Professional Documents
Culture Documents
TOURISM
Tourism is one of the few sectors where Kerala has clear competitive advantages given its
diverse geography in a short space ranging from the Western Ghats covered with dense
forests to the backwaters to the Arabian sea. Its ancient rich culture including traditional
dance forms and the strong presence of alternative systems of medicine add to its allure.
Unfortunately, Kerala is dominated by domestic tourism within the state although foreign
tourists arrivals to the state has been growing at a faster rate than national average. The
goal in the KPP 2030 is to develop Kerala as an up-market tourism destination with the state
being the top destination in terms of number of tourists and revenue among all the Indian
states. Sustainable tourism is the mission. This can be achieved by integrating tourism with
other parts of the economy like medical and health hubs which will attract more stable
tourists over a longer period of time and with higher spending capacity. There will be new
elements added to leisure tourism and niche products in tourism will be developed.
Infrastructure development is crucial to achieve this goal. The success of Kerala tourism will
be based on the synergy between private and public sectors. The government has taken steps
to encourage private investment in tourism, while adhering to the principles and practices of
sustainability. Industry led sustainable tourism development relies upon the governmentimposed and self- imposed regulations. Tourism in Kerala will be benchmarked against
international indicators and monitored on a regular basis to achieve quality.
WTTC. 2003. Kerala: the impact of travel and tourism on jobs and the economy. World Travel and Tourism
Council, United Kingdom.
2
NCAER. 2012. Second Tourism Satellite Account for India, 200910. Study Commissioned by the Ministry of
Tourism, Government of India.
408
past traditions; and promoting cultural heritage, cultural performances and festivals, etc. It
can also reinforce a positive sense of community identity, which in turn will encourage local
communities to maintain their traditions and identity. Further, tourism, particularly
ecotourism, can place a greater focus on the conservation of natural resources by ensuring
financial or in-kind support by the government, in recognition of their importance to visitor
experiences.
11.1.2 But, the benefits of tourism are not unequivocal. It is often seasonal and mainly
generates part-time and unskilled jobs for local people. Further, if not planned carefully,
tourism can be destructive of culture and local traditions. Such criticism can be characterised
by the billiard ball model3. In this model, the cue constitutes the interests of tourism (big
business, investors, government planners, etc.). These are the forces behind the white ball
(tourism) which strikes a static (red) ball, culture. The red ball can only move in the direction
dictated by the white ball at a pace determined by the white ball: it has no control over its
own movement. Finally, tourism can have severe environmental implications. It can be
associated with destruction of natural habitat, pressure on natural resources, in particular,
land, freshwater and marine resources; damage to ecosystems; excessive energy
consumption; and considerable waste and pollution generation.
Development of infrastructure,
Tourist product,
Human resources, and
Marketing
Wood, R.E. 1993. Tourism, Culture and the Sociology of Development. In: M. Hitchcock, V.T. King & M.J.G.
Parnwell (eds.) Tourism in South- East Asia, pp. 48-70. London: Routledge.
409
11.2.3 In 2000, the first Travel Mart was held in the state as a buyer-seller meet in tourism
trade. It was attended by 350 buyers and 150 sellers. In this mart, Kerala launched a slogan
KeralaGods Own Country to create a strong international brand. The branding of the
tourism industry in Kerala has contributed to its success and placed it in the global tourism
map. The brand Gods own country has become popular around the world.
11.2.4 In 2001, the government launched the `Tourism Vision 2025 document. It aimed at
developing Kerala as an `upmarket high-quality tourist destination through optimal
utilisation of resources. The focus was on conserving and preserving the heritage, enhancing
productivity and income, and creating employment opportunities, thereby making tourism the
most important sector for the socio-economic development of the State. It called for
withdrawal of the government from the direct running of all tourism business activities, and
focussed on encouraging the sector to invest in a more open and competitive environment.
11.2.5 In 2007, the Kerala government adopted Responsible Tourism (RT) as the bedrock
of its tourism policy and chose Kumarakom, Kovalam, Wayanad and Thekkady as pilot
destinations for implementing the concept. The objective was to promote community
engagement in tourism-planning and programmes. The community engagement came
through creation of micro enterprises, undertaking group farming, and setting up of ethnic
restaurants run by women from BPL families. The initiative has been supported by strong
policy interventions that aligned incentives and subsidies within the RT framework. The
tourism policy thus gradually evolved into the more inclusive and integrated concept
of sustainable tourism. The recent Tourism Policy 2012 reinforces the need to have a
comprehensive sustainable development strategy to promote tourism. It has balanced
economic dynamism with environmental, social and cultural considerations.
11.2.6 Today, Kerala is known for its successful tourism model that has turned tourism into a
driver of economic growth, without compromising on ecological and inclusiveness concerns.
Its Tourism model has been hailed worldwide. Kerala is regarded as one of the destinations
with the highest brand recall and named as one of the ten paradises of the world by the
National Geographic Traveler. The seventh edition of the Travel Mart in 2012 witnessed
participation by 48 countries, with over 2000 buyers and over 400 sellers. In what follows,
we examine the achievements and weaknesses of this sector and establish the need for a
strategic policy framework.
11.3 Achievements
Rapid growth in tourist arrivals
11.3.1Over the past more than one and a half decades, the total number of tourists increased
sharply in Kerala. Between 1997 and 2011, it almost doubled from 51 lakh to 121 lakh,
registering an annual growth rate of 9.3 per cent (Figure 11.1). While the number of domestic
410
tourists increased from 49.5 lakh to over 93 lakh, that of foreign tourists increased several
times from 1.8 lakh to 7.3 lakh over the same period.
Figure 11.1: Tourist arrival trends in Kerala: 19972011, (lakh)
Sources: Department of Economics and Statistics. 2009. Statistics for Planning 2009. Government of Kerala
and Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
11.3.2 It is significant to note that Kerala is able to capture an increasing percentage of the
national pie in foreign tourist arrivals (Figure 11.2). Its share in Indias foreign tourist arrivals
has grown from less than 8 per cent in 1997 to 12.1 per cent in 2012. Clearly, foreign tourist
flow has been growing faster in Kerala than at the national level.
Figure 11.2: Share of Kerala in National Foreign Tourist Arrival (%), 19972012
Sources: Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala,
State Planning Board. 2000. Economic Review 1999. Government of Kerala and
Market Research Division, Ministry of Tourism. 2013. Indian Tourism Statistics at a Glance 2012. Government
of India. July.
411
11.3.3 This is also manifested in the rising share of foreign tourists in tourist arrivals in
Kerala. Notably, at the national level the share of foreign tourists in total tourist arrivals has
been declining (Figure 11.3). In 2011, Kerala was ranked 8th in the number of foreign tourist
visits in India. The foreign exchange earnings during the year 2011 stood at Rs 4,222 crores
while the total revenue generated from tourism was Rs 19, 037 crores.
