17 Jan, 2013

Global Ministers Urged: Cite Domestic Tourism as a “Performance Indicator”

Imtiaz Muqbil at the SATTE Travel Fair

New Delhi – Tourism ministers worldwide have been urged to start paying more attention to domestic tourism as a means of measuring the performance of their respective industries. Instead of constantly tracking foreign visitor arrivals, they would be far better off investing in the statistical and research tools to quantify domestic tourism and its ability to create jobs, spread income and contribute to social and cultural cohesion as well as nation-building.

Those were among the key messages that came from a historic discussion on domestic tourism on the first day of India’s leading travel show, the South Asia Travel & Tourism Exhibition, in New Delhi. The basis for those discussions was a landmark study on domestic tourism now being finalised for publication in the next few weeks. Key conclusions and summary findings were presented for the first time at SATTE. India was chosen as the launchpad because it is the world’s largest second domestic tourism market after China and SATTE, now in its 20^th year, is the first major international trade show on the global calendar.

Funded by South Korea, the report covers detailed analysis of domestic tourism policies and measures in Iran, Indonesia, Malaysia, Thailand, Australia, China, Mongolia, the Philippines, Vietnam, New Zealand, Papua New Guinea, Bhutan, Pakistan, Bangladesh, South Korea and Sri Lanka. The study is likely to be followed by a full scale conference or event, possibly in India itself, to help implement its conclusions.

Participating in the discussion were Mr. Girish Shankar, Additional Secretary, Ministry of Tourism, India; Mr. Suman Billa, Secretary, Kerala Tourism; Mr. I Gde Pitana, Head of Resources Development, Ministry of Tourism and Creative Economy, Indonesia; and Mr. Subhash Verma, President, Association of Domestic Tour Operators of India. The moderator was Alla Peressolova, head of the Fairs Programme, UNWTO.

The report’s lead consultant, Mr. Omar Nawaz, said countries have been focussing on domestic tourism in the aftermaths of domestic natural disasters and various other forms of local, regional and global crises, all of which land up affecting the flow of inbound visitors. He outlined the importance of domestic tourism as well as a swathe of policy responses and lessons learnt, all of which can easily be replicated countries worldwide.

Indonesia began stressing domestic tourism in the aftermath of the 2004 tsunami. China has done the same as one of the policy measures to revive the economic slowdown. Ditto Japan after the Fukushima tsunami/nuclear disaster. Even Korea, which has reached developed-economy status and is experiencing an outbound travel boom, is now turning to domestic tourism to promote the rural areas.

Domestic tourism can balance the rural/urban income divide and help accommodation units across all spectrums. Although officially referred to as a “shock absorber,” the language used to describe the impact of domestic tourism was a “panacea” that now “deserves to be given its rightful place.”

Conditions for the promotion of domestic tourism are ripe across Asia. In India, there is a rising middle class of 300 million people, most of whom have not yet seen much of their own country. Other contributing factors are pilgrimage tourism, visiting friends and relatives, study and school trips, low cost airlines and growth of social media, which attracts the youth market, the so-called “demographic dividend.”

Mr. Nawaz and all the speakers agreed that domestic tourism needs to be promoted through improved quality of tourism satellite accounts and domestic household surveys. Getting statistics on international tourist arrivals is easy because the foreigners fill out immigration cards, which is not the case with domestic tourism. He voiced hope that the study will help facilitate policy measures to remove the impediments and upgrade the standards of services and facilities, such as better research, improvement of basic services, safety and security, accommodation, transport and quality of information and promotions.

Mr. Shankar said India is estimated to have generated 850 million domestic tourists last year, up by about 14% over 2011. He said the major reasons are the growing middle class, religious travel and strong family bonds, although in recent years, growth in leisure tourism is also high. He said the ministry has just finalised the Tourism Satellite Account for measuring the economic impact of domestic tourism and will do a survey every five years, at least initially. It cannot be done every year as they are expensive and have to mostly carried out by the states.

Mr. I Gede Pitana of Indonesia said that in the aftermath of 9/11 and the 2002 Bali bombing, it became a “safety valve”, a major means of nation building, promoting social and cultural cohesion, and reducing economic disparities between various regions, all of which have political benefits. He estimated that Indonesia had 245 million domestic tourists last year compared to only 8.05 million international visitors.

