Pestle analysis of indian tourism industry

Pestle analysis of indian touristry diligence mould Analysis of Indian touristry industryIntroduction about the topic It is time for Indias touristry sector. Driven by a surge in production line traveller arrivals and a soaring interest in India as a holidaymaker destination, the form 2006 has been the best year till date. Incredible India India is probably the scarce arena that offers various categories of touristry. These include history tourism, adventure tourism, medical tourism (ayurveda and separate forms of Indian medications), spiritual tourism, beach tourism (India has the longest coastline in the East) etc. Explore India choose the locales of your choice, and see what each state has to offer. Lose yourself in the wonder that is India. Meander through lands steeped in chivalry and pageantry that begin onwards recorded history. Explore modern cities that have grown organically from the roots of a multi-hued past. Make a pilgrimage to holy shrines that echo w ith tales of antiquity. Frolic on a vast array of golden beaches that dot an enviable coastline, washed by two seas and an ocean. Sport with adventure in style. Let the jungle coax you to a fascinating world at a diverse array of wildlife sanctuaries and national parks. this is the wonder that is India. Indian tourism industry is iodine of the most principal(prenominal) export industries of the country. Although the international tourist inflow is relatively low, India has found tourism emerging as an important sector of its economy. Tourism yields substantial foreign transmute for India. It is turning into a volume game where a boastful number of participants are contri moreovering to the revenue of the industry. Segments such as hotels, tour operators, airlines, shipping etc.Growth period of Indian tourism industryThe tourism industry in India is substantial and vibrant, and the country is fast becoming a major global destination. Indias travel and tourism industry is su perstar of them most profitable industries in the country, and besides credited with contributing a substantial amount of foreign exchange. This is illustrated by the fact that during 2006, four million tourists visited India and spent US $8.9 billion. Several agents are cited for the growth and prosperity of Indias travel and tourism industry. Economic growth has added millions annually to the ranks of Indias halfway class, a group that is driving domestic tourism growth. Disposable in let in India has grown by 10.11% annually from 2001-2006. Thanks in part to its booming IT and outsourcing industry a growing number of business trips are made by foreigners to India, who will often add a weekend break or long-acting holiday to their trip. Foreign tourists spend more in India than almost any other country worldwide. Tourist arrivals are projected to increase by all over 22% per year through till 2010, with a 33% increase in foreign exchange. The Tourism Ministry has also playe d an important role in the instruction of the industry, initiating advertising campaigns such as the Incredible India campaign, which promoted Indias culture and tourist attractions in a fresh and memorable way. The campaign helped create a shot image of India in the minds of consumers all over the world, and has directly led to an increase in the interest in tourism industry has helped growth in other sectors as diverse as horticulture, handicrafts, agriculture, construction and even poultry. Wel arise to Incredible IndiaNamaskar,Welcome to Incredible India A journey into mysticism through the land of the un evaluate. bound by the majestic Himalayan ranges in the north and edged by an endless stretch of golden beaches, India is a vivid kaleidoscope of landscapes, magnifi cent historical sites and purple cities, misty mountain retreats, colorful hoi polloi, rich cultures and festivities. Modern India is home alike to the tribal with his anachronistic lifestyle and to the sophis ticated urban jet- hardenedter. It is a land where temple elephants exist amicably with the smallchip. Its ancient monuments are the taildrop for the worlds largest democracy. If youre planning a holiday to India, looking for hotels and accommodation and events information or simply interested in India as a country you are sure to find some insights on the multifaceted travel options to India here.The timeless mystery and beauty of India can be experienced besides by visiting this ancient Land. Theres just one thing youll need to travel through 5000 years of culture and tradition- A homelike pair of shoes. The following table provides the major tourist attractions in India by state Tourist Attraction StateCharminarHyderabad, Andhra PradeshKaziranga National Park AssamQutub MinarDelhiMangueshi TempleGoaShimlaHimachal Pradeshdkl LakeJammu and Kashmir Jog FallsShimoga District, KarnatakaKovalam Beach KeralaAmarkantakMadhya PradeshAjantaMaharashtraPuriOrissaGolden TempleAmritsar , PunjabJaipurRajasthanChennaiTamil NaduBadrinath Temple UttarakhandVaranasiUttar PradeshThe various fractions within tourism areMedical TourismIt is one of the fastest growing segments in India. India has been able to leverage on certain advantages it has over other countries like elevatedly skilled doctors, cost entrapive treatment, improved forest of private healthcare etc. Some of the common treatments for which overseas patients to come to India are heart surgery, knee transplant, cosmetic surgery and dental care. Indias traditional rejuvenation therapy like yoga and ayurvedic therapy are also becoming popular.Eco TourismIt is relatively new segment in India. It involves visiting natural areas without disturbing the fragile ecosystem. Eco tourism generates riches for the local people, who in turn take measures to con wait on and protect the milieu and natural resources. India with its natural diversity is one