Figure 11.3: Share of Foreign Tourists in Total Tourist Flow (%), 19972011
Sources: Department of Economics and Statistics. 2009. Statistics for Planning 2009. Government of Kerala
and Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
11.3.4 This trend is expected to continue in the future as well. The Kerala Tourism Policy
2012 targets an annual growth rate of 15 per cent in foreign tourist arrivals and expects 3
million tourists by 2021. On the domestic front, the policy is looking forward to achieving an
annual growth rate of 7 per cent for the next decade; a target of 18 million domestic tourists
by 2021.
Kerala tourism is relatively more stable
11.3.5 The Kerala flow of tourists is relatively more stable than that at the national level.
While the coefficient of variation is 54 per cent at the all India level, it is a mere 25 per cent
for Kerala. This could entirely be attributed to the stability in the domestic tourist arrivals.
This is because most domestic tourism originates within Kerala and is triggered by social and
religious motives. Further, as expected, foreign tourism is more volatile in Kerala than the
domestic tourist arrivals. Notably, it is even more volatile than the all India foreign tourist
arrivals. It could be because most tourist traffic originates from Europe and is vulnerable to
economic shocks in European countries.
Awards won
11.3.6 Kerala has won national and international acclaim for its achievements in tourism.
These include, among others the following:
412
The best tourism state award of the government of India for several years
The best eco-friendly organisation award
Acclaim by the National Geographic Traveller as one of the 12 paradises in the world,
International awards for the Responsible Tourism initiative, and
The best website national award for Kerala Tourism, for deploying the latest advances
in Information Technology for marketing
Direct impact: Direct impact refers to changes in the industries associated directly
with visitor spending.
Indirect impact: It is a multiplier impact through backward and forward linkages. It
is about the intermediate consumption for the production of goods and services in the
tourism sector. These are goods and services that tourism companies purchase from
their suppliers, forming the tourism supply chain. Indirect effects can be particularly
important for the production of local products. The economic impact of tourism
revenue in a country or region can be maximized if the tourism sector procures locally
produced goods and services.
Induced impact: relates to sales, income or jobs resulting from household spending
as a result of income earned from visitor spending (either directly or indirectly).
Induced effects also include the consumption of companies that are benefited directly
or indirectly from initial expenditure in the tourism sector. An example of such
induced effects would be purchases of consumer goods such as food, clothing and
electronic goods by people employed in the hotel sector. For companies, this would
be purchases of capital goods or expenditure related to the reinvestment of profits.
Total impact of tourism = (direct impact) + (indirect impact) +(induced impact)
11.4.2 A global analysis of the contribution of tourism industry to national value added or
GDP shows that the countries where tourism sector contributes more than 50 per cent of GDP
4
Stynes, D.J. 1997. Economic Impacts of Tourism. Illinois Bureau of Tourism, Department of Commerce and
Community Affairs.
413
are Macao, Aruba, Antigua and Barbuda, British Virgin Islands, Anguilla, Seychelles and
Vanuatu5. In absolute term, United States is ranked number one. The sector contributes US$
1,348.2 billion (or 8.6 per cent of GDP) in 2012. In the case of India, the tourism industry
contributes only 6.6 per cent of GDP in 2012. This is equivalent to a mere US$ 119.4 billion.
Table 11.1 shows the estimates for major countries in 2011.
Table 11.1: Tourism's Direct, Indirect, Induced and Total contribution to the GDP by
value (US$ billion) (2011 estimate)
Total
Countries
Direct impact Indirect impact Induced impact Total impact contribution
% of GDP
US
404.0
649.2
296.5
1,349.7
8.8
China
166.7
282.2
116.4
565.3
8.6
Japan
120.1
172.5
84.0
376.6
6.9
Australia
44.7
93.3
37.7
175.7
13.0
France
97.1
84.6
46.2
227.9
9.1
Spain
68.4
84.2
39.1
191.7
14.4
Brazil
68.0
76.6
42.7
187.3
9.1
UK
57.0
73.2
32.1
162.3
6.9
Italy
64.3
71.4
34.8
170.5
8.6
Germany
53.9
64.7
27.1
145.7
4.6
Russian Federation
25.2
55.9
22.3
123.4
5.9
Mexico
65.2
43.7
27.6
136.5
13.0
Canada
23.2
43.6
16.8
83.6
5.0
Indonesia
25.3
32.3
15.7
73.3
9.1
India
34.0
29.4
16.3
79.7
4.5
Turkey
29.2
28.0
14.3
71.5
12.0
Republic of Korea
19.7
26.8
12.0
56.5
5.1
Argentina
15.8
18.4
9.4
43.6
112
South Africa
19.7
16.2
9.1
45.0
11.4
Saudi Arabia
13.5
11.1
5.7
30.3
6.7
Source: World Travel and Tourism Council. 2011. Travel & Tourism 2011.
http://www.wttc.org/site_media/uploads/downloads/traveltourism2011.pdf. London, United Kingdom.
11.4.3 The direct and indirect contribution of tourism in Gross Value Added (GVA) and
employment in Kerala in 200912, as calculated by the NCAER (2012) using the Tourism
Satellite Accounts (TSA), are given in Tables 11.2 and 11.3. The direct contribution of
tourism to Keralas GVA was Rs 11, 308 crore, which was 4.7 per cent of GVA. The total
impact of tourism to GVA in Kerala was equivalent to 9.52 per cent of GVA in 200912
(Table 11.2).
Table 11.2: Contribution of Tourism in GVA of Kerala 200912
Share in GVA (%)
Indirect +
Direct Impact
Induced Impact
3.8
3.2
4.7
4.8
Country/state
India
Kerala
Total Impact
7.0
9.5
Source: NCAER. 2012. Regional Tourism Satellite Account for Kerala and Madhya Pradesh 200910. Study
Commissioned by the Ministry of Tourism, Government of India.
11.4.4 In the case of employment, the study found that the sector generated over 14 million
direct jobs in the state. This means that the direct contribution of tourism sector to total
number of jobs in Kerala was 9.9 per cent in 200912. The total number of jobs created
directly and indirectly by the sector turned out to be 23.52 per cent of the total employment in
Kerala.
Table 11.3: Contribution of Tourism to Total Employment between 2009 and 2012
Share in Total Employment (%)
Country/state
Direct impact
India
Kerala
4.4
9.9
Indirect impact
+ Induced
5.8
13.6
Total
impact
10.2
23.5
Source: NCAER. 2012. Regional Tourism Satellite Account for Kerala and Madhya Pradesh 200910. Study
Commissioned by the Ministry of Tourism, Government of India.
11.4.5 This is the first ever attempt to use the TSA for estimating the size of the tourism
sector in Kerala. In 2003, the World Travel and Tourism Council (WTTC) used an
expenditure based approach to show that travel and tourism accounted for 7.7 per cent of the
total economy and generated employment for 0.1 crore, which formed 6.2 per cent of the total
employment (less than its share in GSDP)6.
Revenue Earnings from Tourism
11.4.6 The total revenue generated from tourism (direct & indirect) increased sharply from
Rs 4,500 crores in 2001 to Rs 19,037 crores in 2011 registering a compound annual growth
rate (CAGR) of 15.5 per cent in the total tourism receipts in Kerala (Figure 11.4).
