9 Tourism Entrepreneurship
Shivani Mahajan
Learning Outcome
After completing this module students will be able to:
a. Understand the concept of Tourism & Tourism Entrepreneurship
b. Need of Tourism Entrepreneurship
c. Importance of Tourism Entrepreneurship
2. Introduction
Today Tourism is not only one of the fastest growing industry but also the biggest job provider as globalization has significantly changed the scenario of Tourism industry. This sector has shifted from air travel, overnights etc to the entire experiences associated with the tourism destinations. This new observable fact is not only influenced by the rising income levels but also by the new way of life and a new generation of tourists. Increasingly, people travel worldwide to have a life enriching experience of culture, outdoors and learning. This drift provides the people with altogether new type of tourist who wants to get inside the destination by meeting the locals and want to learn about the cultures and the communities. This new trend provides new opportunities for the tourism sector with the increasing number of Domestic as well as International tourists. Though demand is increasing but there is mismatch between demand and supply as we do not have sufficient tourism professionals to match the demand. So, there is the need of tourism entrepreneurship so that the available local opportunities can be sought right on the time and to make India a more attractive Tourist destination. Irony of the tourism is that tourism and entrepreneurship, except few exceptions, remains deviating themes that are not considered the way they should be, so that they can be made one and synergies can be drawn out of them. So, there is a need of the strategies which take together both the themes and make it together, tourism entrepreneurship.
3. Concept of Tourism
Tourism is a social, cultural and economic occurrence which involves the movement of people to countries or places outside their normal surroundings for personal or business/professional reasons. Such people are called visitors (which may be either tourists or excursionists; residents or non-residents) and tourism has to do with their activities, some of which imply tourism expenditure. It can also be defined as the “Activities of the individuals traveling to and accommodating in places outside their normal surroundings for not more than one successive year for vacation, trade and other reasons not linked to the activity related to the place visited.”
There are different branches of tourism:
- Inbound international tourism: It can be defined as the visits to a country by nonresidents of that country.
- Outbound international tourism: When the residents of a country visit to other countries, it is called as outbound international Tourism.
- Domestic tourism: When the residents of the country visit their own country, it is called as Domestic Tourism.
- Internal tourism: It is the visit by the residents and non residents within the country i.e the combination of domestic and inbound international tourism.
- National tourism: It is the visit by the residents of a country within their own country and to other countries i.e the combination of domestic and outbound international tourism.
E.g.. India: Inbound -> domestic -> outbound
China-Ind : HP-Kerala : Ind-Japan
4. Components of Tourism:
There are five components of Tourism which are also called as 5 A’s of tourism industry:
- Accessibility: It refers to the ability for tourists to reach the destination. This comprises transportation, which needs to be frequently scheduled, economical, safe and comfortable. The important modes of transportation are road, rail, air and water transport.
- Accommodation: It means tourists have a place to stay and food to eat on reaching at the destination. It can be of two types: Primary accommodations and Secondary accommodations. Primary accommodations include hotels, Resorts, Heritage Hotels etc. and Secondary accommodations include Motels, Youth Hostels, Holiday centers etc.
- Attraction: It means that a place visited should have appeal that forces tourist to visit. Two types: Natural attractions and Man- made attractions. Natural attractions include: climate, mountains, beaches etc and man – made attractions include theme parks, museum, historical monuments etc.
- Amenities: these are the basic facilities that every tourist takes for granted and are supposed to be provided. E.g: drinking water, telecommunications, roads, public toilets etc.
- Activities: these are the entertainments available for the tourists in an area. It can also be natural and artificial. Natural activities include sea bathing, possibility of fishing etc. and artificial activities include entertainment parks, water parks etc.
5. Types of tourism:
Different types of Tourism in India are following:
- Heritage tourism: India is rich in heritage, so heritage tourism in India is probable. India’s magnificent past and cultural diversity make a strong blend which draws millions of tourists each year to its heritage tourist attractions. Heritage tourism in India has also increased due to the interest of many foreigners in the temples and heritage sites of India. Heritage tourism India has developed in recent years but there is capacity for further growth which can be achieved through mutual efforts of the government of India and the tourism boards.
