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1. INTRODUCTION
THE GLOBAL PRESPECTIVE OF TOURISM
International Tourism Markets
Global Trends
Tourism is now the world's largest and most widespread industry. In 1999, global tourist arrivals
reached a total of 663 million (source: WTO), and turnover reached US$453 billion. Growth has
been erratic in the last few years, as economic crises in the Far East reduced the amount of intra-
regional traffic significantly. This decline has now been reversed and tourism is still an industry
with positive growth. Present trends estimate that total arrivals are expected to reach 1 billion by
2010, with a sustained annual growth rate of over 4°/o between 1995 and 2020.
In the main markets of the industrialized world there is a trend towards long-haul holidays as air
services become more competitive and airline technology reduces the. cost per mile of aircraft
operation. All this reduces the travel costs, and the increasing numbers of destinations has also
resulted in highly competitive market places with price and standards of service being significant
factors in choice.
Long haul tourism is still split between travel trade generated business and independent travel. In
many core markets there is also increasing polarisation between mass market multi-national tour
operations offering global programmes, and smaller specialist operators featuring limited
numbers of destinations or special interests who cater to an increasing number of tourists looking
for quasi-independent travel arrangements.
Table 6.1
Annual Growth of International Tourism as a Percentage over Previous Years %
1996/^7 1997/98 1998/99 1996/97 1997/98 1998/99 International Tourist Arrivals
International Tourist Receipts Source: World Tourism Organisation

2. Regional Trends
In 1999, after two years of decreasing arrivals, tourism in South Asia increased in the majority of
countries, and resulted in an overall increase of 8.3% over the previous year's arrivals.
Table 6.2
Regional Tourist Arrivals
Country Tourist Arrivals in ‘000s
^995 1996 1997 1998 1999"
India 2,124 2,288 2,374 2,398 2,481
Iran 452 567 740 1,007 1,173
Nepal 363 394 418 435 na
Maldives 315 339 366 395 429
Sri Lanka 403 302 366 382 436
Pakistan 378 369 374 428 na
Bangladesh 156 166 182 171 172
Bhutan 4 na 5 6 na
Afghanistan Na na na na na
The regional economic down turn which effected all countries in South and South-East Asia has
now been reversed, and economic data shows that many countries have now fully recovered. One
short-term impact on tourism was a significant decrease in intra-regional tourism but, in many
cases this was replaced by long-haul tourism. This was achieved as airlines and destinations both
reduced prices (in both real and foreign currency terms) and increased promotion in both existing
and new long-haul markets. This has had a longer-term effect of increasing international
awareness of the range of attractions in Asia (and the good value offered) and, in many cases, this
increased business from new long-haul markets has been able to be sustained.
The reduction in intra-regional traffic was, in many countries, also replaced by growth in
domestic traffic as tourists stayed at home for their vacations. Many local tourism authorities
implemented effective domestic marketing campaigns. Future trends forecast by the World
Tourism Organisation show a potential for robust growth across the region.
Table 6.3 Forecast of Inbound Tourism to South Asia 1995 - 2020
South Asia Forecast Average Annual Growth Rates
1995-2000 2000-2010 2010-2020 1995-2020
5.7% 6.7% 5.8% 6.2%
Source: World Tourism Organisation

3. SITUATION IN PAKISTAN
Background for Tourism Topography
The Islamic Republic of Pakistan is located in the South of Asia lying between 24.5°-36.75°
degrees north latitude and 61°-76° degrees east longitude. It shares its borders with five countries
namely, Iran in the west, Afghanistan in the north west, Russia, Tajikistan and China in the north,
and India in the east. The Arabian Sea washes its southern shores. Pakistan has a total area
of796,0952km and the equivalent of three times the size of Britain. Geographically it lies in the
north western part of the Southern Asian sub-continent and is divided into six natural regions.
The Himalayan and trans-Himalayan regions occupy the entire northern end of Pakistan, to a
depth of about 200 miles. The mountains there are among the highest in the world rising to an
average height of over 20,000 feet including Gasherbrum I (26,470 feet) Nanga Parbat (26,660
feet) and K2 (Mount Godwin Austin) at 28,251 feet is the second highest in the world. The sub
mountain plateau comprises districts of Peshawar, Kohat, Bannu and Marden, which was once a
flourishing centre of Greco- Buddest culture. The Indus plain covering an area of 200? miles is
the most prosperous agricultural region of the country. It is also the cradle of the oldest
civilisations. The largest freshwater lake in South Asia (Manchar) is also in this region. The
desert areas include Sind, Sagardoab and Cholistan in Bahawalpur and the Thar desert in
Tharparker district which shares the border with the Indian desert state ofRajistan. Baluchistan
plateau and the western bordering mountains are also two distinct geographical regions of
Pakistan. Flowing through the country is the 2500km Indus River - rising in Tibet flowing north-
west dropping south from the mountains and emptying through a delta into the Arabian Sea. On
the basis of ecology the country is divided into four main zones.
• The Mountainous North
• The Plateau ofBalochistan
• The Potuhar Plateau
• Punjab and Sindh Plains
These zones are divided into the following areas:
1. Mountainous and Hilly areas Northern Mountains Western Bordering Mountains Sulaiman
Mountains and Kirthar Hills Mountains and Hills of Sub-Himalayas, Siwalikas
and Salt Range
2. Plateaus Baluchistan Plateau Potuhar Plateau
3. Plains
Trans-Indus Plain Upper Indus Plain Lower Indus Plain Deltaic Plain
4. Desert Area Cholistan Desert Thar Desert
The diversity of landscape is a special feature of Pakistan, the conservation of which has been by
the establishment of as much as fourteen national parks.
1.2. Climate
Pakistan is in the warm temperate zone, with summer temperatures of equatorial magnitudes. A
weak form of tropical monsoon climate occurs over much of the country with arid conditions in
the North and West, where the wet season lasts from December to March. Baluchistan is the

4. driest part of the country, with an average rainfall of 21cm. Overall rainfall is less than 10 inches,
mostly in the months of July, August, December and January. Temperatures vary according to
Province and location with a max high of 52 Celsius in June and July and min lo^ of minus 32
Celsius in January and February.
1.3. History
The history of Pakistan can be traced back to before 2500 BC when a highly developed
civilisation flourished in the Indus Valley. The Indus Valley Civilisation was at its peak from the
3rd to the middle of the 2nd millennium BC. Moenjodaro, which was discovered in 1922 is
considered as one of the most spectacular ancient cities in the world.
Excavations have brought to light evidence that advanced civilisations existed even in the most
ancient times. The oldest evidence of human activity is of early Stone Age peoples in northwest
Punjab. Primitive agriculture as far back as the late 4th millennium BC has been indicated by
excavations, and in the 3rd millennium BC permanent villages were farming along the lower
Indus.
Since then Pakistan has been shaped and influenced by the migration and invasic of many
nationalities the most well known of which was Alexander the Great. From the Indo-Aryans
through Mauryans, Bactrians, Scythians, Parthians, Ksuhan, White Huns, Shahis, Moghuls,
through to the British in the seventeenth century. Pakistan was a key route on the Silk Road
which for centuries wound its way south from Central Asia down through what is today Pakistan.
1.4 Population and Culture
Pakistan houses the world's ninth largest population and one of the fastest growing from just 32
million at independence in 1947 to over 130 million in 1997 spread between the four provinces.
The current growth rate of 2.6 percent is the highest in the region. The concentration of
population is in the Indus Valley. The rural population makes up approx 67.5 percent of the
population with the urban population at approx 32.5 percent. This is distributed between Karachi
(10 million, (Lahore (5.5 million), Peshawar (2.5 million), Faisalabad (2 million), Rawalpindi
(900,000 thousand) and Hyderabad (800,000 thousand). Of the four provinces Punjab has 55.6
percent of the population. Although there has been no official census since 1981, it is estimated
that the population is currently roughly 137 million, but there is discrepancy in the real
population figures which range from 132 to 140 million. It is estimated that over half the
population is under 15 years of age. In 1996 the total labour force was estimated at 36 percent.
With the current annual growth rate of 2.6 percent rate the population of Pakistan is likely to be
250 million by the year 2020.
Pakistan is an Islamic country with over 97% Muslims, Hindu (1.5%) Christian (1%) and other
minorities (0.5%). With its position on the old trade routes, Pakistan has a mixture of peoples and
languages as a result of early migration, with facial appearances that reflect European (Greek),
Arab, Mongol, Indian and in the north, Chinese origins. As a consequence although officially the

