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About Indian Tourism

As per the Travel and Tourism Competitiveness Report 2009 by the World

Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd

overall, moving up three places on the list of the world's attractive destinations.

It is ranked the 14th best tourist destination for its natural resources and 24th for

its cultural resources, with many World Heritage sites, both natural and cultural,

rich fauna, and strong creative industries in the country.

India made it to the list of "rising stars" or the countries that are likely to become

major tourist destinations in the next five years, led by the United Arab Emirates,

China, and Vietnam.

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India also bagged 37th rank for its air transport network. The India travel

and tourism industry ranked 5th

in the long-term (10-year) growth and isexpected to be the second largest employer in the world by 2019.

India has been ranked the best country brand for value-for-money in the

Country Brand Index (CBI) survey conducted by Future Brand, a leading

global brand consultancy.

India also claimed the second place in CBIs best country brand for

history, as well as appears among the top 5 in the best country brand for

authenticity and art & culture, and the fourth best new country for

business.

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Tourism in India Figures

0.8% share of world market

Tourists (2008)

4.6 million (International) 382 million (domestic)

Employment

Direct - 10.7 million

Indirect 24.4 million

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Export earnings ~ US $ 9.6 bn 2008

Contribution to GDP

Direct 2%

Overall 5.9%

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India: An emerging superpower

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FUTURE GDP:

Indias GDP will exceed

Italys in 2020,

Frances in 2020 Germanys in 2025 and

Japans in 2035

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Tourism growth in India

According to World Tourism Organization estimates, India will lead

in South Asia with 8.9 million arrivals by 2020

India is poised to emerge as the 2nd fastest growing (8.8%) tourismeconomy in the world over 2005-14 according to the World Travel &

Tourism

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Contribution to the economy

According to the Travel & Tourism Competitiveness Report 2009 brought out by the

World Economic Forum, the contribution of travel and tourism to gross domestic

product (GDP) is expected to be at 6.0 per cent (US$ 67.3 billion) in 2009 rising to

US$ 187.3 billion by 2019.

The report also states that real GDP growth for travel and tourism economy is

expected to be 0.2 per cent in 2009 and to an average 7.7 per cent per annum over

the coming 10 years. Export earnings from international visitors and tourism goodsare expected to generate 6.0 per cent of total exports (almost US$ 16.9 billion) in

2009, growing (nominal terms) to US$ 51.4 billion in 2019.

The travel and tourism sector which accounts for 6.4 per cent of total employment

or 1 in every 15.6 jobs in 2009 is expected to generate 40,037,000 jobs i.e. 7.2 per

cent of total employment or 1 in every 13.8 jobs by 2019. Real GDP growth for

Travel & Tourism economy is expected to be 0.2 per cent in 2009 and to average 7.7per cent per annum over the coming 10 years.

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Government Initiative

The campaign Visit India Year 2009 was launched at the International Tourism Exchange inBerlin, aimed to project India as an attractive destination for holidaymakers. The government

joined hands with leading airlines, hoteliers, holiday resorts and tour operators, offering them

a wide range of incentives and bonuses during the period between April and December, 2009.

The airlines participating in the campaign, Air India, Jet Airways and Kingfisher Airlines are

offering a companion free ticket for every ticket purchased for international and domestic

flights. Connecting flights to the departing airports are included in the final travel costs. TheIndian Travel Agents Association (IATO) is offering holiday-makers a free sightseeing tour in a

city of their choice.

Euromonitor International's Travel And Tourism in India report states that the Government of

India increased spend on advertising campaigns (including for the campaigns Incredible India

and Ahithi Devo Bhava - Visitors are like God) to reinforce the rich variety of tourism in India.

The Ministry promoted India as a safe tourist destination and has undertaken various

measures, such as stepping up vigilance in key cities and at historically important tourist sites.

It also deployed increased manpower and resources for improving security checks at key

airports and railway stations.

