India, despite its vast size and diversity, rich culture and spectacular historical attractions, only managed to attract six and a half million foreign tourists last year.
To put that in perspective, Dubai attracted more than 10 million hotel guests in 2012, while Singapore received 14.4 million visitors.
The Indian government is striving to boost tourism numbers with plans revealed this month to open up visas on arrival to tourists from about 40 countries, including the UAE and the United Kingdom.
While industry experts say this is definitely a bold step in the right direction for growing India’s tourism industry, they point out that there are a number of challenges that the sector needs to overcome and that the country still has a long way to go before fully realising its potential to attract foreign visitors.
An increase in tourism would provide a much needed boost in foreign exchange earnings as the country struggles with slowing economic growth, which hit a decade low of 5 per cent in the last financial year, and gaping budget and current account deficits. Meanwhile, more tourists would also result in much needed job creation. Last year, tourism in India generated US$17.7 billion in foreign exchange earnings, according to data from the ministry of tourism.
“We feel that a measure like visas on arrival will actually help India as a destination, but it’s not that if tomorrow there are visas on arrival, there’s going to be a flood of people coming to India,” says Thomas Thottathil, the head of corporate communications at Cox & Kings India, a luxury travel company.
“This is one of many things. It takes time. Once you do this, you have to promote it.
“The other issue is capacity of hotels in tourist areas, be it Kerala, be it Bombay [Mumbai], be it the north. The second is high hotel rates. Our inbound season is October end to March. At that time because there’s less capacity in terms of hotel rooms, it tends to get a bit more expensive. I think that’s another challenge. I think we’ll overcome it with time.”
Kamal Sen, the president and chief executive of Cogitaas, a strategy and planning consultancy, says development of tourism infrastructure needs to be stepped up, while concerns about safety are also hindering the growth of the sector.
“As far as tourism is concerned, India is well below potential due to lack of infrastructure – good and safe all-weather roads, small airports and small-aircraft connections, hotels in tourist spots that meet international standards, safety and security of tourists, especially women,” Mr Sen says.
“Huge stretches of coastline can be developed as tourist attraction as well as mountains and forests most of these are undeveloped. With a stronger dollar and euro, India should be a great destination, if the infrastructure is adequate.”
Hoteliers say that India’s tourism has been impacted by an unfavourable global economic environment in recent years, as they compete with more properties that have opened in the country.
“We have certain segments of business like destination weddings, so because of that we’re doing well,” says Shriji Arvind Singh Mewar of Udaipur, who owns the HRH Group of Hotels. “But, if we were only dependent on international travellers, we would be in bad shape. The whole hotel industry in the country, because of the international recession, is not very healthy.”
He says demand from Indians who are increasingly travelling within the country and the benefits from non-resident Indians returning home for visits have been a “saving grace” but adds high taxes are hurting the hotel sector and driving up prices for tourists.
“The money should go into the development of the infrastructure of the hotel [industry]. Because they [the government] thinks it’s an elite business, they keep imposing more and more taxes and obviously we have to pass it on to the guest,” he says.
“India has become a very expensive destination because of taxation. We need to make sure we get competitive in terms of pricing and the government invests in infrastructure. If you don’t connect the airports, you can’t expect all the business to come out of Delhi and Bombay.”
Complicated procedures for getting visas have been a hurdle, Mr Singh Mewar notes. “All that is not conducive for tourism in India. That’s why our numbers are so small. Our numbers are ridiculously small.”
But Mr Thottathil says, while challenges remain, the extension of visas on arrival to more nationalities will definitely have a positive impact.
Over the past couple of years, India has allowed visas on arrival to tourists from 11 countries, including Japan, Finland, New Zealand and Singapore. That resulted in 29 per cent growth in arrivals from those countries in the first eight months of the year compared to the same months last year, Mr Thottathil says.
Some people from countries that have to go through the hassle of securing visas in advance are some of the largest providers of foreign tourists to India. Allowing visas on arrivals would encourage even more visitors from these countries to visit India, as a significant barrier is removed, he adds.
The countries to whose nationals may be given visas on arrival are: Britain, the United States, Canada, Germany, France, Malaysia, Australia, the Russian Federation, South Korea, Italy, Thailand, the Netherlands, Spain, the UAE, South Africa, the Maldives, Sweden, Israel, Switzerland, Oman, Belgium, Austria, Denmark, Kenya, Poland, Saudi Arabia, Taiwan, Norway, Portugal, Ukraine, Mauritius, Ireland, Tanzania, Turkey, Brazil, Czech Republic, Mexico, Kazakhstan, Bahrain and Argentina.
“This move by the government is actually a very timely move,” says Mr Thottathil. “Especially from the point of view that we need more tourists to come to India. Currently our share in international tourism is only 0.64 per cent which is very low for India as a destination.
“The government needs to do something that is more proactive and try and interest people in coming to India. Nobody knows when it will happen, but even the fact that they are thinking about something like that indicates a seriousness and something that will benefit inbound tourism.”