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    2 travelandtourismwp16aug05 2 travelandtourismwp16aug05 Document Transcript

    • Enterprising Ladakh Prosperity, Youth Enterprise and Cultural Values in Peripheral Regions Working Paper No 2 Travel & Tourism by Madhupa Chatterjee Shivanu Kohli Atul Singh Center for Development of Corporate Citizenship S P Jain Institute of Management & Research Mumbai July 2005 Ladakh Autonomous Hill Development Council, Leh Druk Pema Karpo Educational Society Drukpa Trust in association with SECMOL
    • Preface This Working Paper was prepared as part of an 18-month project entitled ‘Enterprising Ladakh’. The Paper seeks to identify economic opportunities available to Ladakhis – especially young Ladakhis - in local, national and international markets. The findings will be discussed at a Workshop in Leh in July 2005, with the objective of identifying economic activities that Ladakhis themselves consider feasible, acceptable and appropriate within Ladakhi society and values. Subsequently, the project team will scope the skills and attributes required to access the preferred market opportunities, while the final stage of the project will outline a new school curriculum to impart enterprise-related skills and motivation to young Ladakhis, alongside traditional teaching of cultural and ecological values. ‘Enterprising Ladakh’ is a project being conducted by the Ladakh Autonomous Hill Development Council (LAHDC) Leh, Druk Pema Karpo Educational Society and Drukpa Trust, in association with SECMOL. The findings set out in this Working Paper are the work of Ms. Madhupa Chatterjee, Mr. Shivanu Kohli and Mr. Atul Singh of the Center for Development of Corporate Citizenship, S P Jain Institute of Management & Research, Mumbai. The work was carried out under the supervision of Professor Jiban Mukhopadyay, Professor M. S. Rao and Professor Nirja Mattoo (Chair of the Centre for Development of Corporate Citizenship). You are kindly invited to communicate your views on this Working Paper to the project team: Project Coordinator 'Enterprising Ladakh' Hemis Complex, Zangsti Leh, Ladakh -194 101 Phone: +91 94191 77536; 252 133 enterprisingladakh@rediffmail.com This document has been produced with the financial assistance of the European Union. The contents of this document are the sole responsibility of Ladakh Autonomous Hill Development Council, Druk Pema Karpo Educational Society and Drukpa Trust, and can under no circumstances be regarded as reflecting the position of the European Union. i
    • Executive Summary Ladakh: The Situation today Ladakh was opened to tourists in the year 1974. It had a subsistence economy before that, using barter system. But with the opening of the roads suddenly Ladakh was exposed to the money economy, which was unknown to these people. Today Ladakh is in a state of transition and is in a poised in a very delicate situation. In these few decades there has been a shift in the employment pattern in Ladakh wherein people who were mostly working in agriculture have now moved to other lucrative options like the tourism industry, army scouts and other quicker money making options. Tourism has developed in a big way, generating Rs. 42 cores yearly for this region, but in a very unstructured and haphazard manner. Right now if measures are not taken to deal with developing the tourism sector and properly channelising these efforts, it would not be long before a unique place like Ladakh will be lost. The Outcomes of the Project We have tried to give a very realistic and relevant study of the Ladakh Tourism Industry and the potential it holds for the next 20 years. The demographics of the tourists have been thoroughly analysed to know which market needs to be targeted and focused upon. Through this report we have tried to address the issue of non-availability of data by extensive empirical analysis and provide a realistic view of the data that we have obtained from various sources. A brand building programme for Ladakh called “Ladakh: The Himalayan gift to India” gives an overall view of the branding strategy that Ladakh needs to project itself as not just another tourist destination. Moreover, any kind of branding effort should target only quality tourists and not lead to the choking of Ladakh. Taking care of supply-side of industry can prevent this predicament; a detailed plan has been laid out as a part of our branding strategy. The cultural tourism business plan that we have presented in this report is a step towards making Ladakh a place that is truly a tourist’s dream. Through this plan we aim to increase the spatial spread of the tourism industry within Ladakh, which has until now been concentrated in Leh city. The plan envisages development of village clusters along the trek routes, which shall serve as the destination for the adventure, cultural tourist segment. We hope that the work we have done will help in the overall development process of a region as beautiful and untouched as Ladakh. ii
    • Abbreviations & References Abbreviations GDP-Gross Domestic Product CNG-Compressed Natural Gas USP-Unique Selling Proposition NPV-Net Present Value YOY-Year on Year SWOT- Strength Weakness Opportunity Threat analysis References Mr. Tundup, Tourist Officer, J&K govt. Proprietor, Adventure Experience (a specialist in adventure tours) Proprietor, Hotel Oma-Sila (A Class Hotel) Proprietor, Hotel Spic n Span (A Class Hotel) Proprietor, Oriental Guest House Mr. Tadbar Oga, Chairman Travel agents association of Ladakh Proprietor, Overland tourism (a specialist in cultural tours) Mr. Sonam Wangchuk, SECMOL (working for Vision 2020 sub-committee on Tourism) Proprietor, Hotel Yak-Tail (B Class Hotel) Proprietor, Hotel IBEX (C Class Hotel) iii
    • Table of Content 1. Tourism Sector................................................................................................5 1.1 Current Status .............................................................................................5 1.2 The Vision 2025 as envisioned by LAHDC ..................................................6 1.3 The Project ..................................................................................................7 2. The Sector .......................................................................................................7 2.1 The market potential....................................................................................7 2.2 The Demographics of the Sector.................................................................8 2.3 Verticals in the tourism sector .....................................................................8 2.4 The Target Market .......................................................................................9 3. The Challenge ...............................................................................................10 4. The Impact of Tourism .................................................................................11 4.1 Environmental Impact................................................................................11 4.2 Social Impact.............................................................................................11 4.3 Cultural Impact ..........................................................................................12 5. Feasibility analysis .......................................................................................12 5.1 Adventure Tourism ..................................................................................13 5.2 Cultural Tourism ........................................................................................13 5.3 Edu-tourism ...............................................................................................14 5.4 Religious tourism.......................................................................................14 5.5 Winter tourism ...........................................................................................15 6. Feasibility plan for Cultural tourism............................................................16 6.1 The Model .................................................................................................16 6.2 The stake holders......................................................................................16 6.3 The Proposed Structure for Home stays network......................................16 6.4 Financial Analysis of Home Stays .............................................................15 6.5 Project highlights .......................................................................................15 7. Branding ........................................................................................................15 7.1 Aim of the Branding Strategy.....................................................................15 7.2 The Concept of Branding ..........................................................................16 7.3 Why do we need to brand Ladakh?...........................................................16 7.4 The Ladakh experience .............................................................................17 7.5 The Process ..............................................................................................18 8. Conclusion ....................................................................................................20 Annexure 1: Year wise Tourist Inflow in numbers ..............................................I Annexure 2:Number of Tourist Arrivals ..............................................................I Annexure 3:Nationality wise arrival of tourists ....................................................I Annexure 4: Month wise tourist arrival ...............................................................I Annexure 5: Tourist Arrival Projections .............................................................II Annexure 6: Tourist Expenditure Projections ...................................................III Annexure 7: Financial Analysis of Cultural tourism ..........................................III iv
    • 1. Tourism Sector 1.1 Current Status The history of tourism in Ladakh is relatively recent, going back by only three decades. Ladakh being opened in the year 1974, the tourism industry has since grown from 527 to 35091 arrivals in 2004, in volume terms (Annexure 1) and this growth has not been steady. The first decade saw somewhat steady growth, but remained erratic in the early eighties. In the second decade, the tourist arrivals reached the maximum of around 25000 in 1988, which coincided with the observance of the Kalachakra ceremony. Disturbances in the nineties saw a steep fall in tourist arrivals. However, with events like the “Sindhu Darshan” the tourist figures have seen a real increase with the last year witnessing the highest ever tourist turnout in Ladakh, touching a figure of 35,000 in just 4 months (from June to September). The overwhelming proportion of foreign tourist arrivals in Ladakh has come down from 84% in 1992 to 62% in 2004. The number of domestic tourist arrivals is on an increase, which is a positive sign for this sector. The total number of foreign tourist arrivals has seen a significant increase in the year 2004 over 2003, with Europeans being predominant. Some observations about the sector can be summarised as: The tourism industry is major contributor to the local economy contributing around 50% of the local GDP. According to estimates, tourism industry revenues amounted to Rs. 42 cores in 2003. The extreme temperature conditions and high altitude makes seasonality a major factor in this sector. The tourist season in Ladakh starts in end of May and finishes in end of September. The number of tourist arrivals in 2004 was 35,000, which had approximately 11,000 domestic tourists and 24,000 foreign tourists. Refer to the Annexure 1 for yearly figures. Thus, there is a predominance of foreign tourists in Ladakh. Arrival figures from Annexure 2 show that almost 60% tourist arrivals were by air. Among those arriving by air, almost 73% were foreigners in 1997. Also, among those arriving by road, 85 were foreigners, mainly trekkers. Unlike the other parts of the Himalayas, the tourist season in Ladakh coincides with the busy agricultural season. Much of the tourism activity involves trekking, rafting and mountaineering, thus there is a shortage of labour for this sector which is being fulfilled by people coming from other tourist places and taking away the money which belongs to the Ladakhis. The nodal agency for tourism promotion is Jammu and Kashmir Tourism Department, which has been aiming to develop a sustainable model of operation through the development of private enterprise in this sector. Annexure 3 details out the nationality distribution of the foreign tourists for the analysis of the countries to be targeted for increasing the tourist 5
