1. To assess the role of cooperatives in development of Tourism in India
Presented by
Prof. Neerja Kashive
Asst. Professor,VESIM
And
Prof. Swapnil Kshirsagar
Asst. Professor,VESIM

2. 1. Abstract:
Tourism is an important upcoming business sector in India. Earlier it was restricted to pilgrimage
or standard places like beaches and hill stations. However of late, a lot of people are interested in
visiting offbeat places which are rarely marketed or have some unique features in them. Another
upcoming aspect of offbeat tourism is the rise in adventure tourism. The government is trying to
promote tourism in India with campaigns like ‘Incredible India’ and many other state level
promotions. However it is unable to exercise control at the grass root level. Hence much of the
offbeat tourism remains unorganized. Through this paper we would like to understand how the
implementation of cooperatives would help offbeat tourism in the country and also be a win-win
situation for all the stakeholders involved.
2. Study Problem & General Purpose of Research
Travel and tourism is the largest service industry in India. This industry provides heritage, cultural,
medical, business and sports tourism. It is expected that the tourism sector's contribution to the
country's gross domestic product (GDP) will grow at the rate of 7.8 per cent yearly in the period
2013-2023. The Indian tourism sector has been flourishing in recent years due to the improved
connectivity to and from the country. Also, a better lodging facility at the tourist destinations has
been a factor which has contributed to increase Foreign Tourist Arrivals (FTA). India's travel and
tourism industry is set to grow by about 7.3% in 2014, better than last year, but average spending
by foreigners travelling to the country could decline sharply, according to the World Travel &
Tourism Council. This year, revenue from domestic tourism is expected to grow 8.2% compared
with 5.1% a year ago, that increasing domestic travel, growth of low-cost airlines and upgrading
of airport infrastructure will be the growth drivers. In 2013, the travel and tourism industry
contributed Rs. 2,170 billion or 2% to the country's GDP. This is expected to rise to Rs. 4,350
billion in 2024. The Government of India has launched the 'Incredible India' mobile application.
The app will help tourists to seek information, besides enabling quality and reliable services from
service providers recognized by the Government of India. This app demonstrates the
Ministry of Tourism's commitment to the use of technology for service delivery

3. The Ministry of Tourism, Government of India has launched the new tourism brand for the Union
Territories of Daman and Diu and Dadra and Nagar Haveli, as well as released the Vision 2020
publication for Dadra and Nagar Haveli. This step by the government has been taken with a view
to help in overall economic development of these union territories.
The West Bengal government has decided to set up an eco-tourism board to project the state as a
major tourist destination. Work for developing a mega tourism project has already started in
Jalpaiguri district and plans to develop similar projects in Sylee and Kunjanagar is under
discussion.
The Tourism Ministry of India along with the state government of Maharashtra plan to create a
cultural hub on the lines of Times Square, New York. The vision behind such a cultural hub is to
provide popular entertainment as well as access to heritage and culture for the benefit of
international tourists, domestic tourists and the people of Mumbai.
The medical tourism market in India is projected to hit US$ 3.9 billion mark this year having
grown at a compounded annual growth rate (CAGR) of 27 per cent over the last three years,
according to a joint report by FICCI and KPMG. Also, inflow of medical tourists is expected to
cross 320 million by 2015 compared with 85 million in 2012.The tourism industry is also looking
forward to the E-visa scheme which is expected to double the tourist inflow to India. Enforcing
the electronic travel authorization (ETA) before the next tourism season, which starts in
November, will result in a clear jump of at least 15 per cent . Expected share of tourists by
expenditure - Domestic travelers are expected to contribute around 84.7 per cent to total tourism
revenues by 2024.

