An empirical study on orissa tourism opportunities and challenges

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An empirical study on orissa tourism opportunities and challenges

  1. 1. THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT NEW DELHI THESIS ON “AN EMPIRICAL STUDY ON ORISSA TOURISM OPPORTUNITIES AND CHALLENGES” SUBMITTED TO: PROF. SUMANTA SHARMA DEAN (PROJECTS) UNDER THE GUIDANCE OF:PROF. DIPTI SHARMA MR. HARIHAR MISHRA (INTERNAL) (EXTERNAL) SUBMITTED BY: SUBHASIS MOHANTY ALUMNI ID NUMBER: DS79-M-962
  2. 2. The Indian Institute of Planning & Management, New Delhi BATCH: PGP/SS/2007-09BATCH: PGP/SS/2007-09 ii ALUMNI ID NO.: DS79-M-962
  3. 3. The Indian Institute of Planning & Management, New Delhi ABSTRACTOrissa, a maritime state, on the east coast of India, is bounded by West Bengal andJharkhand on the North, Andhra Pradesh on the South, the Bay of Bengal on the East andChhattisgarh on the West. Its location is between 17°49`N to 22°34`N latitudes and81°27’E to 87°29’E longitudes. Large numbers of small and big rivers dissect the statebefore draining into the Bay of Bengal, which washes its shores on the southern side. Asper the latest census figures the State ranks eleventh in terms of total population and ninthin terms of total area. Perpetually washed by the blue waters of the Bay of Bengal it has atotal coastal length of 482 Km. The state is endowed with a vast reserve of mineral aswell as other natural resources. The state has also won accolades both in domestic as wellas international markets for its exquisite art and crafts. Works of Appliqué, Metal Crafts,Silver Filigree, Patta Chitra from the State has won special appreciations from places inand around the world. Owing to its rich and varied topography, vibrant culture andcaptivating festivities, the State of Orissa offers immense tourism delights to the visitorsin the State. Visitors, starting from neighboring states to the far flung countries throng thestate at different times especially during the festivities.BATCH: PGP/SS/2007-09 iii ALUMNI ID NO.: DS79-M-962
  4. 4. The Indian Institute of Planning & Management, New Delhi COMPLETION LETTER FROM EXTERNAL GUIDE SIGNATORY LETTERThis is to certify that the thesis titled “An Empirical Study on Orissa TourismOpportunities and Challenges” prepared by Mr. Subhasis Mohanty for the award ofdegree in Master of Business Administration (MBA-PGP/SS/2007-09 batch) fromIndian Institute of Planning & Management under my guidance. It is an original pieceof work based on primary as well as secondary data.This work is satisfactory and complete in every respect. I wish him all the success in hisfuture endeavor.Dr. Harihar MishraVice-Principal, Samanta Chandra Sekhar Autonomous College, Puri, OrissaBATCH: PGP/SS/2007-09 iv ALUMNI ID NO.: DS79-M-962
  5. 5. The Indian Institute of Planning & Management, New Delhi THESIS TOPIC APPROVAL LETTER SENT OVER MAILFrom: Thesis <thesis@iipm.edu>Date: Wed, Nov 18, 2009 at 3:33 AMSubject: Thesis Topic Approval (M) SS/ 2007-09To: subhasismohanty4u@gmail.comDear Subhasis Mohanty,This is to inform that the thesis topic “An Empirical Study on Orissa Tourism :Oppoutunities and Chanllenges”, as proposed by you, has been approved .This email isan official confirmation that you would be doing your thesis work under the guidanceof Dr. Harihar Mishra. Make it a comprehensive thesis; the objective of a thesis should bevalue addition to the existing knowledge base.Please ensure that the objectives as stated by you in your synopsis are met using theappropriate research design.You must always use the thesis title as approved and registered with us.Your Alumni ID Number is DS79-M -962You are required to correspond with us by sending the thesis final draft to Prof. DiptiSharma atdipti.sharma@iipm.edu Ph-0124-3917413.Regards,Sumanta SharmaDean (Projects)The Indian Institute of Planning and ManagementSumanta.sharma@iipm.eduPhone: 0124 – 3917401,413,414,415BATCH: PGP/SS/2007-09 v ALUMNI ID NO.: DS79-M-962
  6. 6. The Indian Institute of Planning & Management, New Delhi APPROVED THESIS SYNOPSISPREPARED BY:Subhasis MohantySECTION: HR-6STUDENT ID: D0709SS11005SPECIALIZATION: MARKETING/ HUMAN RESOURCESBATCH: PGP SS 2007-09CONTACT NO: 09818056166 (Personal), 09861108342 (HOME)E-MAIL: subhasismohanty4u@gmail.comDESIRED AREA OF THESIS: MarketingTITLE OF THE THESIS:An Empirical Study on Orissa Tourism Opportunities and ChallengesINTRODUCTION TO THE AREA OF RESEARCH:Orissa has been the topmost tourist destinations of India for long years, but for someyears its heritage and tourism destinations have been vanishing form peoples’ mind. Theprimary Motivation behind my research work on the tourism Development of Orissa wasdue to after knowing some important facts regarding Orissa and its development. Orissahas been developing tremendously and is engaged in industrial facilitation andinvestment promotion in all key areas of economic growth.Out of the total 256 million domestic tourists coming into India, just 5.36 million end upin coming to Orissa. Whereas annual Growth rate of foreign tourists coming into India isonly growing by only 11.1%.These figures cut a very sorry figure for the tourismindustry. Some steps should be taken for the development of the Orissa Tourism. It isalso understood that the government of Orissa has not been very successful in attractingBATCH: PGP/SS/2007-09 vi ALUMNI ID NO.: DS79-M-962
  7. 7. The Indian Institute of Planning & Management, New Delhineither foreign tourists nor domestic tourists as compared to other states of India on awhole.RESEARCH OBJECTIVE:Main objective of my Thesis was to gather information about the tourist places and thehindrances. Other objective includes to how to solve the existing problems that exist andhow to increase its reputation. • The purpose of my study will be to study tourism industry of India as well of Orissa in detail. • Access the existing tourism scenario in Orissa considering the Natural Resources, Heritage and other cultural assets, Qualitative/demographic factors like Population, employment, occupation, income levels and services and infrastructure already available. • To find out the reasons behind poor performance of the industry in the state and to come up with various measures that can be used in improving it and finally studying and analyzing the applicability of 6S model in the state. As per World travel and tourism Council (WTTC) statistics, tourism in India is poised to grow at a rate of 14.9 %per annum till 2012.States with rich tourism potential ,such as Orissa have as important role to play in this development, as per as survey conducted as market research in Bhubaneswar.The Objective of my survey will be to find the following details. • Indentifying traveling habits of people in Orissa. • Finding out reasons for their traveling. • Factors that affect them in deciding the location of the Tourist spots. • Comparison of services that they get within Orissa and in other states • Their satisfaction level with the facilities available in Orissa and the efforts of Government in promoting various places. • Effects of availability of liquor on tourism and on society as a factor.BATCH: PGP/SS/2007-09 vii ALUMNI ID NO.: DS79-M-962
  8. 8. The Indian Institute of Planning & Management, New DelhiSCOPE OF THESIS WORK:Scope of my research work would be all the districts of Orissa and its tourist destinations.Where, how many tourist spots are there and their existing tourist inflows and outflows.What would be the steps to increase that figure. And at the same time how to make themtourist friendly by removing the existing problems and taking it into the well-knowntourist destinations of Orissa.RESEARCH METHODOLOGY:Primary research:Collection of samples through convenience sampling technique by the use ofquestionnaires which include both open end and close end, which have to be answered bysample chosen. Sample frame will be from the potential Tourists • Exploratory research and Sampling Design • Descriptive ResearchSecondary research: For getting the deep insights of the Industry reference would be taken from: • Books related to the Tourism Industry • Websites of the State Government • Internet • Magazines, Literatures • Annual reports and journalsJUSTIFICATION FOR CHOOSING A PARTICULAR RESEARCH PROPOSAL:To collect an in depth knowledge to the tiniest detail of the Tourism industry, to gain adetailed understanding of the whole industry and its working process as if how differentsteps were followed tactically & strategically for the Development of Tourism Industry ofBATCH: PGP/SS/2007-09 viii ALUMNI ID NO.: DS79-M-962
  9. 9. The Indian Institute of Planning & Management, New DelhiOrissa. Is the system is properly positioned in this highly competitive world. What allcan be done for its betterment. Apart from this thesis will be definitely help me to befamiliar with the each aspect of the Tourism Growth of Orissa and the unsolved questionsit can answer. Feedback and suggestions will also be given from my understandings ofthis thesis project for the same.THSIS EXTERNAL GUIDE:Dr Harihar MishraVice-Principal,Samanta Chandra Sekhar Autonomous College, Puri, OrissaMobile-09861340012Direct (Office)-0752222055Direct (Residence)-06752251352Email ID-hariharmishra52@gmail.comBATCH: PGP/SS/2007-09 ix ALUMNI ID NO.: DS79-M-962
  10. 10. The Indian Institute of Planning & Management, New Delhi ACKNOWLEDGEMENTIt is well-established fact that behind every achievement lays an unfathomable sea ofgratitude to those who have extended their support and without whom the project wouldnever have come into existence.I express my gratitude to Indian Institute of Planning & Management, New Delhi forproviding me an opportunity to work on this thesis as a part of the curriculum.Also, I express my gratitude to Prof. Sumanta Sharma and Prof. Dipti Sharma myinternal guide from IIPM on the completion of my project and I am very thankful toDr Harihar Mishra, Vice-Principal, Samanta Chandra Sekhar Autonomous College,Puri, Orissa my external mentor for his excellent guidance and kind cooperationthroughout the thesis work.BATCH: PGP/SS/2007-09 x ALUMNI ID NO.: DS79-M-962