of the pristine places in the world for eco tourism. The Hima layan region, Kerala, Northeast, Andaman and Nicobar Islands and Lakshadweep islands the Western and Eastern Ghats are near of the hot spots for eco tourism in India. India has some of the best wildlife reserves in the world, rich in plant and fauna.Heritage TourismHeritage tourism is a very lucrative segment in India. It is widely believed it would emerge as the most important segment within tourism in terms of revenue generation by 2010.India has a rich cultural history and reflection of its glorious past is noneffervescent visible in its numerous forts, monuments, palaces, places of worship etc. Heritage tourism itself can be further classified as colonial heritage, urban renewal, sacred tourism, industrial heritage and ethnicity. The Indian government must show keen interest in preserving the heritage sites from a tourism perspective.Adventure TourismIndias varied geographical and climatic conditions offer excellent opportunity for adventure sports. In recent times the popu larity of adventure tourism has increased. Adventure sports like river rafting, rock climbing, mountaineering, trekking, skiing, deoxycytidine monophosphate climbing, scuba diving and angling can be undertaken in the country and the country offers multiple locations to choose from. The trans Himalayan region, the Garhwal and Kumaon mountains, the Western Ghats, deserts of Rajasthan, Andaman and Lakshadweep islands are some of the most popular destination for adventure tourism.Future trendsThe real GDP growth for travel and tourism economy is expected to be 0.2 per cent in 2009 and is expected to grow at an average of 7.7 per cent per annum in the coming decade.Earning through exports from international visitors and tourism goods are expected to generate 6.0 per cent of do exports (nearly $16.9 billion) in 2009 and expected to increase to US$ 51.4 billion in 2019.According to the Ministry of Tourism, Foreign Tourist Arrivals (FTAs) for the period from January to March in 2009 was 1 .461 million. For the month of March 2009 the FTAs was 472000.The reason for the decline is attributed to the ongoing scotch crisis.In spite of the ill-considered term and medium term impediment due to the global meltdown the revenues from tourism is expected to increase by 42 per cent from 2007 to 2017.PESTLE Analysis of tourism industryDefinitionThe PESTLE framework is an analysis tool that is used to put the key drivers of change in the strategic environment (Johnson et al., 2008). PESTLE analysis includes Political, Economic, Social, Technological, Legal, and Environmental factors.Political core group on tourism industry-Political violence has through with(p) considerable damage to tourism in Asia and the Pacific over the past few years. But industry experts say the damage is not necessarily permanent. Governments and industry leaders say much can be done to rebuild tattered tourism reputations. As the world watched, a small band of terrorists killed pull ahead in Mumbai la st November. Although India has often suffered from political violence, this attack aimed largely at travelers and foreigners was a new horror. The globally televised attack, coming during an international economic slump, contributed to an eight percentage fall in tourist arrivals this year. In Thailand, tens of thousands of anti-government protesters laid siege to Bangkoks airports late last year, essentially trapping more than 350,000 travelers in the country for a week. forrader that shock had worn off, a few months later, another group of protesters led violent riots in Bangkok. The two incidents added to the damage from the world economy cut tourist arrivals to Thailand by 20 percent in the first six months of 2009. Phornsiri Manoharn, the chairwoman of the Pacific Asia Travel Association, says many tourists still worry that Thailands political tensions could spoil their visits. When people saw any demonstration like that they associate with the closing of the airport, said Manoharn. Even though we dont c digest the airport but they look like the demonstration, that they might and thats why theyre afraid. Tourism is important to the Asia-Pacific region. In Southeast Asia, it contributes over three percent to economic output. In some separate of the region, tourism accounts for 10 percent of employment in the Pacific island nations of Fiji and Vanuatu, the figure is over 30 percent. But as India and Thailand have seen, violence and instability quickly scare away visitors. Recovery comes, but usually more slowly than after natural disasters. John Koldowski is PATAs communications director. What we have seen in many cases is where there is some sort of intervention effect its been natural or no fault of anybody the rebound has been very quick, he said. Where there has been intent to cause harm as in the case of a say terrorist attack and where there has been a long history of such attacks occurring in that destination or nearby destination, it takes a superficial extended to come back. But with the right government and industry responses, visitors will return. For instance, in October 2002, bombs set off by Islamic militants on the island of Bali killed more than 200 people, most of them foreigners. The island, one of the worlds most famous tourist destinations, saw arrivals fall by 36 percent in 2003. Koldowski said the first bombings shocked the tourism industry. Bali is a definitive case there it took some time to recover because it had never occurred there before it was so dramatic and affected specific western tourists, he said. But the Indonesian government cracked down on terrorists and boosted security. And tourism industry professionals worked hard to woo back visitors. When another attack three years later left over(p) 20 people dead, PATA reported that tourist arrivals were little affected. And twin