Comprehensive project report is part of the MBA sem 3 and 4 curriculum. Under which 2 students in one group are supposed to study one industry and so we have selected TOURISM INDUSTRY for our study.
Tourism Industry is one of the fastest growing industries in the world with an average GDP of 11.6%. Changing lifestyle of the people because of a sudden increase in their income levels accredited to the opening up of the economy and Multinational Corporation has led to the steep growth of tourism industry in India. Tourist’s attention is shifting from established destinations such as European countries to emerging destination such as Asia-pacific countries. Travel barriers have been broken and there is a flow of free trade. Tourism has become multiple activates focused with the integration of shopping and recreation, entertainment and education and culture and business center development.
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Tourism Industry is deeply affected by the social, technological, economic factors. All these factors have been given their due credit in the project. Economy being the bloodline of any country has been devoted a major chunk in the study of these factors followed by social and technological factors. Government policies provide a basic framework, which minds and controls every industry. Therefore, it has to be studied so that not a single factor remains untouched.
For the development of any industry the basic infrastructure facilities are very important. Indian railway is the world’s largest network under a single management. The railway is one of the facilities required for tourism besides aviation, telecommunications and accommodation.
Tour operators and travel agents perform the role of a liaison and a catalyst too in this industry without whom it is very difficult to operate.
As we know that tourism industry of India is growing at a very fast pace so in this we have project also deals with the current scenario and the challenges faced by the tourism industry of India.
A few suggestions about development of tourism in India have been market in the project such as planning, organizational structure, business process reengineering, information systems, operations management, marketing strategy formulation, environmental impact assessment and project management.
GROWTH AND EVOLUTION OF TOURISM INDUSTRY IN INDIA
The fall of Roman Empire resulted into downfall of tourism, at least till the end of Middle East. The available facts reveal that Roman evinced interest in visiting temples, shrines, festivals and baths for health and amusement. The contours of Development underwent radical change at least till the 15th century. The trade and commerce along with religious activities gained the momentum but till the beginning of industrial revolution, tourism continued to remain the matter of pilgrimage. Of Course a number of developments took place between 15th and 18th centuries. Specially In the industrial world which raised the significance of specialization or expertise for excelling competition. This motivated the elite of the society to go abroad for enriching the knowledge, speeding up the learning cycle developing the excellence and making possible cross fertilization of thoughts and ideas. By the turn of 19th century, we find multifaceted development in transportation, communication and, technological sophistication, which energized the process of industrial transformation. The tourism started developing as a business and the professional Travel agents started taking part in the process. With the beginning of the 20th century the process of invention and innovation stated gaining momentum which made ways for the development of infrastructural facilities and further added new dimensions in tourism business. No doubts, the World War I and World War II obstructed the flow of development but the second half of the 20th century proved to be golden age, since almost all the countries of the world started patronizing tourism as an important economic activity.
Thomas cook was of the view that beauty is for the people. The opinion of Mr. Cook generated new dimension in the tourism business, which paved copious avenues for development of tourism as an industry. We can’t deny that since the time immemorial travel has been first choice of masses , the qualitative improvement in the process could take place with the participation and co-operation of leading global organization , such as WORLD TOURIST ORGANISATION, PACIFIC AREA TRAVEL ASSOCIATION, INTERNATIONAL UNION OF OFFICIAL TRAVEL ORGANISATION or so With the development of a broader concept, the essence of Tourism further distilled and it was more holistic approach because in the general theory of tourism, Walter Hunziker and Kurt Kraph (1942) considered it both a human As well as economic activity. In 1974, Burkat and Medlik again brushed up this approach since they viewed tourism as a composite phenomenon embracing a whole range of different relationship between traveler’s and the host population.
The intensity foreign exchange requirement was found at its peak and the tourism appeared to all of them an important source to be tapped optimally. In the face of succulent benefit, the developed, less developed and even the Developing countries started assigning due weight age to the tourism industry in their national development agenda. We agree with this view that with tremendous Socio-economic potential, the tourism industry is considered to be an economic bonanza which paves avenues for the Development of a number of allied Industries, such as hotel, communication, banking transportation, trade and commerce or so. In addition, we also consider tourism a potential source for making possible world peace through mutual appreciation and international understanding.
In the Indian perspective, we find Seventh Five Year Plan as watershed in the Development of tourism industry. For the first time, the vast potential of tourism as a foreign exchange earner and generator of employment opportunities was recognized.