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Tourist Circuits in India

The Golden Triangle

Delhi, Agra and Jaipur

The Buddist CircuitSarnath, Kushinagar,

bodhgaya,

Nalanda, Rajgir &

Nagarjunakonda

The Heart of Heritage

Gwalior, Shivpuri, Orchha

& Khajurahio

The Desert Adventure

Jodhpur, Jaisalmer,

Bikaner & Barmer

The Beaches of India

Goa, Diu, Kovalam,

Mamallapuram

& Gapalpur

Adventure Sports

Srinagar, Manali,

Kulu, Thar Desert,

Sariska, Mount, Abu, Pune,

Gangtok, Darjeeling,Shillong & Ooty

The Temple Trail

Kanchipuram, Madurai,

Tiruchirapalli,

Puri & Konark

The Great Pilgrimage

Prayag, Varanasi,

Puri & Konark

Religion in StoneBelur, Halebid,

Mysore & Hassan

Backwater of Kerala

Alappuzha &

Kumarakam

Island Holidays

Andaman,

Nichobar &

Lakshadweep

The Lure of the Jungle

Corbett, Kanha,

Bandhavgarh &

Manas

The North East

Gangtok, Guwahati,

Shillong & Kohima

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CULTURE, HERITAGE AND ETHNO :TOURISM Chattisgarh, amongst otherstates has identified and is developing ethnic villages. The private sector isalso being encouragement for proper maintenance.

ADVENTURE TOURISM Adventure sports such as water sports, trekking,rock-climbing, para-sailing and bungee-jumping are popular with theyounger travelers and working executives.

MEDICAL TOURISM AND SPAS India has originated as one of the mostimportant hubs for medical tourism. Many people from the developedcountries come to India for the rejuvenation promised by yoga andayurvedic message therapy as well as for high-end surgeries like cardiacbypass surgery or knee/hip replacement.

HIGHWAY TOURISM - Besides catalyzing diversification of tourist trafficand revenue from the urban centers, planned development of highwaytourism opens opportunities for enhancing local employment and upliftingrural economy through local feeder enterprises, which will find scope togrow in the vicinity of such highway tourist complexes.

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RAIL TOURISM The Indian Railways has introduces several new services to

promote rail tourism luxury tourist trains, exclusive steam and hill charters,

tour packages.

CARAVAN TOURISMA new policy guideline to promote Caravan Tourism

in India and facilitate the infrastructure required for the same would be

announced.

WELLNESS TOURISM - A new policy guideline for promoting WellnessTourism in India would be announced. The policy would aim to leverage

Indias potential in traditional systems of wellness and medicines like

Ayurveda, Siddha and Yoga and to project India as a unique destination for

spiritual healing.

HELIPOT TOURISM - With a view to promote tourism in hilly and remote

areas, guidelines would be framed to provide central financial assistance to

States and Union Territories for constructions of helipads/heliports at

selected destinations which have tourism potential but lack good

connectivity's

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Travelers analysis

28%

20%

12%

5%

2%

0%

2%

9% 7% SE Asia

W Asia

W Europe

Africa

Australia

C & S America

E Asia

E Europe

N America

S Asia

Share of Outbound Travelers, 2006-

2008

0

5

10

15

20

25

30

1998 2004 2006 2008 2018

Number ofTravellers(Mn)

Number of Outbound Indian Travelers

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Foreign Tourist Arrivals

Estimates of foreign tourist arrivals (FTAs) and foreign

exchange earnings (FEE) are important indicators of the

tourism sector. FEE in US$ terms during the month of

November 2009 were US$ 1.2 billion as compared to US$

1 billion in November 2008.

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Tourist Visits in India

309598

1127

2124

6.7

14.5

23.5

38

0

500

1000

1500

2000

2500

2003 2008E 2013F 2013F

International

Tourist Visits

Domestic Tourist

Visits

100

96

92

88

84

80

97.87% 97.63%97.96% 98.24%

The number of domestic and foreign tourists has almost doubled in 2003 and 2008.

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Indian Tourism Industry-Market Size

1532

73

164

4

11

22

78

0

50

100

150

200

250

300

2003 2008E 2013F 2018F

International Tourist

Spends

Domestic Tourist Spends

79%

74%

77%

79%

74%

77%

79%

74%

77%

78%

MarketSizein

Bn

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India GDP Growth

The most important growth is the robust economic growth that has been witnessed

in the country.