bombings at international hotels in Jakarta last July are expected to do little damage to tourism. In South Asi a, Sri Lanka and Nepal hope the end of long-running conflicts will entice more visitors. Sri Lankan officials say the end of a civil war earlier this year brought a surge of interest from foreign investors and hotel operators. Dileep Mudadeniya, Sri Lankan Tourism Promotion Bureau managing director, says there are opportunities for tourism, particularly in areas long closed off by the war. North and east, which have not actually taken any kind of development for the last 20 years, virgin beaches, land, monuments is available and the people also come and exploit something or look at something totally undiscovered, said Mudadeniya. We are going on the line which is undiscovered, unspoiled, an island of authenticity, which we can offer. In Nepal, political agreements have finish a Maoist insurgency that lasted more than a decade. The minister for Tourism and Civil Aviation, Sharatsingh Bhandari, says Nepals transition from conflict to peace is in itself a tourism draw. presently we a re going to form a new Nepal. So giving the message for the New Nepal and inviting the people to see, not only the prospect of tourism itself but even the process of transition of the political system from bullet to ballot. That was done successfully by the Nepalese themselves, he said. Industry analysts say tourism in Asia is likely to expand rapidly over the next few years. But, the key, they say, is that governments find ways to prevent political violence, and act quickly to calm fears when it does happen.Economic effect on tourism industry-The service economy is driving growth in most OECD countries. It represents a large part of economic performance and its importance continues to grow. Tourism, a large, complex and fragmented industry which is still very difficult to define and measure, is a key component of the service economy (30% of international trade in services in the OECD area). In terms of revenue, OECD countries generate about 70% of world tourism activity. Tourism, which has expanded dramatically over the past 30 years, looks set to continue growing as societies become more mobile and prosperous. Obtaining better information on services, the least highly-developed side of statistics, is an important challenge for statistical agencies and a necessity for political analysis. Measuring tourism is part of a wider move to improve our knowledge of how economies work, what they produce and what changes occur over time. It is no longer enough to measure physical flows (arrivals and overnight stays) and monetary data (revenue and expending relating to international tourism). In the early 1980s, the OECD began work to set up a present acceptable at international level which gave rise to the OECD Tourism Economic Accounts, which measure certain socio-economic aspects of tourism. While developing this tool, the OECD produced a more precise commentary of tourism, visitors and tourist expenditure Note OECD (1996), OECD Tourism Statistics Design and appl ications programme for Policy. Despite its economic importance, governments, especially in developed economies, still do not adequately key tourism. For this reason, the OECD has developed and recently approved the OECD Guidelines for a Tourism Satellite Account and an Employment Module. These integrated statistical tools aim to measure the economic aspects of tourism (value added, jobs, revenue, investment, profits) in order to provide a more convincing demonstration of this activitys economic significance. Furthermore, together with the United Nations, the World Tourism Organization and the European Commission (Eurostat), the OECD has developed a UN-WTO-OECD-EUROSTAT Tourism Satellite Account Recommended Methodological Framework, approved by the 25-member United Nations Statistical Commission on 1 March 2000. A issuing is available. Other work undertaken in this area includes statistical research. OECD and Eurostat regularly organise international forums on tourism statistics t o share ideas, experiences and concepts with Member and non-members countries, the scientific community and the tourism industry. The United Kingdom, with the support of Eurostat and the OECD, organised the Fifth International Forum on Tourism Statistics (Glasgow, 20-23 June 2000). Similar forums have been organised in Vienna (1994), in Venice (1995), in Sintra (1996) and in Copenhagen (1998). Technological effect on tourism industry-Definition of Tourism TechnologyThe convergence of industries has forced people to create terminology such as information technology, biotechnology, ubiquitous technology and even cultural technology to explain frequently talked about topics. Tourism Technology is a term that encompasses all social, cultural, managerial, and value-adding activities of the tourism industry. Tourism Technology also incorporates and encourages technological advancements and economic development in the tourism industry.The Origin of Tourism TechnologyTourism Technology, ini tially based on the concept of cultural technology, is a more comprehensive term covering knowledge used to add to the value of tourism products on a micro level and the management of the travel and tourism industry on a macro level. New tourism products are also the end result of tourism technology combining with other industries. These include medical tourism, educational tourism, agricultural tourism, marine tourism and the application of information technology to the travel and tourism industry.Application of Tourism TechnologyThe term technology can easily call to mind scientific achievements, computer graphic skills, special effects and other engineering-related images. However, Tourism Technology encompasses the integrated fields mentioned in the previous paragraph, statistics, managerial and socio-cultural