  11. 11. The Indian Institute of Planning & Management, New Delhi CONTENT ABSTRACT.................................................................................................ii COMPLETION LETTER FROM EXTERNAL GUIDE...........................iii THESIS TOPIC APPROVAL LETTER SENT OVER MAIL..................iv APPROVED THESIS SYNOPSIS.............................................................v ACKNOWLEDGMENT.............................................................................ix1. INTRODUCTION ................................................................................................12. RESEARCH OBJECTIVE & METHODOLOGY..............................................153. LITERATURE REVIEW....................................................................................174. PRIMARY FINDING AND ANALYSIS...........................................................535. RECOMMENDATION.......................................................................................626. CONCLUSION & IMPLICATIONS..................................................................647. BIBLIOGRAPHY...............................................................................................668. COPY OF THE QUESTIONNAIRE..................................................................67BATCH: PGP/SS/2007-09 xi ALUMNI ID NO.: DS79-M-962
  12. 12. The Indian Institute of Planning & Management, New Delhi 1 INTRODUCTIONTourism is the basic and the most desirable human activity describing the praise andencouragement of all people and government. Hotel industry is an essential part oftourism. The expansion of tourism is well inevitable bringing out development of thehotel industry. Hotel industry is so closely linked with the tourism industry that it isresponsible for about 50% of the foreign exchange earning form tourism trade andenterprises. The rising volume of tourism influx brought into light, the shortage of hotelsin important tourist’s centers. Keeping are in view the changing standards in theinternational hotel keeping. The Indian industry to make a number of improvements is inIndia. It’s not enough to have adequate hotel accommodations, it is equally necessary tohave at various levels, low priced, moderately priced, high priced, and a few luxuryhotels.Hotels may be categorized depending upon factors such as: • Locations • Categorization according to plan • Categorization according to number of rooms. • Categorization by type of clientele. • Categorization by the length of stay of guests. • Categorization by the facilities that the hotel offers.The devaluation of the Asian currencies, the Kargil issue and the parliamentary electionshad affected growth in the tourism industry. The situation is gradually moving back toBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  13. 13. The Indian Institute of Planning & Management, New Delhi 2normal with the tourist arrival figure marginally increasing from 2.3mn in 1997 to 2.5mnin FYO8. The industry is growing at a rate of 9%. With the political and economicstability being more clearly visible, both tourists as well as business arrivals are likely togather momentum in the remaining part of the year. The Indian hotel business focuseslargely on foreign tourists with only 30% of the business coming from the domesticbusiness and the leisure travels. The tourist arrivals in India are seasonal in nature, withthe best season being from September to December followed by a steep fall till May. Theperiod June to September gains momentum once the monsoons are over. The slackseason is generally used for renovation work and the period is characterized by discountsto attract clients. High capital expenditure acts as an entry barrier in the industry with theavailability of prime land at economically viable rates being a major constraint. Thegestation period is long and break even normally takes five to eight years to happen. Dueto this the established players like Indian Hotels, E.I.H, etc. have an advantage overforeign majors as they already have well establishments at prime locations. India was lateto wake up to the potential of tourism as an industry that is not just an earner of previousforeign exchange but also one that could generate a lot of employment through horizontaland vertical linkages. The importance and significance of tourism could be understoodfrom the observation of UNESCO, which says, "tourism is a traditional instrument, whichenables culture to the rehabilitated and made know to the rest of the world". It is said itsa smokeless industry and has become second to the petroleum industry in world trade.This great importance was formally acknowledged when the XXIU.N General assemblydesignated 1967 as international tourist year with a unanimous resolution recognizingthat "tourism is a basic and most desirable activity deserving the praise andencouragement of all peoples of government". When traveling away from home, touristcomes in contact with the places they visit with their inhabitants and social exchangetakes place. Their presence and social background affect the social structure and mode oflife at the destination. Tourists are in turn affected by the experience and often carry backhome with them, new habits and new outlook on life. Tourist has great educationalsignificance. Contact between people of different races and nationalities widen onesBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  14. 14. The Indian Institute of Planning & Management, New Delhi 3outlook. Tourism, whether domestic or international has common economies significancein the sense that money earned in places visited large sums of transferred to the hosteconomies where this money provided a source of income, a means of livelihood andamenities for the resident population. Purchasing power is generated in the receivingareas through the expenditure of visitors. Money received is spent and resent and thismultiplier process the host country is a beneficiary. International tourism is of greatimportance in international trade in the sense that it enters into the balance of paymentsof accounts of individual countries generating tourist traffic and export for countriesreceiving tourist traffic. For many countries is a major item in world trade. Thesecountries exhibit faster growth in tourism than in trade of goods.Domestic and International Tourism:Usually, a distention is drawn between domestic or internal and foreign of internationaltourism. In domestic tourism people travel outside their normal domicile to other areaswithin the country. Barriers like language, currency and documentation are not in thedomestic tourism. But in India, since difference estates have different languages; onesown language may not serve a medium of communication. Domestic tourism has nobalance of payment implications. When people travel to a country other that which theynormally live in is known as international tourism, the distinction between domestic andinternational tourism is now diminishing. The reasons being: • Language barriers are reduced by improving language skills • Currency and customs unions are developing in many European countries. • With globalization the free movement of people is growing.Considering the greater multiplier effect in domestic tourism, domestic tourism wouldhave received greater emphasis in India. Reliable data on the growth of domestic touriststraffic are not available as not extensive survey has been conducted on a national level byBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  15. 15. The Indian Institute of Planning & Management, New Delhi 4any agency, government or otherwise not given the numerous festivals celebratedthroughout out the year, the innumerable tourists centers in the country, the geographicalexpands and the resource constraints, estimates of documents tourists traffic through anexecutive survey is considered impossible.Domestic tourism if considered separate from the travel for religious and commercialpurpose. It is a post-independence phenomenon. Industrial growth, improvement in thestandard of living, rise in disposable income and most importantly the improvement oftourist infrastructure search as hotels, air, train and road transport has contributed to theimpressive growth in tourist traffic. The definition of a domestic tourist is a person whotravels within the country to a place of residence and stays at hotels or otheraccommodations establishments run on commercial basis or in dharmashalas, sarais,chaultries etc. for duration of not less than 24 hours. The factors that govern themagnitude of domestic tourist traffic are the religious and cultural importance of a place.The extent of manufacturing, business and trading activity, the climatic conditions, theinfrastructure facilities available and the geographical location etc. the current roughestimate of domestic tourism in India is ten million a year.Tourism Planning in India:The outlay for tourism development was Rs.8 crore in the third plan Rs.186.46 crores inthe sixth plan and Rs.326.16 crores in the seventh plan. It was during the sixth plan that atourism policy was formulated and presented before the parliament. The sixth plan is anobjective envisages optimum use of infrastructure, regionalizing tourist traffic andincrease in accommodation and so on. However, the plan turned out to be a very mereblue print for action for tourist development. The seventh plan set a target of 1.5-milliontourist arrival by 2005 and 3 million by 2010 AD. It also recommended accordingindustry status to tourism in order to encourage private sector investment in tourism. Itwas also recommended that public sector would focus on basic infrastructuredevelopment, and the private sector would be in encouraged to develop tourism. For theBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  16. 