5. national language is Urdu, it's the mother tongue of less than 8% of the population, English is the
official language of Pakistan.
Pakistan is enriched with a culture that has its origins in over half a dozen civilisations that has
flourished here since the 4th millenium BC and its cultural diversity ranges from Chitral and
Kalash in the north to Sindh in the south, expanded and multiplied into sub-cultures to be found
now throughout the whole of Pakistan.
1.5 Political and Administrative Structure
Administratively the country is divided into four provinces; Punjab, Sindh, North West Frontier
Province (NWFP) and Baluchistan. Federally Administered Tribal Areas (FATA), Northern
Areas and Azad Kashmir are all Federally administered areas. The principle cities are Islamabad
the political capitol, with its twin city of Rawipindi in the north of Punjab, Lahore in Punjab
province, Karachi, in Sindh, Quetta in Baluchistan and Peshawar in NWFP.
Pakistan has a federal political structure, and has a parliamentary form of government; a
Parliament consisting of two houses - the Senate and the National Assembly. The Senate is
mainly advisory. The National Assembly is the working body of Government. The 217 members
of the National Assembly are elected for five year terms of office. Of these 20 of these are set
aside for women and non-muslims. The Prime Minister is the head of Government and is elected
by the Assembly. T^-" Cabinet and the Prime Minister are responsible to the National Assembly.
The Senate arid ^ Assembly jointly elects the Head of State (President), also for a five year term.
The President on the recommendation of the Prime Minister, appoints Governors for each
province and each Governor nominates a Chief Minister. Each province have their own directly
elected legislative assembly. Authority devolves down through provincial Divisions, Districts,
and Subdivisions headed by Commissioners, Deputy Commissioners and Assistant
Commissioners.
There are over 20 different political parties in Pakistan. The major ones being the Pakistan
Muslim League (PML), Pakistan Peoples Party (PPP) and Jamad-i-Islami.
1.6 Economy
The public sector development budget is under pressure while domestic and foreign investment
has stagnated. The current population growth rate has risen to 2.6% which is high and is placing a
heavy pressure on Pakistan's resources and on its governance. This is coupled with a high
unemployment level of about 18% with the expectation that this figure will increase by a much as
half a million annually at the current population growth rate. The inflation rate is high which is
contributing to the poverty levels and some 5°/o ofGDP is lost due to environmental degradation.
Major crops are rice, cotton, sugarcane and wheat. In the fiscal year 1999-2000, the production of
rice stood at 5156 thousand tonnes while the production of cotton reached 11240 thousand bales
and Sugarcane was 46363 thousand tonnes. The production of wheat during the same period is
estimated at 19272 thousand tonnes.
Major exports are cotton fabric, yam, raw cotton, synthetic textiles, ready made garments, fish,
rice, leather and carpets while major imports are petroleum products, petroleum crude, wheat,
palm oil, planstic material, medicinal products and iron and steel.

6. The industrial sector in Pakistan depends mainly on cotton textiles. The textile industry represents
one of the most important sub-sectors of the economy and its products account for over 60% of
total exports and represents some 18% of the country's large scale production. Overall,
manufactured goods represent about 85% of Pakistan export revenue of which cotton products
amounts to over 80%. The manufacturing sector accounts for almost 25% of total employment in
the country.
Provincial and Principal Areas
Pakistan is divided into four different provinces; Punjab, Sindh, NWFP (North West Frontier
Province) and Balochistan. Their respective capitals are Lahore, Karachi, Peshawar and Quetta.
In addition to the four provinces are the Northern Areas. The Northern Areas are divided into the
administrative districts ofDiamir, Ghanche.Ghizer, Gilgit and Skardu. The Northern Areas are
governed directly from Islamabad.
There are also seven political agencies termed Federally Administered Tribal Areas (FATA)
within which the laws of Pakistan do not apply. The Pakistan Government, like the British before
them, leaves these areas to govern themselves. Unfortunately tourists are discouraged from
visiting these areas which are all in the northwest of the country.
All parts of Pakistan have their distinct tourist appeal ranging from the high mountains in the
north to the beaches of Balochistan on the Arabian Sea. The best known tourist areas have
traditionally been in the Northern Areas and NWFP with their high mountains. The Four
mountain ranges - the Hindukush, Pamir, Karakoram and Great Himalaya form the densest
concentration of high peaks in the world.
If Pakistan is known at all in the tourism world abroad it is because of the two northern provinces
(NWFP & NA). The Mountains, Trekking, The Hunza Valley; one of the most beautiful valleys
in the world, the Karakoram Highway, the Silk Road, the Khyber Pass, and others have all caught
the attention and imagination of the international adventure and special interest tourist. In other
provinces the archeological sites and rich cultural history are relatively unknown outside of
Pakistan. The Indus Valley Civilisation, the excavations at Moenjodaro, Alexander the Great, The
Gandhara Civilisation, The Moghul Empire, Marco Polo the list goes on. These are the rich
ingredients for tourism to develop seriously in Pakistan.
Infrastructure
Despite the lack of clear organisation surrounding infrastructure, Pakistan has seen general
improvement in recent years. Extensive bilateral and multilateral aid and Central and Provincial
Government funding have combined in order that basic services reach all socio-economic levels.
Water continues to be a major source of concern and surface and foul water drainage is
unavailable in most parts of the country. In general the disposal of solid waste is ineffective
despite being administered by the local authorities.
The national electric grid supply is expanding but the main population centers are not adequately
provided for. Efforts to improve the telecommunications systems have led to the recent
privatisation of the telecommunications industry, and the service has already started to improve.
Apart from a long established rail and road network on which upgrading is taking place, there are
over 30 airports in Pakistan with the main International ones being Karachi, Islamabad, Lahore

7. and Peshawar. Having realised the importance of this sector, the government has taken various
measures to build an air transport infrastructure, and a selective open sky policy has been adopted
with a number of countries based on reciprocity and bilateralism.
The country has two major deep-water seaports, Karachi Sear Port and Port Qasim, and in
addition, two fish-harbour-cum-mini ports are being developed at Gawardar and Keti Bunder. In
support of these, a new major road link from Karachi to Gawadar has recently started
construction linking all the coastal towns and villages en route. This major infrastructure
development is due for completion in 2005.
Over 90% of Pakistan's freight and passenger traffic travels by road, and at present there are some
300,000 kilometers of road in Pakistan. The National Highway Authority is responsible for the
development and maintenance of national highways which account for 4% of the total road
network in the country. The country's first motorway, Lahore-Islamabad (367km) was completed
in 1997 with the construction of the Islamabad-Peshawar motorway due for completion in 2001.
The construction work on the Rawalpindi Bhattian-Faisalabad motorway has also commenced
and is expected to be completed in October 2000.
The Pakistan Railway network consists of 7,791 kilometers of track and its major asset includes
582 locomotives, 2,029 passenger coaches and 22,247 freight wagons. Its gross earnings in 1999
stood at Rs.7,208 million.
Pakistan is now connected with most of the countries of the world through international gateway
exchanges. Value added services such as internet, e-mail, cellular mobile telephone, optic fiber
systems, card pay phone and paging services etc are all developing with more than 3.8 million
lines and 2663 telephone exchanges.
NORTH WEST FRONTIER PROVINCE (NWFP)
Stretching for 700 km along the border with Afghanistan, astride the Khyber Pass
and other historical gateways to India from Persia and Central Asia, and
embracing some of Asia's most impenetrable mountains and intractable people,
is the North west Frontier Province NWFP.
Here Buddhism matured and was launched across the Karakoram into Asia.
Here, too, some of history's most famous conquerors got their noses bloodied by
fierce mountain tribes. The province was also the favoured battleground of British
macho colonialism, home to some of its most admired enemies. Today the
province contains the world's biggest autonomous tribal society, that of the
fiercely independent but conspicuously hospitable Pashtuns (Pathans).
The Peshawar plain-the broad Kabul River Valley from the Khyber Pass to the
Indus-was called Gandhara by the Hindu tribes living here in the 2nd millenium
BC. Alexander the Great arrived here in 327 BC. Alexande's successors ceded
Gandhara to the Mauryan Empire, whose king Ashoka opened it to Buddhism in
the 3rd century BC. Ashoka's edicts on morality are still visible, inscribed on
rocks at Shahbaz Garhi and Mansehra. Gandhara in the 1st to 3rd centuriesAD
was the heart of the Kushan Empire. In 467 the Huns savaged Ganddhara,
though Buddhism survived in Swat right into the 15th century. Babur, a grand son

