Category Archives: Tourism and Climate change

Indian Tourism Sector: Urgent Need for Competition Policies and Regulatory Framework

This article has just been published in Geography and You, Volume 19, Issue 99, Nov-Dec 2016, IRIS publication.

“Climate change as well as poverty alleviation will remain central issues for the world community. Tourism is an important element in both. Governments and the private sector must place increased importance on these factors in tourism development strategies and in climate and poverty strategies. They are interdependent and must be dealt with in a holistic fashion.” – (Francesco Frangialli, UNWTO Secretary-General, Ministers’ Summit on Tourism and Climate Change in London, United Kingdom, 13 November 2007)

Current Situation in India

Unregulated tourism activities have changed the landscape of large number of tourism destinations in India beyond repair. And, perhaps, we cannot blame only the tourism stakeholders, especially, the business owners for this. Their objective in most cases remained revenue maximization and they tried to reach the same. In the process, the ecological balance of the areas is getting destroyed to a great extent leading towards environmental degradation beyond a critical limit. This situation has arisen to a large extent due to absence of regulatory framework relating to tourism industry. In fact, there is hardly any regulatory framework in place to promote of sustainable tourism as an organized sector. This regulatory framework should make sure the sustainability in terms of environment, economy and culture.

“Tourism in the Third World, as it practised today, does not benefit the majority of the people. Instead it exploits them, pollutes the environment, destroys the ecosystem, bastardises the culture, robs people of their traditional values and ways of life and subjugates women and children in the abject slavery of prostitution. In other words, it epitomises the present unjust world economic order where the few who control wealth and power dictate the terms. As such, tourism is little different from colonialism” (Srisang, 1992). To corroborate this view, the following are the ill effects of unregulated and unplanned tourism.

  • Degradation of heritage sites
  • Commodification of the sacred resources
  • Create a market for prostitution and drugs
  • Reduce biological diversity and environmental degradation
  • Destroy habitats for wildlife
  • Pollute lakes and other water bodies
  • Overuse valuable fresh water resources
  • Contribute significantly to global warming
  • Leads to loss of scenic beauty and as a result loss of tourist attraction in long term

Promoting Sustainable Tourism

To avoid this, the country must promote Sustainable Tourism practices. Butler (1993) defined sustainable tourism as “which is developed and maintained in an area (community, environment) in such a manner and at such a scale that it remains viable over an indefinite period and does not degrade or alter the environment (human or physical) in which it exists to such a degree that it prohibits the successful development and wellbeing of other activities and processes”. Hence sustainable tourism should fulfil the following:

  • Tourism industry must ensure that tourist visits will be maintained and tourism resources will retain their attractiveness indefinitely. The carrying capacity of the area needs to be kept in mind.
  • There must be no (or only minimal) adverse environmental, social and cultural impacts.
  • All these must be achieved through maintaining the principles of sustainable development.

This is crucial keeping in mind importance of tourism industry in the country. Tourism is gaining importance in India over the years in all respects. According to Ministry of Tourism, the sector contributes to 6.88% to India’s income (GDP) in the year 2012-13. In the same year, more than 12% of the country’s employment is engaged in tourism sector. Keeping these in mind, the Draft Tourism Policy document mentioned the following as key mission for the sector.

  1. To achieve a level of 1% share of the international tourists arrivals by 2016-17
  2. 1450 million domestic tourists by 2016-17
  3. Promoting sustainable tourism as priority
  4. Enhancing competitiveness of Indian tourism industry
  5. Creating world class tourism infrastructure
  6. Ensuring greater visibility for tourist facilities
  7. Augmenting human resource base in the sectorIf we look at the current scenario of tourism development, it is more in a fluidic state rather than a concrete planning. The latest Central Government policy still in practice is of 2002. A new policy was drafted in 2015. It was circulated as Draft Tourism Policy 2015 in Tourism Ministry’s official portal. However, after a certain point of time it has disappeared from the portal. There are several boards constituted to develop or promote tourism in the country, especially to attract foreign tourists, but any regulatory authority is yet to be constituted. Another key problem element is tourism is a state as well as Central subject. Apart from Central Government, various State Governments have their own tourism policies with their own perspective to promote tourism in the states. If one carefully looks at the state level policies, many of them are quite contradictory to sustainable tourism development paradigm.
  8. As it is told at the beginning, it is not easy to prepare a regulatory framework for tourism industry. The reason being tourism activities are combination of large number of sectors that cuts across all different domains of activities of common mass. As contrast to other economic sectors, direct stakeholders for tourism activities are host communities also apart from the consumers and producers. Unlike other sectors or industries, tourism directly affects entire community of a region positively as well as adversely, depending on the nature of activities. Even from governance perspective, tourism activities cut across many different departments and hence fluidic in nature. That is one of the prime reason why even being top revenue earner as well as employment generating sector, it is one of the most neglected sectors among all economic activities from policy making perspective

