Category Archives: Tourism policy

Climate Change Impact on Tourism

We all love to travel to new places irrespective of the country that we belong to. At one point of time tourism was restricted to a section of people as it involved significant amount of expenditure. Perhaps till 30 years back years back tourism was majorly related to travel for leisure purpose. But in today’s world the scenario changed to a large extent. A significant proportion of tourists travel for professional reasons too. Therefore, the combined impact along with affordability and spread of awareness through marketing and social media led to increased tourism activities throughout the world. In 2016 total number of international tourists (visiting foreign countries) in the world was to the tune of 1234 million. The same was 683.3 million in 2000.[1] This simple statistic suggests that number of international travelers has increased by more than 80% in just a little over 15 years. Please do remember that we have not included domestic tourists of any of the countries, which are several times of that of international tourists.

We were relatively unaware of the implications of tourism and the scale of impact till a couple of decades ago. This started gaining notices of the researchers, governments, other stakeholders once the world stated envisioning global warming and the pace it was setting in. The global community is experiencing climate change and has already been recognized the same as the biggest threat to human existence. Tourism activities, spreading across large number of sectors, play a critical role in shaping global warming. Various researches suggest that tourism contributes to more than 5% of the total carbon footprint in the world and is considered as the largest contributor to climate change process. However, it’s a two way relationship. Tourism also gets affected adversely by climate to a large extent. This article brings out certain nuances of how tourism at present and in future are impacted by climate change in a non-technical manner.

What are we experiencing because of climate change compared to the past? Everyone can count those easily. Following are a few examples that are concerns for all of us in whichever part of the globe we live in.

  • Global land and ocean temperature are increasing in fast pace. Polar ice caps are melting soon. It is a big threat to all cities or regions near coastal areas due to sea level rise.
  • Rainfall patterns are changing affecting agriculture production to a major way
  • Storms, hurricanes and typhoons causing catastrophes and disaster in every corner of the world
  • Melting and receding of glaciers in our mountains

When the above are common phenomena, how do we connect these to understand the way tourism sector is going to be impacted? Climate change will impact tourism at two levels – at the destination and from operational perspective. At the destination level it will cause the following adverse impacts:

  • Rising sea levels and extreme weather conditions threatens coastal or beach tourism significantly. Apart from beaches being submerged and infrastructure destroyed, it is affecting coral reefs also. Coral reefs of Philippines are already affected due to increase in ocean temperature that leads to coral bleaching and also acidification of ocean water.
  • Mountain areas are experiencing lower snowfalls and also the duration of winter season has been reduced. Along with reducing the viability of some winter sports destinations, this causes lesser tourist to many of the destinations where tourists used to travel to enjoy cold weather. Increase in temperature and less precipitation have adverse impact on biodiversity and lead to more forest fires in many parts of the world. These uncertainties impact tourist arrivals to a large way. Mountain tourism will also be affected as the glaciers are disappearing in many places.

While the changes in physical conditions of destinations reduce number of tourists due to uncertainties and absence of attractions for the tourists, there are several operational hazards to face by the tourism operators:

  • Vulnerable environment may lead to conflict of tourism activities with local communities due to scarcity of natural resources, for instance reduced water availability
  • Extreme weather events will increase operational uncertainty, particularly in unfriendly terrains
  • Services will be affected in areas exposed to extreme weather or sea-level rise.
  • Any attempt to reduce carbon emissions and make activities environmental friendly will add costs to the industry, particularly from transport emissions. Apart from acceptability to such changes, it will increase price for the tourists which may impact the tourist flows.

To end this article, I just want to mention couple of my own experiences in India. There is a place called Chamba in Uttarakhand hills which was a well known tourist destination at one point of time. At present the number of tourists visit and stay in that destination has declined significantly. One of the reason is the place has become quite hot for last few years. Where people never used fan in earlier years due to its cool weather, now requires air-condition machines during summer months of the year.  Most of the hotel owners are grappling with the problem of renovating rooms as there was no provision even for ceiling fans.

Hope the world community will be able to tackle or at least curb the pace of climate change so that the human society can cope of with the same and our economic activities including tourism management are ready with climate change adaptation to run their activities relative smoothly and in a predictable path. Government tourism policies also promote only sustainable tourism in practice instead of making it a paper document only.