know-how, and skills that the tourism industry can adopt to design, produce, and commercialise various tourism products. In accession to coordinating various aspects of human resources in the travel and tourism industry, Tourism Technology describes a comprehensive field containing but not limited to such widely referred to subjects as entertainment technology, contents technology and creative technology. Software for TouristsOne of the latest applications is software that permits tourists to customize their visits according to their preferences. Luis Castillo Vidal, computer engineer of the University of Granada and one of the authors of the study, points out that, in order to design the customized visit plans, they have used Artificial Intelligence techniques, a science that provides computers with abilities to solve problems which, in principle, can only be solved by humans. Users must have access to the internet, either through a computer, a mobile phone or a PDA, in order to be able to access a web where they can define their preferences and needs, such as their artistic, cultural and gastronomic preferences, their lifestyle and best-loved ho urs, whether they are disabled or not and the spending capacity.Environmental effect on tourism industry-The quality of the environment, both natural and man-made, is essential to tourism. However, tourisms relationship with the environment is complex. It involves many activities that can have adverse environmental effects. Many of these impacts are linked with the construction of general infrastructure such as roads and airports, and of tourism facilities, including resorts, hotels, restaurants, shops, golf courses and marinas. The negative impacts of tourism development can gradually destroy the environmental resources on which it depends. On the other hand, tourism has the potential to create proficient effects on the environment by contributing to environmental protection and conservation. It is a way to raise awareness of environmental values and it can serve as a tool to finance protection of natural areas and increase their economic importance.Three main impact areas natural resources, pollution, and physical impactsEnvironmental impacts at the global levelOther industry impacts on tourismHow tourism can contribute to environmental conservationSocial effect on tourism industry-Jamaica is primarily a sun, sea and sand destination and, therefore, the primary recreational activities of visitors include sun and sea bathing on the beaches. Tourists who visit Jamaica are, therefore, primarily heterogeneous in activities such as going to the beach, snorkelling, scuba diving and glass-bottom boating. Jamaicas tourism product is dependent on the coral reefs and their associated ecosystems such as seagrass beds and mangroves. These ecosystems are, however, threatened by natural causes and human behaviour such as coastal pollution, rapid coastal development, over-fishing and global warming. All parties involved (the citizens, the tourism industry and the visitors) have a vested interest in the management of the environmental resource base and an obligation to do their part to support this management. If the environment is degraded all parties stand to lose visitors will fail to come (or will be willing to pay less) and the countries will lose an important source of economic benefit. In other spoken communication the environment will produce reduced economic, ecological, and amenity benefits. Microeconomic theory is essentially the study of the equitable distribution of scarce goods or benefits. In this instance the scarce benefit is the Jamaican beach tourism product. The economic theory provides approaches to making the demand and supply of these scarce benefits more efficient. Demand of the good in this case is the beach-lust (sun, sand, sea) tourism of Jamaica. This is in contrast to the wonder-lust tourism such as safaris, mountain climbing, cultural and heritage tourism that is observed in other parts of the world. The good is supplied at a cost which would include the traditional cost of, labour and capital etc. However when the c ost of the provision of the good does not take into account negative externalities such as environmental damage, this results in market failure. If this market failure is not corrected it will result in a loss in social welfare (dead-weight loss). Jamaicas cur teardrop tourism model is based on the construction of mega super inclusive resorts, which often supplicate engineering solutions such as dredging, groyne construction and limestone blasting in order to create swimming beaches, and construct buildings a few meters away from the high water mark. Construction and operation of tourist facilities such as hotels and other attractions also result in significant alterations to the terrestrial environment, trees, insects, birds etc. Operation of these entities also results in the diversion of resources such as water and electricity which could have been used elsewhere in the society.MARKET FAILUREIncreased construction activity in the coast provides relatively short term and low-skil led employment. The intermittent demand for this pool of labour often results in the proliferation of unplanned settlements and squatter communities that are conventional close to the resort areas. These settlements are typically located in the hills and mountains above the coast. The creation of these communities results in the destruction of the watershed in these areas as well as inadequate sewage treatment and solid waste management. All of which contribute to reduced environmental quality for illustration, reduced water quality as a result of increased nutrients and turbidity in the coastal waters. The simple economic analysis of Jamaicas tourism model outlined above suggests that market failure exists. The primal reason for the market failure