    • numbers from these countries. From the table it is evident that eight countries contribute 50% of the foreign tourists coming to Ladakh. Since the majority of the publicity takes place through word of mouth, hence ensuring comfort and satisfaction of these tourists is likely to ensure an increase in the tourist inflow from these countries. The majority of tourists coming are French, Italian, British, German, American, Japanese, Canadian, and Australian in order of percentage contribution. Hence, these countries need to be targeted for promotional efforts. Annexure 4 details out the monthly distribution of tourist arrivals. These arrivals show that the tourist season is very limited and lasts for only 4 months. Even among these times the foreign tourist and Indian tourists have different seasons of arrivals. This provides an opportunity for targeting the tourists separately. 1.2 The Vision 2025 as envisioned by LAHDC Future of Tourism in Ladakh The vision can be described in the following sections: Ladakh an Eco-Destination by 2010 to 2015 o Environmental Impact Assessment Study to ascertain the carrying capacity of the land o Let Ladakh be known for nature & environment care- public education & awareness movement o A diesel-free Leh - use CNG or electric cars and taxis o Organic food in all hotels/guest houses o Modern versions of compost toilets o Use the above as Ladakh’ s USP (Unique Selling Point) Community Based Tourism o Decentralise tourism infrastructure to villages. o Promote community based rural tourism o Let Ladakh be known for a different –’People to People’ tourism. o Avoid 5-star multinational chains. o Coordination in Infrastructure development o Choice of new road construction vis-à-vis trekking routes o Discover new trekking routes. o Avoid industrial landmarks in tourist areas o Architectural code for Leh town o Maintain Ladakh’s rustic beauty. o Do things differently in Ladakh. o Plan and build infrastructure before opening new areas for tourism. Garbage & Sanitation o Efficient and environmentally sound garbage disposal. o Functional and ecological public toilets. 6
    • Prolong Tourist Season and Promote Winter Tourism o Support only Solar heated winter operational Hotels/Guest houses o Promote monastery and other festivals in winter o Promote Chaddar trek for winter to o Promote ice and snow games o Ice and snow parks, hotels like in other cold countries Long-term plans o Promote Silk Route trek in Nubra o Nomadic home stays in Changthang o Ice Theme Park at Khardong-la in summer o Promote Conference tourism- support infrastructure. o Museum of Human & Natural History of the region. o Cable trolley to Khardong la 1.3 The Project The Vision 2025 as envisioned by the LAHDC is very broad and talks of various aspects, some of which are under the purview of the LAHDC directly while some need a concrete plan to start with. We have concentrated on those parts of the Vision, which do not have an implementation plan in place and tried to formulate a proper strategy for those. Our work encompasses: Studying the impact of the tourism sector on the local environment Estimating the market potential of the tourism sector Analysing the feasibility of each of the verticals A business plan for the community-based tourism A brand building strategy for Ladakh And all these are done keeping the environmental impacts in mind so that they do not hamper the harmony that man shares with nature in Ladakh. 2. The Sector 2.1 The Market Potential The tourism industry is a Rs. 420 Mn business as of year 2003. By year 2020, at a nominal annual inflation of 5% and average yearly increment of 8% in the number of tourists, the industry is expected to generate Rs. 3 billion, Annexure 6. In the short period of 4 months, on average, an hotelier earns revenue of Rs 1.5-2.0 Mn with a profit of 50%. A typical tour operator earns revenue of Rs. 2.0 Mn with a profit percentage of 40%. This makes tourism a short period but highly profitable business, especially with the foreign groups increasing by the day. However, the government, which has guesthouses in most of the tourist places and villages, earns a paltry profit of Rs. 20,000/-. This shows that this business is best left to the private initiatives in the state, which has been the government policy ever since. 7
    • 2.2 The Demographics of the Sector The stakeholders in the sector are: Guest house owners Tour operators Taxi operators Cooks, guides and support staff Jammu & Kashmir tourism development corporation Retail Hotels and Guesthouses: Most of these were started during the late seventies or early eighties once the region was opened in 1974. The hotels are managed by the Ladakhis themselves. Due to the Central Government policy, no outsider other than the people of Jammu & Kashmir (J&K) are allowed to buy land in this state, thus restricting the hoteliers to be either Ladakhis or people from J&K. This creates a dual situation for the place where on the one hand this part of the tourism industry is controlled solely by Ladakhis or as joint ventures with people from J&K, thereby trying to keep the money earned within Ladakh. Whereas on the other hand, it bars bigger corporates to enter the state and set up big hotel chains which cater to the up-market niche audience, which then becomes a lost opportunity for Ladakh. The tour operators and taxi operators are also the local people. However, all these stakeholders have to employ people like cooks, guides and other support staff that come from places like Nepal, Goa and other tourist destinations - the reason being that most of the Ladakh people do not qualify for the necessary skills for these jobs, hence people from outside perform these jobs. Thus the money flows outside Ladakh through these channels. 2.3 Verticals in the tourism sector Tourism could be divided into various ‘verticals’ along which we could identify the opportunities; listed below are the verticals along with a definition: Adventure tourism: Involves trekking, rock climbing, and river rafting and is quite famous with the groups of foreign tourists and a very small population of Indian tourists. Majority of the foreign tourists come to Ladakh for this vertical. Cultural/Community-based tourism: Involves longer stay at a place and getting a feel of the culture of the place through practical involvement in the day-to-day chores of the host. Edu-tourism: Involves mostly conferences, training, brain-storming sessions and other management development programmes being conducted at a far of location, which offers a change and relief from the 8
    • normal stressful life and helps in better assimilation of learning and idea generation. Spiritual tourism: Involves visits to religious places or fests; in the context of Ladakh’s monasteries, offers a place where Buddhists and others find their roots. Also, with the introduction of Sindhu darshan this has provoked a lot of domestic tourists to come to Ladakh. Health tourism: Involves treatment through the use of local knowledge and materials like natural herbs or hot springs. Both the resources are amply available in Ladakh in the form of Amchis and natural high altitude flora and fauna, which have medicinal properties. Winter tourism: Involves travelling in the extended period of tourism to exploit and view the other side of the coin. This could be developed with unique sub-zero dry conditions with winter sports, ice theme parks etc. The infrastructure required is huge, but if promoted could be turned into a major tourist hot spot for the domestic tourists. 2.4 The Target Market The market segmentation for this sector is high. The various segments are as follows; in brackets is the relative percentage of the total tourists (Annexure 5) Foreign tourists (60%) o Adventure tourists (30%) o Sight seeing tourists (12%) o Cultural and Adventure tourists (18%) Indian tourists (40%) o Sight seeing tourists (36%) o Adventure tourists (4%) In terms of revenue generated by each segment the percentages (Annexure 6) Foreign tourists (77%) o Adventure tourists (46%) o Sight seeing tourists (9%) o Cultural and Adventure tourists (22%) Indian tourists (23%) o Sight seeing tourists (22%) o Adventure tourists (1%) Hence, the majority of revenue generated for the sector is through the adventure tourism by the foreign tourists who generally come in groups of 4-20 with bookings through the travel agents. This is followed by cultural and adventure tourists, who stay for long periods of time and are involved in the both adventure as well as cultural experience. This is the type of the tourists who hold potential for the future of the tourism in Ladakh. 9