Most of the travellers are young people and the emerging middle class, which is estimated to be growing by six million people a year. The liberalisation of Indonesia’s domestic aviation sector and growing impact of the low cost carriers are the major conduits, especially as the country is composed entirely of islands spread across a landmass about the same size as the Russian Federation.

Mr. Billa said that domestic tourism has been a continuation of Kerala’s international tourism promotion policy, viz., to generate maximum revenue with the most cost-effective means of financial resources. He said that Kerala’s marketing campaigns and positioning of India’s most literate state as “paradise unexplored” is helping to attract the upmarket clientele, similar to the strategy used to attract foreign visitors.  He added, “If BRICS countries are contributing to international tourism, why should they not be able to do the same for (their own internal) domestic tourism? Today, luxury properties are now being taken up by domestic tourists at the same level as foreign visitors.”

Mr. Billa stressed that tourism had to be broad-based in approach because it was a politically sensitive industry. If the local communities are not consulted in the planning and development strategies and the tourism projects are not seen to be socially and environmentally responsible, and not contributing to local jobs and income, it will not work. Various schemes are being looked at help the poorest of the poor, such as women-organised self-help groups.

Mr. Verma lauded the UNWTO for doing the study which he said was long overdue. Describing domestic tourism as a “national movement” he said the potential was almost unlimited in India, due to the factors outlined above, as well as the emergence of various products catering to specialist customer segments such as rural tourism, health and wellness, golf and more.

He called for schools and colleges to make intra- and inter-state travel mandatory and for tourism to be taught as a subject. “My argument for promoting domestic tourism is very simple, it requires no visas, no passports and no foreign exchange,” he said.

Mr. Verma said the biggest impediments were in the transportation sector. Because of crippling aviation fuel taxes, the air-fare from Delhi to Kochi (formerly Cochin) in South India is more expensive than to Bangkok or Dubai. The various road taxes and duties levied by the states add to both the complexity and time of the journey. He called on the Tourism Secretary to get these sorted out.

Mr. Pitana said that domestic tourism is a means of strengthening national unity and in line with the national slogan, “Unity in Diversity.” Like India and most of Asia, Indonesia’s ethnic and cultural diversity is such that visiting another region or province can be the equivalent of visiting another country.

Citing similar problems as India, he said that for the Indonesians too, it was much cheaper to travel from Jakarta to Singapore or Kuala Lumpur. He also mentioned the “psychological factor,” also known as the “snob value,” of status-conscious families playing one-upmanship with a foreign trip, which is seen as being more “prestigious” than a domestic trip. Hence, he said, Indonesia is trying to position domestic tourism as part of a “Love Your Country” act of patriotism.

Mr. Shankar said that in addition to the transportation issues, there was the problem of congestion at the popular tourist spots, including the country’s national parks. The state governments are being supported to implement remedial measures.

Mr. Verma said that the domestic trip in the case of captive markets such as pilgrimage tourism could easily be enhanced by adding facilities and services in the vicinity of the holy spots. If pilgrims can be persuaded to stay even one more night after completing their rituals, it will go a long way towards enhancing the value of domestic tourism.

One member in the audience said he had been hearing talk about easing India’s transportation taxes for years but nothing was being done. He also cited problems with corruption at India’s state road-tax collection points. Mr. Shankar acknowledged these issues and said high-level efforts were under way to fix them.

Mr. Billa noted that the entire value for money factor gets affected by taxes and eventually becomes self-defeating. So does lack of coordination. Even if some states take remedial action, it can have limited impact if the neighbouring state does not follow suit. The playing field has to be leveled across the board, he said.

Mr. Nawaz cited measures such as coupons and vouchers for the disenfranchised being used in Korea to promote domestic tourism, which Viet Nam is interested in replicating. Another important measure was the development of community-based tourism in Thailand.

Panelists noted that domestic tourism can be a “great equaliser” for economies by creating new forms of financing and ownership opportunities, such as through cooperatives, and boosting small-medium enterprises. The media was blamed for not asking the right questions to the ministers and focussing only on international tourism as a means of success.

Said Mr. Verma, “We want to make domestic tourism an item on the main menu and not just a shock absorber.” He hoped that would be possible after the study is published.