- Ecotourism; Ecotourism involves travelling to the places that are known for their natural beauty and social culture, while making sure not to damage the environmental balance. Ecotourism concerns about the diversity of the naturally gifted place and maintaining its beauty and cultural heritage. The government of India has set up the Ministry of Tourism and Culture to support ecotourism in India along with other types of tourism.
- Adventure tourism: Adventure tourism has recently developed in India. This involves journeying of remote areas and exotic locales. Tourists prefer to go to Ladakh, Sikkim, Himalayas for trekking. They come to Himachal Pradesh and Jammu Kashmir for various skiing activities. Water rafting is also attracting people to places like Uttaranchal.
- Wildlife tourism: India has a rich forest cover which has some beautiful and wonderful species of wildlife – some of which are very rare. This has increased wildlife tourism in India. There are 502 wildlife sanctuaries in India, promoting wildlife tourism.
- Pilgrimage Tourism: India is a land of different religions and is probably best destination for any kind of person following any faith around the world. There are many places in India which are considered holy by people of diverse faith because of their spiritual significance. People come from all around the world to see the religious serenity of the country.
6. Tourism Entrepreneurship:
Tourism Enterprises refers to the business projects related to the tourism which work on the certain business principles. Sinclair and Stabler (1997) have defined the tourism enterprise as “a mixture of products comprising of accommodation, natural resources, catering, transport, entertainment and other amenities and services, such as tour operators, shops and banks.” A person or a group of persons who are producing and managing tourism products are called as tourism entrepreneurs. Tourism entrepreneurs should possess all the characteristics of an entrepreneur along with the service sector expertise.
According to Shaw and Williams (2002), the service sector proficiency involves two elementary objects: “One is related to the profitable structure of the industry (particularly the supremacy of few activity components and possession groups), while the second concern to an understanding of the general association of financial authority structures.”
Therefore, tourism entrepreneurship can be defined as the process of creating idea associated with tourism and thus using expert skill and competencies to expand a new business or to broaden an existing business to generate employment, wealth and social goodwill. In other words, tourism entrepreneurship refers to the events of the most important group of stake-holders of the service sector mostly planned to meet the demands and supply of the tourism and at the very same time to achieve the competitive professionalism and gainful socio-economic status.
In simple words, it includes all the activities concerned with forming and operating legal tourism business. A legal tourism business does not include the types of tourism or tourism related activities which are not in favour of normally acknowledged laws of the Land. For example, in India, drug trafficking, wildlife hunting, flesh-trading (prostitution), etc. are treated as unlawful and prohibited therefore, do not come under the scope of tourism businesses.
Tourism entrepreneurship provides helps in overall economic development and a boost for local resources and utilizing the local resources to the fullest.
7. Developing Tourism Entrepreneurship in India
It is a well known fact that today a country like India is full of the tourism opportunities; though we were little slow at the beginning in promoting India as a tourism destination. After the Independence, Tourism Industry was not given the preference and in the First Planning Commission, tourism industry is ranked at 269th in the list of priority industries which is too lowest.
During Post independence, the important issues like agriculture & infrastructure were given due importance and tourism sector was ignored as it was supposed to be luxury affordable by few, although the tourists coming to India were near about 15,000.
Things have not changed much over the past decades. During third five year plan (1961-66) tourism got approximately 0.11% of the total plan outlay. In the Eighth Plan (1992-1997), it was Rs 272 crores – but still 0.11% of the total plan outlay. From the time when the concept of tourism has emerged, Tourism growth has taken place with a very reasonable rate in few countries. Today, tourism has developed as the tourism has emerged as the largest industry of the world with large number of opportunities.
At Present, it reports to 8% of the world trade and approximately 20% of service sector in the world and has assisted nations in development from backward to developing to developed. For example, tourism industry adds to more than 70% of the national income of few countries like Singapore and Malaysia.
The World Tourism Organization (WTO) has estimated that within 10 years period, tourism industry will generate 385 million jobs internationally and if India also generates employment at par as world average, 25 million additional jobs will be generated in the country.