    • 3. The Challenge The Himalayas in Ladakh are very different from its other parts and have a very unique set of attributes and features. The people here are very honest and hospitable. However, tourism has not been able to develop full throttle here due to some inherent but surpassable constraints. Here are some of the glaring ones: Seasonality and accessibility are one of the very important issues in front of tourism in Ladakh. Frequency of the air services is very low with 6 flights operating a day in and out of Leh. This becomes a real problem as the Leh- Manali and Leh-Jammu highways are closed for about 7 months of the year. Thus, development of winter tourism gets a major blow. Also, inside Ladakh, some parts are not accessible throughout the year: e.g. reaching remote places like Koyoul, where there is no motor able road in spite of being a border area with China. This brings two issues in focus: • Increase the very short tourist season in Ladakh • Increase the accessibility to and inside Ladakh. Poor promotion and marketing of brand Ladakh is responsible for the poor turnout of the domestic tourists. The major negative impacts of tourism seem to be a result of indiscriminate budget tourists. Promotion and marketing of tourism to culture- and environment-sensitive, discerning tourists has the potentiality of bringing about an enormous change both in terms of revenue as well as the impact of tourism to sensitive areas such as the environment and culture of Ladakh. The domestic tourists are not that aware of Ladakh and for the foreign tourists, security is a concern due to terrorism in other parts of the state. Diversifying the tourism is one major issue for Ladakh. There has been a high emphasis on traditional trekking. Other areas associated with wilderness and adventure such as rafting, hub tourism based on thematic trekking, nature tourism based on biodiversity etc. have not been explored at all. The diversification of the tourism product is essential because Ladakh may be losing the edge it had in terms of cultural tourism, particularly with the opening of Tibet. Also, the growing inflow of tourists in Leh city rather than in the neighbouring places is another very important problem for this sector. Hence, a need for spatial distribution of the tourists has become critical without which the concentration of tourists in the Leh city might put undue pressure on the resources in Leh city as well as the neighbouring areas. A Ladakh specific tourism strategy is something that is missing today. Tourism policy is a state subject and therefore the formulation and implementation of a Ladakh-specific tourism strategy and regulations has been impeded. The LAHDC has very little leeway in terms of formulating the tourism policy for Ladakh. Providing the basic amenities to the tourists are also absent in Ladakh. The proper utilisation of the funds taken from the foreign tourists must be planned carefully so that tourism benefits the most from it. 10
    • There is a lack of professionals for this industry, which is a real problem as most of them are hired from outside and the money that belongs to Ladakh filters out. In the management of tourism, we have to be very scientific and professional, which is very important. In management of the hotels in the private sector, the trained staff at the level of the Manager, Assistant Manager, Receptionist, Tour Executive, and catering staff like cook and waiters are being brought from outside places like Jammu, Delhi, Srinagar, Mumbai, Chandigarh (including other states of country) and Nepal. As a result, millions of rupees are being taken out of Ladakh, which would not have happened in case the hotel industry of Ladakh would have recruited locals in the management of tourism. Lack of professional human resources at the local level is a serious threat, which is not only a growing trend of unemployment among the local youths, but also a greatest threat in the management of tourism industry in the private sector, maybe hotel, a restaurant, a guest house etc. The lack of a good database on tourism both on the supply and demand sides of tourism, as well as the impacts and implications of tourism for the environment, economy and culture of Ladakh. Due to the lack of a good database, there can be very little feedback for the formulation of well- informed policies and programmes, and anecdotal evidence becomes a substitute for scientific data. 4. The Impact of Tourism Ladakh had been isolated for centuries and then was suddenly thrown open to development, including tourism. This development has brought many changes to the previously peaceful, prosperous and largely self-reliant culture of Ladakh. 4.1 Environmental Impact Leh is getting suffocated through intense tourist inflow, and hence the cultural and social structure is being dismantled and strained. Hence there is a need to guide the tourists to villages through spatial expansion as well as increasing the spread of the tourist season in the region. This can be accomplished through promotion of cultural tourism as well as winter tourism in the region. Tourism adds to the existing pressures on the infrastructure. The town lacks a proper drainage and sewage system. Junk food, plastic consumer goods, pollution, and toxics including DDT and asbestos have come to the region as part of this process. 4.2 Social Impact The social structure is such that the educated youth are not returning to agriculture. This human resource, if developed through specific crash courses or regular programmes, can evolve into major revenue earners for the local populace rather than the people from plains coming and tapping the market. 11