[1] Tourism Statistics of India 2017


Inbound Tourism to India- Caution is Required while Using Government Data

The fruitfulness of any planning depends a lot on data quality that are used to chalk out policy and planning for certain development. Therefore, data should be as realistic and authentic as possible. Tourism being one of the most important sectors of Indian economy for its contribution to income and employment, policies should be extremely objective oriented and simple to execute easily. Thus, the data should be accurate and consistent to come out with any meaningful policy planning.

The latest data published by Ministry of Tourism is “India Tourism Statistics at a Glance 2017”.  Finding the new addition to tourism database, I thought of writing a small article in this blog space. After looking at the latest data published in the document, felt that writing on the database is even more pertinent to make relevant stakeholders aware about certain stark anomalies in the present document.

India Tourism Statistics, a publication by the Ministry, is perhaps the only authentic and detailed document on India’s tourism data. I am sure that anyone working on India’s tourism scenario at a broader scale for planning and business perspective, perhaps treats this document as a bible, especially from data availability perspective. Along with other information, it publishes quite a detailed data on inbound tourism to India. The document uses two terminologies regarding inbound tourism to India – FTA (Foreign Tourists Arrivals) and ITA (International Tourists Arrivals). One could envisage these two terms as interchangeable since the numbers were same for FTA and ITA till 2015 publication. While analyzing the number quoted in the 2017 document on inbound tourism, the following graph emerges.


Source: India Tourism Statistics at a Glance 2017 and India Tourism statistics 2015.

One can see the drastic difference in FTA and ITA numbers suddenly from 2014. Within a year ITA has increased by about 80%. In 2017 document Ministry has given a clarification saying that ITA numbers in 2017 document includes NRIs also along with foreign tourists. This explains the difference quite well at the face value. The question is something else.

In 2015 document, in TABLE 3.1.2 (page 79) the ITA numbers are exactly the same as FTA. The tourists in India are reported through two components – a) inbound tourists (FTA/ITA) and 2) domestic tourists. No single tourist can be accounted anywhere else. Now with this, the key question is assuming that NRIs were not included in ITA prior to the 2017 document, where were they accounted in? Were the NRIs a part of FTA till 2015 document? If yes, one needs to conclude that inbound tourists to India has gone up by 80% suddenly since 2014. And, if not, how were the NRIs accounted for? Certainly not as domestic tourists. The number of domestic tourists reported in 2017 document (Table No 17, unfortunately the document is without any page number) and 2015 document (Table 5.1.1, page 103 and 104) both reported exactly same domestic tourists as 1282.8 million and 1431.9 million in 2014 and 2015 respectively.

The only plausible explanation is that the Ministry missed out reporting 5.43 million and 5.26 million NRIs for 2014 and 2015 respectively. And, of course the tourism statistics of India missed to report NRIs for more than 20 years by now. However, it is beyond any level of belief that this can at all happen in any condition. The reason being that international tourists’ numbers cannot be missed by any chance as it comes directly from immigration department. It is a huge credibility issue for the Ministry since these are perhaps the only number that are being used by policy makers and planners as well as researchers at a broader level. Coincidentally, these different numbers have been reported only from the year when the new Central Government took charge at the helm of the country, ignoring the previous years.

However, apart from the credibility issue of Ministry’s entire document, these anomalies have lot more serious implications. Couple of graphs on India’s foreign exchange earnings (FEE) from tourism activities are presented below.



In Figure 2, a significant drop can be noticed in growth of FEE since 2010. Perhaps the prime factors are global recession and poor recovery of most of the economies from recession trap. The current FEE is even lower than that of the year 2000 in nominal term itself. It will be significantly lower if it is considered in real term keeping in mind inflation for last 17 years. FEE related to the NRIs could not be missed out ministry by any chance since it has to be accounted in India’s income accounting system.

If we look at the FEE per international tourist arrival it is much lower than that was envisaged till the 2017 document was published. The blue and red lines in Figure 3 suggest the difference occurred due to new numbers quoted in 2017 document. One of the key policy implications is how to enhance spends of the international tourists in the country. This does not only impact countries income and foreign exchange reserve, but more importantly the local economies of tourist attractions. Perhaps the tourism policy makers need to think through the policies from a new perspective with these set of significantly lower number of FEE per international tourists according to 2017 document.