8. of Timur, raided across the Khyber Pass in 1505 and attacked Bajaur and Swat
in 1518 on his way to founding the Moghul Empire. Having failed to extend their
will further, in two embarrassing wars with the Afghans (1838-42 and 1878) the
British finally agreed with them in 1893 on a common border, the so called
Durand Line. Pakistan has maintained Britain's arm's length approach to the
Tribal Areas. In 1969 Chitral, Dir and Swat were added to the NWFP.
The capital of NWFP is located at the east end of the legendary Khyber Pass.
This rough edged trading town has been taken and retaken for 2000 years. It is a
kaleidoscope of Asian peoples and its old city is straight out of a storybook. From
here the Pakistan government maintains a delicate and tenuous hold over the
Pashtuns. The public toting of guns is now discouraged, but west of the city
Pakistani law apply only as far as the edge of the main road; visitors to the
Khyber Pass for example must have armed tribal escort. The British cantonment
beside the old city has shady boulevards, churches, army quarters and lavish
high walled homes. City's post partition face includes University Town and score
of Afghan refugee relief agencies, and the sprawling new administrative-
residential township of Hayatabad..

9. MANAGEMENT OF TOURISM AT FEDERAL & PROVINCIAL LEVEL
Chapter 3
3. Organisation and Management of Tourism in Pakistan
3.1 Introduction
One of the core issues of tourism development is the system of management and organisation
structured to run it. With the passage of time and the advantage of experience of other countries
tourism administrations, it is possible to make comparisons and compare role models best suited
to Pakistan. There are many role models to choose from as almost all countries in the world have
tourism management bodies of some kind.
One of the primary recommendations of the master plan report is in the area of who should
manage the tourism sector. However to fully appreciate the rationale behind the recommendations
it is first necessary to look at and evaluate the present organisation and management structures
which have been in place in Pakistan for the past thirty years and which had its genesis dating
back to 1949.
3.2 The Ministry of Culture, Sports, Tourism and Youth Affairs
To understand the present position of the Ministry it is necessary to review briefly the tourism
industry in Pakistan in its historical perspective. Awareness of the relative importance of tourism
was slow to understand, and although Pakistan became a member of the International Union of
Tourism Organisations (IUOTO) now the World Tourism Organisation (WTO) in 1949, as a
sector of government activity, tourism was placed with the Ministry of Railways where it
remained until 1955. It was then transferred to the Commerce Ministry. It was during this period
(1955-60) that a proper organisation for tourism was conceived and a Tourism Bureau was
created in 1960 when it became part of the Ministry of Commerce and attained the status of an
attached Department.
In 1964 it was transferred to the Office of Chief Administrator Civil Aviation and Tourism. When
the Aviation Division was created in 1968, the Bureau remained as an attached Department of
this Division. In 1970 it was downgraded to a Cell though continuing as part of the Civil Aviation
Division when most functions of the Bureau were assigned to the newly formed Pakistan Tourism
Development Corporation. Tourism was taken seriously for the first time at the policy making
level in 1972 when a Ministry of Minority and Religious Affairs and Tourism was created,
though this Ministry was disbanded in 1976 when the Tourism Division became part of the
Ministry of Commerce again. In 1977 the Ministry of Culture, Sports, Tourism and Archaeology
was created. A difficult period of time ensued with the imposition of Martial Law and what small
tourism there was, declined as a result.
From 1977 to 1996 tourism remained in the same Ministry but was given various emphasis in the
administration and switched between divisions. In
1996 the Ministry became the Ministry of Culture, Sports, Tourism and Youth Affairs which was
split into three wings:

10. • Tourism and Sports
• Culture and Administration
• Youth Affairs
From the foregoing it can be surmised that judging the manner in which tourism was shifted
around over the years, it had a relatively low priority in the government.
In spite of the fact that a national tourism policy was introduced in 1990, the sector was still
accorded a very low priority, and tourism seemed to be attached to ministries with sectors
requiring more attention and priority. Certainly in the current ministerial structure, culture, sports
and youth affairs, tourism seems more a pain in the side than a sector which needs cultivating and
nurturing. The manner in which the business affairs of tourism is conducted at the level of the
Tourism wing gives cause for alarm on a number of counts, not the least of which is it's dealings
and relationship with the private sector.
Currently the Ministry is responsible for the policy formulation, development, marketing and
promotion of both foreign and domestic tourism besides coordination and regulating of federal
and provincial governments and private sector activities responsible and involved in tourism.
Within the overall set up it is pertinent to observe that only the tourism wing of the ministry in
collaboration with its field organisations are totally responsible for the development of the
tourism industry. These organisations are:
• Department of Tourism Services
• Pakistan Tourism Development Corporation
• Malam Jabba Ski Resort
• Pakistan Institute of Hotel & Tourism Management
• Pakistan Austrian Institute of Hotel & Tourism Management
The tourism wing of the ministry currently has approximately 90 officers and staff on full time
employment ranging from the Joint Secretary's Office down to Assistant Chiefs and clerks. These
staff are career employees of government controlled and disciplined by the Establishment
Division. As with all or nearly all government employees they are termed generalists and can be
moved from ministry to ministry as required. Over the year the tourism staff has been gradually
reduced to its present numbers. There is very little serious tourism knowledge in the tourism wing
other than one or two long time academic professionals in the Development and Research section.
Within the tourism wing the work has been distributed amongst various sections, these are:
• Regulation Section
• Publicity and Promotion Section
• International Coordination Section
• Facilitation Section
• Operation Section
• Research & Statistics and Planning Development
Regulation Section
Is responsible for the administrative control of the Dept of Tourist Services, Pakistan Tourism
Development Corporation, Pakistan Institute of Tourism and Hotel Management and Malam
Jabba Ski Resort. In addition to administrative matters the section is also responsible for the

11. control, licensing, standards and improvement of hotels, restaurants, travel agents, tour operators,
tourist guides and evaluation of proposals and requests for training abroad.
Publicity and Promotion Section
The functions of this section are to propose publicity and promotion measures and to monitor and
evaluate the publicity and promotion of PTDC and providing funds for undertaking publicity,
promotion and marketing of tourism within and outside Pakistan. They are also responsible for
liaison with national and international organisations in terms of publicity and promotions. These
would include WTP, PATA, ASTA.UFTAA, WATA and similar international bodies. A crucial
involvement is the close working relationship needed in regard to all matters of private sector
participation in international trade fairs, conferences and exhibitions, as well as working closely
with PIA, other airlines, tour operators, hotels and other organisations involved in the promotion
of Pakistan overseas.
International Coordination Section
This section is responsible for all activities involving WTO and other international organisations
concerned with tourism development. This means matters relating to statutes, rules of procedure,
contributions, elections, legal and administrative structure and obligations of Pakistan's
membership as a full member. Other involvements include participation at international
conferences, general assembly sessions, executive council sessions and meetings of various
working parties within these parameters.
Facilitation and Support Section
Its main duties are to support the private sector in establishing tourism facilities and to assist them
in applications and requests for concessions and incentives from government as set out in the
tourism policy. It also publishes the frontier formalities booklet for the guidance of international
tourists. It has to ensure the upkeep and standards of tourist facilities at airports, railway stations,
bus stations, archaeological sites etc. It also is responsible for regulating and facilitating foreign
employment in the tourism sector.
• Operation Section
This section is responsible for processing applications of mountaineering expeditions and
trekking parties and provide the necessary permissions and administrative arrangements as well
customs clearance, briefing/debriefing, porters, weather and a range of other facilitation. It
formulates the rules and regulations for mountaineering expeditions and travelling parties. This
section also is responsible for maintaining proper and correct statistics of all mountaineering
groups in Pakistan and suggest measures for the promotion of mountaineering in Pakistan. It
covers a wide range of other related adventure activities such as trekking, hunting, safaris, white
water sports etc.
• Research & Statistics and Planning Development The function of this section is to collect
statistical data on various aspects of tourism and publish in report form. It is also responsible
for preparation of development plans, project appraisal, monitoring and evaluation of
development projects. It also undertakes research studies and is required to formulate the
ministry's tourism development projects. It compiles eight regular publications besides
completion of some adhoc research papers and studies.