16. The Indian Institute of Planning & Management, New Delhi 5first time domestic tourism was sought to be encouraged for promoting social andcultural cohesion and employment generation. The national committee on tourismpresented a comprehensive report in 2007, which provided the basis of a long-termperspective plan for tourism in the country.The committee set a growth rate of 7% per annual for international tourists.Arrivals by 2010 AD. Recommendations also included the following: • Set a tourism finance cooperation to extend financial assistance for tourism project. • Developments of select tourist destination and circuit’s diversification of tourism arrival of cultural destination to the leisure and holiday tourist. • Markets, exploration and development of new tourism generating center. • Increase the hotel accommodation by cent percent by stimulation investment through appropriate package of incentives.The committee’s major recommendation expects that of setting up a national tourismboard wherein accepted. In April 2007, the tourism finance cooperation of India was setup. A working group of the state tourism secretaries in July 2006 identify incentives forthe industry. About 14 states and 3 union territories have declared tourism as an industryhowever, despite the efforts during the seventh plan for diversification of tourists forcultural destinations to the leisure and holiday destination, India still remains as a culturaldestination. Budget outlays where diverted towards facilitating trekking development ofbeach resorts, building shopping plazas, wildlife tourism, facilities for conference isskiing etc. It is reported that the profile of the average overseas and domestic traveler ischanging. In the current plan period as well one of the principal thrust areas would bemodification of the Indian tourism product by adding the concept of India. Trekking,BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  17. 17. The Indian Institute of Planning & Management, New Delhi 6winter and water sports wild life and health tourism will remain as the major thrust areasin the forth-coming area.A Historical Perspective:Post-Independence, while critical issues like agriculture, infrastructure and power supplyhogged the limelight, travel and tourism received step daughterly treatment, as it wasdeemed a ‘luxury’ – affordable by only a few.Not much has changed over the last four decades, and it seemed every time the industrygained some form of momentum despite the closed and protected economy, there wassomething lurking in the shadows to clip its wings. The introduction of FERA put aserious crimp in foreign investment in the country and the Emergency was yet anotherdeterrent to the tourism movement. A look at the Five Year Plans shows that in the ThirdPlan (1961-1966) tourism got approx 4.001 crores, which 0.11% of the total Plan outlaywas. At this time, policy makers, industry representatives and opinion makers equatedtourism with foreign visitors. To their way of thinking, it was the foreign visitor whooccupied hotel accommodation, filled airline seats, frequented bars and restaurants andused recreation facilities. Plus, given the foreign exchange (forex) shortage, the foreigntourist was looked upon as Daddy Big-Bucks – with an almost endless supply of crispforeign currency. And while key aspects of Indian tourism came to be tailored to theforeign visitor, the price mechanism too, came to be tied to overseas costs. Hotel rates,food and beverages in hotels, handicrafts, etc, were priced at a level much higher than theeconomic standards prevalent in the country at the time. No way could our rupee-totinglads compete. Thus, for our fellow countrymen, travel was restricted to places ofpilgrimage or going to one’s native town to visit the family once a year. However, otherSouth East Asian countries were on the ball soon enough when they realised the potentialof tourism. Hong Kong, Singapore and Thailand dug in the infrastructure, developeddetailed tourism plans and marketed them in glorious technicolour across the world.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  18. 18. The Indian Institute of Planning & Management, New Delhi 7Ironically, today, Indian outbound tourism provides a sizeable chunk of tourist inflowinto these countries.Here and Now:Post-September 11, the tourism industry in India has shown resilience with Indiantravelers opting to look inwards to domestic tourism or to explore other destinations suchas Australia and New Zealand. The Kargil conflict, the current Iraq war and the new fluon the loose in South East Asia, have also dealt serious blows to the global tourismindustry. Despite this litany of international crises, today, it is an accepted fact thattourism is the fastest growing industry in the world; a creator of wealth and businessopportunities, an income multiplier, a catalyst for employment and preserver of theenvironment. An investment of Rs 10 lakhs in tourism, creates 89 jobs, as against 45 inagriculture, and 13 in manufacturing for the same investment. The current budget hasfinally granted the tourism industry “infrastructure” status and an increase in plan outlayto Rs 225 crore. The international airports in the four metros are to be upgraded to world-class standards and six comprehensive tourism circuits will be developed to help promotetourism. The lack of a centralized government apex body to give it the tourism industryfocus and direction is still a cause for serious concern. At present, the central ministry oftourism’s functions is limited to marketing India overseas and providing meager financialsupport to state governments for the creation of tourism facilities. Most of the importantissues relating to tourism are deciding elsewhere. The Ministry of Civil Aviation controlsaviation policy as well as the administration of airports. The Ministry of HomeAffairs/External Affairs decides the visa regime, and the Ministry of Finance supervisesthe fiscal policy for investment in the tourism sector and of course the all important taxstructure. It is left to the private sector to run between the ministries to bring about anyradical reforms. The classic Indian bureaucratic runaround – the death-knell to anindustry on the move!BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  19. 19. The Indian Institute of Planning & Management, New Delhi 8Tourists, Tourism and Tourism Industry:While ‘Tourists’ are people from surrounding areas or from other parts of the country oroverseas, who travel around our State for various purposes. They may stay overnight orfor longer periods, usually taken as less than a year; Tourism is “the temporarymovement of people (visitors) from one area to another for activities related to - leisure,pleasure, social, recreational, knowledge-seeking, medical and business etc”. TourismIndustry is primarily service-oriented, people-based industry, in a largely seasonalbusiness providing a wide range of services to ‘tourists’, often on 24X7 basis. It is uniquebecause - 1) it is not a single, definable industry, instead it is made up of businesses andorganizations belonging to various other industries and sectors and, 2) the interplay of allof these (businesses and organizations), when properly aligned, gives rise to TourismIndustry’s ultimate product - ‘the travel experience’.Structure of Tourism Industry:A commonly held misconception is that tourism industry is made up of little more thanhotels and motels, but in reality, it is much larger than that. However, a large part oftourism industry is a combination of Hospitality (a combination of businesses related toaccommodation and dining) and Travel Industry (businesses providing transportationservices (to tourists) through different modes). Other than these, there are numerous otherbusinesses, which offer their services and products to the tourists and form a ‘part’ of thetourism industry. The chart given below indicates the vast and complex structure ofTourism Industry.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  20. 20. The Indian Institute of Planning & Management, New Delhi 9Elements of Tourism IndustryBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  21. 21. The Indian Institute of Planning & Management, New Delhi 10(Source - www.joburg.org.za)Most players in tourism industry are SMEs which are neither a uniform group, nor able todeliver consistently high service quality and most importantly who don’t see themselvesas a part of tourism industry but play a crucial role in creating the overall touristsatisfaction.Economic Value Creation through Tourism Industry:Tourism Industry has always been a strong economic value creator – be it in terms ofearning for or providing jobs or by means of boosting of related businesses. It creates‘economic value’ through ‘tourism sales’ which is combined sales of all the abovementioned components of Tourism Industry. ‘Tourism sales’ can be further classified in‘direct’ and ‘indirect’ economic value as explained through the following chart -BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  22. 22. The Indian Institute of Planning & Management, New Delhi 11(Source - www.joburg.org.za)• Global Tourism Industry - Globally, this is one of the fastest growing industries, thanks to higher disposable incomes, increased leisure time and falling costs and time of travel. Appreciating its potential as an economic value creator, nations are furiously competing for a larger share in this industry and are encouraging and promoting tourism like never before resulting in restructuring the Tourism Industry with innovative tourism products and marketing strategies in the offing, both for the players and the tourists.• Competitiveness and Tourism Industry – being competitive has emerged as a new challenge for tourism industries across the globe because of furious competition amongst nations for a larger share in the ‘tourism pie’. However, for ‘Tourism Industry’, competitiveness is a complex concept encompassing various aspects thatBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  23. 23. The Indian Institute of Planning & Management, New Delhi 12 are difficult to measure and numerous challenges, including a complex structure, also limits the designing and implementation of competitiveness enhancing strategies for this industry.• The Indian Tourism Industry – Tourism in India is a booming industry, with India appearing in various lists of world’s ‘hot tourist destinations’. Indian Tourism is touching new heights based on the popular ‘judgment indicators’ used for the tourism industry – 1) tourist inflow and 2) revenues earned.• Tourist Inflow - If considered in isolation, Indian Tourism Industry is attracting more tourists than ever before and the number is constantly increasing, but comparison between - ‘foreign tourist inflow in India’ and other popular international destinations, presents a gloomy picture. For example - India, a large country, attracted 3.9 million tourists in 2008 and New York, a city, attracted 6.8 million foreign tourists in the same period. Comparing India with its small neighbors like – Thailand, Singapore, Malaysia etc also fetch similar results. However, huge population base is making up for this through rapidly growing domestic tourism, both in numbers and in strength and recently for the first time in the history of Indian Tourism, outbound tourists from India exceeded the number of inbound tourists.