Thursday, January 31, 2008

Tourism Development in India


“Tourism is one of the fastest growing sectors of economic activity” (WTO, 2005). The number of international arrivals shows increasing trend from mere 25 million in 1950 to an estimated 846 million in 2006, corresponding to an average annual growth of 5.4 % (WTO, 2005).

“India is a fascinating country for tourists, with a variegated and rich cultural heritage, religious centres, natural spots, adventure sports, captivating fairs and festivals” (Batra and Kaur, 1996). The major aim of the paper is to highlight the development problems country is facing and would suggest a few strategic recommendations to avoid these hindrances in near future.

Historical, Political and Economic Background

India achieved freedom on 15th August 1947 from British rule. Politically speaking, India is the biggest complete democracy in the world and runs similar system of the parliament having Lok Sabha and Rajya Sabha. Main political parties include Congress party, Bhartiya Janta party and Communist Party of India-Marxist (U.S. Department of State, 2007). The centre politics is run by the ‘Prime Minister’ who is the head of the ruling party. Economically speaking, India is considered to be one of the fastest growing economies after China in the world with the biggest consumer market (Srinivasan, 2006). India is also known as one of the largest manufacturer of the software products and exporting goods. Agriculture has always played a pivotal role in the economic development.

Problem Identification

Although, India is growing politically and economically at a fast pace but there are lots of problems which affect tourism development such as:

1) Terrorism: According to Sahni A, 2001 Lashkar-e-toiba, Jaish-e-mohammad and Hiz-bul-mujahiddeen are three major Islamic terrorist groups, headquartered in Pakistan but have intruded in India.
2) Lack of education and medical treatment (the situation is more sever in rural areas).
3) Increasing environmental problems (pollutants emitted by vehicles and industrial waste).
4) Poverty and hunger (see appendix 1).
5) Unequal distribution of income within the earning society.

People who have responsibilities in Indian tourism industry believe that the major problems faced by them are specifically discussed as:
1) Lack of infrastructure (which includes inadequate air capacity and poor transportation which makes accessibility to tourist destinations difficult).
2) Unavailability of cheaper land.
3) Insufficient trained people in catering (lack of training institutes where expertise is born)
4) Touting and harassment incidents leading to poor visitor experiences (see appendix 2)
5) Un-hygienic conditions and poor maintenance of historical monuments and tourists’ destinations.
6) Natural disasters and changing weather conditions across the globe (see appendix 3).

Despite of these problems, tourism has been playing an important role in the economic and overall development of India. India has an average annual growth of 2.7 % in international arrivals and 5.8 % increase in international tourism receipts.

Tourism Policies

Since India achieves independence, the Five Years Plans (see appendix 4) are catering for India’s growth in different sectors including Tourism. During the 2nd and 3rd five-year-plans, Indian Tourism Development Corporation (ITDC) and Tourism Finance Corporation established by the government of India add another feather to tourism industry in 1966. Upon realizing the importance in the 6th plan (1980), the Central government of India formulated the “National Policy on Tourism” in 1982. Six years later, “National Committee on Tourism” was established to comprehensively develop a steady but fast pace growth in tourism. Altogether 21 National Council for Hotel Management (NCHM) and 14 Food and Craft Institutes (FCI) came up to provide special training in hotel and catering seekers (Sinha, 2000).

The success of tourism objectives and policies can be judged by increasing facts and figures of Indian tourism industry. Foreign exchange earning has gone up by 81% within 5 years since 2000. According to Sinha (2000), domestic tourism has gone up from $64 million in 1990 to $167 million in 1998. Domestic tourism is on the rise with 390 million showing 13% growth in number of trips in 2005.


The recommendations part would highlight responsibilities shared by Indian government and private owners of hotels and tourists spots to promote Indian tourism industry. Some important concerns in the coming future are discussed as follows:
1) Providing better infrastructure in air seating capacity, cheaper accommodation and proper transportation.
2) Promoting heritage tourism by highlighting heritage hotels and historical monuments, developing beaches, water and ice sports, wild life sanctuaries, etc. to promote adventure tourism.
3) Medical tourism is concerned with attracting tourists from those countries where medical treatment is very expensive or of poor quality. India’s attempt to attract foreign tourists with medical needs started in late 2002, for the treatment in India is cheaper and of good quality compared to other developing and developed countries. (Goswami and Chinai, 2007).