Indias GDP has been growing at the rate of 6% since the liberalization of economy

in 1991 and has grown over 8% in the past few years.

At 8% CAGR, Indias GDP would almost triple from US$ 1200 Bn to US$ 3500 Bn by

2023

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Growth in GDP per Capita

Indias strong economic growth has caused the GDP per Capita to increase rapidly

over the past 5 to 10 years. At current rate, the GDP per capita in 2013 would be

double of what it was in 2003

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Distribution of Households Across Income Brackets

More and more families are expected to leave the deprived or aspirers category and join

Indias burgeoning middle class.

By 2025, the Indian middle class is expected to constitute 46% of the Indian population.

Subsequently, discretionary spends would be going up and this bodes well for the tourismsector.

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Share of LCCs In Airlines

010

20

30

40

50

60

70

80

Sharein%

Fsc: Full Service Carriers

LCC : Low Cost Carriers

53%

47%

The above graphs indicates the increasing share of LCC from 33% to 47% between

2006 and 2008.

The advent of LCC has spurred domestic air travel to grow from 11 Mn travelers to

36 Mn travels in the last decade.

Operational airports in the country have gone up from close to 40 airports in 2004

to 81 airports at present.

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Air Travel in India

0

10

20

30

40

50

1996 -

97

1997 -

98

1998 -

99

1999 -

00

2000 -

01

2001 -

02

2002 -

03

2003 -

04

2004 -

05

2005 -

06

AxisTitle

Total

Domestic

International

43.35% 35.79%

7.56%

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Steps taken by Government to Promote Tourism in

Country.

Airline tickets, tour package are all set to go cheaper with 2%

reduction in service tax

State-run oil companies have slashed Aviation Turbine Fuel(ATF) prices by 7%, the 11th reduction since September last

year.

Airport Charges to be cut for a limited period by 50%.

Removal of 8% excise duty on ATF.Reduce the charges which airport operator charges from the

oil companies, leading to enhanced performance.

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Indian Textile and Apparel Industry

Indian textile and apparel industry is one of the oldest and most significantindustries in the country and one of the largest in the world.

Apart from China, no other country can match the size, spread, depth and

competitiveness of the Indian textile and apparel industry.

Today the industry contributes around 14% to industrial production in the

country, 4% to the GDP, is estimated to directly employ apprx. 35 Mn

people apart from the indirect employment in allied sectors, thus making it

the second largest employer after agriculture.

It accounts for about 15% to the countrys exports and is, in sum, an

important economic engine for the nation.

In the past 10 years, the industrys actions, government policies as well as

market events have begun to converge, providing several growth

opportunities for the sector domestically as well as in the global market.

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Indian Textile and Apparel

Market US $ 62 Bn

Domestic Market

US$ 40 Bn

Exports

US$ 22 Bn

Textiles

US$ 10 Bn

Clothing

US$ 30 BnTextiles

US$ 12 Bn

Clothing

US$ 10 Bn

Current Size : Indian Textile and Apparel Market

The present size of the Indian textile and apparel market is US$ 62 Bn of which 22 US$

Bn is exports while rest US$ 40 Bn is the domestic market.The Indian domestic textiles and apparel market is one of the fastest growing market in

the world. It is expected to become one of the major consumption bases in near future.

The textile industry plays a significant role in getting the foreign exchange reserves into

the country as it contributes approx. 15% of the told exports from the country.

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FDI in India : Current Scenario

Due to Indias recent liberalization of its foreign investment regulations, the country

has become one of the fastest growing destinations for FDI inflows.

India offers many advantages to foreign investors like strong economic growth leading

to increased buying power by the middle class, low wages, and an educated work

force.

Indias Special Economic Zones (SEZs) attract foreign investment by providing taxincentives, assistance with bureaucratic and administrative problems and access to

reliable infrastructure.

Indian economy is growing 6 % per annum since last 10 years. Even in times of

recession / slowdown in most of the developed economies, India is expected to

maintain this level of growth.