As can be understood easily from the above situation, there is hardly any policy that talks of regulatory and competition explicitly regarding tourism sector. Perhaps the only significant paper available on tourism legislation in India was prepared by the Indian Institute of Tourism and Travel management (IITTM) sometime in 1990s. The focus was to identify the legislative part of the tourism sector. The complexities in framing regulatory process regarding tourism industry can be well understood. A partial list of 31 legislative acts encompasses tourism industry is presented in Appendix.

However, at the Central or the state level, several schemes are available to promote tourism activities that enhances competition. But, there is no document that talks of a regulatory aspects which is extremely crucial for tourism sector. Unregulated tourism activities have severe adverse impact on welfare of a larger section of the host communities from biodiversity, economic and cultural point of view, while it increases welfare of the tourists (consumers) and direct service providers (sellers/producers). Therefore, a balanced competition policy with appropriate regulatory measures are needed immediately to promote tourism activities that can be win-win for every stakeholder.

Requirements within a Competition and Regulatory Framework

  1. Identifying key industries/sectors that are directly linked to tourism activities and less with day to day life of common man, for instance:
    • Hospitality sector
    • Tour operators
    • Other tourism service providers etc.
  1. To look into issues that are pro- or anti-competitive
    • Policy distortions/conflicts affecting competition (national and/or state level policies)
    • Prevailing anti-competitive practices in the tourism sector
    • Possible impacts of such policies and practices on welfare issues
      • For tourists (consumers)
      • Service providers (producers)
      • Host community
  1. Suggested measures towards regulatory and competition framework on selected sectors that are directly linked to tourism activities exclusively

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Appendix

List of Legislative Acts that covers tourism industry

As adopted from an unpublished research paper of Indian Institute of Tourism and Travel management (IITTM)

  1. The essential commodities act, 1955
  2. Code of criminal procedure, 1973,
  3. The airport authority of India act, 1994,
  4. The child labour (prohibition and regulation) act, 1986,
  5. The motor vehicle act, 1988,
  6. Foreign exchange regulation act, 1973,
  7. Consumer protection act, 1986,
  8. The environment (protection) act, 1986,
  9. The prevention of cruelty to animals act, 1960,
  10. The public liability insurance act, 1991,
  11. The railways act, 1989,
  12. The sarais act, 1867,
  13. The immoral traffic (prevention) act, 1956,
  14. The employers liability act, 1938,
  15. The passport act, 1967,
  16. The wild life (protection) act, 1972,
  17. The prevention of food adulteration act, 1954,
  18. The monopolies and restrictive trade practices act, 1969,
  19. Forest conservation act, 1980,
  20. The road transport corporation act, 1950,
  21. The central excise and sale act, 1950,
  22. The Indian partnership act, 1932,
  23. The urban land ceiling act, 1976,
  24. The industries (development and regulation) act, 1951,
  25. The explosives act, 1884,
  26. The Indian penal code, 1860,
  27. The water (prevention and control of pollution) act, 1974 & the air (prevention) and control of pollution act, 1981,
  28. The Indian contract act, 1872,
  29. Development authority act,
  30. Municipal act,
  31. Ancient monument (site and remains) act, 1951.

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References:

Butler, R., 1993. ‘Tourism – an evolutionary perspective’, in Nelson, J., Butler, R., and Wall, G., (eds) Tourism and Sustainable Development: Monitoring, Planning and Managing, Department of Geography, University of Waterloo, Ontario.

Srisang K. (1992) ‘Third World Tourism: The New Colonialism”, Focus, Volume 4.

Ministry of Tourism (2015): “India Tourism Statistics 2015 At A Glance”, Government of India.

UNWTO (2008): “Climate Change and Tourism – Responding to Global Challenges”, World Tourism Organization, Madrid, Spain.

WTTC (2013): “Travel and Tourism Economic Impact – India”, World Travel and Tourism Council.

Ramachandra T. V. and Shwetmala (2013): “Decentralised Carbon Footprint Analysis for Opting Climate Change Mitigation Strategies in India”, Research Paper Indian Institute of Sciences, Bangalore.

Ministry of Tourism (2011): “Sustainable Tourism Criteria for India”, Government of India.