Several policy initiatives were taken to develop the tourism sector In the development of tourism, the public sector has made a significant contribution. Of late, the industry is equipped with a reasonable infrastructural base and is poised for a self-sustained growth. The future growth of tourism is required to be activated with the support of the private sector. The strategy for the development of tourism is required to be designed on the basis of low-cost economy, higher level productivity, efficiency in the use of infrastructure and sophisticated tourist facilities.
The tourism industry bounced back from the global economic slowdown of last year with 2011 poised to show a positive growth number. As a matter of fact tourism is one of the largest industries globally, both in terms of size and employment ($5.4 trillion and 8.6 per cent of the global workforce.)
Indian tourism industry contributes 6.4% of total GDP. This compares to 3.3% for automotives manufacturing, 4.5% for education and 3.7% for the mining industry. So INR 6.7 billion is contributing from tourism industry in India.
1. Holiday as a Base – Mass Market, Popular Market
2. Demand as base – Primary, Secondary opportunity
3. Geography as a base – Cities, Provinces, Regions, Countries
4. Psychography as a base – Lifestyle, Personality Motive, Product, Knowledge.
5. Demography as a base – Age, Sex, Occupation, Class, Religion.
6. Socio-economic of base – Rich, Poor, Rural, Urban, Literate, Illiterate
7. Purpose as a base – Business Travel, Cultural Tourism, Common Interest
8. Age as base – Kids, Teens, Youths, Young, Married, Single.
The holiday base focuses or attention on the fact that long-distance tours require availability of more leisure hours. The holiday market is classified in terms of demand. The different categories are, the mass market, the popular market and the individual holiday market. The mass market involves largest number of- vacationists who generally travel in long groups. They prefer all-inclusive tours. The users belong to the conservative group in which we find skilled and semi-skilled workers, blue-collar employees as the potential users. The users are generally class one and class two groups, pensioners and retired people. The individual holiday market involves “social group-A7 like corporate chairman and senior executives. We find an apparent change in the behavioral profile of different categories in the holiday base. Another base is purpose in which we find business travel market, cultural tourism market, common interest tourism market and conference and convention.
The demand base classifies markets into primary tourism market, secondary tourism and opportunity tourism. The geographic base includes lifestyle, personality, motives, product and knowledge. The demography base covers age, sex occupation, class and religion. The socioeconomic base makes classification like rich, poor, rural, urban, literate and illiterate. The age-base classifies markets for kids, teens, youths, young married and old people market.
The aforesaid small segments simplify the task of tourist professionals. They know about the changing needs and requirements of different segments and innovate their strategic decisions accordingly. The development of marketing resources in tune with the changing levels of expectations make the ways for the stimulation of demand and simplify the task or marketers. It is in this context that we need to segment the market for the different allied industries helping the tourism industry in many ways.
Designing a Package Tour
In the process of formulating a sound product strategy, there are a number of factors to be given due attention. The designing of a package tour occupies a place of outstanding significance. For the profitable marketing of tourism services, it is pertinent that the different components of product are managed in a right fashion. This gravitates our attention on the offering of a package holiday product which necessitates management of the following factors.
The development of destination or tourist sites has a far-reaching impact on attracting the tourists. It is essential that destination or the tourist sites are easily accessible. This necessitates safe, fast and reliable transportation facilities hither and thither the tourist sites. To be more specific for promoting world tourism or attracting the foreign tourists, it is essential that the flying time is made proportionate. The site should be clean, the beaches should be sandy, sun-shine should be certain, the entertainment facilities at the site should be of quality the site should be safe to walk about, the local people should be friendly, the tour operator, the travel guides and others should have competence of speaking English and other regional languages. These facilities at the destination would add attractions.
Management of Airport
While managing the tourism product, the airports are required to be managed carefully. The airport should be local and convenient. The arrangement for car parking should be safe and adequate. It should not be congested but it should be spacious. In addition, the shopping facilities should be duty free. The airport should be clean and the vehicles should be available so that tourist doesn’t face any trouble. Besides, the security arrangement should be tight to protect the passengers and their valuables. The aesthetic management occupies a place of significance in the very context.
The flights should maintain the time schedule otherwise a dislocation may invite multifaceted problems, not only to the tourists but even to the airport authorities. The services should be reliable, good and polite. The sophisticated modern aircrafts of new generation should be included in the fleet to attract the tourists. The safety record should also be up to mark to remove the fear psychosis or psycho-fobia.
Road and Rail Transportation
For the tourists preferring to travel by buses of railways, it is significant that the stations are well managed. The booking and reservation counters should be managed scientifically. The enquiry should be controlled by efficient and well behaved staff. The safety arrangement should be adequate to counter the law and order signposts should be positioned at right places to help the travelling passengers.