• Revenues earned - The second popularly used indicator for judging tourism industry is the ‘economic value’ generated by it and its contribution to the economy and on that count, Indian Tourism Industry scores high. Accounting for about 2.5% of the GDP, it also appears in the top five forex earner industries in India. However, World Travel and Tourism Council (WTTC) estimates suggest that the contribution of Indian Tourism Industry to the national economy will decline to 1.7% by 2016, but since that is relative to the rapidly growing GDP of India, it might not be a big cause of concern. Information and Research studies suggest a bright future for Indian Tourism Industry in terms of ‘economic activity’, like – according to ‘The Travel and Tourism Economic Research 2006’, Indian Travel & Tourism Industry is expected toBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  24. 24. The Indian Institute of Planning & Management, New Delhi 13 grow by around 8% between 2007 and 2016 taking the generation of economic value to US$128 billion. But even after this success of Indian Tourism Industry, it is not yet among the most competitive tourism industries in the world and in spite of India emerging as a `must see destination in recent years Indian Tourism represents only 0.8% of world market-share which is negligible looking at the potential it holds. Another cause of concern can be India’s position in a research conducted by WTTC to understand• The competitiveness of Tourism and Travel Industry of 174 countries, India clocked in at 89 on infrastructure, and 156 in its relative contribution to national economy.Present Scenario:With commonwealth games (2010) insight and also after appreciating it potential as‘economic value’ creator, Government is taking serious measures to promote tourism andis providing lucrative incentives to attract more players, but as usual in India, efforts andinitiatives tend to founder on shoals created by political unwillingness to implement, civilstrife, weakness in the infrastructure and contradictory administrative policies.Structural Changes:Rapid growth and lucrative incentives are attracting new players (especially foreignplayers and Indian corporate) to this industry, and this is resulting in big structuralchanges and a transition - from traditionally being a ‘mom and pop industry’ dominatedby individually owned SMEs and local / regional players, to the strong presence of‘organized sector’ and ‘chains’ - is taking place.Challenges for Indian Tourism Industry:On basis of current performance, Indian Tourism Industry can be termed as ‘successful’,but being ‘successful’ is very different from being ‘competitive’ and there are criticalBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  25. 25. The Indian Institute of Planning & Management, New Delhi 14challenges which are negatively dictating and adversely affecting its competitiveness.These challenges can be classified into 3 broad categories:BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  26. 26. The Indian Institute of Planning & Management, New Delhi 15 RESEARCH OBJECTIVE AND METHODOLOGYRESEARCH OBJECTIVE:Main objective of my Thesis was to gather information about the tourist places and thehindrances. Other objective includes to how to solve the existing problems that exist andhow to increase its reputation. • The purpose of my study will be to study tourism industry of India as well of Orissa in detail. • Access the existing tourism scenario in Orissa considering the Natural Resources, Heritage and other cultural assets, Qualitative/demographic factors like Population, employment, occupation, income levels and services and infrastructure already available. • To find out the reasons behind poor performance of the industry in the state and to come up with various measures that can be used in improving it and finally studying and analyzing the applicability of 6S model in the state. As per World travel and tourism Council (WTTC) statistics, tourism in India is poised to grow at a rate of 14.9 %per annum till 2012.States with rich tourism potential ,such as Orissa have as important role to play in this development, as per as survey conducted as market research in Bhubaneswar.The Objective of my survey will be to find the following details. • Indentifying traveling habits of people in Orissa. • Finding out reasons for their traveling. • Factors that affect them in deciding the location of the Tourist spots.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  27. 27. The Indian Institute of Planning & Management, New Delhi 16 • Comparison of services that they get within Orissa and in other states • Their satisfaction level with the facilities available in Orissa and the efforts of Government in promoting various places. • Effects of availability of liquor on tourism and on society as a factor.RESEARCH METHODOLOGY:Primary research:Collection of samples through convenience sampling technique by the use ofquestionnaires which include both open end and close end, which have to be answered bysample chosen. Sample frame will be from the potential Tourists • Exploratory research and Sampling Design • Descriptive ResearchSecondary research: For getting the deep insights of the Industry reference would be taken from: • Books related to the Tourism Industry • Websites of the State Government • Internet • Magazines, Literatures • Annual reports and journalsBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  28. 28. The Indian Institute of Planning & Management, New Delhi 17 LITERATURE REVIEWTourism in Orissa:Tourism in Orissa, India has grown considerably in recent years due to the variousattractions of Orissa, ranging from wildlife reserves and beaches to temples andmonuments and the arts and festivals.Eco-tourism:One of Orissas major attractions is its 500 km long coastline and beaches and naturalscenery such as Chilka Lake, Asias largest brackish water lake. Tharea is an importantbird sanctuary for millions of birds, and is also noted for its population of IrrawaddyDolphin (Orcaella brevirostris), the only known population of Irrawaddy dolphins inIndia It is one of only two lagoons in the world that are home to this species.Dolphin tourism provides an important alternative source of income for many localresidents. There are four tourist associations in Satapada employing three hundred andsixty 9-HP long-tail motor boats taking tourists to a 25 km2 (9.7 sq mi) area of the lakefor dolphin watching. About 500 fishing families are involved in this business. [1] TheBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  29. 29. The Indian Institute of Planning & Management, New Delhi 18Orissa Tourism Department and the Dolphin Motorboat Association, an NGO at Satpada,report about 40,000 tourists visit Chilka every year for dolphin watching. October-January and May-June are the peak season for tourists at Chilika, with a maximum 600-700 per day during December-January. The Dolphin Motorboat Association has 75 8-passenger motorboats for dolphin watching. Tourists pay Rs. 250 for 60–90 minutes pertrip. According to the Association, most tourists see dolphins. Only 5% returndisappointed. Besides the Association, the Orissa Tourism Department organizes"dolphin-watch" for tourists. Even during monsoon, about 100 tourists/day visit thelake. Major beaches in Orissa include Gopalpur, Puri, Chandipur and Chandrabhaga andthe waterfalls of Barehipani and Joranda, Badaghagra, Sanaghagra and Khandadhar arecommon attractions. The hot springs at Atri, Deulajhari, Taptapani and Tarabalo alsoattract tourists.The state has rich flora and fauna inhabited the lush green forest and is home to theRoyal Bengal Tiger. Eco-tourism is important in Orissa and notable wildlife sanctuariesinclude Bhitar Kanika, Chandaka, Chilika, Simlipal, Tikarpada, Gahirmatha and NandanKanan. Locations which attract tourists because of their natural scenery includeDarjeeng, Dairingbadi, Barunei, Dhamra, Chandbali, Tensa, Narayani and Saptasajya.Eco-tourism provides a degree of alternate employment to the local community andgenerates environmental awareness, among local residents as well as visitors, about theconservation and sensible use of the lake’s natural resources. Notable locations within thelake are: • Ramba Bay at the southern end of the lake with the group of islands including: • The Becon Island, with an architectural conical pillar (to put a light on the top) built by Mr. Snodgrass, the then collector of Ganjam of the East India Company, on a mass of rock in the Rambha Bay near Ghantasila hill. It is surrounded by the Eastern Ghat.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  30. 30. The Indian Institute of Planning & Management, New Delhi 19 • The Breakfast Island, pear shaped, known as "Sankuda island", with remnants of a dilapidated bungalow constructed by the King of Kalikote, has rare plants and is full of greenery with appealing flora. • Honeymoon Island, 5 km (3.1 mi) from Rambha Jetty, known as Barkuda Island, with clear waters has abundant red and green macro algae in the bed is also known for the limbless lizard, an endemic species found here. • Somolo and Dumkudi islands, located in the Central and Southern sectors of the lake, in the backdrop of scenic Khalikote hill range, are inundated remnants of the Eastern Ghats with rich flora and fauna and also known for sighting of Irrawaddy Dolphins. • Birds island, located in the southern sector of the lake has huge exposed hanging rocks, are painted white due to folic acid of the droppings of the birds and is known for rich algal communities and few mangrove species and also migratory birds in winter. • Parikud is a group of composite islands in the Garh Krishnaprasad Block for nature lovers and provides an avian spectacle during winter season • Kalijai Temple located on an island is considered to be the abode of the Goddess Kalijai • Satapada village, at the new mouth of the lake, provides a beautiful view of the Lake and also views of the Dolphins. Hundreds of boats here provide tours of the lake for tourists. • Barunkuda, a small island situated near Magarmukh, mouth of the lake, has a temple of Lord Varuna. • Nabagraha is an ancient deity located along the outer channel.