To end this article, it is critical for all users of this important and only database of Indian tourism to look at the numbers with extreme caution. One needs to cross check numbers of the previous issues of the same document instead of considering it at the face value. Else we may come out with analysis and interpretations, which may not be true because of source data errors.

What Extent We Can Rely on Tourism Forecast?

By Dripto Mukhopadhyay

In research fraternity, forecasting is always known as “Thankless Job”. The reason being it is one of the most difficult exercise since forecasts depends on large number of assumption about future over and above the assumptions involved in the econometric modelling itself. Being fortunate enough to work on forecasting relating to various sectors ranging from petroleum demand to luxury car to carbon emission, I know the amount of effort and skill goes behind any forecasting exercise, if it is a serious business. Even after that, many of the times the researcher find their forecasts off the target extensively mostly because of externalities. At times I feel that except a “Fortune Teller”, no scientific researcher ever can guarantee about the forecasts. The forecasts can change drastically because of small amount of change in any of the multiple assumptions goes into forecast because of macro-scenario in a dynamic world.

However, a researcher always wants to understand how his forecasts are matched with actual scenario after a few years of the forecasts were made. I did a forecasting for foreign tourists arrivals to India in the year 2008-09 for Indian Institute of Tourism and Travel Management (IITTM) as a consultant. The paper was published later in the “Indian Tourism Statistics”, the only government publication on tourism statistics of India. The forecasts were made from 2010 to 2014. Since recently the latest Tourism Statistics published for the year 2015 contains data for 2014, I felt like matching the accuracy of the forecasts I made in 2008.

The research paper covered 6 countries and all the regions of the world. The data used was various macro economic parameters, household disposable income and certain dummy variables relating to policy and other localised incidences like terrorism etc. The comparison between forecasts made in the year 2008 and the actual foreign tourists arrival to India. The details of the accuracy level of the forecasts is given in Table 1. Country-wise details and region-wise details are given in Table 2.

For any secondary data collected in a large scale and at a macro level, it is always considered that results are extremely accurate if lies within plus/minus 10% deviation level. An accuracy level till 85% (where the deviation is plus/minus 15%) is considered as acceptable for any valid decision making purpose. The numbers presented in Table 1 provides the details of forecast numbers from 2010 to 2014 for all countries and regions covered under the study. It suggests that 62% forecast numbers in the study is extremely accurate when compared with the actual FTA (Foreign Tourist Arrival). If we consider the acceptable limit with 85% accuracy, it goes up to 77% of the forecasted data points. Overall, this results suggest that FTA forecasts made in 2008 was fit to the expectations out of any forecasting exercise. Keeping in mind the global economic recession during end of 2008 and the continuing volatility of the global economy, these results suggests that decision making and policy making can depend on forecasts to a large extent if the methodology used is robust.

Table 1: Details of Accuracy Level of Forecasts

(Forecasts made in Year 2008 for the years 2010 to 2014)

Forecast VS Actuals

Accuracy level

% Forecast points

On target 100% correct


Highly accurate More than 90% accuracy


Acceptable Accuracy level 85% to 90%


Low on accuracy Accuracy level less than 85%


Table 2: Regions and Country of Details of Forecasts and Deviation of Actual Foreign Tourists Arrivals to India

forecast summary

First Time a Prime Minister in India Identifies Tourism as an Instrument to Boost Local Economy

August 15th 2014, should be marked as an important day for the Indian tourism sector. It is not because there is a new toruism policy declared since 2002, nor beause of some bold and innovative steps taken by Ministry of Tourism of Indian Government. It is simply because the new prime minister Mr. Narendra Modi’s speech on the eve of India’s Indepence Day ceremony acknowledging the potential role that can be played by tourism activities in generating income and alleviating poverty at the local level. This is one of the simplest common sense, yet unaddressed by any past prime ministers of the country in any occassion as far as I remember.

Mr. Modi has exactly mentioned the grass root level linkage of tourism sector that needs to be harnessed for a sustainable toruism development strategy in the country. His words that captured implications of tourism development for a tea stall owner, petty service providors and the similar ones are the most cricual ones. A sustainable roadmap of tourism sector is always envisaged in the form that generates income and employment for local comminity and local economy. The strong multiplier effect of tourism automatically starts turning the unturned stones of development once these acticities are started at the local level.

