Tuesday, 13 January 2009

Indian Tourism

I've been looking at a report on Indian tourism on the Incredible India site and noticed a few interesting trends.

The basic conclusion I can derive from the report is that while tourism to India is on the upswing, it still accounts for only a minuscule percent of international tourism.

Here's a table of Foreign Tourist Arrivals (FTAs) between 1996-2008.

I can tell from the table above that foreign tourism decreased steadily from 1996 to 1998. We actually recorded a negative growth in '98 (-0.7%). While I'm unsure about the reason behind the '97 figures, the '98 ones could be due to the Indo-Pak nuclear tests and resulting tension. This does not, however, explain the gradual rise in tourism in 1999, when the Kargil conflict was in full swing.

Assuming, however, that war is the main reason for a drop in tourism, this would comfortably explain the negative growths in 2001 and 2002. '01 of course brought 9/11 along with it, and a corresponding drop in American tourism worldwide (Americans constitute a majority of the visitors to India). Dec '01 saw an attack on the Indian Parliament, leading to troop mobilisations on both sides of the Indo-Pak border, the resulting fear of a war leading to a negative growth in 2002. In fact, at -6%, '02 was our worst year ever in terms of growth, with -4.2% in 2001 close behind.

2003 saw a massive jump in tourism (14.3%) which was followed by the highest growth rate so far (26.8%) in 2004. The reasons for this could be mostly international feel good factors. A thaw in Indo-Pak relations...a booming stock market...a tourism centered media blitz...etc. The growth rate since then has been double digit constant at around 13-14%. It remains to be see what effect the recession and 26/11 has had on FTAs to India in 2008, but with the growth rate at 11% till June, it certainly can't have decreased much. A negative growth this year does not seem very likely, though a growth rate below 10% certainly seems possible.

Here's the monthly FTA table.

Nothing surprising here. Most FTAs happen in the winter months.

On the other hand, the revenue tables below show us that returns from tourism have been steadily increasing, but not in proportion to the increase in visitors. What this means is, foreign tourists are spending more in India than they did before.

We can observe from the tables above that the growth rates of foreign exchange earnings is far greater than the growth rates of foreign visits. Correspondingly, while the number of foreign visitors doubled from '96 (2.6 million) to '07 (5.08 million), the amount of foreign revenue earned has increased by a factor of 5, from 2.8 billion US dollars in '96 to 10.7 billion U.S dollars in 2007. This could mean that the tourism sector in India is getting more organised, and therefore attracting more serious spenders rather than budget travellers.

Looking at the table for source countries of FTAs, we can see that the U.S and U.K together make up over 30% of all arrivals in 2007, which is the most recent year for which we have full data.

Looking now at Indian outbound visits below, it's clear that these have also been increasing steadily between '04 and '07, with a jump in '04.

Though we seem to have more outgoing than incoming visits, it's unclear how many of our visits abroad are for business and how many for pleasure, though they seem to have almost tripled since '96.

And the growth rate figures for domestic tourism below look equally steady, though a lot more in number. We had almost 4 times as many domestic tourists in 2007 as we did in 1996. Again, I 'm not sure how they differentiated these from business visits.

The states preferred by foreign tourists makes for interesting reading.

Nothing surprising about the top 5. It's obvious that Delhi would be up there first. Most tourists do see the Taj Mahal. Mumbai, which is also a must see, is the main reason Maharashtra is up there. Tamil Nadu has done a lot of advertising aimed at tourists in the recent past. U.P is up there almost solely because of the Himalayas. Rajasthan is part of the tourist triangle.

I suspect West Bengal, AP and Karnataka are up there more because of their capital cities than anything else. But the surprises for me are Goa and Kerala, which I thought attracted more foreign tourists. I guess with Goa being so small, visitors there get the perception that there are more tourists there than there really are.

Now comes the bad news, the saddest part of the report. In 2007, India accounted for only 0.56 of world tourism, and only 2.76 of tourism in the Asia Pacific region, inspite of being the 7th largest country in the world.

The top 10 countries in terms of tourism in 2007 are listed in the table below.


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