Dec 29, 2001|
Tourism: India vs Asia
Ever wondered why India attracts meager 2.5 m arrivals in a year in contrast to Thailand, which gets 9.5 m tourists per year with an average growth of an estimated 10% per annum. This compared to our laggard tourist arrival growth of just 3%-4% per annum that too in a good year looks appalling. India's growth in tourism has been very slow over the past few years as compared to the rest of Asia, as no concerted efforts have been made to improve infrastructure and no real marketing effort has come about. Infact, foreign tourists are wary of coming to India mainly due to lack of adequate safety measures for travel across the country.
India is the seventh largest country in size covering an area of 3,287,590 sq. km, which comprises a wide range of heritage and beauty. In terms of land area it is 4,813 times the size of Singapore, 6.4 times that of Thailand, 3,033 times that of Hong Kong and close to 10 times the size of Malaysia. Unfortunately, when compared to the number of tourist arrivals in the country, we fail miserably when compared to Singapore, Thailand, Malaysia and Hong Kong. These destinations, on the other hand, are on the top of the global tourism map and have a flourishing tourism industry.
India vs Asia: A snapshot
Source: Jones Lang Lasalle Hotels report
inbound travel (US$ bn)
Agreed that in terms of economic and social development some of these destinations are way ahead of India. But India has umpteen number of tourist destinations to offer. The former does not give a believeable explanation for such a vast discrepancy in number of tourists visiting India as compared to rest of Asia. India has diverse tourist locations ranging from heritage cities in Rajasthan, to backwaters of Kerala and the beaches across the western and southern tip of the country. However, high tax charges at hotels and lack of adequate good quality economic accommodation, acts as a big deterrent for tourists.
With poor demand growth, room capacity too is lagging way behind its Asian peers. India has room capacity of 67,311 rooms (in 2000) and even this is underutilized on an average by 30%-40%. Singapore has a total five star room capacity of 20,948, Hong Kong 23,225 and Thailand 58,788, while India only a meager 18,847 rooms. Since the early 90s to recent times, five star room supply growth has been very slow. Except for FY96 when demand surged in this segment resulting in 80% utilization levels. Further, occupancy rate in four and three star hotels is even lower at around 40% levels. In comparison, Singapore enjoyed an average occupancy rate of 84% across all hotel categories in 2000, Thailand 48.9%, Hong Kong 83% and Malaysia 54.3%. (all figures are as per Jones Lang Lasalle Hotels report).
Considering the size of our country and its terrific tourist destinations this is pathetic when compared to the rest of Asia. India ranks among the top 60 destinations in the world but hardly contributes 1% of global tourism revenues. In terms of tourist arrivals, as a percentage of world tourism, India accounts for a miniscule 0.4% of total arrivals of around 625 million tourists per annum. This ratio has not changed much in the past decade even after liberalisation of the Indian economy in the early 90's. This implies that India's tourism sector is hardly making a dent on the global tourism map. The country has scope for tapping its vast tourist potential, which could facilitate a surge in revenues as well as provide high level of employment.
Currently, tourism is the third largest contributor to the country's foreign exchange earnings. Considering our precarious fiscal deficit and state of the economy it is baffling that the government, despite all this, does not take up any serious measures to promote tourism. If taken seriously, this industry could turn into a money-spinner for the country, similar to our Asian counterparts.
More Views on News
Oct 17, 2016
Indian Hotels has reported a 5.6% YoY increase in the consolidated topline and a consolidated loss of Rs 1,695 m for 1QFY17.
Mar 28, 2016
Indian Hotels has reported a 13.2% YoY increase in the consolidated topline and a standalone net profit of Rs 1.2 m for the quarter ended December 2015.
Nov 24, 2015
Indian Hotels has reported a 13.2% YoY increase in the standalone topline and a standalone net profit of Rs 1.2 m for the quarter ended September 2015.
Aug 28, 2015
Indian Hotels has reported a 10.2% YoY increase in the consolidated topline and a consolidated net profit of Rs 348 m for the quarter ended June 2015.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407