For managing the hotel services, it is essential that we are also careful to the hotel accommodation facilities. It is pertinent that hotels are easily accessible to the tourist sites or beaches or shops. The hotel personnel trustworthy and competent enough to speak English and other regional languages. They are supposed to be friendly. The management of facilities at hotels need due care. Though the standard of services, amenities and facilities depend upon the grade of hotels still it is essential that hotels offer the promised services to the users. The gap between the services-promised and service-offered should be – bridge over. The hotels should be well maintained, the decor should be attractive; possibly a fair mix of eastern and western culture, the atmosphere should be calm and quiet; specially at the night time, public rooms should be adequate in number, the swimming pool should be neat and clean where inflow and outflow of water should be scientific to protect the danger of water contamination or pollution. There should be bar with good range of drinks.
The bedrooms should be spacious in which balcony facilities should be made available. The childcare services should also be made available. Particularly at the beach resorts, the sea view should be possible with all rooms, in-room telephonic services should be available, in, and room-TV should be provided. There should be adequate cupboard space. The hangers should be attractive and artistic, toilets should be neat and clean and well equipped with east and west provisions. The lighting and ventilation arrangements should be adequate. The intensity of light at different points should be given due weightage. While managing hotels, the restaurants and cafeterias also need due care. The restaurants and cafeterias should be well managed. The food and drinks should have taste-orientation. The varieties of meals and drinks should be available. The seating arrangements should be comfortable, the meal should be flexible and the hotel personnel should be polite and friendly.
Regarding representatives of resort, they should be-knowledgeable friendly, accessible and competent.
In addition, the fellow travelers should be like-minded. The main thing is to make the tour pleasant and memorable. If the tourists have companionable fellow travelers, the journey would of course remain memorable.
The aforesaid facts make it clear that being an amalgam of a number of industries and services, the tourism industry is known as a multi-segment industry in which the designing of a package which proves its instrumentality as a motivational force is found a bit difficult and challenging. It requires professional excellence so that we are in a position to assess the changing levels of expectations of the guests/tourists and all the required amenities and facilities are made available to help tourists to go to the destination, to enjoy and to come back safely. The tour operators and transport operators bear the responsibility of formulating a package tour and therefore they should have world class professional excellence to know and understand their changing needs and requirements.
The services are related to a number of industries managed by others and therefore, the tour operators and transport operators managing the affairs should make it sure that whatever the promises they have made on behalf of hotels, airways,’ railways, roadways are not to be distorted. This is likely to project the image of tour operators and therefore a gap between the services-promised and services-offered would make the task difficult. It is against this background that designing of a package tour occupies a place of outstanding significance and all the allied industries making the package are required to be careful that they are not inviting degeneration.
DEMAND DETERMINATION OF THE INDUSTRY
You should know this fact that India is such a country which is rich in beautiful and amazing places. Some places are god created whereas some are manmade. But in spite of having unbeatable tourism potential, lesser number of tourists visit different destinations of India for which it is known. Though Government authorities are continuously paying attention towards the growth of the tourism industry but still it is lacking the attention of a good number of travelers. It is a fact that tourism industry is contributing a large amount to the total GDP of the country so governments want to attract a good number of tourists to India. But Indian tourism is lacking a good number of tourists. This may be due to various reasons. Some of the important reasons are:
While time and price are self-explanatory, pricing is an art in itself and
requires careful study as part of corporate policy. Price is the most powerful single variable in the marketing mix. But it does not operate in isolation. Value for money, albeit at different levels, is imperative. The product must be in demand or fashionable. It may be in short supply. Competition can be weak or strong, affecting achievable rates.
The wide variety of airline and hotel rates for basically the same product at different times and conditions of sale reflect these characteristics. The market may be very price sensitive, as in the case of traffic from Northern European urban areas to Mediterranean beaches where there is a strong competition and a wide choice. There are also resorts and their establishments offering exclusive attractions, justifying a premium price. Price discounting and discrimination, and segmentation, in the market has always been a feature in travel services. The historic rule is to charge
what the market will bear. The product is highly perishable and cannot be
stored. It is necessary normally to appeal to a number of different
segments. The railways invented first-, second- and third-class travel on
‘scheduled services’. When capacity exceeded demand, excursions and
package tours were invented, the purpose being to sell to capacity and
maximize the yield or return. Prices can be lowered segment by segment.
But the marketing task is to ensure that cheap traffic does not drive out
or invade the higher price and regular clientele. Airlines, for example,
offer Saturday night stopover fares at half or less than full fare, on the
assumption that full fare paying travelers, notably business travelers, will
not stay over the weekend. In times of crisis or recession, special rates apply. In fact, recession has always been the mother of invention in tourism, giving rise to new initiatives that created new movement.