4. 3. Rationale/Relevance of the Project
Tourism has long been identified as one of the sunrise sectors for India which can serve the dual
purpose of not only earning foreign exchange as well as the disposable domestic income but also
boosting inclusion. With its backward and forward linkages and local connect, tourism becomes
an important driver of equitable growth and prosperity offering an alternative source of livelihood,
development and growth in remote locations, preservation of local skills, enterprise development
at the micro level, and sustainable environment management. In India, while tourism is one of the
largest employers, itremains grossly underutilized as a means of creating sustainable financial
inclusion.
The concept of Cooperative Tourism aims to deliver sustainable economic development by
building the capacity of local communities to realize the potential value of their natural and cultural
heritage to create tourism enterprise opportunities through a co-operative destination management
organization model, which not only supplement incomes, but act as an incentive (or motivational
factor) to preserve local art and culture, and maintain traditional practices like architecture, cuisine,
clothing etc.
It is observed that currently most of the offerings in niche tourism areas are based on individual
private efforts, and as a consequence the socio-economic benefits often do not percolate to a large
part of the stakeholder community .This is where the cooperative model can help bridge the divide.
Rather than individual efforts being driven single-handedly, the cooperative model brings all the
aspects of a tourism product under the ambit of a cooperative structure, which not only controls
the structure and volume of tourist activity, but ensures that the entire destination is promoted
rather than fragmented independent entities

5. 4. Literature Review
1. Cooperatives
The distinctive organization and functions of cooperatives enable disadvantaged people to achieve
viable outcomes through collaborative efforts. The Rochdale Society of Equitable Pioneers, which
was recognized as the first cooperative in 1844, was composed of workers whose appeals for salary
increase were continually rejected (Kallen, 1946). The Rochdale Cooperative successfully
alleviated the poverty of its members by improving its market bargaining power and social equality
among members. Consequently, 1,000 cooperatives were established in Britain in the next ten
years (Birchall, 1994). In 1895, the International Cooperatives Alliance (ICA) was founded in
London, with the goal of providing cooperative guiding principles and developing international
trade.
The pro-poor benefits of cooperatives can be traced back to its first establishment in1844 when
the Rochdale Cooperative helped people from the working class to overcome poverty by
minimizing their costs of living (Birchall, 1994). Birchall (2004) further achieve other Millennium
Development Goals as well. Simmons and Birchall (2008) discussed the pro-poor functions of
cooperatives from a network perspective and summarized that aggregated resources are managed
under democratic management, which is considered as a more sustainable way of development
As the application of the concept of cooperatives to tourism is a rather recent phenomenon, limited
discussions on tourism cooperatives are found in scholarly publications. The positive effect of
tourism cooperatives on poverty alleviation has been postulated by a few non-Chinese studies. In
Greece, women’s cooperatives have played an important role in developing agro tourism in
villages and in promoting the social and economic roles of women in the countryside (Iakovidou,
1997). Based on a case study in India, Verma (2006) concluded that tourism cooperatives facilitate
the

6. protection of ethnic culture while ensuring economic viability and a truly enriching experience
fortourists. Gorman (2010) elaborated that tourism cooperatives successfully help farmers in
remote areas to sell accommodation products to tourists.
2. Tourism Cooperative
Based on the ICA(2007) definition, the tourism cooperative can be defined as as a voluntary
association formed by persons in the tourism industry that aims to reach common economic, social
and cultural needs, as well as aspirations through a jointly owned and democratically operated
organization. Community-based tourism (CBT) has been recognized as a catalyst for rural
community development. However, delicate issues pertaining to the management and operations
of CBT have reduced the development and growth of CBT. The economic fragility of CBT has
prompted researchers to argue that, if CBT is to beprofit-oriented, then it should be run as a
business entity. This calls for a sophisticated approach to ensure its economic sustainability
(Mitchell and Hall, 2005; Hamzah and Khalifah, 2009; Baromey et al., 2011).
The significant contribution of a cooperative in promoting participatory tourism through its
community-based organization is not widely recognized (Verma, 2008;George, 2007). Despite this
shortcoming, as a CBT matures, it inevitably makes way for a broader based organization to curb
potential manipulation and increase accountability and transparency (Moeurn et al., 2008). Many
governments advocate the use of a cooperative business model as a tool to manage community
enterprises and increase economic benefits for the local people (Din, 1997; Ooi et al., 1994) as
well as eliminate power-related conflicts and poor tourism distribution among the locals (Goodwin
et al., 1998).
A community cooperative has a few advantages which other organizations lack: it utilizes a broad-
based organization that curbs manipulation bylocal elites (Verma, 2008), and strong stakeholders’
participation that nurtures community empowerment

