The year 2017 has been a mixed bag for the tourism industry with many new policy changes and other impacts. Last year there were three major policies which impacted the industry with after effects demonetisation, Liquor ban policy and GST being the highlight. Whereas demonetisation and liquor ban was condemned by the industry, GST was accepted with mixed opinions.
Speaking about the impact of economic policies in 2017 on tourism industry Pronab Sarkar, President, IATO said, “Policy development in general looks beneficial for over all development of our country. But for travel and tourism industry, it has not been very supportive especially implementation of GST has negatively impacted the industry. Under GST regime, tour operator’s services are taxed under five per cent tax slab with denial of Input Tax Credit (ITC); five per cent tax on entire tour value results in taxing all the procurements made by tour operator once again. This has resulted in cascading of taxes in the entire supply chain. The average tax on tourism industry works out to 28.3%. This may result in loss of business for the tour operators as we will not be able to compete with the neighbouring countries.”
Biji Eapen, President, IAAI added, “Government policies in 2017 are not at all supporting the travel and tourism industry in India. The negative impact of the demonetisations and the current GST regime, had very badly hit the tourism sector. Though India is aggressively campaigning tourism all over the world, the industry needs more supportive policies and also needs to educate from the grass-roots level.”
Despite these impacts, associations have witnessed a slight upward trend in 2017. Some of the niche tourism segments like adventure have witnessed growth.
Swadesh Kumar, President, ATOAI said, “The Year 2017 has been good for adventure tourism, where there was a growth of 10 per cent in inbound arrivals and 30 per cent in the domestic front and our target is to double the growth in the next three years’ time.”
The calendar has flipped from 2017 to 2018, but still the challenges remain unchanged and unaddressed. In fact, challenges has remained same for quite a few years such as developing infrastructure, connectivity, safety, etc. only adding newer elements like GST, developing new quality products and more.
Speaking about the challenges which needs to be addressed PP Khanna, President, ADTOI said, “Though we have Tourism policy is in place it should be practiced in letter and spirit for country’s overall tourism growth. Govt. should bring Tourism Act to keep a check on the activities of people engaged in the industry as any untoward incident on tourism activities can tarnish the image of the place and the country as a whole. North East is yet to see the tourist boom as there has not been much policy development in the region. No proper connectivity, infrastructure facilities, promotional activities is marring the tourism growth which is otherwise endowed with everything that can offer to tourists. Our association is facing challenges from OTAs who are practicing unethical practices. Our members are facing difficulties with regard to applicability and the implementation of GST.”
Speaking about other challenges Sarkar added, “E-visa facilitation at our airports so that tourists on arrival do not feel disturbed and get easy clearance. More Bio-metric machines are needed at all international airports. Even visa for long duration with multiple entry at the originating countries need to be streamlined. For some countries, visa fees should be waived off or reduce the fee. More cleanliness around heritage monuments are required with basic amenities. More language speaking guides are required especially Chinese, Korean, Russian. Evening entertainments which are lacking should be looked into by forming partnership with cultural organisations and assuring them business from the industry.”
Training the members and increasing profitability remains the major focus for associations in 2018. The associations are also working on ways to overcome the challenges and also make a game plan to increase the inbound arrivals with new innovative products. Eapen said, “Our strategy is to develop multiple streams of income. And our new board of directors has given more priority to young blood, which definitely should boost the organisation.” Kumar said that their strategy for 2018 is sustainable growth involving everybody in the industry and with quality products. He further said, “One of our main challenges is take advantage of each other’s strength which so far we have not achieved.”
Sarkar is very optimistic for 2018. He said, “Many of our pending issues got priority attention which were mainly related to e-tourism visa and all our inputs got incorporated in the notifications. We will try to give big boost in international tourist arrivals and this trend will continue in 2018. This gives us a feeling of optimism and our strategies will be put sincere efforts to use these new openings for boosting our business and get increased tourist arrivals in 2018 in a sustainable manner.”