WTTC. 2003. Kerala: the impact of travel and tourism on jobs and the economy. World Travel and Tourism
Council, United Kingdom.
415
Figure 11.4: Total Revenue Generated from Tourism (Direct & Indirect) (Rs crore),
20012011
20000
18000
16000
(in crores)
14000
12000
10000
8000
6000
4000
2000
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
150,000
125,000
100,000
75,000
50,000
25,000
0
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Rs crore
Figure 11.5: Foreign Exchange Earnings (FEE) per tourist of Kerala and India (Rs
crore), 19972011
Sources: Department of Economics and Statistics. 2009. Statistics for Planning 2009. Government of Kerala
and Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
Sources: Department of Economics and Statistics. 2009. Statistics for Planning 2009. Government of Kerala
and Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
11.5.2 This could be attributed to below average growth rate in domestic tourism. Figure 11.7
shows that domestic tourism has been growing more rapidly at the all India level than in
Kerala. The latter has been doing exceptionally well in terms of foreign tourist arrivals
(FTA). Over the period since 1997, its FTA growth rate has been consistently higher than the
417
national average barring a few years namely 2004 (Kerala: 17.3% and India: 26.7%), 2005
(Kerala: 0.3% and India: 13.3%) and 2009 (Kerala: 7% and India: 2.1%).
Figure 11.7: Domestic and Foreign tourist arrivals growth rate: Kerala vs. All India
(%)
30.0
25.0
20.0
15.0
FTA_India
10.0
FTA_Kerala
5.0
0.0
-5.0
-10.0
Sources: Department of Economics and Statistics. 2009. Statistics for Planning 2009. Government of Kerala
and Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala
Spatially lopsided
11.5.4 Keralas tourism is spatially lopsided with the top ten countries accounting for over
70 per cent of the total tourist flow (Figure 11.8). At the national level it is slightly above 62
per cent. The foreign tourists in Kerala mainly come from European countries and the US,
Canada and Australia. The share of foreign tourists was 11.4 per cent of total tourist arrivals
in Kerala in 2010. It was found that the majority of foreign tourists in Kerala came from the
U.K. (23.7%) and the U.S (10.8%), followed by France (9.8%), Germany (7.6%), Australia
(5.6%) and Canada (2.8%), accounting for 60.3 per cent share of foreign tourists in Kerala in
2010. Among the top ten countries, five are from Europe. These are, namely UK, France,
Germany, Netherlands and Italy. These countries account for 45 per cent of the total inflows.
At the national level however, only two European countries figure in the top ten countries and
they account for a mere 21 per cent of the total tourist flow. Kerala does not seem to be
popular with tourists from Asian countries. Only Malaysia and UAE figure among the top 12,
accounting for 5 per cent of the tourist flow.
11.5.5 Over time, there has been diversification in tourist arrival. The share of top 12
countries has declined from over 76 per cent in 2002 to 70 per cent in 2012. However, the
share of the European countries in the top ten remained almost constant.
Figure 11.8: Nationality-wise Foreign tourist visits to Kerala in 2002 and 2010
(%)
2010
2002
3.13
2.43
2.41
2.43
U.K
2.77
U.S.A
3.18
5.67
19.46
13.93
7.85
France
U.K
U.S.A
France
5.59
23.70
Maldives
Germany
Australia
Germany
7.62
Switzerland
10.59
2.32
2.85
Srilanka
7.73
2.38
Malaysia
9.79
10.79
Canada
Netherlands
Italy
Source: Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
11.5.6 The origin of domestic tourist visits has mainly been regional. 71 per cent of tourist
flow originates from within the state; while 25 per cent comes from the region. The rest of
India accounts for a mere 4 per cent (Table 11.4).
419
Table 11.4: Distribution of Domestic Tourist Visits in Kerala by State of Origin, 2010
State/UT
Domestic Tourist Visits (Lakh) Share (%)
Kerala
61.1
71.03
Tamil Nadu
11.2
13.02
Karnataka
5.5
6.5
Maharashtra
2.9
3.4
Andhra Pradesh
1.7
2
Delhi
1.3
1.5
Total
86
97.3
Source: Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala
Source: Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
tourist infrastructure. Of the total number of 413 homestays in Kerala in 2012, 111 were in
Idukki, followed by Ernakulam (71), Alappuzha (70) and Kottayam (62). These homestays
are regarded as one of the major sources of attraction for foreign tourists. Majority of
foreigners believe in enjoying the natural beauty of the landscape (and getting to know the
local culture), so they prefer to stay in these homestays instead of hotels. It has been observed
that foreign tourists demand better facilities and connectivity compared to domestic tourists.
The flow of domestic tourists is relatively more evenly distributed across the other districts of
Kerala, as compared to the foreign tourist flow (Figures 11.9 and 11.10). This is supported by
the coefficient of variation statistic10.
11.5.9 Overall, however, a large number of tourists (both foreign and domestic) prefer to
visit three particular districts in Kerala, namely Ernakulam, Thiruvananthapuram and Idukki.
Further it is found that most of the tourists prefer to visit the central and southern parts of
Kerala rather than other parts of the state, leading to a comparative neglect of the North. The
reasons may be, good connectivity in terms of roads, railways and airports and famous tourist
places.
Figure 11.10: District-wise Share (%) in 2011 and CAGR of Domestic Tourists during
the period 2002 and 2011 (%)
Source: Department of Tourism. 2011 and previous reports. Tourism Statistics. Government of Kerala.
A statistical measure of the dispersion of data points in a data series around the mean. The coefficient of
variation is 180 for foreign tourists and 120 for domestic tourists, indicating lower variation or more even
distribution of domestic tourists across various districts.
11
WTTC. 2003. Kerala: the impact of travel and tourism on jobs and the economy. World Travel and Tourism
Council, United Kingdom.
421
has also not been able to adequately capture its vast potential in medical tourism. A major
challenge for the government is to position Kerala in the international market of health care
services to exploit the opportunities thrown open by globalisation and match up to the best in
the world in terms of health care service providers. According to an estimate for 2013, the
market size for medical tourism is US $2440 billion, based on approximately eight million
cross-border patients worldwide spending an average of USD 3,0005,000 per visit,
including all medically-related costs, cross-border and local transport, inpatient stay and
accommodations12. India is one of the favourite destinations of medical tourism in terms of
low cost of medical facilities, high quality and care. In India, Kerala is one of the popular
destinations for medical tourism. The Tourism Department does not publish any regular
database for medical tourism. Table 11.5 presents an indicative pattern of the arrival of
medical tourists. It is found that Kerala is attracting medical tourists from different parts of
the world. Ayurveda treatment is popular among tourists from Germany, France, Switzerland
and the USA, whereas modern medical treatment is also found to attract tourists mainly from
the Middle East, the UK, Germany and the USA. However, so far medical tourism is
encouraged by a buyer-driven factor. Collective effort at the government level has not been
adopted to draw more tourists for medical purpose until now. A serious effort at the state
governments level is expected to nurture the potential.