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  31. 31. The Indian Institute of Planning & Management, New Delhi 20 • Chourbar Shiva Temple is located near Alupatna village, along the outer channel. • Manikpatna, located on the outer channel has historical evidence of a port which was used for trade with Far East and also has the Bhabakundeswar temple of Lord Shiva, an old Mosque whose entrance door is made of the jaws of the whale. • Sand-Bar and Mouth of the Lake is a striking and un-explored stretch of 30 km (18.6 mi) of empty beach across the sand bar which separates the Lake from the Sea.Orissa has gifted with natures bounty. A trip through Orissa is always an intoxicatingsurprise to the senses and always unforgettable. An enormous canvas coloured by adivine palette, a 482 km stretch of coastline with shimmering golden beaches, serpentinerivers, mighty waterfalls, forest-clad blue hills of Eastern Ghats with rich wild life. Orissais quite rich in its heritage that houses many remarkable monuments of ancient times. TheArchitecture of edifices, like the Konark Temple, Jagannath Temple, Barbati Palace,Rajrani temple, Khandagiri caves, and the Lalit Giri & Uday Giri are really remarkable.With the unsurmountable beauty of nature, culture and the glorious heritage, Orissaundoubtedly deserves to be among the hottest tourism destinations in India.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  32. 32. The Indian Institute of Planning & Management, New Delhi 21Tourism Destination in Orissa:Orissa is a state of India, located on the east coast of India, by the Bay of Bengal. Orissawas in the past known as Kalinga that was invaded by Maurya Emperor in 261 BC. Themodern state of Orissa was established on April 1, 1936 with majorly Oriya speakingpeople. The narrow, level coastal strip including the Mahanadi River delta supports thebulk population of Orissa. The interior of Orissa is mountainous and sparsely populated.Orissa is home to some of the aboriginal tribes of India.Orissa has an important place in Indian history with around 3000 years of historicalevents. Orissa has stood as an observer to the Kalinga war that led emperor Ashoka toembrace non-violence and teachings of Buddha.Orissa is a beautiful state with several amazing tourist destinations. Thousands ofpilgrims visit Orissa to travel to Puri to visit the Jagannath temple, which is one of themost sacred places for Hindus. Orissa can also be visited to visit the Konark Sun Templethat is an amazing historical monument. Further, beach lovers will find numerousbeautiful beaches like beaches of Puri , Konark and Gopalpur-on-sea in Orissa.Monument lovers also have numerous architecturally marvelous temples in the templeBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  33. 33. The Indian Institute of Planning & Management, New Delhi 22city Bhubaneswar in Orissa. Orissa also provides places like Chilika Lake, the largestbrackish water lagoon with numerous beautiful islands, for nature lovers. Wild life loverscan visit Similipal in Orissa to have a wonderful wildlife experience.About Bhubaneswar:Bhubaneswar is the capital of Odisha (Orissa), and is also known as ‘City of Temples’.The modern city of Bhubaneswar was designed by the German architect OttoKonigsberger in 1946. Bhubaneswar is one of the cleanest and greenest cities of India.Bhubaneswar city has a 3000 years old history which is boasted by marvelousarchitecture of the temples of the city. The large number of temples (around 600) inBhubaneswar, depict the entire span of Kalinga architecture. Bhubaneswar is a part of theGolden Triangle circuit, the other two being Puri and Konark and their various tourpackages that cover the three.Bhitarkanika:Bhitarkanika is a place of rich and lush green eco-system lying in the estuarine region of North-Eastern corner of Kendrapara district of Orissa. Bhitarkanika area houses 672 kms of mangrove forest and wetland that is home to well over 215 species of birds including winter migrants from Central Asia and Europe. Bhitarkanika is home to the largest population of giant salt water crocodile in India.Chilika:BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  34. 34. The Indian Institute of Planning & Management, New Delhi 23Chilika is a brackish water lagoon, spread over the Puri, Khurda, and Ganjam districts of Orissa. Chilika lake is separated from the Bay of Bengal by a 60 Km long narrow strip of marshy islands and sand-flats. Chilika lake is the largest coastal lagoon in India and the second largest lagoon in the World. Chilika lakes lagoon is the largest wintering ground for migratory birds in the Indian sub-continent that hosts over 160 birds in peak migratory season. Birds from as far as the Caspian Sea, Lake Baikal, Aral Sea and other remote parts of Russia, Kirghiz steppes of Mongolia, Central and southeast Asia, Ladakh and Himalayas come to Chilika lake lagoon. Chilika lakes lagoon is also home to 14 types of raptors along with rare and endangered Irrawaddy Dolphins (135 in numbers). The fabulous beauty of Chilika which has inspired poets to sing its glory and which can be best enjoyed from Balugaon, Barkul, Rambha and Satpada must be seen to be believed.Gopalpur-on-Sea:Gopalpur-on-Sea is a beach resort in the Ganjam district of Orissa. Gopalpur-on-Sea wasonce a busy port that later turned into a calm and serene retreat for beach lovers. Thebeautiful blue beach of Gopalpur-on-Sea gained its stature as a tourist attraction in theseventies.A tourist can just relax and enjoy the roar of waves and breeze bustling through the palmtrees at Gopalpur-on-Sea. As the beach of Gopalpur-on-Sea faces east ward the sunrise atthis place is also very spectacular. There is also a Light House on the beach (1965),which offers a spectacular 360 degree view of Gopalpur, the sea and a portion of theChilika Lake. Visiting time is 1530 - 1730.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  35. 35. The Indian Institute of Planning & Management, New Delhi 24Keonjhar:Keonjhar, famous as a picnic spot, is a mid size town in Orissa having a very beautifuland scenic landscape. The major attractions in Keonjhar are the magnificent landscapesand the beautiful waterfalls around the town.Konark Temple:Konark is a famous tourist place in Puri district of Orissa, lying at 65 Km fromBhubaneswar. Konark is famous for the 13th century Sun temple built in from oxidizingand weathered ferruginous sandstone by King Narasimhadeva I of the Eastern GangaDynasty. Konark Sun temple is a World Heritage Site that takes the form of a chariot ofSurya, the Sun God, and is heavily decorated with stone carvings.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  36. 36. The Indian Institute of Planning & Management, New Delhi 25Koraput:Koraput, a place surrounded by forests, mountains and waterfalls, is a part of the tribalbelt of Orissa. Most of the area of Koraput was covered under thick forest until someyears ago, forming an abode of many aboriginal tribes. However, due to deforestation andindustrialization these tribes of Koraput are adopting to modernity. A tourist however canhave a glimpse of their traditions and culture during the tribal festival called Parab whichis organized in Koraput in the month of November (2nd-3rd week).Phulbani:BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  37. 37. The Indian Institute of Planning & Management, New Delhi 26Phulbani lies in the Kandhamal district of Orissa, amidst rich and colorful flora andfauna. Phulbani is considered to be the head quarter of Kandhamal tourism as the touristscan make this as their base for visiting the various locations around Phulbani. Phulbani isalso known as the access point for arranging a tribal tour of OrisPuri:Puri, one of the oldest cities in eastern part of India, is a popular beach resort of Orissathat is positioned in a unique place that provides a visitor view of both sunrise and sunsetfrom the beach. Puri is also famous for its annual Rath Yatra (Festival of Chariots), whenthe deities Jagannath, Balabhadra and Subhadra, are brought out of the temple, andplaced in a chariot procession. This festival occurs on various dates of the Gregoriancalendar, typically in the month of July. Puri has dual identities of a relaxed seaside resortand of an important pilgrimage centre.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  38. 38. The Indian Institute of Planning & Management, New Delhi 27Sambalpur:Sambalpur lies in the Western Zone of Orissa, filled with lush green forests, colorful wildlife, beautiful waterfalls, and rich tribal life. Sambalpur is famous for its handloom textilework which has gained international reputation. The unique pattern and design of thetextiles are named under the brand of Sambalpuri.Similipal:Similipal covering an area of 2750 sq.km is situated in the Mayurbhanj district of Orissa.Similipal derives its name from the magnificent Simul which means silk cotton tree.Similipal has numerous peaks and valleys in the region with various streams flowingthrough the region and ultimately draining into Bay of Bengal. The Similipal Tigerreserve was created in the year 1973 and then the government of Orissa declared theBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  39. 39. The Indian Institute of Planning & Management, New Delhi 28Similipal sanctuary within an area of 2200 sq.km in 1979. Later the government alsoproposed the Similipal National Park in the year 1980 with an area of 845 sq. km.Sector Specific Challenges:Being a part of the service sector, Tourism Industry faces the below mentionedchallenges posed by the sector itself – • High Exit Barrier; Difficulty in trial – One characteristic of services is that it is hard to escape from the consequences of a poor choice (of service and service provider). Tourists know this and they also understand that once they are at a destination, a U-turn is not easy. Hence, they are over cautious while deciding on the tourism services (choice of destination, transporter and hotels etc). Another service characteristic that affects tourism industry is ‘reduced trial ability’. Since the trial ability is also almost nil in (tourism) services, in case of tourism industry, it is a prerequisite to have a good ‘product’ and a sound reputation in place, only then sustainable sales can be expected. • Word-Of-Mouth (WOM) – WOM is crucial in selling of (tourism) services because usually the choice of destination is affected by WOM publicity. Here, it is important to realize that tourists tend to believe more on information from independent sources and less on promotions, thus, a destination may be ‘pushed’ through heavy promotion, but the length of its PLC is finally dictated by the WOM.Industry Specific Challenges:Certain challenges are related to the very nature of this particular industry and exist alongwith the industry around the globe, like: • Highly infectious industry – Tourism Industry is very sensitive to environmental changes and it gets affected by them and reacts very fast to them, like - AccordingBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  40. 