Tourism department of India has started taking actions on the above mentioned areas but there is still a need to promote specific areas.

1) Education Tourism attracts students from other countries. Although, there has been a positive response from the neighbouring countries (Pakistan, China, Nepal and Malaysia) but a lot can be done to fascinate students from developed countries (Europe, UK, USA) within certain specified courses where India has edge over them.
2) Social Tourism can be defined as “the relationships and phenomena in the field of tourism resulting from participation in travel by economically weak or otherwise disadvantaged elements of society” (Hall, 2005). In India, it is basically concerned with socialists from other developed countries visiting and helping poor people to have a better standard of living and more meaningful fun-filled life.

Hence, the tourism board needs to bring the above mentioned agendas under there consideration while formulating tourism policies.


Indian tourism has been facing the problem of not getting the effective number of foreign tourists despite extensive marketing efforts. The term ‘India’ is not sending the correct signals to travel enthusiasts across the globe. In spite of upward trend in tourist’s arrivals following the ‘Incredible India’ campaign (Ministry of Tourism, 2006) still India is not preferred as destination image by large number of tourists all over the world. As per the tourism plans discussed above, India is trying to change their general socio-economic tourism to macro-economic levels. Firstly, India few decades ago had a general idea about tourism, which was established further with formation of specialised organizations and later financial institutes supporting tourism. The tourism management is becoming more systematic now. The government needs to make policies comprising of medical, education social tourism and merge with private companies to work towards the common endeavor of achieving tourism development in India.


Ayers, R (2000) Tourism as part to development in small states: reflections on Cyprus, International Journal of Social Economic, Vol. 27, No. 2, pp.114-133.

Batra, G.S. and Kaur, N. (1996) New vistas in reducing the conflicts between tourism and the environment: an environmental audit approach, Managerial Auditing Journal, Vol. 11, No. 4, pp. 3-10.

Chinai, R and Goswami, R (2007) Medical visas mark growth of Indian medical tourism, URL: and script=sci_arttext. [Accessed on 20th October, 2007]

Euromonitor International, (2007) URL: [Accessed on 12th October, 2007]

Hall, C.M. (2005). Governance and state intervention, Tourism: rethinking the social science of mobility, Pearson Education, pp. 152.

Ministry of Tourism (2006) Incredible India Campaign, URL: [Accessed on 23rd October, 2007].

Sahni, A (2001) Major terrorist groups operating in India, URL: [Accessed on 20th October, 2007]

Sinha, A. (2000) Tourism development in India, URL: [Accessed on 12th October, 2007]

Srinivasan, T. N. (2006) China, India and World Economy, Stanford Centre for International Development, Stanford University, Working paper No. 286

U.S. Department of State (2007) Background Note: India, Bureau of South and Central Asian Affairs, URL: [Accessed on 21st October, 2007]


1) India has got indexes of 25.73% in 1997 and 25.73% in 2003, which is ranked 96, and is currently ranked 94th, according to the global hunger index 2007.

2) On 12th July 2007, a British couple was mobbed by three youths of Kolkata and was annoyed by the non serious attitude of the police officials. They registered the complaint only after being threatened of going to the higher authorities (Headlines, 2007).

3) Natural disasters: Firstly, when Gujarat was affected by earthquake in January 2001, 13,800 people were killed and 167,000 were injured. Thousands of houses, schools, markets and administrative buildings crumbled (World Bank, 2007). Secondly, all the countries located around the Bay of Bengal were hit by tsunami waves on 26th December 2004 and the states which were severely affected by tsunami in India were Tamil Nadu, Kerala, Andhra Pradesh, Pondicherry and Andaman and Nicober islands. The total population affected due to tsunami was 3,415,000 (Mohanty, 2004).

4) The process of planned economic development started with the launch of first Five year plan in April 1951.The main aims of planning in India are growth, mordernisation, self-reliance and social justice (Surry, 2006). Since 1951, India has completed tenth five year plan (2002-2007) and eleventh five year plan is underway.

Monday, January 14, 2008

Shahrukh Khan and Cricket-The Branding Perspective

Shahrukh Khan and Cricket-The Branding Perspective

Two brands in the market that carry a personality that is dominating, enlightening and controversial. Let us see what is different between the two. The former lives a reel life and the latter lives a real life. We must remember that there are no retakes on the cricket field. They have to face real people and play their part.

