ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN ... Government of India‟s proactive role to promote tourism in general and ... ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN INDIA

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  • Prepared For:

    Prepared By:

    ,

    IMRB International

    ATTRACTIVENESS OF BUDGET HOTELS AT

    BUDDHIST PILGRIMAGE PLACES IN INDIA

    October 2010

  • ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN INDIA

    2010, BIRD, IMRB International - Confidential and Proprietary

    2

    Preface

    Thailand and India have been maintaining close ties for several centuries, be it historic,

    cultural or economic. Civilizations of two countries and their linkages are reflected in religion,

    language, art & architecture, dance, drama and literature. Indian traders, priests and missionaries have

    visited Thailand since long time ago. Similarly, there are many Thai scholars and monks who have

    studied Indian and Sanskrit language in Indian universities. Movements of people from all walks of

    life for exchanging ideas and strengthening social, cultural & business cooperation have taken place

    over the centuries in both directions.

    The first ever Buddhism into the area now known as Thailand was propagated by King Asoka

    in 218 B.E. (Buddhist Era). After the successful establishment of the third council, King Asoka had

    sent monks in other parts of current-day Thailand to spread the Buddhas teachings. Subsequently,

    King Kanishaka the Great ensured spread of Mahayana Buddhism in Thailand and sent monks to

    spread the religion in Central Asia. Theravada Buddhism, the current form of Thai Buddhism, came

    into existence during the period of Anuruddha the Great, King of Bukama.

    The shared link of Buddhism is reflected in the regular pilgrimages by Thais to places of

    Buddhist interest in India. Over the years the two countries have come even closer through mutual

    political goodwill and closer people-to-people contacts, which are complemented by a rapidly

    expanding economic and business partnership. The tourism industry receives significant benefits from

    Thai-India cooperation to liberalize trade, investment, and transportation at the bilateral level

    (Thailands Look West and Indias Look East Policies) and under regional frameworks such as

    ASEAN-India Dialogue Partnership, Bay of Bengal Initiative for Multi-Sectoral Technical and

    Economic Cooperation (BIMSTEC), and Mekong-Ganga Cooperation (MGC). The number of Indian

    outbound business and leisure tourists traveling to Thailand has touched the figure of 600,000 in 2009

    (in comparison to 300,000 in 2004). The figure is likely to reach 1 million by 2013. Similarly, tourist

    arrivals from Thailand also witnessed upward movement. During the year 2009 more than 60,000

    Thai tourists visited India. The same was only 2,700 in 2004. A significant core of this figure consists

    of tourists who come to India on pilgrimage to visit Buddhist holy sites.

    Government of Indias proactive role to promote tourism in general and Buddhist circuit

    tourism in particular, coupled with the open-sky policy, has resulted in a sharp rise in Thai tourists

    heading towards India. Growing number of Thai pilgrim tourists heading towards Buddhist Circuit

    calls for providing basic facilities to service their needs in terms of stay, food, medical facilities at a

    reasonable cost. Setting up of budget hotels/restaurants by potential Thai investors in the Buddhist

    circuit for tourists coming from Thailand and other neighbouring countries to service their

    requirements may usher a new era in promoting Thai investments in India. Sensing the potential of

    attracting Thai investment to capture emerging opportunities in Buddhist circuit tourism, the Royal

    Thai Embassy, New Delhi has commissioned Business and Industrial Research Division (BIRD) of

    IMRB International to undertake a study for evaluating the feasibility and attractiveness of setting up

    Budget Hotels (2 to 3 star category) in towns and cities that host Buddhist pilgrimage sites in the state

    of Bihar, Uttar Pradesh, Arunachal Pradesh, Sikkim.

  • ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN INDIA

    2010, BIRD, IMRB International - Confidential and Proprietary

    3

    Table of Contents

    1 TERMS OF REFERENCE AND RESEARCH APPROACH .......................................... 8

    1.1 Terms of Reference ................................................................................................................ 8

    1.2 Research Approach and Information Sources .................................................................... 8

    1.2.1 Secondary and Database Search .............................................................. 8

    1.2.2 Primary Research Unstructured Business Interviews ........................... 8

    1.2.3 Primary Research Semi-structured Interviews ...................................... 9

    2 INDIA: DESTINATION FOR BUDDHIST PILGRIMAGE TOURISM ...................... 11

    2.1 Overview of Buddhist Circuit ............................................................................................. 11

    2.2 Spread of Buddhism in Asia ............................................................................................... 11

    BUDDHIST CIRCUIT IN INDIA ...................................................................................... 13

    2.3 Buddhist Circuit in India: Geographical Spread ............................................................. 13

    2.4 Buddhist Circuit in Bihar ................................................................................................... 15

    2.4.1 Vaishali .................................................................................................. 15

    2.4.2 Rajgir...................................................................................................... 17

    2.4.3 Bodhgaya ............................................................................................... 18

    2.4.4 Nalanda .................................................................................................. 20

    2.5 Buddhist Circuit in Uttar Pradesh ..................................................................................... 22

    2.5.1 Kapilvastu .............................................................................................. 22

    2.5.2 Sarnath ................................................................................................... 23

    2.5.3 Sravasti ................................................................................................... 24

    2.5.4 Sankisa ................................................................................................... 25

    2.5.5 Kaushambi ............................................................................................. 25

    2.5.6 Kushinagar ............................................................................................. 25

    2.5.7 Varanasi ................................................................................................. 26

    2.5.8 Lumbini (Nepal)..................................................................................... 27

    2.6 Buddhist Pilgrimage Sites in Orissa................................................................................... 29

    2.7 Other Buddhist Excursions Sites........................................................................................ 29