40. The Indian Institute of Planning & Management, New Delhi 29 to Star News (10 April 2007), a Bollwood movie song resulted in increased tourist inflow to a destination (Khandala) and recently, in a couple of days after India got out of the cricket world cup, many tourists cancelled their tours to West Indies resulting in loss of Rs 30 Crore to tourism industry. • High Social Cost – Tourism takes a toll on the resources (especially natural resources), and a large part of the revenues brought in by tourism is required for sustaining the resources, so the profitability of tourism industry is suspicious, especially in countries where proper ‘sustainability’ mechanisms are not in place. • Intermediary Conflicts - Components of the tourism industry have different commercial objectives, strategic interests and operational procedures, so as channel partners protect and advance their own interests, often at the expense of their partner’s gains, several intra-channel conflicts emerge inevitably. Major reasons behind such conflicts are - • Price and Profit Margin Distribution • Exceeding Vertical Integration generates Oligopolistic Behavior • Operational issues - partners failing to fulfill their obligations or providing the service they promised • Tourists rates the overall experience – visitors tend to rate their overall experience at the destination and in the process they credit tourism industry for the performance of industries and sectors, which are not directly related to tourism. If ‘anything’ is not according to tourists’ expectations, it might go against the tourism industry, because the negative WOM will be generated for the destination.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  41. 41. The Indian Institute of Planning & Management, New Delhi 30India Specific Challenges:Some challenges facing Indian Tourism Industry are uniquely India specific, like – • Sensitizing the diverse Human Resources – It is an industry where even the behavior of general public affects the overall experience of tourists, and people associated with this industry vary significantly in their background, education, occupation and experience etc (an hotelier is totally different from a taxi driver), so having a ‘common program’ addressing everyone in this industry is inviting failure and neither it is easy to have so many different / customized programs. Finally, it is a big challenge to sensitize such a large number of diverse people simultaneously. Although efforts (like – “atithi devo bhava” campaign) have been made to train and groom the HR associated with this industry, but they have not been as successful in achieving significant and measurable results as they were expected to, and neither much research has been done to measure and evaluate the impact of such efforts. • Collapsing Hotel Infrastructure – India has approximately 150000 hotel rooms, which are insufficient to meet the existing demand, let alone catering to new demand. Moreover, concentration of Hotels (approximate 7000 rooms are in Delhi itself) is causing an acute shortage of rooms in remaining areas which are no short of tourist destinations and attract a lot of tourists, thus further aggravating the problem. A comparison of number of hotel rooms is given below –(Economic Times, Dec 2008)BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  42. 42. The Indian Institute of Planning & Management, New Delhi 31High Operating Costs:Indian hotels suffer from high operating costs and this ultimately reflects in their higherprices. The biggest sufferer is the ‘budget tourists’ and even for those who can pay, whenthe facilities are not according to the prices it leads to dissatisfaction and also makes thedestination unattractive for tourists. Following points highlights the prevailing crisis:• In 2008, Delhi and Mumbai appeared in the top 5 cities with highest tax rates aspercentage of overall lodging bill. (Report by World Travel and Tourism Tax PolicyCenter)• Comparing with China - in 2007, rooms of similar quality for business travelers, cost onan average, $187 in Delhi, $178 in Mumbai versus $122 in Beijing and $150 in Shanghai.Adding to all this, an unprecedented rise in real estate prices is working as an “entrybarrier” for hotel industry, negating the government’s effort (incentives) to attract newplayers, thereby slowing down the pace of growth of hotel rooms. • Transportation Chaos – increasing number of airlines (from 2 to 10 in last 4 years) has rapidly increased the number of passengers, resulting in a virtual collapse of facilities at Indian airports. Moreover, there is no supervising authority, maintaining and monitoring the quality and standards • of services delivered by airlines making an unpleasant experience a rule, rather than an exception. Indian Railways, another popular mode of transportation suffers from conditions worse than the airlines (in terms of reservations, punctuality, cleanliness, facilities etc). Since India welcomes tourists mostly from developed countries these problems convert their trip into a ‘mission’ and few return with good memories. • Unfriendly Government Policies – Till recent past, Tourism was perceived as an elitist activity in India and hence high tax rates and less budgetary provisionsBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  43. 43. The Indian Institute of Planning & Management, New Delhi 32 were the fate of its tourism industry. The table below refers to some main provisions affecting tourism industry in the last few years –Classification of Tourist:There are many different types of tourists, which can be classified in a number of ways: By ProductMass Tourism Alternative TourismPackage tour Ecotourism By nature of the activity:Active PassiveAdventure tourism SightseeingEcotourism Beach holidayGolf Cruise Location preferenceCoastal Rural City Mountains LakesCosta Brava Garrotxa Barcelona Pyrenees BanyolesDuration of trip and distance travelledDay trip Weekend break Annual holidayLocal National InternationalBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  44. 44. The Indian Institute of Planning & Management, New Delhi 33By purposeBusiness or Pleasure • Pleasure: need for change, see something new * Culture (ethnic) * History, heritage * Nature-based (eco-) tourism * Farm-based, rural tourism * Personal development, health * Visit friends, family * Social status (to brag!) * RecreationBy age/socio-economic group Backpackers Empty DINKS SINKS Early/Active Boomers Yout Nesters Retirees hBackpackers: 18-24 years, no children. Attracted to adventurous activity. Considerthemselves travelers not tourists. Generally well-educated. Cost conscious.DINKS: Double Income No Kids.SINKS: Single Income No Kids.Both Dinks and Sinks: younger people, between 25 and 35 years of age, no children,affluent.Empty Nesters: Parents whose children have flown the family nest. Between 45 and55 of age, well educated, high disposable income.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  45. 45. The Indian Institute of Planning & Management, New Delhi 34 Boomers: members of the baby boom generation in the 1950s. Youths: Between 18 and 25 of age, not well-educated, low disposable income, are used to traveling, (have learned it during the upbringing) and know how to indulge the good life.Characteristics of tourist:Purpose of VisitThe visitors come for three major reasons: Business Visiting friends or relatives Holiday adventureThe table below gives the statistical distribution of reasons why visitors come to Uganda. % of tourists interviewed stating thisPurpose of visiting Uganda purposeBusiness 39Visiting friends or relatives 30Holiday 15Other (include religious purposes and sports) 16Total 100(Source: Incredible India website)BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  46. 46. The Indian Institute of Planning & Management, New Delhi 35Business is the number one reason why foreigners visit Uganda, closely followed bythose who come to visit friends or relatives. Both these groups however, are of limitedvalue to the Equator City. The Business Group would most probably stay in Kampalarather than away from the capital. Visiting friends or relatives tend not to stay in hotelsbut mostly in private accommodation. However, they usually eat out a lot and go-out onweekends. Chief among the "visiting friends or relatives" are the nostalgic British who,because of their historic ties with Uganda, have many friends and or relatives in thecountry and in neighboring India. Next are guests from countries of origins of theexpatriates working or resident in Uganda and currently USA has the highest number ofexpatriates. A special category of "Visiting friends or Relatives" are the neighbours. Inparticular the Kenyans, Rwandese and Tanzanians, but more importantly the expatriates,who work with Non-Government Organizations (NGOs), who come for long weekendstays. The fourth biggest group is those classified as others. These come for religious andsports events. The conference visitors who also fall in this category are not mentioned.This category is of special interest to the developers of Equator City. Religious visitorsand the sports groups are not immediately relevant since they will stay in Kampala or inwell populated commercial centres. The smallest group of visitors come to Uganda forholiday adventure. The typical visitors come from: Continental Europe, 53% (Germany, Scandinavia, Italy, Benelux and France) North America, 22% (USA and Canada) UK, 15%This group (Others), though small, is important to the growth of tourism in Uganda andto the Equator Line Centre Ltds project.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  47. 