The commonality between two is the hype. A testimony of the same is the huge number of products endorsed by them. Now what is interesting is the relationship between the two. Where do we see them together? And who is it benefiting the most form the brand image.


We see them together on television advertisements, TV shows. The most recent show we saw was on Star TV called Chak De Yaara! Where Shahrukh was there entertaining the cricketers and here we saw the cricketers having a great time with the filmstar.

Who benefits the most?

I would say it is the media and advertising agencies.These brands prevail in the market making their presence felt all the time and creating resonating relationships with the customers.

The Impact

A Shahrukh Khan in Chak De India makes hockey a popular sport which had become extinct and a cricketer in an advertisement makes the product popular. But it is important to realize both can have serious and negative influences on the public. Both need to be responsible in any of heir activities as people idolize them.

Please post in your comments on the same topic….

Sunday, January 13, 2008

Executive Search Consultants

Ever wondered why the CEO of this channel is now a part of another one! Ever thought gosh! This chap was Director marketing in this firm till yesterday and today he is promoting another firm.But who routes these people form one company to another.What is the channel they use? Who are the people they consult? This is where the role of an executive search consultant comes.These are niche HR consultancies which hire people for senior management level posts only.The lowest profile people they place are Director,Marketing,etc.But the job is highly confidential keeping the database of candidates extremely secure.

How do these function?

Most of these are family setups running branches across the country with each branch having approximately 20-25 people.What? That is it?Well yes that is true.But then where is the challenge.

High Profile People!

Here is a chance to interact with the top notch people of various companies and getting to learn a lot from them

Getting Across

The people are high profile and getting through them is not an easy task.Making an entry into his office is a challenge in itself

Cracking the deal

Convincing the person to switch his job to another company is a task in itself.That person is happy with his job and you have ot provide him with geat incentives to let him leave his current job and join another company


A lot of research goes into the industry and the company and the candidate's profile.Then a suitable job match is found

How does it all happen?

A client of yours say Pepsi approached you taht they are looking for a Director,HR.The consultancy will start with doing a research on the industry and company and the candidate's profile and then approach the suitable candidate with an offer.Various people will be shortlisted for the same and finally the most appropriate candidate is appointed by the client.

Nation Branding

Nike!Coca Cola!Google!Apple! Brands prevail in the market making their presence felt all the time and creating resonating relationships with customers.Brands can be products,places,services,etc.Nation branding is a niche subset of place branding.Globalization has led nations to become more integrated and competing with each other for tourists,business,foreign investments or merely for the attention of the media.100% pure New Zealand,Malaysia-Truly Asia,etc are remarkable examples of nations atempting to brand themeselves.However some nations need not explicitly brand themselves due to their popularity like America for power and money,Japan for technology,etc.

Why would a nation brand itself?

1. A nation could brand itself if it has been targeting the wrong audiences.For example targeting a segment with low spending power for tourism.

2. A nation could brand itself if wants to correct a wrongly built image.For instance.India is still known to the world as a land of culture but nothing beyond.It is important to make the people aware of the technological breakthroughs the country has gone through and also that India is the land of spirituality,youth and corporate leaders.

3. A nation could also want to correct a negatively developed image due to wars,etc

Simon Anholt describes the nation brand as the sum of the perceptions of a country and its
people across six dimensions of national assets, characteristics and competence.
Apart from the above mentioned factors some researchers have also identified agriculture as an important parameter to be use din the promotion of the nation.

Thursday, January 10, 2008

Elevator Pitch

Imagine bumping into the CEO or a VC who will fund your next project in an elevator. It takes 30 secs from the elevator to go from the floor you get in to the floor on which you get out. So are you prepared? Do you have your pitch pat down, so that you can if not convince but get the attention of the VC / CEO to your idea? During the managerial communication class we had a tutorial where each student had to make an elevator pitch on a particular situation which was revealed to you just 45 secs before you are due to present and this reminded me of a very smart thing. When I was returning from Amsterdam to Cologne a few months back, in the train, I met this “desi” guy who just came up to us and started talking about how he was a research student at univ X and as a part time he provided other services like courier, arrange for events etc for other desis That’s one interesting thing I observed while in Europe. In India you wouldn’t bother talking to a stranger but there, every brown skinned person is a desi (whether from sri lanka or India or Pakistan ) and you will smile at / greet other desis.. ok I digress…
So this person gives me his card, and on the back side of the card he has a list of the services he provides. This is smart I say. After a month if I were to look at his card, I might not remember where I met him, and who the heck does this card belong to but when I turn it around immediately the context is clear. I don’t remember where I read this or who told me but this was suggested as a very good method for entrepreuners looking for funding. Take your business card and on the back write a short description of your product, main features etc. So the next time you bump into a VC or someone important who can help you in your venture, you give them your card and later they have a way to remember you and your idea later. It didn’t strike me in the train but later when I was planning for my elevator pitch, the application of the idea was blaringly apparent. Nice idea I’ed say, though you would have to be prepared for the chance encounters… but that’s what entrepreneurship is all about isn’t it?