12. The terms of reference and duties of each of these sections is comprehensive. However the
Ministry is still uncomputerised with outdated procedures and work methods. Specifically, work
output and accomplishments is hampered by considerable impediments ranging from
administrative bureaucracy, lack of modem day computer technology, lack of funds, lack of
experience and professional knowledge, lack of facilities, short working hours and general
lethargy. In fact its deficiencies in all departments and lack of funding has serious implications in
the effective management of the tourism sector. It has never been a source of effective and
meaningful data, and the most recent statistics and references date back to 1981. This has been
rectified with the completion of motivational and expenditure surveys of foreign and domestic
tourism undertaken early in the current year 2000. The Ministry in its present form has never had
the respect or confidence of the private sector and has not contributed to the development of the
sector in any meaningful degree over the last twenty years. Its lack of actions in pursuing policy
implementation is lamentable. The Ministry is not fully empowered to tackle the problems of
tourists and tourist enterprises because of assigning of most of these responsibilities to other
ministries/divisions
Department of Tourist Services (DTS)
This department was established in 1976 after promulgation of the three acts to ensure the
standard and quality of facilities to be provided by hoteliers, tour operators and tourist guides.
Currently it has a staff of 116. The main responsibility of this department is to enforce these acts
in the country as a whole and to ensure that tourists are provided the^ facilities/services which are
promised them. Specifically the functions of this department encompass the following:
• Registration of hotels, restaurants, travel agencies and tour guide services.
• Classification of One to Five star hotels.
• All matters pertaining to the issue, renewal, supervision, cancellation, transfer of licenses of
hotels, restaurants, travel agencies and tourist guides.
• Prescribing limits on the number of persons to be accommodated in rooms, transport, and
service charges relating thereto etc.
• Enforcement of apprenticeship scheme.
• Study of rules of establishment of hotels, restaurants, travel agencies and ensuring their
conformity to these rules.
• Enforcement of the code of conduct as specified.
• Fixation of rates and service charges for boarding, lodging, food & beverage and charges
applicable to travel agencies and tour guides. Revision of such rates according to economic
fluctuations or otherwise.
• Setting up of Advisory Committees in accordance with the laws and performance of secretariat
work connected with it.
• Receive and investigate complaints of tourists, foreign tour operators and travel agencies.
This department is one of the most contentious mechanisms of the tourist industry in Pakistan. It
functions on the disciplines of three tourism acts, which are outdated by twenty years. The
standards and international regulations in the accommodation sub sector alone over the last
twenty-five years has changed and improved to modem day demands. The requirements of every
aspect of hotel construction and facilities including kitchens, food preparation, health, services,
public areas, sanitation, environment etc etc. now has to conform to international standards.

13. Grading also now comes into the international domain, as well as taking into account quality of
staff and training requirements. The list goes on.
That this department functions, decides and enforces based on totally outdated laws is not
acceptable either here in Pakistan or internationally. Under international law, tour operators who
promote and bring visitors to a country are now legally responsible for providing what is stated in
their programmes. In the case of Pakistan a stated grade of hotel based on the existing tourism
acts does not conform to international standards, and as a result if featured and quoted in overseas
tour programmes a client may sue the agent for misrepresentation. This is one fundamental issue
which illustrates the need for a total review and updating of the acts as they stand. To continue to
control the sector by enforcing these are further distancing the tourism private sector from the
Ministry. This is compounded by the fact that those responsible for licencing, standards and
enforcement are unqualified in their tasks. They are basically untrained or experienced in what is
now a highly professional and international sub-sector of the industry.
The Ministry of Tourism through the DTS has never addressed the grievances of the private
sector to modify these acts which are now non-implementable at this stage, and numerous
proposals given by. the private sector have gone unresolved.
The inherent malpractices that exist in the tourism public sector has its genesis in this area of
enforcement. As a result there is no standardisation or quality control of the tourism product and
the travel agency/hotel private sub-sector are disillusioned and unresponsive to meaningful
involvement with the Ministry in areas of promotion and co-operation.
Pakistan Tourism Development Corporation (PTDC)
The PTDC is a public limited company registered under the Companies Act in April 1970.
Ostensibly it was created to be the government's arm and thrust for tourism development in
Pakistan. It was given a wide brief and effectively fronted the ministry in all the activities of
development and promotions. It's stated objectives are:
• To develop tourism infrastructure on an all Pakistan basis
• To act as an agent on behalf of the Federal Government for the production of tourist literature
and publicity for tourism both domestically and internationally.
• To act as a catalyst to encourage the private sector to play a more active role in tourism
development.
• To undertake tour operations and provide ground handling facilities for group tours.
The PTDC has an administrative structure which is responsible to control and operate all its
involvement's in the tourism sector. These are:
• Planning and Development Wing/Engineering Department which undertakes identification and
implementation of projects dealing with tourism infrastructure such as motels, recreation
units, resorts etc.
• Publicity and Promotion/Marketing Department which undertakes the production and
publication of tourist literature and foreign and domestic tourist markets.

14. • Associated Hotels of Pakistan (AHP) Ltd, which manages the AHP chain of hotels which
includes: Faletti's Hotel, Lahore Flashman's Hotel, Rawalpindi Dean's Hotel, Peshawar
Cecil's Hotel, Murree
• PTDC Motels Ltd which undertakes the management of all hospitality units operated by PTDC
in various tourist destinations in Pakistan.
• Pakistan Tours Ltd which provides ground handling and transport facilities for international
and domestic groups and also acts as an inbound tour operator.
PTDC maintains 20 Tourist Information Centers (TIC's) in different parts of the country. A model
TIC has been set up at Taxila and Islamabad and a new one has now opened at Karachi airport.
Grants received from government for maintenance of TIC'S are utilised for salaries of working
staff and on rent and maintenance. TIC staff are directly employed by PTDC.
PTDC is governed by a Board of Directors. The Chairman is either appointed by the government
or the position is held by the Minister of Tourism in the absence of an appointed Chairman. A
maximum of 22 directors is allowed. The Chief Executive is the Managing Director under whom
the various organisations, subsidiaries and departments of PTDC operate. The Managing Director
is the principal reporting officer to the Board.
PTDC currently has a staff of some 240 excluding Hotels and Motels. An unsatisfactory and
worrying aspect of the day to day administration and management of PTDC is that not all staff
are employed by the Ministry directly. There is the problem of dual management in that half the
employees are generalists employed directly by the ministry and half employed as semi
experienced personnel directly by PTDC. This results in dual orders and disciplines resulting in
petty suspicions which affects reporting procedures and a lack of internal cooperation.
Since its inception PTDC has had a troubled time and its relationship with the ministry and the
private sector has not been good. PTDC involvement in activities such as tour operating has been
seen by the private sector as the government being directly in competition with the private sector.
Its funding from government has not been sufficient to enable it to function as originally
envisioned and it is top heavy in institutional and administrative costs, so much so that it was
estimated that almost 80% of its funding from government has in the past gone on administration
and staff costs. This has been addressed in part with a reduction in employed staff.
PTDC does however own and operates 31 motels and facilities totaling some 550 rooms in areas
where the private sector would not invest and currently provides a good deal of required low cost
motel accommodation in the Northern Areas and to a lesser extent in parts ofNWFP. Its
involvement in hotels has been a serious failure in terms of standards and profitability. Due to
lack of government support no funding was available to maintain standards, and experienced staff
were difficult to identify. However PTDC has now privatised Dean's Hotel in Peshawar and
Cecil's Hotel in Murree which has since closed and is being rebuilt as a shopping complex. The
remaining two properties are still operated by PTDC though efforts are underway to privatise
Faletti's in Lahore, but technical hitches concerning cantonment authority will delay any progress
to privatise Flashmans Hotel in Rawalpindi. That these two hotels are allowed to remain open and
promoted by PTDC as acceptable standards of accommodation as hotels is a serious indictment of
the governments involvement in commercial tourism activities.