47. The Indian Institute of Planning & Management, New Delhi 36Length of Stay:On average, visitors spend two weeks in Uganda, although the single largest groupspends just a week or less. The popular visits are between 10 days to two weeks, andbetween two to four weeks. There are a significant number of tourists who spend over aperiod of four weeks. Most whites stay about the same period (about 18 nights) and thisperiod rhymes with the duration of the tourist circuits operated now and thoserecommended for the future in the Tourism Master Plan.The single most important expenditure item (which takes over half the money) is foraccommodation and meals/bar. There is also substantial expenditure on restaurantsoutside the hotel. Others include obligatory airport tax, donations, and transport.Surprisingly expenditure on sightseeing/organised tours and purchase of handicrafts arenegligible.Destinations and Composition of Travel ArrangementsPeople who visit Uganda: Visit Uganda alone (58%) Combine their visit with another country (27%) Combine their visit with two other countries on top of Uganda (11%)Pure holiday makers usually come to see two countries; Uganda and another. Themajority of the visitors (79%) come with companions. Those accompanied come withnon-family friends and in groups, the most popular being of four persons followed by asecond group of two persons. 21% come alone. Groups of three are the third. Wherefamily groups come, the most common are a couple plus children, or just other familymembers (not children). The third and fourth family groups are coming as a couple or oneBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  48. 48. The Indian Institute of Planning & Management, New Delhi 37parent and children. Lastly, those coming in family group are mainly from UK, USA,Canada, and Continental Europe. All the visitors do not use packaged tours but maketheir own travel arrangements individually or through an intermediary. Only a very smallfraction of the holiday makers use the packaged tour arrangement.Factor influencing travel demand:Land Use effects:Many land use strategies to change travel behaviour to any extent, concluding that “theability of the planning system to influence changes to reduce travel demand is limited”,which is a vote of no confidence in the planning system, a counsel of despair, deeplyunhelpful, and not borne out by evidence. The report concludes that land use policies “ontheir own, have little effect on travel demand” second line, bold text in original), but theevidence presented does not really support this conclusion, and in any case the distinctionis spurious since land use policies are not being promoted on their own but in concertwith transport and other policy areas.Local Sourcing:Local sourcing might increase levels of road transport which could just as easily bewritten to express the opposite. The conclusions to this section are again generalized andunsupported. Local sourcing is said to be most unlikely to have any noticeable effect ontravel demand, because trends in trade militate against it; for many products there is verylittle choice to switch to closer alternatives; there is no evidence that it is happening toany extent; and there appear to be no policy initiatives to promote such changes “inprospect”. It is difficult to understand where these assertions are coming from, given thatlocal sourcing is happening; marketing phrases such as “cutting out the middle-man”,“saving transport costs”, and “local quality assurance” are commonplace; and there isconsiderable policy interest in it for reasons from wealth retention by agriculturalproducers, supporting local economic revival, animal welfare, and countrysideBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  49. 49. The Indian Institute of Planning & Management, New Delhi 38conservation, as well as the potential to contribute to traffic reduction. There is notenough evidence of current effects to hand, on which to base an alternative forecast, but amore useful approach would have been to explore the potential for traffic reductionthrough local sourcing, to point to the need for research where necessary, and to offersuggestions for effective policies to manage travel demand through local sourcing.Oil Supplies and Fuel Technologies:Oil supplies will not dry up over the next few decades to the extent that fuel prices oravailability will affect the demand for travel, and that CO2 emission reductions can beachieved by technological improvements without the need for traffic reduction policies. Italso appears to argue that new technologies are on hand to improve technologicalperformance still further should it be needed or become competitive in its own right, sothe likelihood of significant reduction in travel demand for any reasons relating to fuel oremissions is small. This is an area of intense debate at the present time, and the aboveconclusions appear somewhat complacent. This seeks positive action to stem CO2emissions in all areas of activity, and transport is recognized as the fastest growingsource. Traffic reduction policies and initiatives are central to the government’scommitted reduction targets, and if it does not occur, and thereby deliver climate changeobjectives, government policy will have failed. In these circumstances, it seems perverseto base MMS projections on an assumption that there will be minimal traffic reductioneffects on the margins of overall traffic volumes.Major decisions involved in marketing of Hospitality services:Service Characteristics of Hospitality & Tourism Marketing: • The Service Culture • Characteristics of Service Marketing • Management Strategies for Service BusinessesBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  50. 50. The Indian Institute of Planning & Management, New Delhi 39 • Ritz-Carlton: Taking Care of Those Who Take Care of Customers • Overview of Service Characteristics: The Servuction ModelThe Role of Marketing in Strategic Planning: • Nature of High-performance Businesses • Corporate Strategic Planning • A Strategic Look at Starbucks Coffee • Business Strategy Planning • Unique Challenges of the Hotel IndustryThe Marketing Environment: • The Company’s Micro-environment • The Company’s Macro-environment • Managing in Uncertain Times • Popcorn’s Cultural Trends • Linked Environmental Factors • Responding to the Marketing EnvironmentMarketing Information Systems & Marketing Research: • The Marketing Information System • A “Questionable“ QuestionnaireBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  51. 51. The Indian Institute of Planning & Management, New Delhi 40 • Research Problem Areas • The Internet: A Great Source of Marketing Information • Marketing Research in Small Business • Marketing Research in Smaller OrganisationsConsumer Markets & Consumer Buying Behaviour: • A Model of Consumer Behaviour • Personal Characteristics Affecting Consumer Behaviour • Senior Consumers • The San Diego Padres Baseball Club • The Buyer Decision Process • Unique Aspects of Hospitality & Travel ConsumersOrganizational Behavior of Group Market: • The Organisational Buying Process • Participants in the Organisational Buying Process • Major Influences on Organisational Buyers • Organisational Buying Decisions • Group Business Markets • Dealing with Meeting PlannersBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  52. 52. The Indian Institute of Planning & Management, New Delhi 41 • The Corporate Account & Corporate Travel ManagerMarket Segmentation, Targeting, and Positioning: • Markets • Market Segmentation • Jollibee: A Regional Fast Food Chain • Targeting Families by Targeting Kids • Market Targeting • “Elite-Napping” the Business Traveller • Market Positioning • Airline Positioning: Southwest AirlinesDesigning & Managing Products: • What is a Product? • Product Levels • Augmented Product • Brand Decisions • New Product Development • The National Food Laboratory Helps Restaurants Develop New Products & Improve Existing ProductsBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  53. 53. The Indian Institute of Planning & Management, New Delhi 42 • Restaurants & Hotels Develop New Product Ideas • Product Development Through Acquisition • Product Life-cycle StrategiesInternal Marketing: • Internal Marketing • When Employee Communications Go Against Customer Expectations • The Internal Marketing Process • Nonroutine TransactionsBuilding Customer Loyalty through Quality: • Defining Customer Value & Satisfaction • Tracking Customer Satisfaction • Relationship Marketing • Retaining Customers • The Link Between Marketing & Quality • What is Quality? • Benefits of Service Quality • Developing a Service Quality Program • The Five-gap Model of Service QualityBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  54. 54. The Indian Institute of Planning & Management, New Delhi 43 • Forecasting Market DemandPricing Products: Pricing Considerations, Approaches, and Strategy: • Price • Factors to Consider When Setting Prices • Aspen Skiing Company Knows Out-of-State Visitors Are Less Price Sensitive • General Pricing Approaches • Pricing Strategies • Segmented Pricing: The Right Product to the Right Customer at the Right Time for the Right Price • Price Fixing • Other Pricing Considerations • Price Changes • The Internet Makes it Easy for Customers to Find Price InformationDistribution Channels: • Nature & Importance of Distribution Systems • Nature of Distribution Channels • Marketing Intermediaries • Top Ten Ideas for Working with Travel Agents • Channel Behaviour & the OrganizationBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  55. 55. The Indian Institute of Planning & Management, New Delhi 44 • The Hilton Model • Restaurant Franchising • Selecting Channel Members • Responsibilities of Channel Members & Suppliers • Business LocationPromoting Products: Communication & Promotion Policy & Advertising: • The Communication Process • Thank You – A Great Personal Communication • Establishing the Total Marketing Communications Budget • Managing & Coordinating Integrated Marketing Communications • Southwest Airlines • Manage the Integrated Marketing Communication Process • Advertising • How Does an Advertising Agency Work? • Major Decisions in Advertising • Association AdvertisingPromoting Products: Public Relations & Sales Promotion: • Public RelationsBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  56. 