From August 1991 to March 2009, India has attracted a total of US$ 106 Bn, of which

approx. US$ 90 Bn was invested during Apr 00 to March 09.

In textile and apparel sector, 100% FDI allowed under the automatic route. FDI sectors

to the extent permitted under automatic route does not require approval either by

Government of India or Reserve Bank of India (RBI).

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Healthcare Industry

The wave of change has swept across every industry, such dynamism and

corporatization has completely changed the face of the healthcare

industry.

Due to increased competition Healthcare Providers are unable to pass the

burden onto patients in the same proportion.

Since there is a rising demand and unprecedented growth of the sector,

there is a growing need to come up with newer models to improve

operational efficiency and make processes, infrastructure and out outlook

to management more lean and specific.

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Out of Pocket

Doctor

Patientrelationship

Sporadicquality checks Accounting

Low

EmployeeParticipation

MassApproachPaperRecords

Documentation Mode of Payment Public Relations QualityHospital Financial

Operations Human Resources Customization

Third - PartyMarketing /

CRMAccreditation

Revenue

Cycle

Management

Active

Employee

engagement

Personalized

Care

Electronic

Medical

Records

The Ongoing Transformation in Hospitals

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Medical tourism in India Medical care in the USA and private health care in UK is very expensive. India

has well-trained doctors who will work for a lower fee than they could expect

abroad.

Medical tourism offers people the option ofknee replacements,hipreplacements, heart care, cosmetic & dental surgery in India.

Hundreds of people have treatment abroad, saving them a great deal of money

in treatment costs.

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30

Confederation of Indian Industry (C II) sponsored Mc Kinsey & Co. study.Healthcare in India : The Road Ahead report:-

1.3 million medical tourists visit Asia / year

Nos. of US patients seeking cheaper care abroad - grew to

7,10,000 / year

Over 1, 50000 medical tourists travelled to India in 2002 bringing

in earnings of $ 300 million.

2007-08 > 3,00000

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Predicted growth of medical

tourism in India

2007 2012 2017 2022

By 2012 India is likely to become the top medical destination

Source: CII

0

5000

10000

15000

20000

25000

30000

1 2 3 4

2000

500

7000

25000

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Customer Relationship Management

Customer Relationship Management (CRM) is a method for an organization totrack, maintain and organize a database of its current and prospective customers.

In the healthcare sector, there is a wide difference between the customer and

consumer.

Hence there is a series of relationships that need to be nurtured and managed to

enhance patient retention.

CRM is increasingly applied in the healthcare industry in the following way:

CRM goes long way in building patient confidence and goodwill, and hence it becomes a

deciding factor for patient while choosing a hospital again. Hence customer service is one

of the major drivers of repeat business.

In a active CRM programme it is necessary to train every member of the hospital in

providing quality care and service to the patient . It plays important role in retaining the

patient.

The cost of efforts undertaken to retain a customer is ten times lesser than that of

acquiring a new one.

Today health care has become global. India has growing number of international patients

and more and more hospitals are rushing to upgrade their services.

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Application of CRMCRM has now evolved into a science which has been used very effectively and

productively to enhance the efficiency of various sectors such as the bankingindustry.

Multi-channel

Integration

Customer

Marketing

Customer

Analysis

Customer

Care

Credit Cards,

Insurance Schemes

Customer

profitability,

Propensity to busy,

Attrition behaviors

Collection&

Integration of

Customer

data

Customer

Delight

&

Retention

Analysis

&

Application

Of this date to

provide quality

Service to

customers

Application of CRM

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Total Current and Projected Growth

in Higher Education Enrollment (Mn)

Enrollmentin HigherEducation

GER21%

GER

17%GER13%

Education Industry

The enrollment in higher educationis currently at 17 Mn at a GrossEnrollment Ratio (GER) of 13%.Enrollment are projected to grow ata CAGR of 5.6%, reaching 22 Mnby the year 2013 and 29 Mn by the

year 2018.

As per these estimates, 12 Mnadditional seats in the highereducation would need to be createdby the year 2018 as shown in the

Exhibit 2.

The cost per seat in a regular higher education institution is UD%$ 8300.Therefore, the total investment that India required for higher education alonewould be US$100 Bn.