    • Tourism is reported to have contributed to the loss of traditional values and the distinctiveness of the Ladakhi way of life. People have become more materially-oriented and selfish, and the cooperative basis of the Ladakhi way of life is gradually being lost. Religious dances, arts and music are being commercialised and commoditised. Tourism has brought Ladakhis face to face with the modern world and provided a sense of worth, of self-confidence and pride in one’s own culture and traditions. It has taught the Ladakhis the intrinsic value of their architecture, arts, music and crafts. 4.3 Cultural Impact Just as dramatic as these environmental impacts have been the psychological effects of western-style education, television and advertising, all of which glamorse an urban consumer life-style, giving the impression that life in the West is one of limitless wealth and leisure. The influx of tourists has added to the impression that life in the West is infinitely better than in Ladakh. Tourists will often spend the same amount in a day that a whole family in a Ladakhi village might spend in a year. As a consequence, Ladakhis, particularly the young people, feel that their lifestyle seems poor and backward. Tourists, in turn, often unwittingly reinforce these feelings and insecurities. Having no way of knowing the degree to which Ladakhis have traditionally been self-reliant, they are often horrified to hear of daily wages as low as five dollars, or of an absence of electricity. Generally, neither tourists nor Ladakhis reflect on the fact that money plays a completely different role in the West, where it is needed for basic survival. 5. Feasibility Analysis Use of tools and frameworks is essential for properly analysing the problem from various angles. It helps in properly planning out the implementation of various schemes. 12
    • SWOT Analysis: Vertical-wise 5.1 Adventure Tourism Strength Weakness The difficult Himalayan treks are a The amenities on the trek routes trekker’s delight. are lacking. Both long as well as short treks are Treks are reducing in number due available, giving a choice to the to development. trekker. No government body monitoring the Other adventure activities like river trek routes, safety an issue. rafting and mountain climbing also available. The treks pass through villages that are adequately spaced. Opportunity Threat Discovery of new trek routes. Motorable roads along the treks Use of motor able roads for Indian (e.g. Likir trek, Rumbak trek (under tourists to be developed as safaris. construction)). Other sports like Para-gliding, sand The solid waste mismanagement by skiing etc. can be explored as an the tour leaders or the trekkers. option. Recommendations Enabling body responsible for discovery and maintenance of new trek routes. Camping site development allowances to the villages. Implementation of home-stay concept on the trek route villages. Selling of treks as a combination of adventure and cultural experience through extended stays at the en-route villages. 5.2 Cultural Tourism Strength Weakness De-congestion of Leh city during the No amenities in the villages for the tourist season. tourists. Income generation at the village Accessibility is an issue with level. respect to the villages Supplementary products can be No drive to earn more especially in sold through this concept. the villages. The basic nature of the people is very hospitable. Opportunity Threat Encouraging entrepreneurs for Spoiling of rustic atmosphere in 13
    • development of guesthouses in the villages if too few a villages are villages. targeted. Agri-tourism on lines of ‘farm The tourists are not well project’ initiated by an NGO in informed about the cultural tourism. Ladakh. Participation by the tourists in other chores as well as handicraft work. Recommendations Government to identify two levels of tourism opportunities o Villages near to Leh city (e.g. Phyang, Likir, Shey, Thiksey) - for specific cultural tourism promotion in form of pilot projects. o Villages that fall on the trek routes (e.g. Stok, Spituk, Rumbak) - for adventure tourists who want to experience the culture of Ladakh. JKTDC to continue the subsidies, along with it special incentives for the identified locations need to be provided. Promotion of cultural tourism through customer awareness, promotion of the concept by making it a USP. 5.3 Edu-tourism Strength Weakness The ideal location, which is very The communication connectivity is quiet and away from the city life. poor. The beautiful and ancient culture. The infrastructure in Ladakh is not in line with the needs of business executives. Opportunity Threat Development of hotels suitable for High competition from other places such type of conferences, meeting like Himachal and Uttaranchal Recommendations The development of locations for holding such conferences. Promotion of such tours in association with corporate houses (already visiting Ladakh) and travel agents (arranging these tours and programs). 5.4 Spiritual tourism Strength Weakness The ‘little Tibet’, which sustains the The huge crowd puller is a festival Buddhist roots in the country. that puts a lot of pressure for a The monastic view and culture short period of time. attracts a lot of foreign as well as domestic tourists. The Sindhu Darshan festival a major attraction. 14
    • Opportunity Threat Clubbing this type of tourism with The fest culture requires sustained the sight-seeing tourism, making it a attention from the JKTDC for active package, which only Ladakh can promotion. offer. The monastic culture is being Opening up of Mansarover route via promoted at more accessible Ladakh to promote enroute tourism. locations like Mclodganj and Dharmashala. Recommendations Continuous pressure on government for active dialogue on opening Mansarover route with China. Making Sindhu darshan and only ‘Aryan’ village Dha a promotion point for more tourists. Ensure that the tourists get a package tour in their consideration set. 5.5 Winter tourism Strength Weakness Winter that is not common in plains The infrastructure requirements like and even in lower Himalayas power and water are lacking. (Himachal and Uttaranchal). No hotels have facilities or any kind Winter sports like skiing, skating of govt. incentives to be open and ice hockey. during winters. Zanskar trek, a world’s only trek on frozen river. Opportunity Threat Adventurous Indian tourists hold a The foreign tourists have other potential. avenues like countries in northern Europe and Canada. Indian tourists are not very risk taking. Recommendations Development activities along the Zanskar trek for the foreign tourists. Government to provide support to few hotels to remain open for the tourists in the winter season through providing Power using renewable resources. Hence, after analysing the opportunities, we see that those which hold potential for further development, are: Adventure tourism Cultural tourism Spiritual tourism 15