This is nothing new to anyone involved with tourism development in some way or other. The major problem faced till now was that the tourism officials were more concerned about how to increase the number of foreign tourists instead of domestic tourists. Recognizing the fact that only 2% of the total toturists arrivals are of foreign origin and 98% are domestic, one fails to understand why we ignore dmestic tourists and concentrate more on foreign tourists. Perhaps it is time that we focus on developing domestic tourism also without taking it for granted. Increasing the number of domestic tourists will boost local economic development much more than that can be harnessed from foreign tourists. However, a few cautionary steps must be taken to develop a sustainable tourism across destinations:

1. Awareness generation amongst domenstic toruists to conserve and protect environemnt and destination which is perhaps completely missing at present.

2. Importance of maintaining cleanliness and respect the local culture while harnessing maximum pleasure from tourism

3. To prefer eco-friendly modes of travel/activities rather than those that increase carbon footprint in the region

Local authorities need to play important role in this. It cannot be expected that behavioural characteristics the the travelers will change automatically as desired for sustainable tourism development. The destination management should be in suach manner that the tourists are made to follow the rules strictly, else penalised severely, so that over a time the scenario changes towards a more disciplined tourism sector in the country. Large number of countries in the world are examples of creating such environment over time. The major role played was by governance than anything else. Hope, the new prime minister’s views to connect the grass root level to tourism activities will be translated into some changes in policy making of the authorities who are at the helm of decision making at central, state as well as local level.

Is the International Tourism to India Changing Its Composition? – A Region-wise Analysis

In my last to last blog, I had shown how Foreign Tourists Arrivals (FTAs) are changing over time. The same blog also identified the pattern of the change and concluded that the revival in foreign tourists arrivals, post 2008 global recession, started since 2012 only.

However, I did not include any analysis on the origin of the FTAs to India. We find the FTA data country-wise as well as region-wise. In this blog, I present a region-wise analysis of FTAs without going into the country-wise details. These series of blogs on FTAs to India is inteded towards a bigger analysis which can finally capture changing pattern of expenditure of foreign tourists in India and how that is occuring over time. It will take me about 4 to 5 more blogs like this one to reach at point whereby I can do that analysis. As I wrote in the previous blog also, I am trying to use lesser texts with more visual presentations so that readers are not burdened with too many texts, but can have the essence clearly with visula representatuions.

The Fig 1 depicts that three top regions of origin of FTAs to India are Western Europe, North America and South Aisa. These three regions contribute to about 65% to 70% of the total FTAs to India during 2010 to 2012. The following figure also suggests that the relative ranks of the regions in terms of FTAs remined same over the period 2010 to 2012.

fig 1

Note: C & S America stands for Central and South America; NEC stands for “Not Classified Elsewhere”. The same are applicable to all graphs used in this blog. Continue reading

Foreign Tourists Arrivals to India Reflecting Global Economic Recovery Now

Inbound tourism to India experienced the impact of global economic recession severely starting last quarter of 2008. Though Indian economy apparently showed signs of early recovery towards the end of 2009, other countries were still fighting on how to grapple with recession. However, apart from some of the European countries and Asian countries like Japan, gradually the situation improved towards betterment. Though the countries were still struggling with slow GDP growth, unemployment and other crucial economic indicators, most of the countries started gaining the growth momentum, slowly but steadily.

Indian tourism industry that saw a significant change since beginning of the decade 2000 was hit dearly because of the global economic recession. A sudden dip was observed in inbound tourists to India. And, this was true for every originating country where from tourists visited India. It was expected that the scenario should start changing in a year or two. This was especially true from the perspective of various stakeholders within tourism industry, especially the core ones like hotels, tour operators etc. The hotel prices were slashed significantly with various discounts and incentives on face of recession coupled with fierce competition because of entry of new international as well as smaller domestic players.

However, the scenario did not turn like that. Though economies started moving upwards in most of the countries, especially the developed ones, the impacts were not felt instantly. Anyone worked on tourism demand forecasting for inbound tourists knows that two crucial variables explain substantial part of data variation in tourists’ arrivals to any country. These are income in the originating country (expressed in terms of GDP) and lag of tourist arrivals, i.e., the number of tourists arrived during previous year or so. All other parameters like cost comparison, distance to travel, law and order including terrorist activities etc. do play their role, but to a much lesser extent. But this time, the demand system behaved in a slightly different manner. There was a lag effect that played a crucial role in the system. Increase in income in the originating countries did not show its influence immediately. A look at the data will ensure the explanation in a meaningful manner.