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0

100

200

300

400

2008 2013 2018

14-18

11-14

6-11

Total Current and Projected Growthin K-12 Enrollment (Mn)

AgeGroup

147

72

97

158 171

80

10097

74

Currently, the total number of

students enrolled in K-12 schools in

the country is 317 Mn and expected to

grow to 328 Mn by 2013 and further

to 351 Mn by year 2018.

Clearly, India will need to add at least

34 Mn additional seats in K-12

segment in the next 10 years to cater

to the education needs of its

continuously growing population, as

shown in the Exhibit 1.

The cost per additional seat, at a conservative estimate is US$ 2400 (cost of land

included at US$ 1 Mn per acre). This translates into a minimum investment requirement

of US$ 80 Bn of investment over the nest 10 years to establish these 34 Mn seats.

Total Current and Projected Growth in K-12 Enrollment

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Parameters

Health &Beauty Counseling

EnglishSpeaking

No. of Students 1380 560 1180

Capex- 1 Centre (US$) 195,800 133,333 100,000

Cost Per Seat (US$) 145 240 84

Vocational Streams of Education

The vocational education and training landscape of India is extremely underdeveloped. Indiacurrently has 5,500 industrial training institutes and 1,745 polytechnics as compared to 500,000

similar institutes in China. This infrastructure cater to only 2.5 Mn people annually. There are 175

trade training programs in India as compared to 1,500 in the USA. Clearly there is a pronounced

skill gap in terms of both quality and quality in the country.

As estimated 85-90 Mn people with vocational skills would be requited in various sectors

between 2008-2013. According to industry sources, the split of people intake sector-wise over the

next 5 years will be 44.8% from the service sector, 31.2% from agriculture and 12.6% from

manufacturing.

Cost per seat will very vary significantly in this segment depending on the location, scale,

positioning of training service and investment by private players vs. the govt.

Cost per Seat Estimation in Few Vocational Streams of Education

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INFRASTRUCTURE FORTOURISM-WHAT DOES IT

INDICATEAdequate Accommodation

Road infrastructure

Air connectivityBasic amenities at tourist centres

Developed tourism circuits

Adventure Tourism

Tourist trains

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According to the latest Tourism Satellite Accounting (TSA) research, released by the

World Travel and Tourism Council (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 per cent

between 2010 and 2019 and will place India at the third position in the world.

Indias travel and tourism sector is expected to be the second largest employer in

the world, employing 40,037,000 by 2019. Capital investment in India's travel and tourism sector is expected to grow at 8.8

per cent between 2010 and 2019.

The report forecasts India to get capital investment worth US$ 94.5 billion in the

travel and tourism sector in 2019.

India is projected to become the fifth fastest growing business travel destination

from 2010-2019 with an estimated real growth rate of 7.6 per cent.

Preparing for the 2010 Commonwealth Games in Delhi, the Tourism Ministry is

exploring the provision of tented accommodation to tourists in Faridabad and Suraj

kund in nearby Haryana.

The Road Ahead

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Benefits of tourism

Employment generator.

Low Capital Investment in the trade.

Imports earn foreign exchange. Cultural revival/ regeneration

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SWOT ANALYSISStrengths Weakness Opportunities Threats

DIFFERENT VARIANTS

OF TOURISM

INTERNATIONAL

COOPERATIONAVERAGE LENGTH OF

STAY

INADEQUATE

INFRASTRUCTURE

ACCOMADATION

BASIC AMENITIESLACK OF

PROFESSIONAL

MANAGEMENT

FAST EXPANSIONS

RAPIDLY GROWING

MIDDLE CLASS

TERRORISM

RECESSION

INFLATION/

DEFLATION

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CONCLUSIONS

Tourism is one of the main driver of economic growth/employmentgeneration in India.

It has the potential of addressing issues such as rural poverty,

strengthening the economic status of the rural artisans, earning forexetc.

India has the potential to become a global health destination

It is necessary to create the right environment to attract FDI byestablishing progressive legal-institutional framework and facilitatingorganizations

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THANK YOU