Table 11.5: Medical tourists from Different Countries to Kerala (%)
Alternative Medicine
Modern Medicine
Germany
22.2
Middle East
26.4
France
13.1
UK
18.41
Switzerland
12.8
Germany
13.4
USA
12.9
USA
12.4
UK
7.2
Maldives
11.4
Italy
7.2
France
7.3
Russia
6.7
Australia
3.5
Middle
East
6.3
Spain
2.4
Denmark
5.0
Switzerland
2.4
Japan
4.6
East Africa
1.8
Spain
1.6
Kenya
.24
Kenya
0.42
Note: The paper does not mention the year the survey was carried out.
Source: Cherukara, J.M. and Manalel, J. 2008. Medical tourism in Kerala: challenges and scope.
Proceedings of the Conference on Tourism in India Challenges Ahead. 1517 May 2008.
12
IIML. 369379.
11.5.11 In a survey, tourists were asked about their views on the effectiveness of the
government in promoting medical tourism in Kerala. The results presented in Table 11.6
show that the there is ample scope for improving the governments role in promoting medical
tourism, which can turn into a major revenue generator in Keralas economy.
Table 11.6: Role of Government in Promoting Medical Tourism (%)
Level of Success
Alternative Medicine
Modern Medicine
Successful
15.7
Satisfactory
26.3
29.4
Failure
57.8
70.5
Source: Cherukara, J.M. and Manalel, J. 2008. Medical tourism in Kerala: challenges and scope.
Proceedings of the Conference on Tourism in India Challenges Ahead. 1517 May 2008.
IIML. 369379.
13
We have assumed that the GSDP growth rates will decline to 45 per cent in BAU scenario.
423
Year
2011
2015
2020
2030
Foreign
Tourist
Domestic
Tourists
Alternative 1
Domestic
Tourists Alternative 2
Total Tourist
Forecast
Total Tourist
Forecast
Alternative 1
Alternative 2
9.4
1122
13.37
19.72
9.4
12.85
12.8
17.55
12.13
12.16
15.23
23.29
12.21
11.99
14.66
21.12
0.73
1.14
1.86
3.57
11.6.3 The above analysis suggests that despite excellent work carried out by the Kerala
Tourism Department over the last decade, there are fault lines in the performance of the
sector. There is a strong dependence on seasonal leisure tourism; innovative products and
services are still scarce. The economy is dominated by low knowledge and low technology
intensive tourism SMEs. New products and services have appeared in the tourism sector with
the emerging global knowledge economy. These are income-inelastic and more stable. But
the tourism industry of Kerala is still not a part of this knowledge economy. It is facing
serious competition from other countries that offer nature-based tourism. Changing
demographics, shifting travel patterns, and volatile global economic conditions are
increasingly putting the pressure on industry stakeholders to shift to a new tourism paradigm
to stay competitive in a challenging global economy. More importantly, the new knowledgedriven sustainable development strategy proposed for the macroeconomic development of
Kerala will call for a longer term strategy for tourism as well to bring it in line with the
former. Tourism in the overall Kerala knowledge economy will focus on identifying new
products and new markets, and promoting technology-based innovative business solutions
enabling tourism sector activities to be more competitive and sustainable in the global
marketplace. The next section discusses a knowledge-driven strategic framework for the
tourism sector.
without harming local culture and heritage. Kerala will be a world brand in tourism and a top
destination among Indian states in terms of the number of tourists and tourist revenue by
2030.
Mission
Achieve sustained and sustainable tourism. This means,
11.7.2 Targets
FTA of 2.33 million by 2020 and 5.88 by 2030 for leisure tourism
DTA of 16.79 million by 2020 and 32.33 million by 2030 for leisure tourism
Above 50 per cent share in total medical and knowledge related tourism in India
Tourism should be initiated with the help of broad-based inputs that involves all
stakeholders, including the community where the development is taking place, and the
stakeholders should maintain control of tourism development.
Tourism should provide quality services and generate demand for high value added
services.
Product differentiation
Market diversification
425
Innovation
Marketing
Infrastructure
Product differentiation
11.7.3.3 Research has shown that there has been a shift in travel patterns and demand for
products and services (Table 11.8). The advancement of technology has also had a significant
impact on the tourism industry. Continuous upgrading and modernising of tourism products
will be important in providing visitors with quality, user-friendly and consistent services. The
tourism industry should be able to develop unique products, which can provide authentic
experiences and value added services. It is necessary to realise the potential of tourism and to
extend the products and services at the minimum cost through product differentiation.
Table 11.8: Shift in Travel Patterns
Switch from
Plan well in advance.....
Full packaged/fixed schedule holidays....
Established destinations....
....toward
....holiday on short notice
....menu of experiences/flexible holidays
...new destinations
...integration of city and provincial/territorial
experiences
...special markets
...experiential travel/nature based tourism
... niche marketing
...destinations chasing specific markets
...highly branded destinations
City tourism....
Undifferentiated markets...
Theme parks and man-made attractions....
Mass marketing...
Destinations taking who arrives....
Non-branded destinations...
Source: Western Australian Tourism Commission. 2000. Partnership 21: 2001-2005 Tourism Industry Plan: a
Working Strategy Reviewed Annually. Western Australian Tourism Commission, 2000
11.7.3.4 In its efforts to differentiate the tourism experience in Kerala, the Department of
Tourism has been introducing newer products. Some of these, for instance, are: Ayurveda,
backwaters, rural tourism, plantation tourism, adventure tourism, eco-tourism, convention
tourism, and medical tourism. We propose that more innovative elements should be added
into the development of theme products, and deep exploitation and utilisation of tourist
resources. This will call for two sets of action plan:
Adding new elements to leisure tourism to change sightseeing tours into leisure
vacation tours
Promoting new tourism products
11.7.3.5 New elements to leisure tourism: Leisure tourism is already one of the important
components of tourism, accounting for 51 per cent of the global tourism activity. Traditional
tourism must be adapted to the changing tastes and travel patterns by adding the following
elements:
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11.7.3.6 New innovative products and services: The new knowledge economy which will
provide a major thrust to medical and education related tourism is expected to change the
face of Kerala tourism. The Kerala knowledge economy will shift the paradigm to new
varieties of tourism. These are, for instance,
50+tourism: The ageing of society will result in far-reaching changes, particularly on the
demand side. There is a continuing rapid increase in the number of outbound travellers
aged 50 years and above. This means that travellers will be older. It also means that the
aged population, which is more mature, experienced, sophisticated and demanding, will
demand high quality, technology-based services, tailored to their requirements. Travel
and tourism planners will need to respond creatively to the needs of this market and
provide the exact services required to meet and exceed their expectations. This tourism
can be marketed to those with functional limits or disabilities. Destinations often employ
Universal Design and Universal Destination Development principles.