    • 6. Feasibility plan for Cultural tourism 6.1 The Model The aim of the proposed model is the spatial expansion of the tourism sector from Leh in Ladakh. The basic premise of the Cultural tourism is to develop infrastructure in the villages so that the local people can transform their homes to accommodate tourist, thereby increasing the spatial distribution of the revenues to the interior of Ladakh. 6.2 The stake holders LAHDC J&K Tourism Local village cooperatives Travel agents Entrepreneurs Tour operators 6.3 The Proposed Structure for Home-stays network Training and setup agency Village Coop. Society Village Home Independent travel agencies The characteristics of the model are: The proposed model will have a body, which will be the village cooperative society. Its responsibilities involve: o The responsibility of tourism in that particular village. o Act as an interface between village and the independent travel agencies. o It can also work with independent training and setup agencies, which will help in the customisation of homes to suit the tourists’ requirements and also help in training the villagers in the required skills and etiquettes. The cooperative society will thus work as the central agency and will be responsible for the implementation of the home stay concept in its village or purview of villages. The homes in a village will be members of this society. 16
    • Tourists will reach the villages either directly or through independent travel agencies. The independent travel agencies will be motivated to sell the village as another option in their package of options to the tourist. 6.4 Financial Analysis of Home-stays Under this scheme, the investment requirements per village are taken into consideration, which includes the salary of a Programme Manager who will coordinate the home-stay at the village level. Various other charges are also incorporated. The variable expenses per tourist are taken which include commission to transporters; permit charges, laundry and food charges. The investment details per village include training charges and costs associated with providing facilities in each home to support home-stay. The fixed costs associated with this are sales and marketing costs, preparation and distribution of brochures, communication and entertainment charges. Refer Annexure 7 for detailed workings We worked out a financial analysis of providing home-stays along all trekking routes, which will give a boost to the local development and will decrease the concentration of tourism income in the Leh city. 6.5 Project highlights Parameters of the Model Analysis Data Number of villages covered initially 23 Number of villages where it can be 33 (covering all trekking routes) extended in future Number of households covered 8 per cluster Capacity utilisation (assuming a 43.69% season of 90 days) Minimum rate of return (YOY) 31% Approximate cash profit per home Rs 37,605/- Initial investment required Rs 3,28,000 Payback period 1 year 7. Branding 7.1 Aim of the Branding Strategy Before going in for a branding strategy, it is very important to identify and list the objective of the process so that it becomes a benchmark for evaluating the outcomes of the process and also maintains focus. The aim of branding Ladakh will be to: 15
    • Project the true image of Ladakh to the world - so that the different sources of information carry more or less similar information with its own added touch and the tourist is not misguided. Communicate and educate the world what Ladakh has in store for the tourists arriving here. Provide a structure for the fragmented tourism industry so that it can be monitored and flourish. Develop infrastructure around the core concept so that the issues for the target market are addressed properly; and Set out a proper policy framework that the Government could formulate and implement to help the strategies. 7.2 The Concept of Branding The process of branding has to be done in phases in a planned and systematic way. The first step in this process will be setting up of a separate body that will handle this entire process of promoting Ladakh to the world. This body can be named as the “Ladakh Tourism Development Board” (LTDB), which will be an independent organisation under the auspices of LAHDC and J&K tourism. An experienced corporate professional from outside Ladakh, who has done such exercises before or has some kind of exposure to this field, can head this body. The rest of the members of the Board will be Ladakhis from different sectors of the tourism industry like the hotels, guest houses, tour operators, representatives from the villages that organize home-stays etc.. The primary responsibility of the Board will be to draw up a plan for promoting Ladakh, recommending the measures to fulfil the demand to the J&K tourism and monitoring the type of tourists and there requirements. This requires a professional touch hence a person with experience would be of immense help. We propose that the entire branding programme be called: “LADAKH: THE HIMALAYAN GIFT TO INDIA” The unique cold desert, valley full of pleasant nature and the warm people that beats the coolest season and the monarchies touching the sky with solemn grace of Lord Buddha - that's Ladakh, our place of the "Lost horizon". 7.3 Why do we need to brand Ladakh? Branding is the art of setting yourself apart from everyone else in the minds of your customer. This is the age of specialisation where being all things to all people reduces or can even eliminate your long term success. If a visitor can experience similar activities closer to home, why should they visit you? What do you have that sets you apart? That makes you worth a special trip? In order to succeed, you must "jettison the generic." Every product requires a "branding" effort in order to successfully compete for business. In the tourism industry, this includes states, regions, communities, hotels, resorts, and tourism attractions. It is the culmination of everything you do that plant an image of who you are in the 16
    • minds of your customer, and what it is that sets you apart. Effective branding programmes increase your market share, will allow you to increase revenues, and, of course, the bottom-line. Branding is about finding your niche and promoting it effectively so that you become “THE” destination for the market you are working to attract. Successful branding will help you stand above the crowd, not among the crowd, and will help you stay there. Branding should be the cornerstone of all your marketing and product development efforts. Every part of the great Himalayas has its very own and unique beauty, be it the far east of Arunachal Pradesh, Sikkim, Darjeeling or the Uttaranchal with the Char Dhams along with Rishikesh, Valley of flowers, Nainital or the other part that is in Himachal Pradesh- Shimla- Kulu-Manali and of course the world famous Kashmir. These are very unique and very different from each other. These places are blessed with a variety of flora and fauna and are very green. Ladakh is one of the very few high altitudes cold deserts of the world. The barren mountains provide a great place for adventure sports like rock climbing, hiking etc while the picturesque valleys provide great scenic beauty for the trekkers coupled with the local culture which is simple yet very beautiful and is a ‘must see’ for all tourists around the world. There is no doubt that a lot of things available here are not available anywhere else in the world. But why are not people coming here just like they visit other parts of the Himalayas or Rajasthan or even for the matter Kerala? This is one of the primary reasons for the need of a proper branding strategy that sets Ladakh apart from the rest of the tourist destinations. 