56. The Indian Institute of Planning & Management, New Delhi 45 • Taco Bell Provided Example of Creative Publicity • Major Activities of PR Departments • Publicity • Singapore Suntec Centre • The Public Relations Process • Major Tools in Marketing PR • Public Relations Opportunities for the Hospitality Industry • Crisis Management • Sales Promotion • Local Store MarketingElectronic Marketing: Internet Marketing, Database Marketing, and DirectMarketing: • Internet Marketing • Using the Web to Market Tourism Destinations • Web Site Development • Business-to-Business E-commerce • Developing a Marketing Database System • Using your Database for Customer Research: Defining the Power of Your Loyal CustomersBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  57. 57. The Indian Institute of Planning & Management, New Delhi 46 • Gazelle Systems Brings Database Marketing to Restaurants • Manhattan East Suite Hotels Gives Customers What They Want Before They Ask • Direct MarketingProfessional Sales: • Management of Professional Sales • Nature of Hospitality Sales • Sales Force Objectives • Sales Force Structure & Size • Organizing the Sales Department • Relationship Marketing & Strategic Alliances • Recruiting & Training a Professional Sales Force • Managing the Sales ForceDestination Marketing: • The Globalization of the Tourist Industry • Importance of Tourism to a Destination’s Economy • Stop the Brutal Marketing • Tourism Strategies & InvestmentsBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  58. 58. The Indian Institute of Planning & Management, New Delhi 47 • Gambling on Central City • Segmenting & Monitoring the Tourist Market • Maryland Office of Tourism Development Case Study • Communicating with the Tourist Market • Organizing & Managing Tourism Marketing • National Tourism Organizations: How They WorkThe Tourism Products and the Supply Factor:1. Attraction - Natural (Land Forms, Flaui Fauni) - Man Made (Historic/Modern) - Culture Factors (Music, Art)2. Transport3. Accommodation - Hotels, Guest House, Holida, Camps, Put, Residences, CampingSites.4. Physical and Communication Infrastructure - Roads, Airports, Electricity, Sewage Disposal Etc.,The Hospitality Product:Required to produce satisfactions- • Physiological - Satiated Appetite, Quench.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  59. 59. The Indian Institute of Planning & Management, New Delhi 48 • Satisfactions - Thirst, Comfortable bed and Room, Pleasant Environment. • Economic Satisfactions - Good value for Money, Speedy Service, Excellent Location and credit Facilities. • Social Satisfaction - Enjoyable Company, Attentive Staff and Advice on Selection of food/Wine. • Psychological - Fulfillment of Needs • Satisfactions - Relating to self-esteem Status and security.Five Basic Components of Hotel’s: • Location - Facilities • Services - Image • Price - CostApart from time, money, mobility to travel, Motivations to Travel may spring form avariety of needsTourist Segment and Their main marketing Characteristics:Marketing Holiday Tourists Business Tourists Common InterestsCharacteristics TouristTypical Destination Resort Oriented Big City visit friends, Relative Education, PilgrimageSeasonality High-Marketing Mix can No Seasonality Partial SeasonalityBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  60. 60. The Indian Institute of Planning & Management, New Delhi 49 Assist in Spreading Demand LevelsLength of Stay Could be Influences by Normally short. Prefer Long Stay promotion/comm. Not prolonged by cost effectiveness Advertising. helps.Mode of TPT. Varied Mode (s) of TPT. Air-plane the Cheapest mode time spent on way is par of Invariably of transport holidayHotel Yes, Normally yes Normally Only to a veryAccommodation limited degree In-expensive hotels Expensive hotelsRequires Very much so yes to a Ltd. No.entertainment DegreePrice Sensitivity Very Sensitive (High price Low price Sensitive elasticity of demand) Elasticity of demandRole of Very Important Rather Limited Quite ImportantAdvtg./Mktg. Particularly salesComm. promotionsImpotence of tour Of great interest and Of no appeal at all. Limited Appealpackage (s) demandHospitality Product Augmentation:Accommodation Food and BeverageReservation system Convenience Speed of food ServiceReservation System Simplicity Ordering ConvenienceAcknowledgement of reservations Advance OrdersBATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  61. 61. The Indian Institute of Planning & Management, New Delhi 50Lift Attendants Reliability of F & B QualityRoom Service Cooking to OrderSTD. of House Keeping Acceptance of Credit CardsCourtesy Home deliveriesProcedures for handling overbooking Function catering FacilitiesInformation Service Fiber/calorie informationCredit Provision EntertainmentDiscountsCredit Cards systemThe Travel Decision:Tourists want to travel for several reasons in order to meet their needs, expectations, anddesires. While some of these reasons are related to destination attributions such ascultural and natural attractions of a destination which is called pull factors, other reasonsare related to motivational factors of tourists such as escape from daily routine andexperience new culture that is called push factors. Cultural values of a specificcommunity to be experienced can be considered as a pull factor which is mainly relatedto natural attractiveness of a destination. lots of things have caused the increased incultural tourism. Some of the reasons include: • Travel Desire • INFO. Collection and Evaluation • Travel Decisions - Involving selection of destination, travel mode, Accommodation and activities.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  62. 62. The Indian Institute of Planning & Management, New Delhi 51 • Travel Preparation - Involving tickets, Bookings, Travel Money, DOCS, Arrangements clothing. • Travel Satisfaction Evaluation - Tourism Expenditure is constantly evaluated before during and after experience assessment useful for future decision.Marketing Strategies for the Tourism Market:Market Penetration Strategy:Utilized primarily by new entrants by creating a differential Advantage in  Pricing  Promotion or bothWhen determining Market Penetration Strategy for tourism market, barriers to entry,competitor analysis, and perceptual map method are used. Despite having potential toentry, Indian outbound tourism market has three fundamental barriers for cultural tourismof Turkey. Firstly, there is a lack of information and awareness about U.K. as a holidaydestination place in the minds of India since its cultural tourism is also not well-knownby potential Canadian tourists. Secondly, India’s image is based on sun, sand, and seatourism in the world. On the other hand, there is severe competition in the Indianoutbound tourism market. India’s main competitors for travelers are American continentcountries such as United States of America (USA), Mexico and European countries suchas United Kingdom (UK), France, and Germany.Market Extension Strategy:BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  63. 63. The Indian Institute of Planning & Management, New Delhi 52There are many ways different elements of the marketing mix can be evaluated. Forexample, promotions can be evaluated with money off coupons. Special informationrequest forms, telephone numbers to call or post office box numbers to write to canidentify the area the request is coming from. Also, formal (written) and informal (face-to-face) surveys can be used to determine the promotional material the customer used inplanning the trip;It entails reaching new types of tourists through.  Modification of existing tourist products  PLG. in advance launch of a new product.  Extending/stretching PLC.Market Development StrategyToo many communities attempt to market themselves as tourist destinations withoutaccurate information about their resources (facilities, services, staff), image (projected vs.actual), and how well their customers are satisfied. Without this information, it is difficultto make other decisions in the planning process. Included should be such things asrecreational and entertainment facilities, cultural and historic sites, overnightaccommodations, restaurants, shopping opportunities, special events and activities, staffsize, and transportation. Each item of the "inventory" should also be assessed in terms ofquality and availability.The Tourist firm here seeks  New Classes of tourists for its products or.  Would and salient product characteristics to the existing offer.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  64. 64. The Indian Institute of Planning & Management, New Delhi 53 PRIMARY FINDINGS AND ANALYSISQ1. Please tell me, how frequently do you travel? How frequently do you Travel 2-3 Years, 10% Half Yearly, Yearly, 35% 55%The above mentioned graph shows that 35% respondents are yearly travel and 55%respondents are half yearly travel.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  65. 65. The Indian Institute of Planning & Management, New Delhi 54Q2. Please tell me, do you consider a travel agency to plan your trip? Consider a travel Agency No, 30% Yes, 70%The above mentioned graph shows that 70% respondents consider a travel agency to plantheir trip.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  66. 66. The Indian Institute of Planning & Management, New Delhi 55Q3. Please tell me, how often do you consider a travel agency for planning yourtrip? Consider a travel Agency Never, 5% Always, 40% Sometimes, 55%The above mentioned graph shows that 55% respondents sometimes consider a travelagency to plan their trip but 5% respondents never consider a travel agency to plan theirtrip.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962
  67. 67. The Indian Institute of Planning & Management, New Delhi 56Q4. Please tell me, are you satisfied with the current services offered by your travelagent? Please rate your satisfaction level on a scale of 1 to 5 where 1 means not at allsatisfied and 5 means extremely satisfied. Scale of Satisfaction 6 5 5 4 4 3 3 2 2 1 1 35% 20% 27% 11% 7% 0 1 2 3 4 5The above mentioned graph shows that 7% respondents are not at all satisfied with thecurrent services offered by their travel agent but 11% respondents are extremely satisfiedwith the current services offered by their travel agent.BATCH: PGP/SS/2007-09 ALUMNI ID NO.: DS79-M-962

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