TOURISM FOR DEVELOPMENT: STRATEGY

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TOURISM FOR DEVELOPMENTSTRATEGY PROCESS
MANAGEMENT
YES Summit, Nairobi 2006

• ARVIND MAYARAM
• INDIA

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TOURISMa Potential Development Driver

• Why Tourism
• Sustainable Livelihood
• Poverty Alleviation
• Uplift of Rural Artists
• Uplift of Rural Artisans
• Empowerment of Women
• Improvement in Urban and Rural Infrastructure
• Better Image, Quality of Life and Attitude of
  People
• Revival of Traditional Crafts
• Heritage Conservation
• Conservation of Natural Resources

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TOURISM a Potential Development Driver

• Significant multiplier effect on the economy
• Every dollar spent by a tourist changes hands 13
  times
• Every hotel room generates direct employment to 3
  and indirect employment to 8 persons

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TOURISMa Potential Development Driver

• FAMINE-PROOFING
• Reducing absolute dependence on agriculture
• Revival of traditional arts crafts, building
  art, etc.
• Providing ready marketing opportunities for rural
  artisans
• Employment generation during entire year
• About half a million of artisans employed in
  Handicraft sector in only one State of Rajasthan
• Handicraft Exports from one of the States,
  Rajasthan
• 1991-92 Rs. 2800 mn.
• 2000-01 Rs.43,000 mn.
• 2004-03 Rs. 100,000 mn.

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TOURISMa Potential Development Driver

• TOURISM creates
• Jobs in situ-wild life sanctuaries, historical
  places, beaches, mountains etc. Does not result
  in migration
• Creates a large number of semi-skilled jobs for
  local population
• Contributes to overall economic development of
  areas that would otherwise be deprived

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TOURISMIndia Case Study

• EMPLOYMENT
• Every Rs.1 million (25,000) invested creates
• Tourism (directly) 47.5 Jobs
• Tourism (indirectly) 89 Jobs
• (sub-sector of hotels and restaurants,
  transportation etc.)
• Agriculture 44.6 Jobs
• Manufacturing 12.6 Jobs

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TOURISMIndia Case Study

• TOURISM THIRD-LARGEST NET FOREX EARNER
• (2001-02)
• Gem Jewelry US 7.40 Bn.
• Readymade Garments US 5.50 Bn.
• Tourism US 3.30 Bn.
• COMPARATIVE FOREX INFLOW (2000-01)
• FDI 2.4 bn
• Tourism 2.9 bn
• 2001-02 2003-03 figures are not used due to
  the effect of Sept 11 2001

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TOURISM DEVELOPMENTPre-requisites

• Image/Visibility
• Infrastructure
• Tourism enabled services
• Heritage conservation and management
• Tourism friendly environment (non-intrusive,
  facilitating, safe and secure)
• Tourism products
• Deepening tourist experience (repeat
  visits/longer stay)

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Tourism Circuit Approach

• Integrated
• Tourist, the focal point
• Circuit development involves creating a circular
  route to be taken by tourists
• Based on features of tourist interest throughout
  the circuit route
• Driven by infrastructure development
• FDI can play a major role in inducting capital,
  technology, managerial skills and marketing

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POSITIVE ROLE OF FDI IN TOURISM DEVELOPMENT

• Foreign Direct Investment (FDI)
• Augments investible resources
• Improves technological standards
• Improves efficiency of the domestic industry
• Increases competitiveness
• Introduces latest technology
• Improves allocative efficiency
• Introduces higher level of technical or X
  efficiency
• Results in diffusion of technology and knowledge
  to local firms
• Leads to labour turnover or reverse engineering
• Results in income multiplying effect

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OBVERSE SIDE OF THE COIN

• Could result in cutting into the market of local
  firms (reduce productivity)
• Could result in financial leakages
• Repatriation of profits
• Direct channeling of tourists expenditure to the
  home country
• Remittances by expatriate workers
• Imports on account of weak host country supply
  chain
• In international tourism, cross-border
  anti-competitive practices may adversely affect
  smaller tourism service suppliers from developing
  and least developed countries particularly
  vulnerable to anti-competitive policies
• Employment opportunities may not increase for
  local population because of absence of skilled
  manpower

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INVESTMENT PRE-REQUISITES

• Policy/Regulatory Framework
• Facilitating Institutions
• Decision-support structure
• Facilitating organizations
• HRD institutions
• Infrastructure
• Physical
• Social
• Investment Products (Opportunities)
• Public Private Partnership mode

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INITIATIVE Policy/Regulatory Framework Tourism
Development Mission/Tourism Policy

