Tourism is one of the fastest ways to earn foreign exchange and create jobs, although it does not get much attention. At a time when global uncertainty, energy price volatility, supply chain disruptions and geopolitical shocks are putting pressure on the current account, tourism can act as a stabilizer for our economy. Foreign tourists bring dollars directly into our economy. They spend money on hospitality, transportation, sightseeing, souvenirs, cultural experiences and local cuisine. Each of these sectors is a powerful source of employment generation in itself. Every direct employment generated in tourism also creates 13 indirect jobs. Waiters, chefs, drivers, guides, craftsmen, homestay operators, digital marketers and thousands of small local enterprises are just a few examples. While manufacturing-based foreign direct investment – preferred as a long-term solution – takes years to materialize and even longer to generate foreign exchange at meaningful levels, tourism converts a tourist’s decisions into dollars in a matter of months. Indian aviation companies have ordered more than 2000 new aircraft, the supply of which will increase rapidly in the coming years. On the surface, this appears to be a story of ambition in the aviation sector, but if efforts are not made to simultaneously fill these planes with foreign tourists, the opposite result may be achieved: travel abroad will become easier and cheaper for Indians, leading to more valuable foreign exchange leaving the country. India’s overseas tourism marketing budget has been reduced to almost zero over the last four years. Results are also expected. India is expected to receive 9.9 million international tourist arrivals in 2024 – about 10% less than the pre-pandemic peak. While all of India’s major competitors have crossed 2019 levels, we are still looking for a way out. So the sharp cuts to our overseas tourism marketing budget are surprising. A foreign tourist contributes $3,000 to India’s GDP on each visit, while a domestic tourist contributes only $75—a difference of 40 times. An investment of $200 million on marketing will attract 1 million additional foreign tourists, generating economic value of $3.6 billion, GST realization of $400 million and creation of 2.83 lakh new jobs. That means every dollar spent on marketing will yield an 18x return. Just 55,000 additional tourists – a mere 0.5% of India’s current tourist base – will recoup the entire marketing spend. These are not estimates. These are the same results that the Incredible India campaign had directly demonstrated. Digital technology is bringing major changes to global tourism. And this is the area in which India’s absence is proving costly for us. Today, 78% of total tourism-related sales happen online, 70% of bookings are completed on mobile devices and 45% of transactions happen through online travel agencies. The playing field has now shifted to YouTube pre-rolls, social media algorithms, programmatic display, and influencer networks. These are channels where spend can be measured, targeting is precise, and return on investment can be measured in near real-time. India has the infrastructure but has failed to take advantage of it. Incredible India has only 19 lakh followers on Facebook and 7.85 lakh followers on Instagram. While Saudi Arabia, with the same number of followers, earned 2.7 crore content views in a single month, India was limited to only 3.88 lakh views. The platform exists, but India has been completely absent from the global marketing landscape for almost a decade. Our tourism sector is paying a heavy price for this. Marketing alone will not be enough. We also have to de-regulate the tourism sector in mission mode. Hotels, restaurants, homestays, transport operators and tourism service providers operate under the burden of numerous licenses, procedures and inspections. Projects that take 18 months to complete in other Asian countries take much longer in India. Unified licensing regime, digitization and automatic renewal should be implemented. Each of our states has to become the pioneer of tourism. Each state should identify 15 key tourist destinations and develop them into holistic tourism eco-systems covering accessibility, accommodation, experiences, events, safety, cleanliness, local enterprise and marketing. A destination cannot be considered ready just because it has roads, hotels or signage. It becomes visible when a traveler can discover its uniqueness, assess its credibility, identify bookable experiences, transact easily and be confident that the experience will be as expected. The competitiveness of the tourism sector will now also depend on whether a destination is friendly to content-creators, whether it can be easily searched online, whether it is transaction-ready and whether it can be trusted. We also have to adopt content-creation economy as a strategy for tourism. Government campaigns can create awareness, but trust is built by content-creators. A great video can make an impact that no brochure can. 2.83 lakh new jobs… A foreign tourist contributes $3,000 to the GDP on each visit. An investment of $200 million on marketing will attract 1 million additional foreign tourists, creating value of $3.6 billion, generating GST receipts of $400 million and creating 2.83 lakh new jobs. (These are the author’s own views)
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Amitabh Kant’s column: Tourism can provide dollars as well as jobs