Private Telephone Exchange?? Huh?

Ya that’s my first reaction when I heard about it. I was just talking with my gym instructor about whether he goes to other gyms as well to teach, how much he is paid and how does he manage with the salary etc. It so happens that the job as a gym instructor is just a hobby that gets him some extra cash. He owns a printing business and a PRIVATE TELEPHONE EXCHANGE.
I don’t know about you guys, but my only memory of a telephone exchange is that of a dilapidated building, with pan chewing babus who think they are doing a big favor even if they let you stand in front of them and listen to you. But those were the days of the monopoly of state owned telephone companies. With the liberalization in the telecom industry and entry of private players this has changed. “So what exactly is this private telephone exchange? How does it work?” I asked him. So here is the model. I will apply for 7 or 8 telephone lines from a private telecom company, Relaince or Tata Indicom for example. Then I will install a “box” which will let me create 150-200 lines. Something like a PBX we have in offices, or some kind of a multiplexing device I guess. Then you give these lines to customers in a local area of say 1-2 km radius. You charge them rental and on a per call basis.
“Is it legal? Do the companies know about it? How do you make money?” I ask.
Well for starters the companies know about it. Each of the 150-200 users gets a proper and unique telephone number from the telecom company itself. Its cheaper for the users because the private exchange guy will charge them lesser rental and lesser call rates than charged by the teleco. “So whats in it for the telecom companies?” One it reduces their investment in terms of infrastructure and marketing since these are borne by the pvt. exchange fellow. It helps them quickly increase the subscriber base. They get a share of the revenue from the pvt exchange. Here is how it works, the teleco will charge rental and call charges to this guy for the 7-8 lines he uses. The teleco will give this guy a better rate say 90p per call as against 1.30p charged to a retail user. This guy will give a rate of Re 1.00 or 1.10 to the user, and half the rental of a normal telephone connection. Even so, contrast full rental of 8 lines vs half rental of 150 lines. The numbers are evident. Since he charges 10p or 20p less than the teleco, users wouldn’t mind going to him. He breaks even and then pays some percentage of profits over and above the breakeven to the teleco.
Sounds like a win-win for all right? So where’s the catch you ask. I did too. “What about the quality of the line?” He assures me that there is no drop in quality, and I would agree with him, cos at the end of the day, the box is just a router, which connects your line to one of the 7 lines. So you might face a problem of delay / line being busy when you call someone or when someone calls you. “Nobody uses the phone all the time, so we have an idea of how many lines we can branch out from a single line without effecting availability or quality” he tells me. Don’t know much about the details of the technology, nor can you be sure that there is no drop in quality, but in the Indian context, I’m sure that people would be willing to sacrifice a bit on the quality if the cost is low enough. Besides in voice communication, a minor loss of quality might not be easily perceptible compared to data where your page loads slower. Doesn’t this model remind you of when broadband first came, and cable modems cost in 5 digits. Your local cable operator would buy a cable modem between 5-10 users and you would get shared broadband.
Interesting isin’t it? The teleco gains cos it gets a higher customer base, quick penetration, share of revenue, lower infrastructure costs. The customer benefits because he pays less with almost the same quality, the exchange fellow benefits because he is able to utilize his infrastructure at high utilization rates, have his own business and earn a decent return on his investment. Sounds too good to be true, the zero sum mentality in me doesn’t let me leave it at a “win-win for all” so looking forward to your suggestion / comments on flaws, problems in this model.
To advertise on our blog write in to us at


All the content, information and comments presented on the Management Informatika blog at are those of the authors of posts and comments and not of the blog Management Informatika.