15. Malam Jabba Resort Ltd
Malam Jabba Resort is a private limited company under the administrative control of the Tourism
Division having its own Board of Directors with the Secretary, Ministry of Sports, Culture,
Tourism & Youth Affairs as its
Chairman. Formed in 1980, the Company took over from M/s Pakistan Services Ltd the
construction and establishment of a Ski-cum Summer Resort at Malam Jabba, Swat, and after
obtaining administrative and financial approval from government completed the project in 1988
at a cost of Rs.90.68 million which included the loan amount ofATShillings 16.30 million
provided by the Austrian Government. It is designed to offer the following facilities and
equipment:
• 52 Rooms
• Restaurant
• Chairlift
• Training Lift
• Skate Rink
• Skiing equipment
• Snow Clearing Machines
• Two Generators
• Two Chalets
The project was never visualised as a financially viable proposition which was conceded by
ECNEC when it granted its approval to the project in 1979. Six attempts were made to lease out
the project but to no avail. Finally it was privatised and sold to the highest bidder M/s Parks
Pakistan (PVT) Ltd for Rs 50 million. The company backed out however and filed a suit against
the government for non-issuance of a liquor permit.
With a view to making the resort functional for promoting tourism in the country and also to
generate income to meet the increasing expenditure being incurred on salary and maintenance, the
resort was put into partial operation through PTDC in July/August 1998. It was formally opened
while incomplete by the then Prime Minister in November 1998 and directed that PTDC should
make it fully operational at least to the first floor by June 1999. Other options were considered
such as the resort being run as an extension of the Serena chain of hotels. Meanwhile it was
decided that PTDC would act as managing agents on payment of certain management fees. This
has not been formalised and the future of the resort is currently in doubt.
A recent inspection of the resort showed that the resort displays five different names on
signboards positioned at strategic places and three different names in the main entrance lobby.
There are engineering defects in the roof resulting in leakage into rooms below, only part of the
accommodation has been completed and there is the appearance of decay and general neglect.
Only 22 rooms are functional.
The main visitors to the resort are day-trippers who visit during the summer season. However no
facilities for day-trippers have been .provided by the resort. These include:
• Drinking Water
• Toilets

16. • Parking
• Resting areas (seats/benches)
• Children's recreation facilities
• Walking tracks
• Shelter
• Restaurant/Fast food outlets
• Telephones
As with the PTDC, staff are divided into two groups. One group employed by the Ministry the
other employed by PTDC. This has created hostility among the staff which adversely affects the
working environment, efficiency and standards of service at the resort. There is an urgent need to
address the lack of training and qualified staff for the resort which adds to the fact that it is a
deteriorating physical plant and will have an inevitable negative impact on tourism generation to
this area.
3.6 Pakistan Institute of Tourism & Hotel Management (PITHM)
The Pakistan Institute of Tourism & Hotel Management (formerly known as Tourism and Hotel
Institute, Karachi) was initially set up as a cookery school under the decision of the Cabinet in
December 1960. Later, an institution called the Pakistan Hotel Training Institute was established
by the former Department of Tourism in September 1967 in collaboration with the Pakistan
Hotel, Restaurants and Clubs Association. Capital investment was provided by the Government
of Pakistan for the establishment of the Institute and to supplement its recurring expenditure.
It aimed to train personnel for hotels, restaurants, air/shipping lines and in various catering
disciplines. The cost funding was covered by the UNDP/ILO as agreed in the project document
and signed by the UNDP/ILO and the Government of Pakistan. This funding covered the cost of
international training experts, overseas training and equipment. Interested organisations
contributed training expenses of their staff and private students paid their own fees.
The institute functioned under the National Tourism Organisation until mid 1972 when it was
registered as a society under the Societies Registration Act I860. thereby acquiring its legal
status. Since then the Institute has been functioning as an autonomous body administered by a
Board of Governors including representatives of the travel trade, the hotel industry, PTDC,
Airlines, shipping lines and the Ministry of Education. The Ministry of Culture, Sports, Tourism
and Youth Affairs functions as the coordinating, supervisory and controlling body for the
Institute with the Secretary of the Ministry acting as ex-officio Chairman of the Board.
The main function and activity of the Institute is to impart knowledge by training manpower for
the Hospitality, Travel and Tourism Industry in Pakistan. This is done by regular courses,
seminars, workshops, on the job training etc. It also arranges and coordinates training
programmes with international agencies such as Western Wheat Association, World Food
Organization. It cooperates with PIA’s training center in Karachi ad provides
courses for the Pakistan Navy. It also offers consultancy services when and where required.
Since its inception the Institute has been located in rented buildings which could not cater for the
demands of a professional education institute. This has been a major constraint on its
effectiveness and its ability to train students to the standards indicated in its aims and objectives.

17. Recently the institute has moved to a newly constructed building which is not yet complete and
lacks numerous important facilities and equipment and has yet to resolve many problems to
enable it to provide better training and facilities and environment for students and staff.
The institute cannot provide proper fulltime training in any of its disciplines which are stated as
courses conducted in:
• Travel and Tourism
• Tour Planning
• Sales and Marketing
• Hotel Management
• Hotel Front Office
• Hotel English Skills
• Food and Beverage Production and Service
• Bakery
• Fast Food and Continental
• Food and Beverage Service (bar and restaurant)
• Housekeeping
• On the Job Training
• Interior Decoration
• National Training Bureau (Special Skills)
It has had no official Director for the last decade and the current Acting Director has little
management or training skills and is not in tune with the requirements of the hospitality industry.
The existing staff are demotivated and unqualified with instructors entrenched in outdated
syllabuses and teaching methods. As a result, the image of the school throughout the industry is
very negative, primarily due to lack of knowledge as to the industry needs and what the school
can provide.
The inabilities of the school is further compounded by government controls and establishment
employment scales where it is not possible to attract national or international qualified trainers at
acceptable private sector levels.
Previous funding assistance through the EU and ILO in a range of technical support has not been
adapted by PITHM and consequently has proved unsustainable due to the lack of Government
commitment and implementable actions.
A new PAITHM school is being completed in Swat with assistance from the Austrian
Government. At the time of this report it is questionable and remains to be seen, that in view of
the experience of PITHM, Karachi, and if it is to be run on the same lines, if it will contribute
improved training standards to the industry.
3.7 PROVINCIAL TOURISM DEPARTMENTS AND ITS CONSTITUENTS ORGANIZATIONS
N.W.F.P.
Tourism is the responsibility of the Department of Information and Tourism, with the Secretary
as the delegated official in charge of tourism. Information sector being the most crucial and time
consuming delegates tourism affairs to junior officers who lack knowledge and skills in the
tourism sector. They also have no authority in any matters of policy decisions. Efforts of the
Federal Government have resulted in promotion of tourism in this province but has not been able
to fully explore the tourism assets of the province.

18. NWFP after assessing the performance of the TDCP and realising that most tourism assets of
Pakistan are located in the jurisdiction of NWFP, set up the Sarhad Tourism Corporation
(STC). The STC was assigned the total responsibility for promotion, development, marketing and
any other activities necessary and was to act as a field wing of the Department of Information and
Tourism.
Unfortunately the provincial government in spite of the establishment of the STC has failed to
promote tourism, mainly due to lack of financial resources. A Ski Resort at Malam Jabba
established by the Federal Government is being operated by PTDC. Similarly motels at Naran,
Miandan, Kalam, Saidu Sharif etc have been established by PTDC and are being operated by it. A
training institute with Austrian funding support at Guli Baga has been constructed by Federal
Government.
NWFP along with the Northern Areas is generally recognised as the tourism region of Pakistan,
with its beautiful valleys, lakes, ski resorts, archaeological sites, historic remains, rivers,
mountains and glaciers, civilisation and culture and its people. With the Northern Areas it is the
main tourism product and image to be projected to the outside world; that it has failed to be
developed and promoted, is a lack of motivation and will, based on negative financial resources
of the provincial government and its tourism organisational structure.
The functions of coordination, regulatory and implementation of policies of the
Department of Culture, Sports, Tourism, Archealogy and Museums are looked
after by the Secretary being its head. In the secretariat, the Secretary is assisted
by:
• Deputy Secretary, Sports, Culture, Tourism, Archeology & Museums.,
• Each Deputy Secretary is assisted by four section officers alongwith their
support staff.
The organization of the Secretariat is as follows:
ORANIZATION OF THE SECRETARIAT
SECRETARY
DEPUTY
SECRETARY
SO-A POSO-I SO-II