Medical tourism: This is arguably the fastest growing variety of tourism. While in
Europe, National Health Services for the citizens is heavily burdened and the system has
almost collapsed, in the U.S. the cost of medical treatment is 3 to 6 times higher than in
427
its counterpart OECD countries14. In the Middle East, huge infrastructure facilities are
available, but the expertise is insufficient. Kerala has distinct advantages in terms of
medical cost which is 1/12th that of the advanced countries. Its doctors and nurses have
been working all over the world. Finally, and most importantly, Kerala will have two
medical hubs supplemented by regional spokes over the next 20 years, which will make
extensive medical infrastructure available in the state. But this will not automatically
guarantee the inflow of medical tourists. There has been serious competition from
Thailand, Malaysia, Singapore and South Korea, and it will be important to benchmark
the experience against these countries. In addition, Kerala will have to identify niche
areas for the promotion of medical tourism.
11.7.3.7 Ayurveda is almost synonymous for Medical Tourism in Kerala. Ayurveda
Tourism can contribute to increasing the average length of stay of tourists. The average
duration of stay of a tourist coming to Kerala for Ayurveda Tourism is as long as 16.2
days. However, quality control is a major issue. There has been an overcrowding of
unqualified people conducting massage parlours in the name of Ayurveda. Further, there is
a lack of standardization and scientific research in Ayurveda in India. In order to control
quality of Ayurveda, Kerala Tourism has introduced two kinds of classification - Green
Leaf and Olive Leaf - for Ayurveda centres. There are strict criteria and guidelines that
the centres have to follow to get these classifications. These classifications ensure the
credibility of the service providers and the quality. The implementation of this programme
must be monitored carefully so that Kerala does not get any negative publicity due to fake
centres. Promotion of Ayurveda tourism can be integrated with medical cities to provide
tourists a holistic experience. Another component of Ayurveda tourism is its aggressive
marketing across the world. It must be noted that Sri Lanka has also taken to promote
Ayurveda tourism and will soon emerge as a serious contender in this area.
11.7.3.8 In addition, with several dental clinics operating, Kerala has a distinct advantage
in dental tourism. The fact that the treatment requires multiple sittings, with liberal gaps in
between sittings, and hence requires around 3040 days stay, makes the dental patient an
ideal candidate for medical tourism. Hence, more effort should be made to market the
dental tourism product.
Tourism showcasing rich tribal heritage: There has been a growing trend of
promoting tribal tourism in different parts of the world. Tourists are taken to the
spots that are associated with the tribal way of life. Of late, however there has
been concern that this form of tourism is exploitative and should be stopped.
There may be alternative ways of showcasing tribal heritage and attract tourists. In
the Yunnan province of China, an Ethnic Village has been created to bring the
history, culture, and customs of 26 different Yunnan minorities together into one
14
Todd, H. 2012. Why Are U.S. Health Care Costs So High? Can be accessed on
http://www.forbes.com/sites/toddhixon/2012/03/01/why-are-u-s-health-care-costs-so-high/.
428
exhibit. Each of the 26 ethnic minorities has a village built on the premises. A
central square has been built to symbolize unity among the various ethnic groups.
In addition, there is a folklore museum, a museum of ethnic waxworks, and a
theatre for the performance of ethnic songs and dances. This is a major point of
attraction in Kunming, the capital of Yunnan. In this form, the province is able to
showcase its heritage without disturbing the habitat of the tribal population.
Further, there have been cultural shows on colourful tribal dances which attract
tourists from different parts of the world. This also opens a window for the outside
world to their life style.
International music festivals and youth festivals have also proved to be a major
tourism product. The midsummer music festival was originally a French idea, but has
now spread worldwide.
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best practices of promoting wetland tourist while minimizing its threats and adverse
effects include the following:
11.7.3.9 Some of the successful case studies of wetland tourism have been provided in
Appendix 11.2. Their details can be viewed at the Ramsar website at
www.ramsar.org/tourism.
Niche Products
11.7.3.10 Customers of different age, sex, nationality, occupation, culture, hobby and tourist
motivation have different needs and perceptions. The strategy will be to subdivide the market
and design different products according to the special features of the segment market. In
Kerala, for instance, 56 places have been identified for development of ecotourism. The
Kerala Tourism has set up a separate ecotourism wing to give policy support for the
development of ecotourism destinations in the State. Out of them, some progress has been
made in 31 locations. It is important to design specialised products to enhance experience of
these locations. Besides these, highly specialised tourist agencies and material need to be
promoted to deliver quality services by complying with the standards set by international
benchmarks. Destination Management Councils set up in Kerala are a right step in this
direction. Their functioning will need to be monitored on a continuous basis.
Diversification of markets
New markets: Kerala has already strengthened the existing international markets
along with local markets. The state needs to explore new emerging international
markets, like USA, Scandinavia, Russia, China, Malaysia and other South Asian
countries having tremendous potential for tourism growth. The product specific
promotion of tourism products, like Ayurveda in Germany, and culture in France
needs to be replicated in the case of other countries. Foreign exchange earnings could
be optimized only if Kerala succeeds in attracting more stable foreign tourist inflow.
Advertising campaigns and promotional tourism programmes through electronic
media, especially for television, major international tourism events and fairs, etc.,
need to be further developed to promote awareness among the tourists.
430
Department of Tourism. 2012. Kerala Tourism Policy 2012. Government of Kerala, Thiruvanthapuram,
Kerala.
16
Stncioiu, A., Teodorescu, N., Vldoi, A., Bltescu, C. and M. Stoian. 2011. Banat-Criana as Microdestination Elements of Tourism Image and Tourism Identity. Theoretical and Applied Economics. 18(9).
1726.
431
internet property worldwide, for popular search-based campaigns. These efforts need to be
carried forward over the next 20 years.
Encourage the use of ICT tools in marketing
11.7.3.14 The industry is information intensive and is benefited tremendously from the
implementation of Information and Communications Technology (ICT). The growth of the
Internet and new technologies in general, has influenced the overall sector in terms of
approaching potential customers (visitors) who seek information and fulfil their purchase
through the Web. Tourism seems to be directly related to the use of ICT. For instance, Italy, a
leading worldwide European tourist destination also has an enormous number of web pages
of itself (767,000 pages). There is evidence that tourist companies that had web sites
increased their revenue but the ones that had their own web portals, had even higher
revenues. ICT also offers value added services by providing information on accommodation,
events, culture and leisure, together with booking and payment facilities.
11.7.3.15 ICT will also have a great impact on virtual tourism, a market-share development
strategy that focuses on promoting the unique aspects of a city or region in order to draw
tourists interested in those particular subjects to the area. Action in the field of ICT for
tourism is targeted at developing new components and distributed architectures for tourism
information and communications systems that support users and businesses, by offering value
added services and multimedia information on tourist destinations. Eventually, this may also
have a positive impact on the physical flow of tourists to the state.