7.4 The Ladakh experience In the SWOT analysis we have identified three most promising sub-sectors, which are: Adventure tourism Cultural tourism Spiritual tourism The branding strategy will revolve around these three areas. Just like Kerela’s branding experience of “God’s own country”, Ladakh can build its tourism highlighting these areas, which are very unique to this place. Adventure tourism in Ladakh is unique for the combination of mountain desert and the cold climate. The rock characteristics are also very different from other places as the rain factor is not that much like other places in the Himalayas. Cultural tourism involves staying in a typical Ladakhi household and spending time there, getting a feel for the culture, life and food habits, which are very unique to this place. Also, if this can be accompanied with agriculture or Pashmina products production, wherein the visitor can make a small product by himself/herself, it will be a whole new experience for him/her. 17
    • Ladakh is one of the important Buddhist locations in India. With innumerable monasteries (infact each village has one), coupled with Sindhu Darshan started in the early 90’s, Ladakh can be developed further into a spiritual destination. The combination of these three together can be put in a package and offered to the tourists, so that the target audience for each of the sectors can identify what they want. Also, to attract those tourists who come for the whole package and not only the separate parts. 7.5 The Process The branding can be separated into the demand and supply side. Phase 1: Demand Side: In total, Indian tourism earned Rs.172 billion last year, out of which the majority will be domestic tourism. Hence India itself is a vast market open to be tapped by Ladakh. Thus,in the first phase, the Board should consider the domestic market and plan accordingly. The steps that can be taken: The first work of the Board will be to take up the three priority sub-sectors and package them into one brand identity. This will be the representation of true Ladakh and the base for any further work that the Board will embark on. Create a separate identity sub-stall within the J & K tourism stall so that people come to know of Ladakh better. Also, at major tourist spots like railway stations, airports, multiplexes etc. the Board can set up permanent stalls. To boost tourism, Ladakh needs to carve its own niche, which is separate from that of J&K, and have to educate people that even though it is part of the same state as Kashmir it is very different in terms of scenic beauty, food and even culture. With the branding document in hand, the Board (through the J & K Tourism) can approach the national media and start advertising. It can also have a brand ambassador in place promoting Ladakh. For this the Board will need to have a professional advertising agency that will take care of these issues. Organise Ladakh festival outside Ladakh in small-scale, highlighting the major aspects of the place. Bringing all the hoteliers, guesthouse owners, tour operators and others under one roof. Design a good informative and user-friendly website. Create brochures and send it free of cost to people who visit the website and ask for it. J&K tourism should help Ladakh in creating its own niche be that by providing sub-stall or even providing more information to the tourists through them. 18
    • Setting up an all India toll free phone number to respond queries can be also done. Thus the first phase in the demand side will include getting the concept in place and then using it as a tool to educate the domestic tourists to begin with. Supply Side: While doing all this to simulate the demand for Ladakh, it is also important to have the supply part of tourism in place. This will include: Trying to increase the number flights to and fro Ladakh and to various parts of the country. Setting up of professional training institutes like the Hotel Management School, mountaineering training centre and to start a curriculum in schools, which are based on tourism so that the Ladakhi youth becomes more inclined towards this sector. Providing basic amenities for the tourists in Ladakh so that there stay becomes more comfortable. Making motor able roads however maintaining the trekking routes or identifying newer routes. Giving the villages more incentives so that the home stays can be encouraged for the domestic tourists as well On the supply side the phase1 will be based on a long-term vision. It has to address the human resource problem that Ladakh faces during the tourist seasons. Also the infrastructure becomes one of the core points. Phase 2 While in the first phase the domestic tourists were targeted the second phase may be devoted to the foreign tourists keeping the campaign for the domestic tourists in place. Demand side: The steps will be very similar to the ones taken for the domestic tourism only it will be done in an international scale. Apart from the tourism fairs, the board can invite international tourism majors and also media like “National Geographic”, “Discovery” to give a more realistic coverage of the place. It can also participate in the rankings and get to know the criterion for making an international tourist destination. Since less of Americans are coming to Ladakh special promotional activities can be organized in the US and the neighbouring countries mostly to communicate them what Ladakh has in store for them. Even places like China which has very similar culture can be targeted. Information flow has to be made easier and free flowing, so that the foreign tourists get to know anything that they want to at the click of a mouse. Supply side: 19