Packages, cruises, specialist tours are all examples. Indeed many hotels have created events to attract business. Tactical plans must be highly flexible, short term and changing to meet the
varying ‘tides’ in demand, especially seasonal change. Economic and
political ‘perturbations’ usually unexpected, can alter trade suddenly and
sometimes with great force. Currency devaluation, the Gulf War and the
severe recession of 1991 in world markets are examples.
The strategic plan with its long-term marketing implications needs
consideration with the development plan. As marketing has a key role in
product formulation the plan must select market segments. For example, it may give priority to quality and higher priced services, which will affect the investment in equipment to provide luxury items. It will be important to select segments that fit together. At a later stage in preparing the marketing plan, a detailed product/market match exercise will be necessary.
The early resort promoters understood the selective approach very well.
There were from their inception select resorts, usually quiet, small and
patronized by the ‘upper classes’ and higher spenders, and large, gregarious resorts which were popular centers for ‘lower class’ visitors.
THE SUPPLY DETERMINANTS:-
There are supply determinants, ranging from absolutes such as under- or
overcapacity to infrastructure weakness, e.g. transport bottlenecks and
health and security dangers or political instability. Such factors can seriously
limit or even destroy for a time a tourist destination’s reception capacity. The
marketing plan will take such factors into account.
SEGMENTATION AND MOTIVATION:-
Two key aspects of the third demand determinant – consumer preference –
need careful study. Indeed the success of the whole marketing operation
depends on this. They are segmentation and motivation.
Tourism’s mass expansion takes many different forms. It is a heterogeneous
not a homogeneous movement, made up of many different types of
traveler, seeking a wide range of tourism products. Thus the mass
movement divides up into a number of segments, each differing from the
others and needing a separate approach in sales, servicing and product
There are many possible divisions and subdivisions which can be made
usefully in planning, but essentially the segmentation task is to identify
specific groups in the travelling population interested in the same type of
facility and service. The group identified must be large enough to warrant
separate marketing or production attention, to make a specialist approach
profitable. It must also be possible and practical to reach this section of the
population in an effective way. This means that the group should not be too
dispersed, and that there should be efficient media and distribution
channels enabling the producer to reach the customer at a reasonable
marketing cost. There are a number of criteria and categories in segmenting the total market.
POOR ARRANGEMENTS OF TRANSPORTATION FOR THE TOURISTS:-
Even after making lots of effort in improving qualities of the comforts for the tourists, it is said that the transportation system still requires to be improved. Tourists from outside India want to enjoy their tour with comforts in all respect and they are ready to pay for all these facilities. So it is essential to offer the best transport facilities for the tourists in order to attract more and more tourists.
NON-STANDARDIZATION OF FARES AND RATES:-
There are not any standard fares and rates for the transportation. Due to this tourists face lots of problem. Most of the travel agencies want to earn more and more especially from the tourists outside India. This ultimately gives a bad impression of India on outsider.
IMPROPER MAINTENANCE OF HERITAGES:-
With the advancement of tourism industry in India, numbers of heritages and resorts are built at different destinations in order to avoid inconvenience to the tourists. But most of the heritages are not maintained properly and these things are disliked by the tourists especially from outside India.
LACK OF SECURITY AND CHANCES OF HARASSMENT:-
If we talk about the security of the tourists, it is little bit weak. We can’t say with full confidence that the tourists who tour to India are secured completely.
LACK OF TRAINED AND PASSIONATE PROFESSIONALS:-
Due to lack of trained and passionate professionals, tourists don’t enjoy and get satisfied fully.
LACK OF PROMOTIONAL STRATEGIES:-
Indian tourism must adopt a good number of promotional strategies which will help in attracting a large number of tourists.
ABSENCE OF HYGIENIC AMENITIES IN THE RESORTS AND HOTELS:-
Though there are numbers of hotels and resorts but most of them lack in hygiene especially in the basic amenities which they offered to the tourists.
PLAYERS IN THE INDUSTRY
Thomas Cook India
Cox & Kings
Club Mahindra Holidays
Kuoni Travel Group, India
Goodwind Travels Pvt. Ltd
Airtravel Enterprise India
Compass Tours India
KEY ISSUES AND CURRENT TRENDS
Tourism as one of the important foreign exchange earning industries has manifested great potential of growth under liberalized Indian economy. To attract the foreign tourists in India, liberal policies and reduction in taxes along with a comprehensive package for attracting tourist and foreign investment are the need of the hour. There is also a need to increase the government’s role in promoting India as a brand. Just like exports and other sectors, tourism will grow only if the India brand is established in the global market. Hence, we must have an open mind on alliances with other countries, which might help in adopting better promotion strategies, marketing, services and packaging. Only overall growth can help in improving revenue generation, which needs to grow in line with the additional capacity being setup by the hospitality industry.