19. ROLE AND FUNCTIONS
The Department's functions, as prescribed in the Rules of Business of the
Government of NWFP, are as follows:
 Tourism;
 Sports;
 Culture;
 Archealogy & Museums;
The attached Directorates etc. of the Department have set the objectives as
detailed in the following sections:
 DIRECTORATE OF SPORTS
The Sports Directorate has the following objectives:
 Control and allocate necessary grants to the sports organizations
in the Province;
 Develop sports activities;
 Hunt talent by holding inter-district, inter-divisional and inter-agencies
tournaments; and
 Impart training through coaching camps.
 SARHAD ARTS COUNCIL
Sarhad Arts Council was established in 1985 at Peshawar with a view to achieve
the following broad objectives:
 Preserve cultural heritage;
 Promote and develop culture, art and literature on indigenous and
national lines, keeping the regional background intact;
 Monitor the activities of cultural, arts and literary organization:
 in the Province;
 Forge unity among different segments of society;
 Maintain a healthy balance between the institutions involved ii cultural
and literary activities and Government functionaries;
 Cement the bond of brotherhood between oilier province; through
cultural exchanges, arts exhibition and literary meetings;
 Launch campaign against drug abuse/menace through cultural and
literary activities.

20.  SARHAD TOURISM CORPORATION
Sarhad Tourism Corporation (STC) was incorporated as a limited company on
January 14, 1991 for the development of tourism industry in the Province. The
strategy of STC is to act as catalyst and encourage the private sector to come
forward for the development of various aspects of tourism. The objective for the
establishment of STC are to:
 Motivate the private sector to come forward and support tourism
development in the shape of tour operations and accommodation
facilities at potentially attractive regions;
 Provide long-term, leases to private sector for development of
properties through Joint ventures with STC;
 Serve as a spring board for fruitful interaction between the
Government, PTDC and the private sector for proper development of
tourism industry;
 Cooperate with private sector in developing, distribution and sale of
quality information and publicity materials;
 DIRECTORATE OF ARCHEOLOGY AND MUSEUMS
The Directorate has been established to:
 Preserve the cultural heritage;
 Operation and maintenance of the Peshawar Museum to impart
knowledge and educate the youth students, scholars and foreign
visitors.
FIGURE 6-2
ORGANIZATION OF
INFORMATION, PUBLIC RELATIONS, CULTURE, SPORTS, TOURISM,
MUSEUMS AND ARCHIVES DEPARTMENT

21. HUMAN RESOURCES
The manpower of the Department of Information, Public Relations, Culture
Sports, Tourism, Museums & Archives and its Directorates, is provided in tin
table given below:
SECRETARY
DEPUTY
SECRETARY
SARHAD ART
COUNCIL
INFORMATION
DIRECTOR
SPORTS
SARHAD TOURISM
CORPORATION
DIRECTOR
MUSEUMS &
ARCHEOLOGY
POSO-A
SO-I SO-II

22. TABLE
MANPOWER OF THE DEPARTMENT AND ITS DIRECTORATES
(In Nos.)
SR.
NO.
DEPARTMENT
OFFICERS STAFF TOTAL
1993-94 1994-95 1993-94 1994-95 1993-94 1994-95
1. Secretariat 8 8 24 24 32 32
2. Information 39 39 203 211 242 250
3. Public Relations 3 3 6 6 9 9
4. Archives & Libraries 19 19 107 107 126 126
5. Archeology & Museum 17 19 90 90 107 109
6. Sports - 11 - 36 - 47
Total 86 99 430 474 516 573
Source: NWFP Budget, 1994-95
The budgeted manpower during 1994-95 is 573 as compared to 516 in 1993-94.
 Augment the tourism, revenues and tourism potential of the Province in
particular and the Country in general; and
 Establish Tourism Information Centres at various locations in the Province
to disseminate information about tourist spots and facilities to potential
tourists and provide market services.
PERFORMANCE
The Department is giving publicity to the promotion of Government's social
activities. The Sports Directorate has held inter-district and inter-divisional
tournaments and conducted coaching camps in squash, athletic, hockey,
badminton, boxing, football, table tennis, basketball, weight lifting and volleyball
at Peshawar, Abbottabad and Swat where 287 participants were coached. The
Archives and Libraries Directorate has maintained many a files of important
nature besides preservation of library books and files. The accesstion registers of
all antiquities of the museums have been maintained by the Directorate of
Archeology and Museums. The museum itself comprises of three sections viz
Gandhara, Muslim and Tribal sections.
Sarhad Tourism Corporation has -been established to promote tourism in the
Province.

23. ORGANIZATION
The Department is carrying out its allocated business through the following
attached departments:
 Directorate of Information;
 Directorate of Public Relations;
 Directorate of Archives and Libraries;
 Directorate of Archeology and Museums;
 Directorate of Sports; and
 Sarhad Arts Council.
In addition to these directorates, Sarhad Tourism Corporation is functiioning as a
limited company under the Companies Ordinance, 1984.
The organization of the Department is attached as Figure 6-2.
BUDGETS
The budgetory allocations of the Department are as follows:
TABLE
BUDGETORY ALLOCATIONS OF THE DEPARTMENT AND ITS
DIRECTORATES
SR.
NO.
DEPARTMENT PURPOSE
1993-94 1994-95
BUDGETEDBUDGETED REVISED
1.
2.
3.
4.
5.
Secretariat
Information
Public
Relations
Archives &
Libraries
Archeology &
Museums
Estab- Charges
Other Charges
1,560
299
1,612
665
1,924
378
Total 1,859 2,277 2,302
Estab-Charges
Other Charges
7,635
1,852
8,030
3,887
9.926
1.955
Total 9.487 11,917 11,881
Estab. Charges
Other Charges
388
28
272
52
463
113
Totall 416 324 576
Estab. Charges
Other Charges
3,364
893
3.049
1,221
3.633
696
Total 4,257 4.270 4,329
Estab. Charges
Other Charges
3,212
1,168
2,970
1.327
3.489
996
Total 4,380 4,297 4.485

24. 6.
7.
Sports
Total
Department
Estab. Charges
Other Charges 2,578
417
5,117
294
3,341
Total 2,578 5.534 3.635
Estab. Charges
Other Charges
16.159
6,818
16,350
12.269
19.729
7.479
Total 22,977 28.619 27.208
Grants-in-Aid
- Improvement of Stadium
- Promotion of Cultural Acvities
- Maintenance of Nishtar Hall
15.000
1.450
2,000
15.000
9.128
700
17.000
1,450
4,000
Total 18.450 24,828 22,450
Total Expenditure 41,427 53,447 49.658
Source: NWFP Budget, 1994-95
The increase in budgetary allocations during 1994-95 on establishment charges,
other charges and grants-in-aid, has been 22, % 10% and 22 % respectively over
1993-94. The overall budgetary increase during 1994-95 is 20%. The
establishment and other charges were 55% of total expenditure during 1993-94
and 1994-95.
SCOPE & METHODOLOGY FOR PRIVATIZATION PRIVATE PARTICIPATION
Most of the activities of the Department of Information, Public Relations, Culture,
Sports, Tourism, Museums and Archives are providing of information to the
general public through different medias and development of public relations
between Government and general public. As such, there seems to be no
potential of private participation in these activities of the Government. However,
the maintenance of archives is reported to be poor. There is, therefore, possibility
of giving-out maintenance contract to private sector to up-keep the archives.
Sarhad Tourism Corporation (STC), a public limited company, has the mandate
to provide long-term leases to private sector for the development of properties
through joint ventures with STC.
The Government of NWFP had leased out three motels at Naran, Kalam and
Miandam to Pakistan Tourism Development Corporation (PTDC) at lease rental
of Rs.12,000/- per motel per annum. The lease period of these motels has since
expired and the Government has already decided to take back these motels from
PTDC and lease out to private sector through STC. However, because of many a
reasons the decision is yet to be implemented.