7. (Aref and Gill, 2009). Empowerment through its three forms (individual, community, and
institutional) enables a local community to collaboratively manage their interests in relation to the
wildlife (Daniela, 2002) or other people-land-nature based interests. More importantly, a
cooperative can identify and provide necessary capacity building programs for the local
community involved in CBT (Bushell and Eagles, 2007).
Funded by the Scottish Government through its International Development Fund (IDF) under the
South Asia Development Programme, Yes banks project envisages establishing a scalable model
for sustainable economic development in tourism, adapted to an Indian context by applying
cooperative principles to destination management and tourism development in India.
In a study conducted by Hamzah A. and Mohamad H.N (2013) the following model was suggested
for Community-based tourism (CBT) in Malaysia.The establishment of CBT in Batu Puteh was
triggered by the changing economic landscape that severed the local people’s dependency on the
forest when the state government replaced indiscriminate logging practices to pro-conservation
/sustainable forest management practices. To alleviate the dire economic situation caused by the
loss of livelihood and income from the gazettement of the Lower Kinabatangan area where Batu
Puteh is located, a community-based tourism project was initiated by the local youths in 1997 with
the help of NGOs. This was in tandem with the latter’s conservation efforts. The local youths
called themselves Model of Economically Sustainable Community Tourism (MESCOT) members
to represent their CBT initiative. MESCOT’s goals were to create community-based ecotourism
activities On 17 July 2003, MESCOT established a community tourism cooperative named
Koperasi Pelan congan Mukim Batu Puteh Bhd or better known as KOPEL.

8. 5. Specific Study Objectives
Research Objectives
It describes how the cooperative business model successfully created sustainable economic
benefits for its local community and reveals how the cooperative effectively managed the local
community’s economic, environmental and social interests.
Research Question
1. Is it possible to develop co-operative sustainable model for tourism industry?
2. How a tourism cooperative creates economic sustainability as well as bringing socio-cultural
and environmental benefits to its members?
6. Research Methods
The study will be conducted by taking a few models as reference and arriving at a model which
can be implemented in India. A structured questionnaire would be prepared to collect data from
all the stakeholders involved. Simultaneously qualitative data would be collected from a few
offbeat tourist locations. From the analysis of the data a model would be prepared. The model
would be tested on a pilot basis at offbeat tourist locations to understand its practical implications.
Modifications would be done to the model if required and then the final model can be presented
for implementation
Qualitative approach via the case study method will be employed to gain a deep understanding of
the phenomenon being investigated. A case study method is appropriate for this study because it
enables the involvement of various local stakeholders with varying perspectives; and the use of
multiple instruments to give invaluable insights. This approach enabled the authors to gain an in-
depth understanding of the issues at hand; address the central research questions; and revisit,
verify, and validate the findings. Key informants would be identified from the local community at
the site who were directly or indirectly involved in Co-operative Tourism.
In-depth interviews with villagers (5), Financial Institutes(5) and Service Providers tourism
cooperative (5) would be conducted.

