Monthly Archives: December 2009

A Corporate Social Responsibility Model for the Hospitality Companies

By Dripto Mukhopadhyay

A few years back I did a study on linkage of tourism with socio-economic development of artisans in a few selected districts of Rajasthan in India. The research paper was published as a chapter of the book Tourism Development Revisited: Concepts, Issues and Paradigms, by Sage Publication. Amongst the key findings, a few relevant ones are that the smaller artisans suffer from lack of money to invest, hardly have any access to access to credit facility, Continue reading

A Win-Win Model for Tour Operators to Promote Sustainable Tourism

By Dripto Mukhopadhyay

My writing blogs on sustainable tourism development does not necessarily indicate that I love travelling; but to speak frankly, I can very well be considered as a travel freak. Since my childhood, I travelled to several tourist destinations every year. Of course, most my travel experience is mostly in Indian soil only. One of the major reasons Continue reading

The Conflict between Goals of Sustainable Tourism Development and Present Reality

 

By Dripto Mukhopadhyay

There is a big conflict between current reality and goals of sustainable tourism development. One of the key issues that led to the rise of the need for the sustainable tourism development was leakage of revenue from the tourism destinations. This leakage was/is due to the very simple reason Continue reading

Can we develop agro-tourism in villages like this one?

By Dripto Mukhopadhyay

Recently I had an opportunity to visit a few villages in Amravati for a study related to cotton cultivation. One of these villages is “Wadhna”, which is located at a distance of about 40 Km. from Amravati. Continue reading

Forecasts of Inbound Tourism to India for 2009 and 2010 – A brief Analysis

By Dripto Mukhopadhyay

I am working on a paper related to inbound tourists to India. This paper will include identification of determinants and forecasts for inbound tourism to India at country and regional level. However, quite a few interesting facts have emerged related to Indian tourism during working on this paper. I want to share a small part of it including the forecast for total inbound tourism to India from all countries and regions of the world. I think this article might interest all my friends in the tourism sector in the world, especially in India.

Global economic recession has taken its toll on world tourism. India was also affected adversely and this was a real cause of concern for millions of those who are directly or indirectly linked to this potential sector. It affected the tourism sector hard, especially, from last quarter of 2008 till 3rd quarter of 2009. Presently, the situation looks like better compared to the months of core recession period. However, even if it is considered that the recession is over and we have entered into the recovery period, for most of the countries the recovery is expected to remain low during 2010 as well as for 2011.

Several incentives came into play from all sub-sectors of such as hotel industry, tourist operators, aviation industry etc. However, these incentives did not really play a major role since the period of recession was marked with large number of layoffs, salary cuts and their multiplier effect on the overall economies. This was combined with the incidents of 26/11 terrorist attack in Mumbai, which had shaken the entire country exposing the brutal faces of terrorism. The spread of swine flu must have also played its part on Indian tourism during this period.

In such a volatile situation, it is important that we are able to predict tourism activities, especially, for a short-term so that the players involved with the industry can plan their activities accordingly. I will limit my observations only to inbound tourism to India, i.e., foreign tourists’ arrivals (FTA) to India. Before coming into the forecast, I want to show the past trend in Indian tourism regarding FTA. We can see three distinct periods experienced by Indian tourism regarding this indicator. The figure given below shows these structural changes with vertical red broken lines.    

The data considered here for this analysis is from 1981 to 2008. The figure distinctly identifies the periods which are a) 1981 to 1985, b) 1886 to 2002 and c) 2003 to 2008. To substantiate the visual identification, I have presented the following table which shows average increase in FTA per year and average growth in FTA per year during these three periods.

Structural Change in FTAs Over Time

Period Average annual increase in FTA (%) Average annual growth in FTA (NO.)
1981-1985 0.20 -4957
1986-2002 4.01 62499
2003-2008 14.68 499273

 

For forecasting purpose I have used an econometric model. Since this is slightly technical in nature, I am not going into the complicated modeling part of the analysis, rather will highlight the dimensions that are important to understand for everyone. From planning purpose it’s important to understand the likely impact of any incidences like change in the economic growth pattern, change in petroleum prices, change in exchange rates, terrorism and several others. I have taken care of about 10 important indicators which include macro-economic as well as socio-demographic characteristics. Several models were run to identify the best possible model and the elasticity related to the explanatory variables.

The elasticity related to  a few important findings are:

  • Income (Gross Domestic Product as well as disposable income) is the most significant indicator making impact on tourism decision.
  • Exchange rate also plays an important role though not as strong as income.
  • Policy initiatives, especially on promotional aspects have a huge role to play in tourism demand. In case of India, “Incredible India Campaign” launched by the tourism department has a significant impact in attracting tourists to India. Thanks to the Tourism Ministry and especially to Dr. Amitabh Kant.
  • Economic liberalization has also played an important role, since opening up of the economy has generated lots of export import related activities which increases number of business tourists substantialy.  
  • Terrorist activities have an adverse impact; however, this is more short-lived than a long term one. The impact remains for a couple of month or so and also depends on originating country.

 

I have given here the forecast for 2009 and 2010. The forecast has considered the economic growth as predicted by International Monetary Fund (IMF). I have given three scenarios based on different economic condition of the world economy.

Estimated Total Foreign Tourist Arrival to India during 2009 and 1010

Year

 

Most likely scenario

 

optimistic scenario  

 

pessimistic scenario 
2009 5154714 5305754 5006500
2010 5532180 5854723 5224443