Tourism faces need for alternatives

Tourism faces need for alternatives

Indian tourism is at a point of profound change. The fast emergence of a massive, consuming middle class (and a neo-middle class) combined with a strong, strategic push from Prime Minister Narendra Modi is giving rise to a never-before opportunity for the sector.

Unfortunately, if the sector has to benefit from this big opportunity, it will have to junk its older, small-time thinking and reimagine itself in multiple ways. Which means, it has to rethink India’s core tourism product in light of the new traveller.

For the past 65 years, India’s tourism sector has been on a largely fruitless quest to get Westerners to visit India in large numbers. In service of this holy grail, our policy-makers created ‘exotic’ ads and attended western travel fairs, our tourism companies became non-thinking, small-time, local coordinators of big western tour operators. The Indian middle class was completely ignored tourism as a potential sector for employment or entrepreneurship.

To illuminate this with data –in 2014, India got a total of 5.7 million foreign visitors (many of whom were not even tourists, but business travellers or NRIs visiting home). Contrast this with Thailand which clocked four times our tourist arrivals at around 29 million – with about a sixth of India’s land area and about a 20th of our population.

However, in the last decade, the realities of the market have dramatically changed. Today, India’s tourism demand is driven almost completely by its middle class. Weekend getaways have become the new engine of tourism growth and even hitherto snobbish hoteliers have had to ‘descend’ to fighting for the traveller market.

Again, the numbers highlight the magnitude of change. Acco-rding to official statistics, in 2014, there were 1.3 billion domestic trips undertaken; even if one discounts massively for various types of travel, there is no doubt that about 200-250 million tourism-related domestic trips are taken by Indians annually.

Therefore, the first thing Indian tourism needs to recognise in the new world is that the customer is now Indian with the huge numbers getting bigger by the day. The primary implication of this is in India’s core tourism product. Till now, the country has had only one real tourism product – our ancient heritage, especially around the ‘golden triangle’ of Delhi, Agra and Jaipur.

However, with a young, restless and upwardly mobile consumer leading tourism demand, the opportunity lies in massively broad-basing the product.

Active, experiential and forward-looking tourism products are needed to supplement the relatively narrow, heritage product. In fact, even broad-basing the heritage product across all geographies of the country can be a good starting point in creating the tourism product of tomorrow. Unfortunately, very little work on this is visible today.

While the domestic traveller has become the real tourist now, a specific development has been the emergence of non-metro cities as the fastest growing source of demand. Cities like Jaipur, Indore etc now top the list of cities from which tourists are increasing. Equally interestingly, the vast majority of the leisure trips preferred by these non-metro travellers is within 250 km of their home city.

New products
To leverage this underlying growth, new products in the physical proximity of these non-metro cities needs to be built. Araku Valley near Visakhapatnam, Pachhmarhi near Indore and Lansdowne near Dehra Dun are examples of tourism destinations that have emerged in the last few years in response to this demand from regional urban centres. These need to be carefully nurtured and many more need to be developed.

Our tourism has always had a problem building enough accommodation capacity for even a meagre number of tourists, resulting in our hotel prices being some of the highest in the world. The problem will compound as the market moves to building for the domestic demand.

With weekend getaways and short breaks being the primary demand from domestic tourists, the market becomes even more of a ‘peaking’ nature with demand for rooms shooting up over the weekend and school holidays while remaining almost non-existent at other times.

This makes construction of new hotels for tourism a dodgy financial proposition.  The only way out of this to massively encourage the growth of home stays. Data mined from HolidayIQ reviews suggests that homestays are already starting to replace traditional hotels as the primary vehicle of accommodation capacity creation in India. This trend is especially visible in emerging tourism destinations.

However, a robust, national policy framework for homestays is sorely lacking and will go a long way in spurring their growth and thereby of tourism accommodation capacity.
(The writer is Founder & CEO, HolidayIQ)

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