25. Similary, the Government haslias decided that various rest houses owned and
managed by different Departments of GoNWFP will be transferred to STC and be
operated in collaboration with private sector for tourism. The properties identified
to be transferred in first phase to STC are as follows:
TABLE 6-3 PROPERTIES IDENTIFIED FOR TRANSFER TO STC
SR.
NO.
DETAILS OF PROPERTY OWNERSHIP AND MANAGEMENT
1 Kund Rest House C & w Department
2 Inspections Bungalow Chand View. Muree C & w Department
3 Secretarial Cottage No. 2, Nathiagali C & w Department
4 Fan House, Nathiagali C & w Department
5 Annand Cottage, Nathiagali C & W Department
6 Hill-Side Cottage, Nathiagali C & W Department
7 Falak Sair Hotel, Kalam Commissioner, LG&RD Malakand Deptt.
8 Frontier Inn, Khushal Garh, Kohat Commissioner, LG&RD Malakand Deptt,
9 Frontier Inn,. Banda Daud Shah, Kohat Commissioner, LG&RD Malakand Deptt.
10. Frontier Hut, Malakand Agency Commissioner, LG&RD Malakand Deptt.
11. Kund National Park Commissioner, LG&RD Malakand Deptt.
Source: Sarhad Tourism Corporation.
However, because of many impediments the decision has not been implemented
and the owning departments are reluctant to transfer these properties to STC. As
a result STC, which was provided seed money of Rs. 5.1 million, is consuming its
equity. A complete list of properties is attached as Appendix 6-1 placed at the
end of this chapter.
In view of the foregoing, there is an urgent requirement for having implemented
the Government's decisions for the promotion of tourism industry in the Province.
IMPACT ANALYSIS
The properties identified- to be transferred to Sarhad Tourism Corporation are
under the possession of C & W deparment and LG&RD of Provincial
Government. These departments are using these properties as rest houses and
paying a nominal amount for the period of stay in them. The transfer of the
identified properties to Sarhad Tourism Corporation for their operation on
commercial basis with private partnership will boost tourism in the Province.
However, various impediments will continue to be created in transferring of these
properties.
Special room rates may be negotiated with the private sector for providing of
required facilities to the parent departments for official and personal uses. The
transfer of identified properties to Sarhad Tourism Corporation and subsequent

26. participation of private sector would result in substantial. generation of revenue to
the Government. There would be no negative effect on the employees as they
would continue to function under the new arrangement of management.
APPENDIX 6-1
PROPERTIES PROPOSED TO BE TRANSFERRED TO
SARHAD TOURISM CORPORATION
PROPERTY PRESENT OWNERSHIP &MANAGEMENT
1. Kulalai Rest House.
2. Dassu Rest House (3 rooms).
3. Thandiani Rest House.
4. Thai Rest House.
5. Kalabagh Rest House.
6. Barrian Rest House.
7. Dadar Rest House.
8. VIP Guest House, Shogran.
9. Inspection House, Shogran.
10. Inspection House No I, Shogran.
11. Inspection House No. II, Shogran.
12. Naran Rest House.
13. Darosh Rest House.
14. Bahrain Rest House.
15. Band Kalam Rest House.
16. Shangia Rest House.
17. Kund Rest House C&W deptt.
18. Rest House, Haripur.
19. Batrassi Rest House.
20. Highway Rest House, Khanpur Dam on
lake-side
21. Thandiani Rest House.
22. Inspection Bungalow, Kawai.
23. Inspection Bungalow, Mohandir
24. Inspection Bungalow, Naran Upper.
25. Inspection Bungalow, Naran Lower.
26. Naran Anexxe, Naran.
27. Inspection Bungalow, Sherkol.
28. Inspection Bungalow, Thakot.
29. Inspection Bungalow, Dungagali.
30. Annex, Dungagali.
31. Inspection Bungalow, Chand View Murree.
32. Secretariat Cottage No. 1, Nathiagali.
33. Secretariat Cottage No. 2, Nathiagali.
34. Fan House, Nathiagali.
35. Inspection Bungalow, Kalapani.
FOREST DEPTT.
“
“
“
“
“
“
“
“
“
“
“
“
“
“
“
C & W deptt
“
“
“
“
“
“
“
“
“
“
“
“
“
“
“
“
“
“
“

27. 36. Annand Cottage.
37. Hill-side Cottage.
38. Vindya Cottage.
39. Additional Cottage.
40. Inspection Bungalow, Nathiagali.
41. Shimla House.
42. Inspection Bungalow.
43. Naran OTDC Motel.
44. Miadam PTDC Motel.
45. Kalam PTDC Motel.
46. Falak Sair Hotel, Kalam, Swat.
47. TOR MOR Rest House,
Malakand Agency
48. Changia Gali Rest House,
49. Frontier Inn, Khushal-Garh, Kohat.
50. Frontier Inn, Banda-Daud Shah.
51. Frontier Hut, Malakand.
“
“
“
“
“
“
“
“
“
“
Commissioner Malakand
Local Govt. & Rural Area
Development Deptt. (LG&RD)
LG & RD Deptt/DC, Abbottabad
LG & RD Deptt/DC, Kohat
LG & RD Deptt/DC, Karak
LG & RD Deptt/PA, Malakand

30. Position of Pakistan
6.3 Position of Pakistan
Pakistan receives limited numbers of tourists, and recent data have shown no growth in real
terms, although there has been recovery from a low point in 1992, and current trends are positive.
Using the latest figures available (1998) it can be seen that since a peak in 1989, total visitor
arrivals have in fact decreased from 494,600 to 428,790. An examination of the motivation for
travel in 1998 shows that returning Pakistanis and others visiting Friends and Relative account for
more than half of all foreign arrivals at 57%. Business visits remain strong at 25%, while holiday/
vacation visits are limited to only 13% of all arrivals. Currently, Pakistan receives approximately
the same number of foreign arrivals as Nepal, a smaller country with much less returning ethnic
traffic, only one sixth of the numbers of India, and less than half of the number received by Iran.
Table 6.4 Visitors to Pakistan Annual Arrival Data
440000
430000
420000
410000
400000
390000
380000
370000
360000
350000
340000
330000
1995 1996 1997 1998
Table 6.5 Visitor Arrivals by Main Purpose of Visit 1996 - 1998
Holiday/Vacation
Visiting Friends and
Relatives
Business Other Total
1996 53,500 15%- 206,700 56% 91,200 24% 17,300 5% 368,700 100%
1997 53,400 14% 210,700 56% 93,000 25% 17,700 5% 374,800 100%
1998 55,600 13% 245,300 57% 107,800 25% 20,100 5% 428,800 100%
Source MCSTYA
In real terms, with only 55,000 tourists arriving in Pakistan for holiday and leisure purposes in
1998, this is a very low base. Without returning Pakistanis and business traffic (some of whom
participate in leisure activities as a secondary motivation), the Country would have minimal
tourism. After discussion with tour operators, we believe that over 75% of long-haul
leisure tourists confine their tour to major cites such as Lahore and Islamabad, and to the
northern part of the Country.

31. Trekking, and to a lesser degree mountaineering, are the highest profile activities of tourists,
although there are a growing number of more general tours, while religious sites are providing a
significant attraction to visitors from the Far East.
Market Constraints and SWOT Analysis
The primary constraints that have inhibited the development of robust markets for Pakistan,
compromised any positive image that the destination may have tried to cultivate, and limited the
impact of both airline and private sector initiatives in core markets are:
• Market perception of political instability, regional and local conflicts, and poor ' security and
safety
• Lack of investment in correctly targeted and integrated marketing activities, including the
provision of information in Pakistan and overseas.
• Erratic standards of service, facility and welcome to foreign tourists.
• Poor quality control of both tourist services and facilities
• Inadequate research, and therefore inadequate information, on core markets, their primary
operators and their market needs
Impact of source market laws
A growing marketing constraint is the importance of consumer protection in major source
markets, which impacts on destinations where standards of operation are low. In Europe, the tour
operator is, by law, totally responsible for the operation of the tour and the services of all
suppliers, while in the USA, Japan and Australia the tour operator can still specifically decline
such responsibility. The German travel trade association ASA confirms that there is no way they
can exclude this liability. To do significant business in European markets every responsible
supplier must recognize these standards of liability, and ensure that their operating standards are
raised, and they hold appropriate insurance cover. This does not mean that tour operators in
Japan, Australia and the US accept lesser standards as they are more likely to be taken to court by
the individual tourist, and the courts tend to support the aggrieved tourist. Therefore most
operators in core source markets will only work with operators and suppliers in Pakistan who can
demonstrate that they recognized and provide international standards of service and facility, and
that their staff is fully trained. This has been demonstrated in Pakistan where the two or three
most professional operators serve over 70% of foreign tour operator demand.
In our analysis of the market potential for Pakistani tourism products we have identified the
following:
Strengths
• A rich historical and cultural heritage
• World renowned natural attractions such as the Indus valley and the northern mountains
• Good access links with primary source markets
• An increasing range of hotels, tours and tourist services
Weaknesses