Use Smartphone systems
11.7.3.16 Smartphones come in very handy to an increasingly mobile generation and in
particular for travellers. Companies are developing applications that allow travellers to
download all the information they need related to their trip, straight onto their BlackBerry
smartphone. This mobile shortcutting method will enhance the already interactive, marketing
initiatives and make everything more efficient. Just as the Internet completely revolutionised
the way consumers book their travel, now the immense, growing reliance on mobile devices
is causing a second shift in how travel is purchased. It is imperative for hotels to tap into
these growing markets. In the future, the computer as the main means to access the Internet
will move to the background, while other mobile devices will provide an interface to the
Web. The end user will interact in a more natural and relaxed manner. Hence, there will be
more possibilities of service customization and product configuration. In addition, flexibility
during the trip will be increased and travellers will have the possibility to book ad hoc
services.
11.7.3.17 These visions require new forms of collaboration between service providers and
ICT industry for skill development, incentives, and capacity building.
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11.7.3.20 In the case of Kerala, districts may form such collaborations to form electronic
value chains covering all aspects of the tourism experience.
Encourage customised packages
11.7.3.21 Travel agencies are dynamically packaging tour products and also support the
development of customized packages. This calls for flexible and smart products, which will
allow customers to plan their own trip according to their wishes, choosing from the large
variety of items on offer. This very often can be frustrating to the consumer. There is,
therefore, a great need for meta-data screening of information so that the consumer can find
what he wants in the time frame available to him. As an example, a search for Cochin hotels
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yields a number of web pages. This makes it difficult for the customer to decipher and screen
all this information. Use of some of the websites may reduce the number of pages, but the
problem still remains. It is important to have organised efforts to provide information and
packaged services to customers to plan their trips.
11.7.3.22 In Kerala, the portal www.keralatourism.org is a move in this direction. It needs to
be upgraded technologically and made more interactive by exploring the Web 2.0 based
technologies.
Box 11.1: The European Travel Commission (ETC)
ETC, created in 1948, is an association of National Tourism Organisations (NTOs) with 39 members,
27 member countries of the European Union and 12 other countries. It is an independent body, which
is financed entirely by annual membership contributions. It also generates significant funding for its
marketing activities from commercial partners in relevant marketplaces.
Source: Europe Travel Commission website. http://www.visiteurope.com/home.aspx
11.7.3.23 The huge benefits from technologies like Web 2.0 can be exploited by capacity
creation, infrastructure development, need for education, and exposure to global best
practices, focusing on innovation and always having a vision for the future.
Infrastructure
11.7.3.24 The government has been attempting to deliver a world-class experience to all
visitors in terms of basic amenities by improving the basic tourism infrastructure. The focus
has been on improvement in hotels, restaurants and other visitor related services (including
wayside amenities, such as public toilets, parking bays and refreshments); upgradation of
visitor facilities through proper management of tourism resources; and overall improvement
in maintaining the tourist destinations by forming institutional mechanisms at various levels
to make them clean and safe as per international standards. Our proposals in this regard are
as follows:
Integrated framework for infrastructure development
11.7.3.25 Transport: Easy access to tourism destinations in terms of international transport
and facilities for easy movement within the destinations is a prerequisite for the development
of tourism. Transportation infrastructure is composed of:
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11.7.3.26 The state should focus on providing good connectivity in terms of rail, road and
air in each and every district. In particular, infrastructure and tourism products in
underdeveloped districts, mostly situated in the northern parts of Kerala, need to be promoted.
Initiatives are required for better quality infrastructure, in terms of transport facilities based
on the principles of affordability, and easy access to tourist destinations, etc.
11.7.3.27 It should be the responsibility of the public sector to develop transport
infrastructure due to the public goods nature of this infrastructure. It should be ensured that:
The network of services is available to both tourists and residents of the area.
Achievement of consistency in standards is maintained.
The construction of an integrated system contributes to the economic welfare of
the region.
11.7.3.28 The government will adopt the Multimodal planning approach in transport. It refers
to planning that considers various modes (walking, cycling, automobile, public transit, etc.)
and connections among modes. Further, sustainable tourism development plans should set
stringent environmental guidelines for infrastructure development. Finally, planning for
infrastructure and services must effectively accommodate the needs of aged and physically
challenged travellers.
11.7.3.29 Hospitality Infrastructure: Efforts should be made to provide a world class
experience to all visitors by giving importance to the provision of basic amenities in
destinations, and making constant improvement in services offered by hotels, and
restaurants. The less known and unseen places should be identified and developed into
tourist destinations with necessary infrastructure. While providing world-class products
and services to the tourists, the prices should be made competitive. This can be pursued
primarily by inviting private players and ensuring competition. Kerala tourism has put in
place certifications for its key tourism products houseboats, Ayurveda and hotels to
ensure that the tourist receives products that are acceptable, uniform and also adhere to
certain basic standards. These may be extended to all other hospitality infrastructure, with
adequate information provided through the website.
11.7.3.30 Tourism infrastructure: Typically tourism infrastructure is viewed as
consisting of museums, cultural institutions, amusement parks, entertainment parks,
heritage sites, and parks. In the case of medical tourism, it comprises medical facilities.
For education tourism, educational infrastructure is the key. Different layers of
government should collaborate together to work for the promotion of tourism
infrastructure. This type of infrastructure requires upgradation of visitor facilities in
places of interest and the overall improvement in the upkeep and maintenance of local
attractions at destinations. Kerala is believed to be the first state in the country to
provide accreditation to tour operators. However, the accreditation policy initiated in
2009 is limited to tour operators based in Kerala. It will need to be extended to all.
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Pillar 2: Environment
11.7.3.31 The use of cleaner technologies can contribute to the sustainability of the tourism
system. These are environment friendly technology, the adoption of which can attract more
green customers, and reduce production and fixed costs. As discussed in Chapter 10, these
technologies comply with the principles of Reduce, Reuse, and Recycle. Cleaner
technologies include treated sewage use for irrigation; metal, glass and plastic recycling;
composting organic solid waste; use of renewable energy sources; and smart building design
to reduce energy demand for lighting and cooling systems. Cleaner technologies lead to the
minimisation of the volumes and hazards of gaseous, liquid and solid waste; the minimisation
of the risk of accidents involving chemicals and processes; the minimization of the
consumption of raw materials, water and energy; and the use of substitute chemicals and
processes less hazardous to human and ecological health.
11.7.3.32 Destination approach in development plans: Destination Management Councils
(DMC) has been formed to cater to 35 tourist destinations in Kerala. These councils, with
statutory authority, undertake and maintain tourism projects completed in tourism
destinations and evaluate the basic infrastructure, security, protection, encroachment, new
schemes, etc., in the respective destinations. The DMCs also implement new projects based
on the characteristics of the tourist destinations. Each council has the member of the
legislative assembly from that region as its chairman and the DTPC secretary as its chief
executive.