9. 7. Analysis
Qualitative data of service providers
We could derive the following observations on the data collected from local service providers
 Most of the persons are regular service providers (food, service, transport)
 Most people own their business which they run and about 80% of them have invested
their own money
 They generally do not have a fight with customers
 Almost all service providers don’t follow the rules or the norms. They do not follow any
safety and security measures
 Most of them are part of local union which is highly unorganised. They face challenges
of corruption from local authorities, competition and issues like fuel price hike and
unavailability of resources
 The local authorities help but it is not consistent
 The service providers are not aware what role can the cooperatives play in societal
development. Hardly anyone is aware about what cooperatives are and what role do they
play. They were also convinced that a tourism cooperative will help them
 When explained to them what cooperatives are, they showed interest in being a part of
the cooperative but wanted the local authorities to regulate it and also were keen to know
whether it is profitable to them
 The service providers are willing to take loans from cooperatives if they get the loans at
less interest rates
 The service providers are willing to take the initiative for forming the tourism
cooperative and feel that the tourism cooperative will help in conservation of social,

10. economic and environmental interests. They would like to seek the government support
in development of infrastructure and regulatory matters
Quantitative data of customers response about tourism cooperatives
Fig. 1: Gender
Fig. 2: Age
From figures 1 and 2 we understand the demographic diversity of the respondents with figure 1
stating the gender which is almost 70% males and 30% females. The age groups represented are
16-25 years (60%), 26-40 years (33%) and remaining 7% in the group 41-58. This signifies a
majority of the population is young.

11. Fig. 3: Marital Status
Fig. 4: Profession
From the figures 3 and 4 we can see that three fourth of the respondents are males and one fourth of
the respondents are females .Also most of the people are not working in the government sector.

12. Fig 5.Monthly income
Almost three fourth of people belong to the income groups below Rs.50000.This figure is important
representation showing the low income group of the respondents. From this we can infer that they
might be willing to spend less which is an important observation.
Fig 6. Mode of transport for traveling

13. Fig 7. Travel companion
Fig 8. Frequency of travel
From figure 6, 7 and 8 we can see that people prefer public transport for going out on vacations. They
generally travel with family and more than 75% of the people travel at least once in a quarter

14. Fig 9. Role of tourism cooperatives
From figure 9 we can state that the tourists or tourism customers are looking out for a complete set of
solutions from the service providers and not particularly improvement, only in one service in isolation
Fig 10. Accommodation aspects

15. Fig 11. Food aspects
Fig 12. Transport aspects
Figures 10, 11 and 12 denote the critical aspects of food, transport and accommodation which the
tourists seek. There is a high expectation of standardization and improvement of quality of
services.

16. Fig 13.Unique services that can be offered by Tourism cooperatives
From figure 13 we can interpret that sightseeing is of top priority in terms of unique services
offered. People believe that locals know the place very well and might be able to show some key
places of tourist interests.
Fig 14-a. Perception of people regarding tourism cooperatives
Role in
development
of tourism
Enhancement of
accommodation
facilities
Enhancement
of food
services
Enhancement
of transport
facilities

17. Fig 14-b. Perception of people regarding tourism cooperatives
Fig 14-c. Perception of people regarding tourism cooperatives
From figure 14.a, b, c we can see that people perceive that forming of cooperatives in tourism will help
enhancement of services and lead to better facilities for the tourists. It will also help devlop the local
wellbeing and empower local people. People believe that government and social support will help
setting up and running these institutions. Also, Most of the people have shown interest in being part of
the tourism cooperative
Enhancement
of hygiene and
cleanliness
Compete with
private players
Offer unique
services in
tourism
Help in
community
development
Government
should support
tourism
cooperative
Will help in
managing
environment
sustainability
Will help in
giving better
customer
experience
Will be
profitable in
long term

18. 8. Working Models
Tourism cooperative as a base to state and national tourism
development
• Forming micro level tourism associations/cooperatives
• Doing pilot project of implementing the cooperatives and reviewing the progress
• Creating nexus of cooperatives/associations
• Supporting state and national government in tourism development
• Displaying information and links to websites
Indian
tourism
Nexus of tourism
cooperatives
Local/micro level tourism
cooperatives