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Present Position of Tourism Industry in India:-
It may be mentioned here that the Government of India had no Tourism Policy for more than forty years since the initiation of planning in the country in1951. Consequently, no efforts were made to lay down any sort of infrastructure for the promotion and development of tourism industry in the country. As a matter of fact, the country, after independence, had to pay serious attention towards increasing food production and laying down infrastructure for industrial development. On both the fronts, the country made tremendous progress and became leader of the developing nations. In order to achieve targets of faster economic growth, a number of Public Sector Enterprises were set up including India Tourism Development Corporation. However, no worthwhile progress was made in developing tourism in accordance with tourism potential of the country. It was only in 1992 that a tourism policy was laid down by the Government of India.
As far as total revenue to the Government of India is concerned, tourism is the third largest source of foreign exchange earnings to the country after garments, gems and jewelry. India has tremendous potential to earn more foreign exchange because it has a huge and diverse potential for tourism ranging from pilgrimage tourism, beach tourism, eco-tourism, spiritual and health tourism to leisure and adventure tourism. The amazing diversity offers tourists everything they want to enjoy from a holiday but still we could not capitalize on the huge variety of amusements offered by our country. In order to attract the influx of tourists in the years to come, the Government of India has allocated US $590 million for the tourism sector for the period of 2002-07. While the global tourism market has shown negative growth, tourist arrivals in India have improved a little in the recent past. This is a positive indication but much more can be done to promote inbound tourism in India. In brief in India, the tourists feel insecure and irritated on account of unwanted paper work, time consuming compliance of various rules and regulations, customs and immigration formalities, currency convertibility, beggars, tipping, bargaining, environmental pollution, transport problem, high rates and taxes etc. Beggars are such a nuisance that they are visible almost at all tourist spots, hotels, shopping centers, markets, monuments, places of worship, railway stations and bus stands. They constantly follow the visitors and there have been occasions that the tourists are so much irritated that they cut short their visits, shopping and spending. The tourists, thus, ignore India to avoid hassles and prefer other destinations where the specter of poverty and its manifestation like begging do not spoil their holiday spirit. Thus, India’s third largest foreign exchange earning industry is beset with a large number of problems. These problems have been examined in greater details in the pages that follow.
RECENT CHALLENGES OF TOURISM INDUSTRY IN INDIA:-
During the last few years tourists have witnessed good amount of violence and killing almost in every country including India. Kashmir, historically known as ‘Heaven on the Earth’, appears to be deserted on account of terrorism and violence. A large number of tourists, who used to visit and stay for a longer period in the Kashmir valley, do not tour the State of Jammu & Kashmir for fear of violence and aggression. The business travelers also schedule their business trips only when it is absolutely essential. In fact, terrorism and violence have become the first and the foremost problem for tourists everywhere and India is no exception. The problem has assumed such alarming proportions that the world community must find its last in solution. The injustices done to the people in various parts of the world have result in great damage to tourism industry all over the world Tourists, especially of the developed countries; have been avoiding such destinations where there is any chance of violent activities against them. The problem has become so acute that the Governments in UK and the USA, in the recent past, had to issue travel advisories to their tourists. Though these travel advisories were, later on, withdrawn but the damage had already been done. India is not a preferred destination now for most of the Western tourists who spend, from our standards, a lot of money on tourism. Tourists are also irritated on account of unwanted paper work, time was the compliance of rules and regulations in India. In addition to customs and immigration formalities, language barriers are also the major problems faced by the foreign visitors. The difficulties of entry and exit too spoil half of the holiday charm. Again, our poor infrastructure, shortage of packaged tours, lack of connectivity between places, lack of transportation, our failure to create mass awareness throughout the world, polluted environment, discriminating economic and social behavior, inadequate and inexperienced staff, uneasy current convertibility and lack of multi-linguistic guides come in their way of pleasant tour and make the foreign tourists reluctant to come to India.
The Indian tourism industry has seen rapid growth in the last few years. Before any kind of analysis is undertaken, it is important to find out what are the main environmental influences that have lead to this growth and how the extent to which the changes are occurring. This is important because the change in these factors can have significant effect on the way the industry performs.
These environmental influences can be analyzed by using the PEST Analysis. The PEST Analysis within its parameters indicates the importance of the political, environmental, social and the technological changes on the industry.
a) Political / Legal Political
The political factors are the main force of the industry. The Indian tourism industry is built on the ba
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