Budget 2012: A dampener for travel industry

Updated: Mar 28, 2012, 08:51 AM IST

The travel and tourism industry, which is one of the largest employment generators in the country, is not too impressed by the announcements of Finance Minister Pranab Mukherjee. Deep Kalra Founder & CEO of MakeMyTrip and Romit Theophilus, Director, Sales and Marketing, German National Tourist Office shared their views with Reema Sharma of Zeebiz.com on the Union Budget, its impact on the sector and overall tourism industry.

How do you analyse the budget?

Deep: The budget was a bit of a dampener for the travel industry. Costs will expectedly increase largely due to hike in
i) Service tax rate
ii) Deemed value of services for purposes of service tax and
iii) Railway fares

Considering that the industry is already facing pressure due to the weakening of the Rupee over the last one year, it would make the Indian travel & tourism industry less competitive. Although we assume that there will be a little reprieve considering that the disposal income of Indians will be slightly higher with the marginal increase in the income slabs from last year.

What is the current scene in the Indo-German tourism sector?

Romit: Year 2012 will be the year of infinite opportunities between Germany and India as both countries celebrate their 60th year of diplomatic ties. Also increased participation from both the countries will strengthen bilateral relations. India is a key market for us. We have a target to get 1.5 million visitors overnight by 2020. Germany is an MICE destination with 62% Indian companies preferring Germany for business purposes.

What is the government doing to promote tourism in India?

Deep: World Travel and Tourism Council (WTTC) and World Tourism Organisation (UNWTO) has predicted that Asia, specifically India and China, will drive the future of tourism. The Government of India is making sincere efforts to promote tourism in India as well as attract travellers from potential tourist generating markets, covering America, Europe, Africa and Asia–Pacific regions.

Besides, the Union Tourism Ministry has signed a MoU with Ministry of Civil Aviation to promote more synergy between both the Ministries for effectively positioning India as a preferred tourism destination in the tourist generating markets overseas.

The ‘Incredible India’ campaign will also help to promote various tourism destinations and products of the country.

What are the challenges of Indian tourism or what can be done to make the sector better?

Deep: Sadly there are many heritage monuments which are in a state of neglect. An effective solution for this could be to outsource the maintenance and exterior lighting of the heritage monument to corporate houses.

Steps could be taken to make the tour to major destinations replete with tour guides, activities for the children, culinary tours and interaction of tourist with the cultural aspect of the place.

What are the positive factors of tourism in India?

Deep: There are many unexplored destinations that travellers would love to visit. One can choose to have an adventurous holiday, or simply relax by the beach, unwind at a hill station or visit religious cities.

India offers a variety of tourism options; there is something for everyone. Niche segments as medical, religious, wellness and wedding tourism have also emerged in the recent past attracting visitors from across the globe.

Romit: According to the latest Tourism Satellite Accounting (TSA) research released by the WTTC and its strategic partner Oxford Economics in March 2009, the demand for travel and tourism in India is expected to grow by 8.2 percent between 2010 and 2019. This will most likely see India be placed at the third position globally.

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