32. • Very limited tourism infrastructure
• Poor tourism services in many areas
• Lack of any meaningful promotion of the destination
• Inadequate national and provincial tourism organisations and services
• Negative international image of Pakistan
Opportunities
• To improve foreign and domestic tourism by implementation of the WTCVUNDP Strategic
Development Plan for Tourism
• To create a new image for Pakistan
• To optimise existing foreign and domestic markets
• To develop new markets, and new tourism products
• To increase the national awareness of the benefits of tourism
• To increase developmental opportunities in many rural areas
Threats
• Lack of national support for tourism
• Failure to implement recommendations of the Strategic Development Plan for Tourism
• Failure to improve standards of service in all sectors of the industry
• Failure to improve infrastructure in all tourist areas
• Renewed political and social instability
Types of Markets
There are a wide range of motivations that bring tourists to Pakistan. To be able to penetrate any
tourist market successfully, and to develop Pakistan's tourism industry effectively, without
unjustified capital outlay, it is essential to develop markets that are directly attracted by the
specific tourism products that are either already available in Pakistan, or can be developed as part
of the growth of the Country. Certain tourism products attract similar markets and many markets
combine various styles of tourism to create marketable programmes. A full analysis of the various
markets appropriate Pakistan is contained in the Medium Term Marketing Strategy Technical
Report.
Business visitors require a stable and growing economy, with increasing business opportunities in
order to be attracted to a country. A strong economy and a healthy business climate increases the
frequency of business visits and an influx of new business tourists. Leisure tourists require good
access to many parts of the country, good accommodation, services and recreational facilities,
and attractions that have ar appeal to the tourists as individuals. As each person is different, each
destination invariably has attractions that appeal to a certain group of potential visitors. Even the
most unlikely attractions gain the interest of profitable niche markets.
For Pakistan we have identified a range of markets that will be attracted by selected tourism
products, some of which can be developed in the short term, while others must wait for the
opening up of the whole Country to tourists or the development of improved infrastructure.
6.5.1 Business Markets
Business, professional or official visitors come for a specific purpose. They will have come from
countries that have official or trading links with Pakistar The economy of Pakistan is not strong,

33. but there are still many business opportunities here and there is evidence of more new capital
projects. In addition, there are many inter-govemment agencies, NGOs and donor programmes
working in Pakistan, and this brings significant long and short stay traffic. In turn these visitors
also bring in VFR traffic. The majority of business traffic is regional, and current statistics
identify China, India and other parts of the sub-continent as the principal source markets, as well
as the United Kingdom and America as markets outside the region. At the present time, business
visitors account for approximately 25% of all visitors to Pakistan.
Meetings, Conferences and Incentives (MICE) Meetings, Conferences and Incentive
programmes bring a singular, but important form of tourism to a country. It is also an important
form of domestic tourism. Motivation to hold meetings or conferences in Pakistan is currently
governed by the relevance the meeting subject has to the venue. Mos current meetings are hosted
by organisations already in Pakistan, or by the Government. Pakistan can well provide meeting
facilities and the linked accommodation for meetings from 20 to 2,000 delegates.
Special Events
Special events are important in attracting tourists and can influence the numbers of foreign and
domestic tourists, both business and leisure, depending on the style of event. Trade fairs attract
both local people and foreign supplier; and buyers. Sports events such as cricket matches, polo
tournaments, international athletic meets and others attract supporters from the visiting country as
well as domestic visitors. Festivals and national events attract all types of visitor, and are
particularly important in attracting regional tourists.
6.5.2 Visiting Friends and Relatives
Because of the Diaspora of Pakistanis overseas there are important Pakistani communities in
Europe, America, East Africa and the Middle East. Most of them return regularly to visit friends
and relatives and in 1998 accounted for 57% of all visitors. At the 1998 level of 245,000 arrivals,
they are, and will remain for many years one of the most important markets for tourism.
However, because of the very structure of this market, it is a static market that is unlikely to grow
unless there is a significant increase in emigration, and the decision to visit is rarely stimulated by
normal tourism promotional campaigns.
6.5.3 Leisure
Leisure tourism is the most important form of tourism for most destinations as it is a sector that
can be encouraged by infrastructural and facility development in the Country. It is the tourism
sector most influenced by promotional campaigns, and markets can be stimulated by well
targeted and effective marketing programmes.
Leisure tourism is also based on the natural and existing attractions of Pakistan, and most
facilities can be used by both domestic and foreign tourists In 1998, around 55,000 foreign
visitors to Pakistan were identified as coming on holiday or for leisure, and this approximated to
only 13% of all arrivals, while there were indications that there were over 1 million domestic
tourists on a trip of three days or more.
Adventure Tourism

34. At the present time, adventure tourism is the most evident in Pakistan, and is given highest
priority in existing tourism promotion. This is a very important form of tourism and includes
trekking and mountaineering. Most of the tourism of the north is based on this and it has been
reported that over 50% of all foreign holiday tourists at the present time participate in these
activities. These are very important forms of tourism, and for trekking in particular, Pakistan can
increase its market share. Mountaineering has little capacity for growth as the demand for
mountaineering permits is now outstripping availability. Improved access to certain areas,
improved standard of guiding, the development of facilities for additional activities such as
skiing, white water rafting, para-and hang-gliding, and canyoning, through trained and qualified
adventure centres, will stimulate additional interest
Soft adventure tourism can be developed in all parts of the Country with such examples as Camel
Safaris in Sindh and Baluchistan, River Sailing on the Indus, Jeep Safaris in many parts of
Pakistan, Sailing and Game Fishing off the coast of Sindh and Baluchistan, and Horse Trekking
in other regions. The deserts are ideal areas in which to develop new soft adventure programmes.
Leisure/Resort Tourism
There are a limited number of tourist resorts in Pakistan, and as most foreigr tourists are primarily
attracted by the cultural and historical attractions, or sc adventure activities available, most resorts
are targeting domestic markets. However, with a large domestic market, there is robust demand
for tourist resorts that are aimed at the needs and in a price range appropriate to domest travellers.
Cultural Religious and Historical Interests The sub-continent's primary attraction to most
international source markets i the broad range of cultural, religious and historical attractions. The
many cultures, the wealth of relics from past empires and civilizations, the strong religious
heritage of the region, and the diversity of the people provide an appeal that is hard to match in
other parts of the world.
The religious sites can attract pilgrims, while the historical sites can be linke^ in themed tours. In
many cases, regional pilgrims will come to Pakistan to participate in religious festivals, while
tourists from further away, such as Japan, Korea and Taiwan, may combine a holiday tour with
visits to Buddhii shrines. In Pakistan, Buddhist, Sikh and Muslim shrines all provide the
opportunity of developing a wide range of religion-based programmes.
The opportunities for innovative tour development and marketing are only limited by a need to
ensure better access to certain sites, co-ordination with festival authorities, and the provision of
improved guide services and better facilities such as toilets and interpretation.
Environmental and Eco-Tourism
In many parts of the world, and increasingly in the sub-continent, the attractions of the natural
environment are seen as a major tourism resource. The interest in the natural world, its birds,
animals, land and rivers (both abo1 and below the water) and diverse rural surroundings, bring
opportunities for tourism to benefit even the most remote areas. Many of the most important
source markets are found in the industrialised countries of Europe, Japan and the Americas.

35. Environmental tourism, whether referred to as safari, eco-tourism (although this term is suffering
from excessive and incorrect use and a poor image), or nature tourism, attracts serious tourists
who are keen to discover more about the natural life of Pakistan. The Tourism Master Plan has
already identified that Pakistan can offer a variety of areas that are of high environmental interest.
However, many of the regions have few tourist facilities, and little in the way of infrastructure,
and access may be restricted for safety regions. These lucrative markets will not be attracted if
environmental degradation, in any form, is allowed to escalate.