    • The same policies have to be followed with a more emphasis on developing trekking routes and cultural tourism. Newer adventure sports like sand skiing, gliding, Para sailing can also be incorporated. Better policies for waste management and decentralized tourism (away from Leh city par see) have to be formulated. Phase 3 It’s the consolidation and maintenance phase wherein focus should be diverted towards consolidation and maintenance of the tourism industry as a whole going in for innovations and constantly keeping up with the changing industry demands without shifting from the core focus. 8. Conclusion The present state of tourism development as well as the implications of tourism for the development, economy and culture is indicative of a number of constraints in the development of responsible tourism in Ladakh. In view of strategic considerations for the promotion of tourism in Ladakh, the concerned authorities in the tourism sector should work towards a framework for a tourism policy for Ladakh. The long term objectives of the tourism policy should contribute to increased generation of income and employment with a concern for equity, preservation of Ladakhi’s environment, culture, traditions and the way of life, development of infrastructure and linkages with the other sectors of the economy and promote tourism as a vehicle for local development, and visitor satisfaction. The main focus has to be responsible tourism in the case of Ladakh, which is characterized by environmental awareness, cultural sensitivity, and strengthening local production linkages. Policies should lead to the development of regulations and code of conduct for travel/tour operators, trekking agencies, hotels and lodges as well as tourists for the promotion of responsible tourism. The obligation for responsible tourism has to lie with all the stakeholders including the tourists. 20
    • Annexure 1: Year wise Tourist Inflow in numbers Year Sno. Foreign Indian Total 1992 1 13,580 2,438 16,018 1993 2 12,401 2,000 14,401 1994 3 14,369 2,080 16,449 1995 4 12,391 5,594 17,985 1996 5 13,036 3,537 16,573 1997 6 12,810 3,991 16,801 1998 7 15,229 6,767 21,996 2000 8 11,828 6,227 18,055 2001 9 15,439 4,260 19,699 2003 10 15,362 13,031 28,393 2004 11 21,608 13,483 35,091 Source: Jammu & Kashmir Tourism Development Corporation Annexure 2: Number of Tourist Arrivals Foreign Domestic Total Air 6,875 2,505 9,380 Road 5,373 980 6,353 Foreign Domestic Total Air 73% 27% 100% Road 85% 15% 100% Source: ICMOD report on Tourism Annexure 3: Nationality wise arrival of tourists Nationality % age French 15% Italian 8% British 7% German 6% American 5% Japanese 3% Source: CSO report on Ladakh Annexure 4: Month wise tourist arrival Month Foreign Domestic Total January 0.2 0.1 February 0.3 0.2 March 0.4 0.4 0.4 April 1.1 1.3 1.1 May 2 3.4 2.4 June 10.7 18.2 12.3 I
    • July 41.9 23.6 37.9 August 33.6 34.3 33.8 September 9.8 18.8 11.8 October November December Total 100 100 100 Source: ICMOD report on Tourism Annexure 5: Tourist Arrival Projections Indian Foreign Sight Sight Adventure Year Seeing Adventure Adventure Seeing +Cultural Total 1992 2194 244 6790 2716 4074 16018 1993 1800 200 6201 2480 3720 14401 1994 1872 208 7185 2874 4311 16449 1995 5035 559 6196 2478 3717 17985 1996 3183 354 6518 2607 3911 16573 1997 3592 399 6405 2562 3843 16801 1998 6090 677 7615 3046 4569 21996 2000 5604 623 5914 2366 3548 18055 2001 3834 426 7720 3088 4632 19699 2003 11728 1303 7681 3072 4609 28393 2004 12135 1348 10804 4322 6482 35091 2005 10476 1164 11912 4765 7147 35464 2006 11349 1261 12905 5162 7743 38420 2007 12222 1358 13897 5559 8338 41375 2008 13095 1455 14890 5956 8934 44330 2009 13968 1552 15883 6353 9530 47286 2010 14841 1649 16875 6750 10125 50241 2011 15714 1746 17868 7147 10721 53196 2012 16587 1843 18861 7544 11316 56152 2013 17460 1940 19853 7941 11912 59107 2014 18333 2037 20846 8338 12508 62063 2015 19207 2134 21839 8735 13103 65018 2016 20080 2231 22831 9133 13699 67973 2017 20953 2328 23824 9530 14294 70929 2018 21826 2425 24817 9927 14890 73884 2019 22699 2522 25809 10324 15486 76839 2020 23572 2619 26802 10721 16081 79795 Source: Analysis done based on data collected from Field Survey II
    • Annexure 6: Tourist Expenditure Projections Year Indian (in Rs. Mn) Foreign (in Rs. Mn) Total Sight Sight Adventure projections Seeing Adventure Adventure Seeing + Cultural (in Rs. Mn) 2003 137.5 7.2 167 31.8 80.4 424 2004 149.3 7.85 246.7 47 118.7 569 2005 135.4 7.1 285.6 54.5 137.5 620 2006 154 8.1 324.9 61.9 156.4 705 2007 174.2 9.1 367.4 70.1 176.8 797 2008 196 10.3 413 78.8 198.9 897 2009 219.5 11.5 462.9 88.3 222.8 1,005 2010 244.85 12.9 516.5 98.5 248.6 1,121 2011 272.2 14.3 574.2 109.5 276.4 1,246 2012 301.7 15.9 636.4 121.4 306.3 1,381 2013 333.5 17.5 703.4 134.2 338.6 1,527 2014 367.6 19.3 775.5 147.9 373.3 1,683 2015 404.4 21.3 853 162.7 410.6 1,852 2016 443.9 23.4 936.4 178.6 450.7 2,033 2017 486.4 25.6 1,026 195.7 493.8 2,227 2018 532 27.9 1,122 214.1 540.2 2,436 2019 580 30.5 1,225 233.8 589.8 2,660 2020 633 33.3 1,336 254.9 643.2 2,901 %age share 22% 1% 46% 9% 22% 100% Source: Analysis done based on data collected from Field Survey Annexure 7: Financial Analysis of Cultural tourism Variable Expenses per Tourist YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Commission to Transporters 100.00 105.00 110.25 115.76 121.55 Permit Charges 50.00 52.50 55.13 57.88 60.78 Laundry Charges Detergent 2.50 2.63 2.76 2.89 3.04 Water 4.00 4.20 4.41 4.63 4.86 Food Charges - - - - Salt 5.00 5.25 5.51 5.79 6.08 Sugar 5.00 5.25 5.51 5.79 6.08 Vegetables 10.00 10.50 11.03 11.58 12.16 Oil 10.00 10.50 11.03 11.58 12.16 Wheat 4.00 4.20 4.41 4.63 4.86 Rice 4.00 4.20 4.41 4.63 4.86 Gas 4.00 4.20 4.41 4.63 4.86 Tea 5.00 5.25 5.51 5.79 6.08 Milk 3.00 3.15 3.31 3.47 3.65 206.50 216.83 223.33 230.03 236.93 III
    • Variable Expenses per village Unit Detail Nos Cost Year 1 Year 2 Year 3 Year 4 Year 5 Salary Program Manager 1 4000 48,000 50,400 52,920 55,566 58,344 Communicat ion charges 120 30 3,600 3,780 3,969 4,167 4,375 Stationary - - - - - Feed back forms, Instruction 1 300 300 315 330 347 364 Electricity 1 1500 1,500 1,575 1,653 1,736 1,823 Travelling charges 1 3000 3,000 3,150 3,307 3,472 3,646 56,400 59,220 60,996 62,826 64,711 Fixed Expenses for the project Unit Particulars Details Nos Cost Year 1 Year 2 Year 3 Year 4 Year 5 Sales and Marketing- 6months 2 4,000 48,000 50,400 52,920 55,566 58,344 Selling Preparation of Expenses brochures 500 5 2,500 2,625 2,756 2,894 3,038 Distribution of brochures 1 1,000 1,000 1,050 1,102 1,157 1,215 Other Advertisements 1 6,000 6,000 6,300 6,615 6,945 7,293 Telephone charges 12 200 2,400 2,520 2,646 2,778 2,917 Travelling charges 1 15,000 15,000 15,750 16,537 17,364 18,232 Entertainment expenses 1 3,000 3,000 3,150 3,307 3,472 3,646 Others 1 15,000 15,000 15,750 16,537 17,364 18,232 TOTAL 92,900 97,545 102,422 107,543 112,920 IV
    • Investment per village Particulars Total Cost REPL COST AFTER 4 Training Charges YEARS Trainer fees 1,000 Food & Beverages 500 Stationary 500 Books for perusal 600 Maps of villages 200 Equipment Trekking 5,000 5,000 Camping 5,000 5,000 12,800 10,000 Investment per home Particulars Nos Unit Cost Total Cost REPL COST AFTER 4 YEARS Mugs 2 20 40 Shoe rack 1 100 100 40 Bucket 2 60 120 Racks and Hangars 1+4 200 120 Chairs 2 120 240 Solar bulbs 2 200 400 240 Pillows 2 150 300 400 Mattresses 2 400 800 Curtains 2 500 1,000 Blankets 4 400 1,600 Cooking Vessels 1,200 Bed sheets 4 200 800 500 Beds 2 1000 2,000 800 Total 8,800 2100 Source: Analysis done based on data collected from Field Survey V