19. Functional model of tourism cooperative

20. 9. References:
Aref, F. and Gill, S.S. (2009), “Rural tourism development through rural cooperatives”, Nature
and Science, Vol. 7 No. 10, pp. 68-73.
Baromey, N., Rith, S. and Yokohari, M. (2011), “Enhancing sustainability through the building of
capabilities: analysis of community-based ecotourism development in Cambodian protected
areas”, in Hamzah, A. (Ed.), Conference Proceedings, 3rd World Ecotourism Conference,
Sihanoukville, Cambodia, pp. 1-19.
Birchall, J. (1994), Co-op: The People’s Business, Manchester University Press, Manchester.
Birchall, J. (2004), “Cooperatives and the millennium development goals”, available at:
www.ilo.org/public/english/support/lib/resource/subject/coop/birchallbook Bushell, R. and
Eagles, P.A. (2007), “Benefits beyond boundaries: tourism and protected areas”, in Bushell, R.
and Eagles, P.A. (Eds), The Vth World Parks Congress, CABI Press, Oxfordshire, UK and
Cambridge, MA.
Daniela, B.R. (2002), “Capacity building for co-management of wildlife in North America”,
Human Dimensions Research Unit Department of Natural Resources Cornell University, New
York. HDRU Series 02-2, available at: w2.dnr.cornell.edu/hdru/pubs/
HDRUReport02-2.pdf (accessed 30 November 2012).
Din, K. (1997), “Tourism development: still in search of a more equitable mode of local
involvement”, in Cooper, C. and Wanhill, S. (Eds), Tourism Development – Environmental and
Community Issues, John Wiley & Sons, West Sussex.
George, B.P. (2007), “Alleppey tourism development cooperative: the case of network advantage”,
The Public Sector Innovation Journal, Vol. 12 No. 2, pp. 1-10.
Gorman, C. (2010), “Garden tourism in Ireland an exploration of product group – co-operation,
links and relationships”, unpublished PhD thesis, Department of Geography, Trinity College
Dublin, Dublin.
Goodwin, H., Kent, I., Parker, K. and Walpole, M. (1998), Tourism, Conservation and Sustainable
Development: Case Studies from Asia and Africa, available at:
http://pubs.iied.org/pdfs/7786IIED.pdf (accessed 28 November 2012).
Hamzah, A. and Khalifah, Z. (2009), Handbook for Community Based Tourism: How to Develop
and Sustain CBT, Asia Pacific Economic Cooperation Tourism Working Group, Singapore.

21. Iakovidou, O. (1997), “Agro-tourism in Greece: the case of women agro-tourism co-operatives of
Ambelakia”, Medit, Vol. 8 No. 1, pp. 44-47. Kallen, H. (1946), The Decline and Rise of the
Consumer: A Philosophy of Consumer Cooperation,Packard and Co., Chicago, IL.
Mitchell, M. and Hall, D. (2005), “Rural tourism as sustainable business: key themes and issues”,
in Hall, D.R., Kirkpatrick, I. and Mitchell, M. (Eds), Rural Tourism and Sustainable Business,
Channel Views, Clevedon.
Moeurn, V., Khim, L. and Sovanny, C. (2008), “Good practice in Chambok community-based
ecotourism project in Cambodia”, in Steele, P., Fernando, N. and Weddikkara, M. (Eds),Poverty
Reduction that Works: Experience of Scaling up Development Success, Earthscan, London.
Ooi, S.T., Kohoi, G. and Yapp, J. (1994), “Local participation in a nature tourism project: the Batu
Punggul experience”, in Ti, T.C. (Ed.), Issues and Challenges in Developing Nature Tourism in
Sabah, Kota Kinabalu, Institute of Development Studies, Sabah.
Verma, S. (2006), “Promoting peace through tourism: a role for co-operatives”, The nternational
Journal of Co-operative Management, Vol. 3 No. 1, pp. 54-59
.
Verma, S.K. (2008), “Cooperatives and tourism: an Asian perspective”, National Cooperative
Union of India, available at: http://torc.linkbc.ca/torc/downs1/india%20cooperatives.pdf.
A Brief Report on Tourism in India, Corporate Catalyst (India) Pvt. Ltd, January 2015
Cooperative Tourism Development project, Yes Bank.