Industry Analysis

Tourism Industry

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Introduction

Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".

1. Tourism brings in large amounts of income in payment for goods and services available, accounting for 30% of the world's exports of services, and 6% of overall exports of goods and services.

2. According to World Tourism Organization estimates, India will lead in South Asia with 8.9 million arrivals by 2020.

3. India is poised to emerge as the 2nd fastest growing (8.8%) tourism economy in the world over 2005-14 according to the World Travel & Tourism

Key Key playersplayers

(Indian Tourism Industry)

PEST Analysis

PoliticalHefty TaxationDiktat of local or state governmentPolitical StabilityGovt. spending on tourism & travel

EconomicalForeign Exchange RateElasticity of DemandEfficiency of EconomyBusiness Cycle

SocialDifferent languages, cultures, traditions, cuisinesRespect & entertaiment of guests embedded in culture itself

TechnologicalIncreasing role of web & internetFacilitates Online BookingEfficiency of EconomyProviding customers with easy payment facility via online and use of credit cards and wi-fi facility on the go, easy recharge of mobile phones etc.

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Quick Facts

India’s Rank:

40

About 7.19% of the country’s GDP comes from tourism and it provides employment to over 40 millions of the country’s workforce.

For every INR 1 million of investment, the number of jobs created is as follows:

• Industry – 18• Agriculture – 45• Travel & Tourism – 78

100 percent FDI in developing tourism infrastructure in India: According to a WTTC report, India’s travel and tourism industry have directly contributed INR 63,160 crores

the GDP in 2013, allowing 100% foreign direct investment in hotel infrastructure development. This will prove to be a major growth driver for the industry.

Emerging new products in Tourism

1. Golf tourism2. Education Tourism3. Domestic Tourism4. Luxury Trains5. Wedding6. Eco-Tourism7. Tea Tourism8. Sports Tourism9. Medical Tourism

Challenges

1.Lack of proper infrastructure

2.Human resources

3.Service levels

4.Lack of adequate marketing and

promotion

5.Taxation

6.Security

7.Regulatory issues

Strategies

•Product development- Customised services Specific location oriented packages. Low cost packages.

•Web and E-commerce Rising users of internet

•Establish, attract and facilitate sporting, recreational, cultural and other major events