The COVID-19 pandemic has presented unforeseen challenges to global tourism. With geography gaining significance and the importance of shorter distances becoming more pronounced, regional tourism is likely to grow. Governments must thus pivot to focus considerably more attention on regional tourism through investments in infrastructure and services, particularly digitisation to reduce human transactions, a new report by Brookings India has said.
India, in particular, will have to leverage the wide range of cultural similarities with its neighbours such as the regional Buddhist trail and pilgrimage, etc, the research report noted. Such a push would also contribute locally through employment and revenue generation from foreign exchange earnings. Brookings India is a non-profit public policy organisation.
India has been the preferred short-haul destination for tourists from its neighbourhood. Tourists visit India not only for leisure and medical reasons, but also use the country for transit to other regions. Bilaterally, there have been improvements in visa policies, for example, the relaxation of the India-Bangladesh visa policy in 2013 and with the Maldives in 2019, the report said.
However, there are still significant challenges towards promoting free and open intra-regional tourism such as visa-openness, gaps in cross-border infrastructure, etc. China, on the other hand, has been increasing its presence in the region, with a growth of 753% in the last decade (2007-2018). It has also made significant investments in South Asia’s tourism and hospitality sectors.
Policy Recommendations
Several steps can be taken to ensure a seamless flow of tourists in India and its neighbourhood:
E-visa, with digital application and delivery: Technical modernisation, upgradation and other improvements are needed in the Indian visa application and delivery system for South Asian nationals. Currently, only China and Sri Lanka are eligible for an Indian e-visa. Considering the rising share of tourists from the neighbourhood in India, the e-visa facility should be extended to other countries in the region, the Brookings report observed.
Investing in digitisation in the tourism industry: Due to the Covid-19 pandemic, there is an increasing focus on digitisation of various services to revive the tourism sector. Contact-less transfers, hotel check-ins, site-visits etc. will be crucial for revival of the industry. This requires participation from both public and private sector stakeholders and significant investment in digitisation to enhance secure travel and ensure revenue from foreign exchange.
Inter-ministerial coordination to enhance infrastructural connectivity: The Ministry of Tourism should actively work with other ministries such as the Ministry of Civil Aviation and Ministry of Home Affairs to undertake infrastructure-related connectivity initiatives, for example by further expanding the UDAN Scheme to neighbouring countries and supporting digital immigration services at the Integrated Check Posts. Apart from this, the government must play a role in facilitating tourism infrastructural development supported by multilaterals such as the Asian Development Bank, World Bank, Japan International Cooperation Agency, etc.
Tourism promotion through regional initiatives: India must take the lead in promoting intra-regional tourism through the South Asian Association for Regional Cooperation (SAARC), Bay of Bengal Initiative for Multi-sectoral, Technical and Economic Cooperation (BIMSTEC) or the Bangladesh, Bhutan, India and Nepal initiative (BBIN). The Brookings report said that following the example of the Association of Southeast Asian Nations (ASEAN), India could host regional tourism summits and facilitate inter-regional cooperation among tour operators, for example with the Federation of ASEAN Travel Associations (FATA). India should also work and cooperate bilaterally with other South Asian countries on joint tourism promotion and advertising campaigns, towards establishing the tourism industry as a regional value chain.
Promoting religious tourism circuits: The historical and cultural linkages between South Asian nations offer the potential to develop tourism circuits within the region. There has been an interest towards developing a Buddhist circuit between India and Nepal, and a Ramayana circuit between India, Nepal and Sri Lanka, the research report said. India’s regional governments will have to play a vital role in targeted outreach initiatives to promote their religious heritage to specific countries.
Countries in South Asia reportedly gain more from tourism exports to China than India. This is reflected in the average per capita spending capacity of Chinese and Indian tourists in 2018, at approximately US$ 1850 and US$ 960, respectively. In the same year, the total Chinese tourist expenditure amounted to US$ 277 billion, registering a 5% increase from the previous year. By comparison, India’s total international tourist expenditure was US$ 26 billion after a 9% year-on-year increase, the Brookings report said.
China’s increasing investments in tourism and allied sectors in South Asia could have possibly led to the rise in Chinese tourist arrivals. For instance, in the Maldives, China has invested significantly in infrastructure, housing, hotels and airlines. Nepal and China have established direct flights from Kathmandu to Beijing through Himalayan Airlines, a Nepal-China joint venture. Furthermore, China’s Northwest Civil Aviation Construction Group, with financial assistance from the Asian Development Bank (ADB), is constructing the new Gautam Buddha International Airport.
As per the World Travel and Tourism Council’s (WTTC), the sector contributed US$234 Billion or 6.6% to South Asia’s total GDP in 2019. There was a 4.5% travel and tourism GDP growth vis-a-vis the 5% real GDP growth in the region. While foreign tourist arrivals to the region have increased over the years, there has also been a significant increase in the contribution of tourists from the two largest economies: India and China.
A comparison of Indian and Chinese tourist arrivals in four South Asian countries – Bangladesh, Maldives, Nepal and Sri Lanka – reveals that while more Indian tourists visit South Asia, the last decade has witnessed an unprecedented rise in the number of Chinese tourists, approximately by 753%, the Brookings research report said.
A decade later, the 2018 figures reflect a rather different reality, with a phenomenal rise in the number of Chinese tourists to the Maldives, Sri Lanka, and Nepal. Between 2007 and 2018, Chinese tourist arrivals rose by 687% in the Maldives, and 462% in Nepal. Sri Lanka registered the highest growth in tourist arrivals from China, from just about 10,000 in 2007 to almost 260,000 in 2018.
According to the UNWTO and the Chinese Tourism Academy, China has been the world’s largest tourism source market since 2012. The number of outbound travel departures increased from 4.5 million in 2000 to 150 million in 2018, with an average annual double-digit growth of 16%. However, it is reported that the market is still in its infancy. Since only 7% of Chinese citizens currently own a passport, the number of trips could surge to over 400 million by 2030.
This enormous expansion of the Chinese outbound tourism market can be attributed to reasons such as increased air connectivity and a rising middle-class with growing disposable income. Between 1990 and 2016, the number of international air travellers has increased from just one to 52 million. Furthermore, a profile segmentation of Chinese outbound tourists shows that women and millennials (aged between 15-34 years) dominate the market with 53% and 55% respectively of the total outbound tourist share.