11.7.3.33 Environment protection: Environment friendly practices have been a part of the
Tourism Policy since 2004. Under the policy, the use of disposable plastics at major
destinations has been banned reducing the pollution caused by various tourism activities. In
this regard, the Department also supports environment friendly initiatives such as production
of paper bags and conversion of plastic and other wastes into resources, through viability gap
funding. As discussed above, there have been initiatives to encourage the adoption of ecofriendly practices by the hospitality industry. Eco-friendly activities, like solar powered and
manual coracle ride rafting in the reservoir, up-gradation of musical dancing fountains,
creation of jungle camping facilities, enhancement of interpretation facilities, etc., have been
successfully completed and are in operation. A new campaign, Kerala Waste Free
Destination (KWFD), has been started and a Task Force has been constituted to manage it.
11.7.3.34 Research with hotels and travel industry executives shows that the travel industry is
not fully immersed in environmental technology application programmes. A variety of
environmental guidelines have been developed by different organisations, such as the
International Hotel & Restaurant Association (IH&RA), the American Hotel & Lodging
Association (AH&LA), and the International Hotel Environmental Initiative (IHEI). Even
hotel corporations now prepare their own action plans and training programs in
environmental protection. Tourism businesses are slow in adopting change. Government
policy interventions are necessary to promote environment friendly tourism. Some of the
proposals are as follows:
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Develop a toolkit and supporting materials to assist SME hotels to plan for and
invest in energy efficiency (EE) and renewable energy (RE) technologies.
Test the toolkit in hotels and use the lessons learned to improve the tools.
Disseminate and promote the toolkit to hotels highlighting the practical solutions
for increased use of energy efficiency (EE) and renewable energy (RE) tools,
thereby enabling SME hotels to benchmark their energy performance and to
prioritise the most cost-effective investments for improving their energy
performance.
Promote policy interventions for use of clean technology- The limitations in using
cleaner technologies can be stated as follows: expensive equipment / investment,
low consumer interest, no government sanctions, and lack of skilled, professional
staff. Some of the policy interventions proposed here are: tax incentives on
renewable energy technologies, the use of geothermal energy, the implementation
of a solar lighting demonstration project, and permitting purchase of solar water
heaters as an allowance against taxable income.
Focus on beach management practices. The practices adopted by the Gold Coast,
Australia are a case in point.
Initiate a hotel project aiming at radically improving the usability of hotels and the
well-being of guests, by assuring the competitiveness of the hotel industry through
the development of technologies in the areas of Sensations, Simulation &
Training, Sustainability, Safety and Security Services, and Wellness & Health,
and by facilitating necessary dialogue and collaboration between education and
training institutions and the sector stakeholders.
Cultural activities in the form of traditional art forms are promoted. Kerala
celebrates many of its festivals, like Onam, Pongal and local cultural programmes ,
with people participation. Initiatives have been taken up by the state government
437
Identify skill gaps: There is a need to conduct a study on the skill requirement,
skill availability, and skill gaps in the tourism sector and design specialized
438
training for addressing the gaps. There needs to be specialised training for those
who have been engaged in the tourism sector. These courses need to be evaluated
on a constant basis to upgrade their content and usefulness. The National Skill
Development Corporation has prepared a report assessing the human resource and
skill requirements for the tourism sector17.
Strengthen tourism pedagogy: Tourism education has a strong vocational focus
with relatively little emphasis on sociological or philosophical issues. There is a
need to link specific sociological and philosophical issues to tourism pedagogy.
Tourists and hosts activities, behavioural patterns, and motivations are to be seen
in socially-specific contexts. Tourism influences, and is influenced by societal
ideology, that is, culturally determined expectations and attitudes. Students
should be exposed to these issues and the ways to address them.
Include tourism in school education: Tourism education, in particular
sociological and philosophical issues, should be a part of the school curricula to
shape the perception of the host community towards tourists.
11.8 Implementation
Institutional set up
11.8.1 A strong institutional set up is required within the tourism ministry to monitor and
implement various tourism programmes where private players can also participate actively.
Development planning for tourism should include the use of multidisciplinary teams for the
following:
National Skills Development Corporation. Human Resource and Skill Requirement in Tourism, Travel,
Hospitality and Trade Sector (2022)-A Report. http://www.nsdcindia.org/pdf/tourism.pdf.
439
11.8.3 The, organisation set up may be strengthened based on the principles of development
planning for tourism. Fast track clearance should be given to tourism projects with an
investment of more than Rs 12 crore.
Financial Assistance
11.8.4 In Kerala adequate plan support is made available to the sector in every successive
Five Year Plan. Private investments are being promoted through incentives and infrastructure
support. Financial incentives are given by the state government in the form of investment
subsidy, limited to 12 per cent subject to a ceiling of Rs 12 lakh; concession in electricity
charges; support to avail loans from state financial corporations (KSIDC & KFC), and
guidance and publicity support from the state government under the Responsible Tourism
initiatives. The existing investment subsidy schemes will be withdrawn by 2013. In its place,
a new subsidy will be introduced whereby 15 per cent of the total investment, subject to a
maximum ceiling limit of Rs 20 lakh, will be provided for investors classified under
Responsible Tourism (RT). In addition to the proverbial carrot, there need to be provisions
for sticks as well. Punitive actions need to be taken against those who do not adhere to
prescribed standards.
Stakeholder participation
11.8.5 Emphasis should be made to enhance the role of major stakeholders, i.e., government,
industry, and host communities in the development of sustainable tourism. The government
has powerful tools at its disposal to influence tourism development, namely, legislation,
regulation (revenue collection and distribution), control, coordination of policies and
programmes, infrastructure and incentives, and planning and promotion between state and
local level sustainable tourism ventures.
11.8.6 The success of Kerala tourism will be based on the synergy between private and public
sectors. The government has taken steps to encourage private investment in tourism, while
adhering to the principles and practices of sustainability. Industry led sustainable tourism
development relies upon the government- imposed and self- imposed regulations.
11.8.7 The interactions of the volunteer sector, host communities, and NGOs with tourism are
generally in the form of pressure groups. Pressure groups can help to move tourism towards
sustainability, particularly in cases where they represent the voice of local population. They
440
11.8.9 It is proposed here that the state department should develop the Tourism
Competitiveness cum Sustainability index for comparison by destination, to monitor and
evaluate the performance of the tourist destination over time. This will be a composite index
of the indicators presented in Table 11.9.