 

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Importance of Regulatory Reforms for Indian Tourism – 1

Since long, almost a year now, I was thinking of writing on Indian tourism industry and related regulatory reforms. But somehow not able to find time to start writing on this crucial area. Now, to make sure that I write on this and can share and discuss with those interested in this important aspect of Indian tourism among the tourism fraternity, I have decided to write this in a few installments! This one is the first of the series. My endeavour will be to write one in every week through next 3 to 4 weeks.

As we know that unregulated tourism activities have changed large number of tourism destinations in India beyond repair! But, to add to this pinch further, al these destinations are expanding their space of activities much beyond their own territory. And, of course the tourism stakeholders, especially, the business owners cannot be blamed for this since their only objective remains maximization of revenue and profit. In the process, the ecological balance of the areas are getting destroyed completely leading towards environmental disasters awaiting for all of us. And, this situation has arisen to a large extent due to absence of regulatory framework relating to tourism industry. In fact, if one looks into the tourism industry closely, it would be noticed that there is hardly any regulatory framework in place that can be used for promotion of sustainable tourism. In other words, regulatory framework that can stop unwanted activities on part of the business and facilitating pro-sustainable tourism activities, can hardly be identified.

There are large number of factors behind this absence of regulatory framework relating to tourism sector in India. One of the most important fact is hardly any study has been done to seek a tourism regulatory framework in the country. Fortunately, I can get hold of perhaps the only significant paper available on tourism legislation in India which was prepared by the Indian Institute of Tourism and Travel management (IITTM) because of one of my close friend working with the same institute. the paper was written long back, sometime in mid 1990. The principal author of this paper was a legal expert. Since the focus of the study was also to identify the legislative part of the tourism sector, as expected, the paper concentrated more on the legal aspects instead of an analysis of the merits of these legislation in promoting tourism activities. And, it goes without saying that sustainable tourism did not figure anywhere because in 1990s tourism industry itself was not really recognized properly in India regarding economic context. In fact, till today, sustainable tourism does not bear much importance in India, except some mention about it in bits and pieces. however, this paper is one f the most important one to understand the complexities in framing a regulatory process regarding tourism industry in India. Just to provide the extent of complications, let me enlist some of the laws, as mentioned in the paper, relating to tourism industry. This itself is enough strong to suggest how difficult and yet how important is the regulatory framework for Indian tourism sector.

1. The essential commodities act, 1955, 2. Code of criminal procedure, 1973, 3. The airport authority of India act, 1994, 4. The child labour (prohibition and regulation) act, 1986, 5. The motor vehicle act, 1988, 6. Foreign exchange regulation act, 1973, 7. Consumer protection act, 1986, 8. The environment (protection) act, 1986, 9. The prevention of cruelty to animals act, 1960, 10. The public liability insurance act, 1991, 11. The railways act, 1989, 12. The sarais act, 1867, 13. The immoral traffic (prevention) act, 1956, 14. The employers liability act, 1938, 15. The passport act, 1967, 16. The wild life (protection) act, 1972, 17. The prevention of food adulteration act, 1954, 18. The monopolies and restrictive trade practices act, 1969, 19. Forest conservation act, 1980, 20. The road transport corporation act, 1950, 21. The central excise and sale act, 1950, 22. The Indian partnership act, 1932, 23. The urban land ceiling act, 1976, 24. The industries (development and regulation) act, 1951, 25. The explosives act, 1884, 26. The Indian penal code, 1860, 27. The water (prevention and contro of pollution) act, 1974 & the air (prevention) and control of pollution act, 1981, 28. The Indian contract act, 1872, 29. Development authority act, 30. Municipal act, 31. Ancient monument (site and remains) act, 1951

I believe this list is enough to suggest the complexity of the regulatory aspects thought about relating to tourism sector. If one considers this list, keeping in mind that this list is some of the legislation relating to tourism sector, creating a regulatory framework for tourism sector is not only humongous but also almost impossible since different departments are involved in developing these legislation from the perspective of their own requirement, rather than tourism sector. Therefore, it is crucial that tourism sector regulations are thought of separately, which may include elements of these as well as acts from other domains, but under one single umbrella.

Another big hurdle is constitutional provisions for central and state governments. unless a synchronized regulatory framework is prepared, it will not be able to remove the obstacles or barriers towards a sustainable tourism development in the country. I will discuss this issue in the next blog of this series. Thank you.

A Snapshot of Foreign Tourists Arrivals (FTA) in India – A Monthly Analysis from 2010 to June 2014

Tourism is one of the major compenent of foreign exchange earning for India. Since 2003, launch of Increible India campaign, India has seen a significant increase in number of foreign tourists visiting the country. Though it is still an insignificant share of total outbound torusim in the world, the scenario is encouraging over time. Even though the inbound tourism to India was hit substantially because of 2008 global recession, it recovering gradually with global economic recovery.

