Poor flight connectivity in some regions is a massive challenge that needs to be overcome.
As the Narendra Modi-led government has set an ambitious goal of $5 trillion economy by 2024, the travel & tourism sector is identified as an important area where the capacity can be largely added to boost revenue and foreign exchanges. Last year, the foreign exchange earnings from tourism increased 4.70 per cent on-year to USD 28.59 billion, taking cues from government initiatives like e-visa that have helped in attracting various international tourists, Yogesh Mudras, Managing Director, Informa Markets in India, told Samrat Sharma of Financial Express Online in an interview. However, poor flight connectivity in some regions, value-for-money across hotels, and bad infrastructure still remain a major roadblock, Yogesh Mudras added. Here are the excerpts of the interview:
1) What portion of the Indian economy does tourism constitute?
In 2018, India’s travel & tourism GDP was at USD 247 billion, growing at 6.7 per cent over the previous year. In addition, travel & tourism generated nearly 26.7 million jobs in India in 2018. The industry is also likely to reach Rs 35 trillion by 2029.
2) How has the current economic and political crackdown in India affected tourism?
The tourism industry still remains one of the fastest-growing sectors. The reason for this could be government initiatives like e-visa, which has helped in attracting various international tourists. Under the Swadesh Darshan Scheme, 13 thematic circuits in the country have been selected for the development of tourism infrastructure with an aim to boost domestic and international travel.
3) What are the roadblocks for the Indian tourism industry?
Although the travel and tourism industry in India is on the rise, there are few roadblocks that the industry faces. Poor flight connectivity in some regions is a massive challenge that needs to be overcome. Another issue that can be addressed is the Value-for-Money across hotels in countries such as Thailand, Cambodia and Sri Lanka which is much better for luxury travelers than what they get in India. The current reduction in GST rates should help the industry, but the competition and ease of travel that other countries have provided is something that India needs to match up to. Besides, while tourist sites have been beautified, the infrastructural network to reach them also needs to be considered.
4) What is the mantra to attract FTAs in India?
The proposed initiatives of the government to develop world-class 17 iconic tourism sites will be a major attraction for not only domestic tourists but also international travelers. These destinations will boost the investment in the travel and tourism industry especially by both international and domestic millennials who have the spending power. Short-haul destination travelers from neighbouring countries like Sri Lanka, Thailand, and Dubai can be tapped as they would be keen to travel on weekends if the price is affordable. For this to happen, it is important that the visa cost is reduced just like our Pan Asian neighbours have done.
5) What role has tourism to play in govt’s $5 trillion economy goal?
The travel and tourism sector has a huge role to play in the $5 trillion economy dream as it is one of the sectors that is on the rise despite the economic slowdown. Tourism in India has significant potential considering the rich cultural and historical heritage, variety in ecology, terrains, and places of natural beauty spread across the country. Tourism is also a potentially large employment generator besides being a significant source of foreign exchange for the country.
Also, with government initiatives like e-visas, the Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sector in the country. By 2020, the medical tourism industry is also expected to boost up to USD 9 billion. During 2018, FEEs (Foreign Exchange Earnings) from tourism increased by 4.70 per cent on-year to USD 28.59 billion. The FEEs during January 2019 reached USD 2.5 billion, which is an encouraging sign to the overall economic growth.