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Can Incredible India Charm Indians?

Monday, September 9, 2019, 16:58 Hrs  [IST]

The Prime Minister’s appeal to the citizens of India to visit 15 domestic destinations in the next three years is a welcome move, and a logical step to popularise the concept of domestic travel at a time when inbound is witnessing moderate growth. However, converting this vision into reality is a mammoth exercise and needs some war footing measures, writes Prasenjit Chakraborty.

A At a time when India is witnessing a slowdown in economy, fall in foreign exchange reserves and not so impressive inbound traffic, it is the domestic tourism sector that can serve as the backbone in maintaining the travel & tourism balance. At this crucial juncture, the Prime Minister’s (PM) appeal to the citizens of India to visit 15 domestic destinations by 2022 during his Independence Day speech has assumed tremendous significance. Stakeholders believe that when the top leadership sends a strong message it always helps the cause, and in turn creates a multiplier effect. Buoyed by the PM’s appeal, even if a section of citizens from the 130 crore population start travelling within the country, it will completely change the tourism landscape of India, which has become a favourite ground for overseas destinations to inject inbound growth.

The appeal comes at a time when a Reserve Bank of India (RBI) report says that Indian’s are spending record on international travel. According to this data, Indians spent USD 595.9 million in June alone which is a peak travel time. If the residents of India take the appeal seriously and domestic tourism witnesses a surge, it will definitely help balance the lean months of inbound traffic. However, is this enough to motivate people to travel within the country when they have an option to travel to short-haul foreign destinations at a cheaper price? Here lies the challenge.

Issues Plaguing Domestic Tourism
Most of the stakeholders in the industry are unanimous in their opinion that the PM’s appeal will have an impact on the industry provided the government addresses some key issues of high tax rates, infrastructure development and tourism promotion on a war footing measure. Aashish Gupta, Consulting CEO, Federation of Association in Indian Tourism and Hospitality (FAITH), strongly believes that PM’s appeal will provide impetus to the domestic tourism segment provided it is supported by policy action. “This should be in the form of income tax relaxation up to a certain amount for Indian citizens travelling in India. For corporate clients, who are hosting their MICE events in India, their expenses should be given a double weighted exemption on income tax. Additionally, hotels should be allowed to charge IGST (Integrated Goods and Services Tax) which will allow Indian corporate entities and travellers to claim hotel GST (Goods and Services Tax) in states where they are not registered. Finally 28% GST for hotels should be abolished,” he states.

Echoing similar sentiments, Shobha Mohan, Founder, RARE India, says, “I appeal to the PM to look into the various policy structures so that taxation can be minimised and for travel agencies, the Ease of Doing Business can be elevated. This will also help smaller hotels and home stays to make tourism a viable business proposition, and without a doubt increase domestic tourism across India.”

Besides high taxation, infrastructure is another stumbling block that deters the growth of domestic tourism. “Last mile connectivity to key tourist destinations is must,” points out Rajiv Mehra, Vice President, Indian Association of Tour Operators (IATO). He adds that it is imperative to have effective and efficient tourist facilitation counters at key gateways - railway stations and airports. For example, due to lack of infrastructure, many potential destinations remained unexplored in the North East region. The present government has starting taking steps on infrastructure and connectivity fronts, which would yield results in the near future.

Take the example of Ajanta & Ellora (in Aurangabad, Maharashtra) which are among of the oldest UNESCO World Heritage Sites. During Diwali, the flight from New Delhi to Aurangabad surges more than INR 14,000 which is just a INR 1,000 cheaper than an air ticket Bangkok for the same dates. Moreover, Aurangabad doesn’t have the infrastructure required to handle mass tourism. This is just one example; there are plenty of destinations in the country which are facing similar hardships.

Trends & Benefits
Rajeev Kale, President & Country Head – Holidays, MICE, Visa, Thomas Cook (India) Ltd, believes that it is high time the focus shifts to the domestic tourism sector as it offers significant potential in terms of its sheer diversity of experiences - from culture, cuisine, wildlife, adventure and heritage. Its force multiplier effect offers cascading positive impact on employment generation, skill development, in addition to boosting allied industries like aviation, railways, hospitality and the nascent cruise sector, and hence putting the spotlight onto domestic tourism is a step in the right direction.

Interestingly, for Thomas Cook there is around 21% rise in domestic demand for the upcoming quarter of 2019. “Some of the prominent destinations that are gaining popularity are Shillong, Rann of Kutch, Gir, Jaisalmer, Varanasi, Rishikesh, Darjeeling, Ladakh, Pondicherry, Mahabalipuram, Bandipur National Park, etc.,” reveals Kale.

Taking due cognisance, MakeMyTrip has rolled out ‘MyIndiaMyTrips’ campaign to support the PM’s vision to boost domestic travel. Sunil Suresh, Group Chief Marketing Officer, MakeMyTrip, says, “With its beautiful natural landscapes, rich cultural diversity, 7,500- kilometre coastline and a multitude of cuisines, customs and art that changes every few hundred kilometres – there is no dearth of destinations to visit as a tourist in India. #MyIndiaMyTrips is a concerted effort to inspire, encourage and assist more and more Indians to explore their own country as per our Prime Minister’s appeal during his Independence Day address to the nation.”

Addressing the Mindset
While there is no doubt that the PM’s appeal is a good call, but at the same time it is a tall order. Tourism is a labour-intensive industry, and if a substantial chunk of capital is invested on tourism activity, it will help create jobs and enhance incomes for a multitude of players. But majority of Indians perceive tourism as luxury and a discretionary spend. Unlike Western countries, people in India rarely borrow money for undertaking vacations.

On the contrary, a large portion of the income is invested on children’s education, weddings or securing the future. This mindset is another problem and may pose a bigger challenge than all other related issues. Therefore, as a first step to convince a substantial chunk of the population to travel within the country, the government has to offer some benefits. Arun Verma, CEO, Allways Marketing & Travel Services, points out, “To make the middle and upper classes travel in India, the government should incentivise domestic travel by way of tax deduction, and only then this will turn the vision into reality.”

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