By Priya Saraff
In some ways, the Budget is like Christmas: talks of it start when it’s still a month away, and though there are no jingles yet, industries are making their own lists of everything they would like this Budget season. And the travel and tourism industry is one of them.
Expectations from the 2017 Budget
In the list for the Union Budget last year, the industry had a few demands. Leniency in taxation was one of the obvious ones. Heavy taxes make India an expensive destination to visit. An additional service tax on travel packages further dampens India’s global competitiveness. There also come the issues of security and sanitation. The industry looked forward to better infrastructure and connectivity across the country.
Realities of the Budget
When the Budget finally came out, the measures for the travel and tourism industry included setting up of five special tourism zones, launching the Incredible India 2.0 campaign, starting pilgrimage or tourism trains etc. All in all, Rs. 1,840.77 crore was allocated to the tourism ministry. Funds were allotted for ongoing projects like the Swadesh Darshan Scheme and the PRASAD scheme. The Swadesh Darshan Scheme was launched in 2014-15, with the intention of making theme-based circuits for tourism. The PRASAD (Pilgrimage Rejuvenation and Spiritual Augmentation Drive) project focuses on leveraging India’s collection of pilgrimage spots to promote spiritual tourism. Although not directly connected with travel, there were initiatives to develop rail and road infrastructure and set up airports in Tier-II cities, which would benefit the industry.
Was all this satisfactory? Leaders in the sector had varying opinions. Along with the initiatives mentioned above, there were tax cuts for all MSMEs (Micro, Small, Medium Enterprises) which would help the sector. But for some, this wasn’t enough. JB Singh, President and CEO of InterGlobe Hotels, revealed, “The industry was, however, keenly looking forward to a stronger government focus on incentives for the commercial real estate sector such as listing of REITS, changes to the Real Estate Regulatory Bill and creation of single-window clearances besides according infrastructure status to the hospitality industry.”
Incredible India Campaign 2.0
On September 27, 2017, World Tourism Day, the President launched the Incredible India 2.0 Campaign, the “Adopt A Heritage” project, and the new Incredible India website. The initial Incredible India campaign was brought out by Ogilvy in 2002 in the form of print ads. The renewed campaign saw the Ministry of Tourism collaborating with CNN Create to produce advertisements that showed not only tourist spots, but tourist experiences. And these starred world famous personalities: Emma Puttick, Clint Johnson, Kylee Newton and Carly Booth. The head of advertising sales for India of CNN International, Abhijeet Dhar, puts it like this, “The brief from the client was to develop an integrated multi-platform campaign appealing to international travellers, which would provide a fresh perspective and highlight the diversity of travel destinations and experiences offered by India. We have collaborated with the Ministry of Tourism to identify four key focus areas including fashion, cuisine, cruise and golf around which the commercials were developed.
The reactions to this campaign are mixed. Aneesh Jaisinghani, creative director with Cheil India, believes that the campaign is the logical next step to be taken in India’s own journey as a tourism destination. He believes that the perspectives shown in the ads correspond to how the world views India. Gulshan Singh, of FCB Interface, begs to differ. For him, the original campaign stood out because of its innovativeness. Its initial success does nothing to guarantee the success of the re-launch. The campaign wants to make spirituality, medicine and wellness tourism products as well. The ministry is trying to promote polo tourism, which is being positioned as a heritage sport. It is popular in Rajasthan and West Bengal. The United States Polo Association went to Manipur to compete with the state’s women’s team. Since then, it has garnered a lot of attention. Manipur has been playing polo for years, called sagol-kangjei in its traditional form. The ministry’s focus on polo tourism is another step in their direction towards promoting tourism in the North East, which it called its top priority.
Government schemes and Ministry efforts
The Tourism Ministry organised Paryatan Parv, a 20-day programme from October 5 to October 25, which is aimed to highlight the benefits of tourism. The three aspects of the programme were Dekho Apna Desh (see your own country) which encouraged domestic travel, the self-explanatory Tourism for All, and Tourism and Governance. The third aspect focused on skill development and innovation, creating rural tourism near well-established tourist spots and carrying out workshops on creating homestays and B&Bs.
The scheme for developing the five Special Tourism Zones (to be anchored on Special Purpose Vehicles) will soon be launched. As of now, the Ministry is creating guidelines for its implementation, with the help of state governments and the private sector. The creation of such zones is expected to develop the related area, transform tourist experience, and elevate local communities.
Naughty or nice?
Statistics show that India’s tourism industry has grown since last year. Foreign Tourist Arrivals (FTAs) from January to November 2017 were 90.01 lakh, indicating an increase of 15.6 percent year on year. India’s rank in the Travel & Tourism Competitiveness Index jumped to 40 in 2017, from 52 in 2015 and 65 in 2013.
In the upcoming Budget, the industry is awaiting tax rebates. Aashish Gupta, consulting CEO of the Federation of Associations in Indian Tourism and Hospitality (FAITH), mentioned that the apex organisation had a meeting with the finance minister, where they laid out their demands for reduced GST and implementation of IGST in hotels. Amit Modi, CEO of Bristol Hotel, spoke along similar lines, recommending rationalisation of GST rates, so that hotels taxed at 18 percent and 28 percent can be brought down to the 12 percent bracket. Other categories under the tourism sector, like online booking portals, are rooting for tax cuts as much as the hotel industry itself. The hospitality sector has also long been demanding the status of the infrastructure sector, which will allow hotels to get cheaper loans for longer periods. Restaurants, meanwhile, are focused on receiving input tax credit benefits.
As is the case every year, every sector and sub-sector has its own list of demands. And while the tourism and travel industry has definitely been nice, with all its unexplored potential, it is finally up to the Government to decide who gets the best gifts this time around.
Featured Image Source: titoalfredo on Visual Hunt / CC BY-NC-SA