Tourism still leads the way

Written by M Sarita Varma | Updated: Dec 31 2008, 06:24am hrs
It was only in the first year of the millennium that Kerala woke up to its potential as a tourist destination. Till then, it was the Rs 30,000-crore NRI remittances that was almost solely propping up the state economy which the manufacturing sector had failed to secure.

We had decided to shift the states role from an active player in tourism promotion to a mere facilitator. One, a crack team of tourism professionals were handpicked from civil service to form a battery of strategists. Two, a PPP (public-private-partnership) was formed to run the industrys main vending event KTM (Kerala Travel Mart) effectively, says E Chandrasekharan Nair, a former tourism minister of the state.

The deliberations came out into a self-prescriptive policy paper on 2000. Tour-operators, hoteliers and houseboat-owners came to the fore in working out special products for domestic and overseas tourists.

The shift in decision-making paid off. While the NRI inflows had been spasmodic in the last two years in tune with international financial climate, its the in-bound traveler who has fuelled the states new growth engine. In a dramatic surge, tourism earnings in Kerala has grown from below Rs 2,000 crore in the year 2000 to Rs 11,433 crore (projected) in 2007-2008. The success of the Gods Own Country campaign was never more evident as when other state governments vied to win the battery of newly-spawned tourism professionals for their own destination management.

If Kerala tourism model enjoys some resiliencethough the states foreign tourist inflow fell in the current year by 40% given the global financial meltdown and post the Mumbai terror attacksit is largely because of the professional acumen of the stakeholders.

Hotels and travel operators are meeting the crisis frontally with short-term and long-term measures. New differentiated products are conceived and brought to the marketing tables in a jiffy, says KC Chandrahasan, a leading tour operator.

In the short-run, houseboat owners are not happy about the cancellations. We are even offering 25% discounted rates, says Tomy Pulikkattil, a spokesman of Houseboat-owners Association.

In the turn of the decade, the travel industry in Kerala started focusing on creating differentiated products that appealed to various categories of visitors. Thus, while many other competing destinations marketed only beaches or only desert palaces or only heritage places, Kerala Tourism was careful about creating an entire basket of products. In addition, it also repackaged its unique backwater product, mixing and differentiating, whenever necessary, with Ayurveda rejuvenation/health tourism offerings.

In some situations, it is the much-maligned French queen Mary Antoinettes model of eating cakes when there is no bread thats turning out to be the most effective strategy. Even while the rest of India is rocked by travel advisories against the country, Kerala Tourism is not too critically affected, says Jose Dominic, who runs the Casino hotel chain. This is because the tour products that Kerala uniquely offers cater not to the broad matrix of charter tourists, but to the more brand-loyal segment of AIT (alert, independent traveler), he says.

From January- March of the current year the total foreign tourist arrival in Kerala has increased by 20.05% while domestic tourist has increased by 15.04% over the same period last year. Recently, Kochi joined the big league as a stopover port for the worlds premier offshore yacht race, Volvo Ocean race, adding to the destinations international laurels.

Meanwhile, the shares of primary, secondary and tertiary sectors to Keralas GSDP (gross state domestic product) are 17.8%, 21.6% and 60.6% respectively. A hard time-series perspective of sectoral contribution over the last decade shows that the share of agriculture is falling and that of the service sector is gaining rapidly. The growth rate of the secondary sector is more or less static at 22%.

A literate state with high population density, green concerns run high in the Kerala public psyche. Along with scarcity of industrial land, this makes the advent or expansion of big manufacturing industries (like fertiliser, chemical with inherent pollution costs) an unattractive proposition for Kerala.

At the same time, buoyed tourism revenue can, at best, only be a growth stimulus. It cannot be a substitute for production bases in agriculture and industry. Research-intensive industrial segments like biotech has been identified as ideal for the state given literate manpower and green sensitivity.

For this, the states planners will have to be bullish about replicating the winning PPP model in tourism in investment-starved sectors like industry and higher education.

The CPI(M)-led LDF Government is yet to reach a political consensus on this issue. Just as Chief Minister VS Achuthanandan has written to Centre against private partnership for the proposed Kochi Metro rail, states CPI(M) bosses have called for an urgent investment stimulation strategy in the era of worldwide recession.

It is too early to predict if the next decade would actually see the share of industry crossing the 22% threshold in Kerala. The success of PPP in the tourism market should indeed help in tailoring a similar model of industrialisation for the state.