Table 1: Foreign Tourist Arrivals (FTA) in ‘000
 Month 2009 2010 2011 2012 2013 2014
Jan 481 569 624 681 699 720
Feb 490 552 636 677 688 738
Mar 442 512 550 623 640 669
Apr 348 372 438 452 452 504
May 305 332 355 372 384 421
Jun 352 385 412 432 444 492

We find two important points from Table 1 as given above. The data is given for first 6 months of each year starting from 2009 so that no confusion is created regarding the trend. Primarily this is because of the fact that data for 2014 is available till the month of June. So, data for rest of the months for other years may create a noise in the pattern where 2014 data plays a crucial role. The second important reason is Indian tourism is marked with significant periodicity or seasonality which I have mentioned in several of my previous blogs as well as have been clearly established by many research papers. Inclusion of data for other years and not for 2014, may create a problem to identify the proper signals because of seasonality factor.

Two important trends appear from the above data are:

  • In case of each month number of tourists have increased in every year
  • FTA in each month is highest in 2014

These two points simply corroborates the discussion we have previously that there is a slow and steady increase in FTA. To avoid the clutter, I have presented this trend 2012 onward in Figure 1 below. The graph shows clearly that recognizing the seasonality with the crest in Jan-Feb and the trough occurs in May, every year the number of tourists visiting India has increase every year. But does this portray the entire story? The answer is NO. It is too simplistic a conclusion to be made and could have been easily concluded that with economic revival, India’s inbound tourism has also seen an immediate impact.


To prove this particular point, let us have a look at the Figure 2 and Figure 3. These two visuals exhibit growth rates in FTA to India and absolute change in growth rate in the same. If one carefully looks at these two visuals, a few points sharply indicate why the change in tourism behaviour did not start during end of 2010 when the world economy stated looking upwards.

Slide2 Slide3

  • In Figure 2, growth rates, year-on-year basis, in almost every month declined since 2009 to 2013. The representing growth rates during 2012-13 is the bottom most line and all other years follow a sequence in decline except February and April during 2011-12
  • While looking at this point one needs to remember that the base number has increased as the year increases; so it growth rates will always have an edge if it belongs to earlier years
  • In Figure 3, the absolute change in growth rates (Y-O-Y basis) are presented. This is similar to “first difference” that we normally consider in econometric modelling which plays crucial role in any trend analysis.
  • The graph shows that the absolute change in growth also behave almost in similar manner to that we identified in case of growth rates. The red line, which represents absolute change between 2012-13 and 2013-14, appears at the top.

This trend clearly suggests that though apparently it looked like that the inbound tourists arrivals to India has recovered the hit from global recession since 2010, the actual recovery has started only in 2014 January onward. Till then it was more of a falsified trend that might create a wrong perception regarding the recovery of the Indian tourism in terms of foreign tourists’ arrivals. This has significant implications for policy making as well as for core stakeholders in the industry. Also, while forecasting FTA, one needs to look into carefully at the variable behaviours. It is quite possible that lag effect might be much higher than generally though of.

India’s Budget 2014-15 and Tourism Sector: Allocations for the Sake of Allocation Continues

India’s Budget 2014-15 and Tourism Sector: The Story of Directionless Allocations Continues
Finally, 10th of July 2014 arrived – the long awaited day for India’s new government’s budget announcement day. The day had immense significance to everyone, looking for a new thoughtful direction from the new government. Keeping in mind the key purpose of his blogspace, I intend to discuss the key inferences for the tourism sector only, without entering into the debate whether the budget has given a direction towards building strong fundamentals for long term growth of the country.

We all know that tourism sector is one of the key industry in terms of generating employment and income apart from being one of the largest foreign exchange earner for the country. The sector can also play a magical role in developing local level economy if policy orientation is in right direction. The sector is in fact comparable with the ‘hen lays golden eggs’ of the childhood story all of us are familiar with. However, the simplest yet decisive moral of the story, perhaps, remembered seldom since we all learn it during childhood. Continue reading