associated with Jamaicas tourism model is the fact that the economic rent associated with the natural environment is not captured by the people of Jamaica. Economic rent is an excess return on an asset, a profit above normal market rate s of return. Rents usually arise from assets that are scarce and fixed in supply. Beachfront property is a very good example of the attribute of assets that will yield economic rent. Or another example is the higher property costs in Coopers Hill or Beverly Hills when compared to Havendale or Mona, the economic rent (or value added) in this case being a view of the city. It can be argued that economic rents such as the beauty and natural environment should fall down to the people of Jamaica and not to foreign tourists or tourism operators. Rents are essentially a type of payment for the use of the resource. So the first reason for market failure is that there is no real capture of economic rents. A second example of market failure is that these tourism entities that are currently gaining all of the rents are also not accounting for the negative externalities of their activities. For example, hotels do not pay for the aline costs of pollution and negative impacts associated with t he use and operation of their facilities. However the problem of market failure does not stop here. As with several other Caribbean nations, the development of the tourism industry is heavily subsidised by the Jamaican government. Hotels and attractions are given tax holidays (e.g. no taxes for 10, 15, 20 years), duty is waived on imports of construction materials among other things. Additionally, the Governments facilitation such as fast-tracking permit requirements and their suspected role in circumventing environmental and planning regulations can reduce costs to investors and also be viewed as a subsidy. So in addition to the non-capture of rent and ignoring negative externalities, government subsidies to the tourism industry through tax holidays and other waivers also exacerbate the problem of market failure. This in turn means that the welfare of the society i.e. the Jamaican people is even more reduced.POSSIBLE REMEDIESAs was highlighted above correcting market failures can b e achieved through the implementation of taxes. In the case of Jamaicas coastal tourism this would mean that investors are forced to internalise environmental costs. This would theoretically lead to better environmental management and sustainable development of the tourism industry. However, given the current political climate in Jamaica and the influence of the tourism industry players this suggestion is likely to be received with hostility. Given this fact a more feasible way of capturing some of the economic rent is to capture a small portion of the benefits that accrue to the visitors to the island. This would be through the use of the existing system of arrivals taxes from cruise and stopover visitors to the island. However, unlike the current system where the charges are often unknown in room surcharges or airline tickets the additional environmental tax should be explicitly identified.HIDDEN COSTSThere are, of course, wider questions of the true economic contribution of tou rism. Clearly tourism is very important to Jamaicas economic sustainability. The Jamaican tourism industry accounts for 32 per cent of total employment and 36 per cent of the countrys GDP according to many studies. However, based on some of the market failures described above, are there more costs that are not being considered? Tourism has many hidden costs, which can have unfavourable economic effects on host countries such as Jamaica. The direct income for a country is the amount of tourist expenditure that remains after taxes, profits, and wages are paid and after imports are purchased these subtracted amounts are called leakage. For the all-inclusive tourism model, studies show that about 80 per cent of travellers expenditures go to the airlines, hotels and other international companies, and not to local businesses or workers. In addition, significant amounts of income actually retained at the destination level can leave once more through leakage. For example, the profits gained by foreign-owned tour operators, airlines, hotels, are repatriated to their home countries. Estimates made for Third World countries range from 80 per cent in the Caribbean to 40 per cent in India. In laymans term, on average, of each US$100 spent on a vacation tour by a tourist from a developed country, only about US$5 actually stays in the developing-country destinations economy. The current tensions between local craft vendors, restaurants and other service industries and large resort chains are all too common and point to the problem of leakage. Super inclusive hotels do not encourage guests to venture extraneous the walls of the hotel and so most of the tourists experience is limited to the entertainment as well as the sun, sea and sand activities available at that location. One could say that Jamaica the country is not the destination, it is actually the resort that is the destination. More comprehensive studies on this issue are urgently required by our academic institution s in the region. Caribbean researchers have a responsibility to provide balanced information that can enrich the discourse between all the relevant stakeholders. Much of the discourse is driven by short sightedness and politics on one side and passionate advocacy on the other. Too often the arguments of the contending parties (developers versus environmental advocates) are not supported by balanced information.Legal effect on tourism industry-MUSCAT Tourist traffic into the Sultanate is projected to scale new highs next year on the back of a raft of major initiatives, most notably an aggressive campaign targeting new markets, according to the Under-Secretary of the Ministry of Tourism Mini