New focus for Indian tourism

By Neil Heathcote
Editor, India Business Report, BBC World, Mumbai

The Gateway of India is getting a facelift as Mumbai spruces up some of its historic monuments ahead of the winter tourist season.

Even on a rainy monsoon afternoon, the monument draws a wide range of visitors - from foreign backpackers to business with half an hour to spare between meetings.

Thanks to a concerted push by the central and regional governments, the number of visitors coming to India has doubled over the past five years.

But it still attracts far fewer people than rival destinations in Asia. While India has five million foreign tourists, China draws 10 times that number. Even the city state of Singapore attracts more.

"I am not at all satisfied," says Jayant Gaikwad, the new head of the Maharashtra Tourism Development Corporation. "We should have more visitors."

Traveller boost

Free-spending tourists mean more money for the local economy, and they create jobs where they're needed most. Drivers, tour guides, waiters, it's not just those with qualifications who benefit.

"After realising this, we're taking the whole issue of tourism in a very big way," says Mr Gaikwad.

"India suddenly does not have the advantage of being a low cost destination"

Madhavan Menon, Thomas Cook India

India has an unparalleled wealth of heritage sites, festivals and beaches. But by global standards it still spends relatively little promoting and developing them.

The country invests 0.9% of its budget in tourism. By contrast, Malaysia spends 5.1% and Singapore 9.1%. That has helped these other countries to win much more of the market for international travel.

Nowadays, globe-trotting tourists can go almost anywhere they choose.

Once they've decided what they want to do - see culture, visit spas, party all night or just lounge on beaches - they pick their destination.

They expect value for money, modern facilities like ATM machines, and affordable hotels. All areas in which India is falling behind its rivals in Asia.

Value for money

The growth of the industry has been good so far, says Madhavan Menon head of Thomas Cook India, but it now risks being held back.

In particular, he says, there are not enough good budget hotels. As a result, room rates have risen rapidly over the past couple of years, making them much less competitive.

"When a tourist has a choice, and looks at costs, as they're increasingly doing, India suddenly does not have the advantage of being a low cost destination," he points out.

The government is aware of the problem and is busy improving the country's tourist infrastructure, as well as encouraging companies to build more mid-range accommodation.

It's a gargantuan task. But at least it's a question of how best to manage rising demand. And there's almost certainly more to come.

Domestic tourists

As India's middle classes become more wealthy, they too are travelling more.

The vast majority of the visitors crowding around the Gateway of India are visiting Mumbai from other parts of the country. They're curious to see the bright lights of the big city, check out the shopping malls and explore everything else the financial capital has to offer.

But their ambitions are already growing. Some have already developed a taste for foreign travel.

They are the government's next big challenge. Not only does it need to persuade foreigners to visit - it must also convince its own tourists that the best place for a holiday is the country they live in.