Table 11.9: Indicators and Specific Measures of Tourism Competitiveness and
Sustainability
INDICATOR
1. Infrastructure
4. Stress
SPECIFIC MEASURES
Transport infrastructure
Tourism infrastructure
ICT infrastructure
Environment
Health and hygiene
Safety
Educational and training facilities
Availability of skilled workers
Tourist numbers visiting site (annum/peak month)
5. Use Intensity
6. Social Impact
7. Waste Management
3. Human resources
8. Critical ecosystems
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INDICATOR
9. Consumer satisfaction
SPECIFIC MEASURES
Level of satisfaction by visitors (questionnaire based)
A. Carrying Capacity
B. Site Stress
C. Attractiveness
COMPOSITE INDICES
A weighted sum of : accessible beach area; number of
official beds; parking and road capacity; change in index of
local attitudes
A weighted sum of : number of tourists; number of tourists
per square metre; local response; damage measures
A weighted sum of : water quality; water access; variety of
attractions; visitor response
Source: Conceptualised by NCAER
11.9 Conclusion
11.9.1 In order to achieve the vision targets for sustaining and accelerating the growth of the
sector and making sustainable tourism a reality, a number of best practices need to be
followed. The need of the hour is to promote quality on all fronts so as to provide world-class
experiences to tourists without deterioration in the society and in the environment, while at
the same time strengthening the economy. Awareness of the issues appears to be relatively
high in Kerala, and a number of good practices have been widely adopted, but more still
needs to be done in this direction since these practices are not well promoted by the state. The
strategy should be to engage all stakeholders by marketing and social media, identifying
sustainability goals/targets, and creating more sustainable products and services. Marketing
assistance for service providers should be increased. Finally, technical assistance and the use
of ICT are needed to help tourism organisations market Kerala as a sustainable destination.
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APPENDIX A11.1
PROJECTIONS
This study estimates tourism demand model of foreign tourist arrivals in Kerala using an
econometric model. The demand equation has been estimated by Ordinary Least Square
(OLS). Wherever the autocorrelation problem existed, as per the Durbin-Watson (D-W)
statistic, the equation was estimated after adjusting for autocorrelation. We have also done
diagnostic checking such as Whites heterocedasticity test, Godfreys autocorrelation test,
and Jarque-Beras normality tests before carrying out the projections. The projection period
covers the period, 2012 to 2030. Data used for estimation of demand equation covers the
period from 1995 to 2011. The required data is taken from Kerala Tourism Statistics, India
Tourism Statistics, and Economic Review of Kerala. The equation is estimated using the
software package, Eviews.
As discussed earlier, Keralas foreign tourist comes mostly from European countries. This
region contributes more than 50 per cent of Keralas total foreign tourist visits. In theory,
personal income is one of the key determinants of consumer spending. Travel and tourism is
a part of consumer spending and is highly influenced by personal income. Therefore, to
calculate the income elasticity, we have considered per capital GDP of Euro area as a key
explanatory variable of foreign tourists visit to Kerala. We have estimated a log-log linear
model to calculate the elasticity. The data period covers the period from 1995 to 2011.
The equation for foreign tourists visit is specified below:
Log (Foreign tourist) = 17.956 + 3.269 * Log (Euro area GDP per capital) + 0.939*AR (1)
(t-value)
(2.63)
(12.6)
R2 = 0.97
D-W = 2.3
The results show that the income elasticity of foreign tourists visit to Kerala with respect to
per capita GDP of Euro area is 3.3 and the t-value is 2.63, statistically significant at 5 per cent
significance level. The elasticity value suggests that 1 per cent increase of the Euro areas per
capita GDP leads to a 3.3 per cent increase in foreign tourists visit to Kerala and vice-a-versa.
The first order auto regressive term (AR(1)) is used to correct the auto correlation problem in
the equation. We have used the income elasticity for the projections of foreign tourist flow to
Kerala.
In case of domestic tourists, we make a similar attempt to find out the influence of Keralas
economic growth (GDP growth) on domestic tourists visit. The reason is that more than 75
per cent of domestic tourists belong to Kerala. The estimated equation to calculate the income
elasticity is specified below:
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Log (Domestic tourist) = 7.22 + 0.890 * Log (Kerala GSDP per capita) + 0.446*MA (1)
t-value
(12.79)
(1.88)
R2 = 0.96
D-W = 2.01
201213 to
201617
201718 to
202122
202223 to
202627
202728 to
202930
2.0
2.5
2.0
1.6
1.4
1.5
1.0
1.0
Based on the above assumptions, we have made a baseline or BAU and an alternative
scenario projection of foreign tourist arrival in Kerala. The results are reported in Table
A11.1.2. The actual foreign tourist arrival in Kerala was 7.3 lakh in 2011. Our projection
period covers from 2012 and onwards. The results show that foreign tourist arrival in Kerala
is expected to reach 2.33 million by 202021 under BAU (preferred) scenario and 1.86
million under pessimistic scenario. This is in contrast to 3 million, as being projected by the
Department of Tourism, Kerala in its Tourism Policy 2012 report.
Table A11.1.2: Projections of Foreign Tourist Arrival in Kerala (million)
Scenarios
Foreign
tourist
Actual
Foreign
touristsBAU
Foreign
touristAlternative
200001
201112
201213
201516
202021
203031
0.21
0.73
0.81
1.22
2.33
5.88
0.81
1.14
1.86
3.57
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201213 to
201617
7.1
201718 to
202122
8.0
202223 to
202627
7.8
202728 to
202930
7.3
Alternative scenario 1
Alternative scenario 2
4.7
4.2
4.4
3.6
4.4
3.6
4.5
3.7
Scenarios
Based on the above assumptions, we have made projections of domestic tourist visits in
Kerala for three scenarios: baseline (preferred scenario), alternative scenario1 (low GDP
growth), and alternative scenario2 (lowest GDP growth). The results are given in Table
A11.1.4. The results indicate that domestic tourist visit in Kerala is expected to reach 16.79
million by 202021 under BAU (preferred) scenario, 13.37 million under alternative
scenario 1, and 12.80 million under alternative scenario2. These numbers are lower than
the projections made by the Department of Tourism, Kerala. In its Tourism Policy 2012, the
department had said that domestic tourists visit will touch 18 million by 202021.
Table A11.1.4: Projections of Domestic Tourist Arrival in Kerala (million)
Scenarios
Domestic
touristActual
Domestic
touristsBAU
Domestic
touristAlternative
1
Domestic
touristAlternative
2
200001
201112
201213
201516
202021
203031
5.0
9.40
9.97
11.98
16.79
32.33
9.76
11.02
13.37
19.72
9.72
10.85
12.80
17.55
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APPENDIX A11.2
WETLANDS TOURISM
1. Ibera Marshes: ARGENTIN: 24,550 ha
4.
5. SoomaaESTONIA: 39,639 ha
Raised bogs, rivers, swamp forests, floodplain meadows
~ 45,000 visitors/year
Boardwalks, canoeing, guided walks, wildlife watching, cultural experience
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Coral reefs
~ 1,400 visitors/year
Scuba diving
River, delta, river and marine levees, floodplains, brackish lake and lagoon complex,
beaches, dunes and coastal waters
~ 50,000-73,000 visitors/year
Floating hotels, boat trips, canoeing, wildlife watching, rural tourism and home stays,
fishing, photo safaris, beach tourism, local cultural experience, rest and relaxation,
camping
~ 50,000 visitors/year
Nature trails, guided excursions, bird watching, sightseeing, caving, hiking, horse and
camel trekking
13.
14.
Freshwater and wet prairies, sub-tropical forests, salt marshes, mangrove, forests,
beach, dunes, brackish water estuaries
~ 1,000,000 visitors/year
Canoeing, boat tours, elevated boardwalks, hiking trails, camping, wildlife watching,
fishing, bicycle tours, houseboats
448