• Mission for Tourism Development
• Efforts to raise tourist arrivals
• Aggressive domestic and international marketing
• Organizing international tourism events
• Awareness about and professional management of
  heritage and raising resources for it
• Ensuring hassle-free and pleasant stay of
  tourists
• Tourism promotion through Internet
• Encourage Public Private Partnerships
• Rural tourism for generating employment in rural
  areas
• Eco-tourism

• Tourism Policy
• Comprehensive Tourism Master Plan
• Promoting Private sector investment
• Enhancing quality and diversifying tourism
  products
• Development of tourism infrastructure
• Aggressive marketing publicity
• Tourism as Industry
• Tourism Trade Regulation Act to prevent
  possible exploitation of tourists
• HRD for Tourism Sector
• Upgrading Tourism Support Services
• Improved Connectivity
• Preservation of historical and cultural heritage
  and promoting Heritage Tourism
• Promoting Adventure, Wildlife, Eco-Tourism (as
  applicable)

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INITIATIVE Policy/Regulatory Framework Tourism
(Facilitation) Law

• OBJECTIVES
• To make the country/region Tourist Friendly
• Security for tourist, i.e.
• Not to be mobbed by beggars, touts, taxi drivers
  etc.
• Not to be cheated-cost / quality
• Accessible/reliable Information
• Good amenities reliable services
• Cleanliness hygiene
• Heritage conservation

• PROVISIONS
• Definitions
• Regulatory
• Anti-begging
• Special attention to tourists by Police
• Voluntary Adoption of law
• Bench-marking
• Certification
• Third Party Inspections
• Penalties
• Exit Clause
• Heritage
• Declaring building/area/township protected
  heritage
• Construction to be strictly regulated

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INITIATIVE InstitutionsDecision-support
Structures

• Single Window Clearance System
• A. Investment Proposals
• B. Visa applications
• C. Concessions to commercially use state assets
• D. Licenses to operate tourism related activities
  (recurring)

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INITIATIVE InstitutionsDecision-support
Structures

• Tourism Advisory Council
• Top political and bureaucratic executives
• Membership to include tourism trade and industry
  representatives, experts
• To deliberates upon policy initiatives, demands
  of the industry, problems with the government
  institutions, development plans
• Tourism Regulatory Authority
• Accreditation
• Benchmarking services
• Grievance redress
• Adjudication

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INITIATIVE InstitutionsHuman Resource
Development (Indicative)

• Institute of Crafts for the handicrafts sector
• Design input
• Professional degree/diploma in craft
  design-techno-design managers
• Facilitating marketing and marketing linkage
  intervention
• Technology intervention and product and process
  standardization
• Capacity building at artisan level
• Documentation and resource centre
• IPR issues related to the handicrafts sector
• Entrepreneurship Management Institutes
• Entrepreneurship development for SMEs
• Tourism specific entrepreneurship programmers for
  tourism enabled services

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INITIATIVE InstitutionsHuman Resource
Development (Indicative)

• Institutes of Hotel Management
• HRD in hospitality industry
• Managerial level courses
• Language skills
• Food Crafts Institutes
• Shop floor level skill development courses
• Language skills
• Centre for Heritage Management
• Capacity building amongst officials in the local
  governments, town planners, urban and civic
  bodies, government functionaries about heritage
  conservation and management issues

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INITIATIVE Infrastructure
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INITIATIVE InfrastructurePublic Finance

• Several key sectors like water supply, sewerage,
  roads, capacity building and public awareness,
  and heritage conservation can be covered -
  assistance from multilateral and bilateral
  funding agencies
• Separate budgetary provisions for tourism related
  activities in Forest, PWD and other related
  departments
• Public finance and assistance from organizations
  such as the UNESCO and the World Monument Watch
  for restoration of heritage monuments
• TOURISM Infrastructure (Illustrative)
• Civil Aviation (Airports)
• Roads Up-gradation Project
• Urban Infrastructure
• Public facilities
• Information Kiosks

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PPP Project Development Process
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CONCLUSIONS

• Tourism is the main driver of economic
  growth/employment generation in more than 80
  countries
• It has the potential of addressing issues such as
  rural poverty, empowerment of women,
  strengthening the economic status of the rural
  artisans, earning forex etc.
• It is necessary to create the right environment
  to attract FDI by establishing progressive
  legal-institutional framework and facilitating
  organizations
• Circuit development approach yields fastest
  results
• HR is the key
• Presenting bankable projects to the investors not
  only increases the possibility of attracting
  forex but also establishes benchmarks for the
  future

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Thank You