With all players in the tourism sector ready to grab any opportunity that comes their way, they are also looking up to the Government for all kinds of advantages, ranging from tax concessions to various incentives that would facilitate their business.

The domestic tourism industry has really grown at a very healthy pace in the last 2-3 years. There are many factors that have helped in the spread of the wanderlust contagion among the middle class. First of all, the economy has really turned the corner and the larger benefits of higher economic growth are now percolating down to all sections of the society. The stock market boom has also made people richer in a short period of time.

Disposable income has also risen manifold and so has consumer spending, according to Parmod Uppal, a senior banker. Uppal adds that reduction in airfares and construction of world-class highways across the country has enthused Indians to travel more within the country.

Shining tourism industry

As projected by World Travel and Tourism Council, the next 10 years will see India growing by 9% per annum — one of the highest rates of growth in the world. Last year, India’s travel and tourism generated over 37 billion dollars of economic activity. The capital investment in this industry is estimated at 10 billion dollars or 7% of total investment in 2004. By 2014, this should reach $21 billion.

India is shining in the top 10 list of travel and tourism economies in the world. Goa and Kerala are leading the country, as these 2 States attracted the maximum number of foreign tourists, while Jammu & Kashmir is regaining its lost glory with the improvement in relations with Pakistan.

According to reports, India is a favoured destination for weddings and honeymoons as people from abroad could choose an ethnic wedding in Rajasthan or Kerala. The number of visitors from the Gulf countries have also gone up by 30%, as the Arab tourists are looking East now.

Foreign jobs are also helping in boosting outbound travel. The craze among the Punjabi youth, especially the poor and middle classes, to settle abroad is boosting foreign travel from north India.

In the last 2 years, outbound travel by the youth from the northern region increased by 15-20%. The number of those going to the Gulf countries for jobs like heavy vehicle drivers, carpenters, masons, welders, steel fixers, bar binders and labourers is over 1 lakh.

Incidentally, the overseas job market is also linked to the growing number of youngsters going abroad to study. It is expected that the number of students wanting to work outside their own country will rise to a whopping 7.5 million by 2020, with India and China being the main contributors to this movement.

While the size of the domestic tourism market in the country is almost 2.5 times the foreign tourism, a very large part of this is still not available for the hotel industry.

The domestic tourism

Of the total tourists, 7% are related to business or holidays and close to 60% go for social purposes, like wedding and family functions. Presumably, travellers for social functions stay with relatives and friends. Another 7% travel for religious purposes and around 70% of domestic tourists travel by bus.

There are 22 million tourism families in urban India (of the total of 55 million families) and the average number of trips made in a year is around 2.6, taking the total number of domestic tourists to 550 million. The average expenditure in each trip is Rs 1,400-Rs 2,040 for urban families, and Rs 1,160 for rural families.

Spendings on package tours are slightly higher, at Rs 1,500, but just 4 million Indians went on package trips in 2002. The number is increasing every year and now it has touched 5 million.

While Uttar Pradesh, Andhra Pradesh, Maharashtra, West Bengal and Tamil Nadu have the maximum number of tourist households, Delhi has the highest per capita incidence.

Besides J & K, Himachal Pradesh and Uttaranchal are also witnessing a spurt of tourists. Kerala, famous for its houseboats, beaches, Ayurvedic treatments and wildlife sanctuaries, has been the top destination in recent years.

According to the National Council for Applied Economic Research (NCAER) rural folks in India contribute more to domestic tourism than urban dwellers.

People in rural areas travel more and contribute more to domestic tourism than the urban population. Though they move out mostly for social purposes, yet they make a significant contribution to the growth of tourism by visiting tourist spots in and around their main destinations. Travel for social purpose accounts for the largest percentage of tourists in both urban and rural areas in India.

With most Indian States now waking up to the potential of tourism as an industry, travelling within the country has become a good getaway option. Sensing the demand, the tourism industry is offering attractive packages.

The advent of good quality hotels at most of the Indian tourist destinations has also helped the boom. Now, many luxury hotels are also changing gear and wooing domestic travellers, instead of focussing purely on overseas visitors.

Domestic tourists are no longer interested in just visiting popular tourist sites. They are also looking for luxury holidays that provide them extraordinary experiences at an affordable cost.

Much needs to be done

While the Government claims that it is taking all measures to improve the image and quality of the country’s hotel industry and transportation and to focus on maintenance and restoration of monuments, experts say much needs to be done to fuel growth. Banks also contribute to breathe life into people’s travel dreams, and holiday financing business has grown by over 10% in the last year.

While more than 90% of the holiday-makers tend to tap their internal resources to fund their travel breaks, there is small but growing number of those getting bank loans to travel to then dream destinations. Leading travel companies say holiday financing has more than doubled in the last 2 years.

After housing and car loans, banks have now started concentrating on holiday financing. While the numbers are still small, changing lifestyle, unconventional approach to taking a holiday and readiness to raise loans because of growing incomes and assured futures, is prompting some of the bigger travel companies to work with banks to offer attractive options.