This particular blog has given a snpshot on how the inbound tourism has changed during last three and half years (till the latest data avaiable). the analysis provides a month-wise scnario so that seasonality involved in inbound tourism can be kept in mind while looking at the pattern.

The graph below exhibits the number of FTAs month-wise from 2010 january till 2014 June. Two important inferences can be made from this visual:

1. For this entire period FTAs have increased for every month.

2. It shows a seasonality in FTAs with peak during the winter, lean during the summer with marginal increase during the month of July.

fta numbers

The next visual exhibits the year-on-year monthly growth in FTA. The inference can be made from this graph is as follows: Continue reading

Hotel Industry in India – Some Correlates between Prices and Macro Economic Issues

By Dripto Mukhopadhyay

Hospitality has become one of the major businesses in the India. Large number of international brands has entered the sector in recent times. The sector has been marked with increase in number of premium segment hotels in different parts of the country, along with smaller ones that cater the need for the middle class and lower middle class domestic tourists. In this particular blog, I would restrict myself in highlighting a few crucial attributes of the hospitality sector in India and some of the consequences thereof.

To start with let’s look at some of the macro economic indicators relating to hospitality sector. As obvious, hospitality sector includes hotels and restaurants. Though apparently this should include informal sector also, as the norm goes in national accounting system, data pertaining to this sector majorly reflects the trend of the registered sector because of sheer nature of the sector. Gross Domestic Product (GDP) relating to hotel & restaurant sector is presented in Figure 1. The visual presents the GDP of the sector at 2004-05 prices and the share of hotel and restaurant sector to total GDP of the country from 2000-01 to 2011-12. It is evident from the graph that hotel and restaurant sector GDP has increased to 3 times during the last decade starting 2000-01. It showed a gradual increasing barring the period 2008-09 and 2009-10 as the period was marked with global economic recession. However, the share of the sector in total country GDP rose till 2007-08 significantly and since 2008-09 suffering a dip followed by a stagnating share. This is a reflection of happenings in the world economy as well as of the Indian economy. Though apparently India recovered quickly enough from the recession, due to some of the fiscal measures by the Central Government, but the recovery was quite brittle in nature. It has become evident from high GDP growth registered soon after 2008-09, but poor GDP growth during last couple of years. Poor performance of industry sector, majorly due to reduced demand from domestic market, led the slow down.

However, investment in hotel and restaurant sector was not hampered by timid GDP growth during recent years. Gross Fixed Capital Formation (GFCF) in hotel and restaurant sector and its share in total GFCF of the country is given in Figure 2 below. There was a steady growth in investment in this sector, especially since 2003-04. The momentum dampened a little during the year 2008-09, but picked up again and has shown steep growth. The red line in the graph Continue reading

Determining the Size of the Sustainable Tourism Market

By Dripto Mukhopadhyay

A recent report on climate change sponsored by The World Bank http://climatechange.worldbank.org/sites/default/files/Turn_Down_the_heat_Why_a_4_degree_centrigrade_warmer_world_must_be_avoided.pdf suggests that the temperature in earth atmosphere is going to be warmer by 4 degree Celsius compared to the predicted 2 degree Celsius. And, without saying one can understand that the consequences will be much severe than those we expected during last few years. The life of different parts of the world will be marred with extreme temperature fluctuations, drought, floods and many other similar natural calamities, which will be normal occurrence rather than “Disaster” as are called today.  Why am I citing this study in this blog at all? The reason is one of the simplest one to mention and the most difficult one to implement!!!! It is that we have reached a time which urges us to act proactively and without a second thought any further.

Tourism is also a major contributor to this bleak future for mankind. Tourism market is growing at a faster pace than ever before. This is true for most of the countries that are known as the major tourism destinations in tourism map. However, the pace of popularization of the buzz words Continue reading

Weak Governance and Sustainability of Sustainable Tourism

By Dripto Mukhopadhyay

When we talk of sustainable tourism, a crucial question comes to our mind that have we achieved any success till now? This question is crucial since in several countries sustainable tourism or ecotourism or other forms of tourism that generally talks of similar objectives stated almost for a couple of decades by now. However, evidences suggest that if for the time being we keep aside other components of sustainable tourism and focus on the environmental aspect of it, it is quite a controversial topic. The reason being total carbon emissions from tourism activities in absolute term have been increasing unabatedly though it has declined to some extent on per capita basis. The primary reason for the Continue reading

Willingness to pay for more environment friendly Hotel facility