Downbeat On Tourism

Updated: Nov 17 2003, 05:30am hrs
The ongoing rally in stocks is widespread. More sectors and more scrips are northward bound. However, most analysts have underplayed the stimulus provided by a strong upturn in the economy and its positive fallout on the markets. The hospitality sector is one such sector that has bounced back since the 9/11 terrorist attack.

The Hotel Industry Business Confidence Survey 2003-04 in June 2003 had hoped for a good winter season (October 2003 to March 2004). About 60 per cent of the hotels surveyed in all categories are expected to increase their room tariff for the current busy season up by 39 per cent as against the June 2002 survey. The number of foreign tourists visiting the country is also expected to go up to 2.7 million during 2003-04, the same as in 2000-01.

Hotel scrips have responded with gusto to these developments. Most scrips have crossed their 52-week high recently. In fact, scrips of Indian Hotels, EIH Hotels, Asian Hotels and ITC Hotels appreciated in the range of 7-15 per cent on a single day. Even Thomas Cooks scrip was up 7 per cent.

That said, things are not that bright with respect to the tourism sector. For instance, The World Travel and Tourism Council (WTTC) in its latest survey of 200-odd countries says that India is not among the most competitive tourist destinations judged in terms of parameters such as price competitiveness, openness, infrastructure, technology, human resources, social development etc. In fact, India does not compete with Laos, Gambia, China or Indonesia in terms of price competitiveness due to the lack of low-priced, good quality rooms. Reason being the Indian hotel industry sees every foreign tourist as a rich person. This perception needs to be discarded and some fine-tuning on pricing needs to be done which would meet the requirements of all pockets.

A great deal also needs to be done to improve the infrastructure facilities as India, which ranks 89, is way behind leaders like Australia, Sweden and Canada. Other areas of concern in the survey relate to visa requirements, taxes on international trade and the impact of tourism on human development. The Tenth Plans candid confession that ...the initiatives taken by the State so far have not yielded the desired result and Indias tourism performance has failed to match its potential, only endorses the WTTCs findings. Its really sad that considering Indias rich endowments and heritage its share of international tourist arrivals, which is at a measly 0.38 per cent, would be enhanced to 0.62 per cent by 2007.