer, M. Yau, and P. Lam, (2003), Travel Agents: Facilitators or
Inhibitors of Travel for People with Disabilities, Tourism Management, 24, Pp.46574.

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