    2.8 Popular Routes to Cover Buddhist Pilgrimage Sites ........................................................ 32

    2.8.1 Road Distance among the important sites .............................................. 33

    3 UNDERSTANDING TRAVELER DYNAMICS .............................................................. 36

  • ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN INDIA

    2010, BIRD, IMRB International - Confidential and Proprietary

    4

    3.1 Taking a deep dive into destinations .................................................................................. 36

    3.2 Tourist Inflows in the Buddhist Circuit States ................................................................. 39

    3.3 Inflow of Travelers across Buddhist Circuit ..................................................................... 40

    3.3.1 Overall.................................................................................................... 40

    3.3.2 Seasonality ............................................................................................. 42

    3.3.3 Country Wise ......................................................................................... 43

    3.4 Profile and Preferences of Foreign Travelers ................................................................... 44

    3.4.1 By Nature of Travel ............................................................................... 44

    3.4.2 By capacities to spend ............................................................................ 45

    3.4.3 Other salient points with respect to Traveler preferences and behavior 45

    3.5 Traveler Need Gaps and Pain Points ................................................................................. 49

    4 NATURE OF HOTEL INDUSTRY ACROSS THE BUDDHIST CIRCUIT ................ 52

    4.1 Competitive Landscape ....................................................................................................... 52

    4.2 Location-wise Availability of Hotels .................................................................................. 55

    4.3 Business Dynamics ............................................................................................................... 56

    4.3.1 Role of Stakeholders in the Chain ......................................................... 56

    4.3.2 Hotel price/tariffs ................................................................................... 57

    4.3.3 Occupancy rates ..................................................................................... 57

    4.3.4 Growth drivers ....................................................................................... 58

    4.3.5 Key Business Risks ................................................................................ 61

    4.4 Case for mid end budget hotel chain targeting Thai tourist............................................ 63

    4.5 Fund requirements for setting up a Hotel across destinations of primary and

    secondary importance ................................................................................................................. 64

    4.6 Attractiveness of locations for establishing hotels across Buddhist circuit .................... 66

    4.7 Locations for establishing Rest areas................................................................................. 69

    4.8 Key problems in setting up hotel/restaurant across the Buddhist circuit ...................... 70

    4.9 Possibilities of Collaboration .............................................................................................. 70

    5 POTENTIAL IN TAWANG AND RUMTEK .................................................................. 72

    5.1 TAWANG (Arunachal Pradesh) ........................................................................................ 72

    5.1.1 Major Routes to Cover Arunachal Pradesh ........................................... 73

    5.1.2 Tourist arrivals in Arunachal Pradesh .................................................... 74

    5.1.3 Profile of the Tourists ............................................................................ 77

    5.1.4 Major Barriers for Low Tourist Turnout ............................................... 79

    5.1.5 Future Scenario ...................................................................................... 80

  • ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN INDIA

    2010, BIRD, IMRB International - Confidential and Proprietary

    5

    5.2 RUMTEK (Sikkim) ............................................................................................................. 81

    5.2.1 Rumtek Monastery ................................................................................. 81

    5.2.2 Tourist Arrival in Sikkim ....................................................................... 83

    5.2.3 Profile of the Tourists in Sikkim ............................................................ 83

    5.2.4 Rumtek Visitors and Hotel Facilities ..................................................... 84

    5.2.5 Opportunity for setting up Budget Hotel in Rumtek ............................. 85

    6 TOURISM DEVELOPMENT AND INVESTMENT POLICIES .................................. 87

    6.1 National Tourism Policy Government of India ............................................................. 87

    6.1.1 Guidelines for 11th Plan Scheme ........................................................... 87

    6.1.2 Scheme for Infrastructure Development: For Buddhist Circuits ........... 88

    6.1.3 Infrastructure Development in Bihar & UP ........................................... 88

    Tourism Policy of Bihar Special reference to Buddhist Circuit .......................................... 88

    6.2 Tourism Policy of Uttar Pradesh Special reference to Buddhist Circuit .................... 90

    6.2.1 Salient Features of Uttar Pradesh state Tourism Policy ......................... 90

    6.2.2 Plans for Developing U.P. Buddhist Circuit .......................................... 90

    6.2.3 New Hotel Policy by Government of Uttar Pradesh .............................. 91

    7 GUIDELINES FOR APPROVAL OF HOTELS AND RESTAURANTS ..................... 94

    7.1 Guidelines for approval of hotels at project stage and classification &

    reclassification of hotels .............................................................................................................. 94

    7.2 GUIDELINES FOR APPROVAL OF STAND ALONE RESTAURANTS .................. 95

    7.2.1 General Terms, Conditions and Application Format for Approval of Restaurants

    95

    8 GOVERNMENT INCENTIVES FOR INVESTMENT IN HOTELS............................ 99

    8.1 Central Government Subsidy Scheme for setting up 1, 2 and 3 Star categories hotel

    projects ......................................................................................................................................... 99

    8.1.1 Interest Subsidy Scheme ........................................................................ 99

    8.1.2 Capital Subsidy Scheme ...................................................................... 100

    8.2 State Level Incentives from Uttar Pradesh ..................................................................... 101

    9 INVESTMENT IN TOURISM INFRASTRUCTURE .................................................. 102

    9.1 Major Steps in Setting up Hotels and Rest Room Facilities by Foreign Investors

    across Buddhist Circuit ............................................................................................................ 102

  • ATTRACTIVENESS OF BUDGET HOTELS AT BUDDHIST PILGRIMAGE PLACES IN INDIA

    2010, BIRD, IMRB International - Confidential and Proprietary

    6

    9.2 Government Bodies and Officials to be contacted for the investment in the Hotel

    Infrastructure .........................................................................................................

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