But the growth of tourism in India has so far at a very low and is indicated by its insignificant share to national income and to the world trade (Bezbaruah 2001). While tourism assists to more than 70% in the national income of some of the countries like Malaysia and Singapore, its share to the national income of India is yet very low at 2.5%.
Though India has around 15% of the world population with its 2.5% of the world territory, it shares only 0.40% of the world tourism market. In 2006, India has 47th place out of the top 60 tourist places of the world. The unfortunate circumstances of the Indian tourism are not due to lack of tourism potential, but due to non-utilization of the plenty tourism potential she is blessed with (Bhatia 1978).
The World Travel and Tourism Council (WTTC) have recognized the potential of India for tourism growth as: “India has prospective to turn out to be the number one tourist destination in the world with the demand increasing at 10.1% per annum.”
Although Tourism has not developed to that extent in India but still helps in earning Foreign exchange and this sector is third largest foreign exchange earner after gem and jewellery and readymade garments. The travel and tourism sector chains 18 million jobs in India or 5.9% of total employment and accounts for 5.6% of the gross domestic production (GDP). The travel and tourism demand in India amounts to Rs 1200 billion and by 2010 will reach Rs 6,200 billion. It would grow an annual rate of 8.3%, more than double the global forecast of 4.1%.”
Following are the some facts and figures about the Indian tourism:
(source: http://www.yourarticlelibrary.com/essay/developing-tourism-entrepreneurship-in india/41108/)
Following are some more features of the Indian tourism industry representing its important role in the national economy:
a) There is 12.7% rise in coming of foreign tourists to India within one year from 2006 to 2007. In 2006, Indian tourist industry had seen a growth of 14.3 per cent, which reached around 3.89 million in 2007.
b) The arrival of the foreign tourist’s led to a tremendous growth in the foreign exchange earnings which increased from US$ 5.03 billion during January-October 2006 to US$ 6.32 billion during January-October 2007, which is a 25.6 per cent rise.
c) Nonetheless, the outbound chart of tourism industry in India is in equality to the inbound one. People journeying from India to abroad or domestic tourism have increased by 25 per cent. The United Nations World Tourism Organization (UNWTO) has projected the outbound tourists to arrive at around 50 million by the year 2020.
Understanding the potential of tourism development in the country, the Government of India has given stable importance to tourism development and thus, a tourism cell was created in the Department of Transport in 1949.It was a beginning of the formation of a separate Ministry of Tourism under the charge of a Cabinet Minister In sixties. Afterward, an inclusive tourism policy stressing the objectives of tourism development in the country was disseminated by the Government of India in 1982. Tourism was given a status of the Industry in 1986, thus entitled for several incentives and benefits including tax incentives, subsidies and priority in the sanctions of loans by the State Financial Institutions. It was also declared as the priority sector for foreign investment in July, 1991.
The Government of India is giving due importance to the tourism sector and is declaring separate Tourism policies to further boost the tourism in the country ,like other Third World Nations, because of the two major reasons. First, tourism need smaller capital investments and also does not require any industrial gestation period. Second, it can provide employment to a large number of populations covering skilled to unskilled. In addition, It also offers multiple benefits:
To list a few, it facilitates us to:
(i) Encourage economic development;
(ii) Develop our lives with rich experiences;
(iii) To gain respect for other (foreign) cultures; and
(v) Helps in international cooperation and peace all over the world.
Tourism is an important activity and because of Domestic and International, the economic benefits are enormous. Some of the countries are completely dependent on tourism sector for their survival. Therefore there must be growth of tourism entrepreneurship so that tourism potential can be used for the economic development of the country.
8. Importance of Tourism Entrepreneurship:
- Employment opportunities: It helps in providing employment opportunities to large population covering from skilled to unskilled, as it is a labour intensive industry
- Foreign Exchange: It helps in Generating foreign exchange for the country and is third largest earner of foreign exchange to India.
- Income Generation: As it has a wide potential and helps in attracting large number of tourists, therefore it increasing income.
- Increase in Gross National Product: As income increases, therefore. It adds to the gross national product and thus helps in increasing GNP.
- Infrastructure development: It helps in building of roads railways etc ,thus encourages infrastructural development
- Diversification of the economy: Tourism Entrepreneurs can be linked with local products and resources and thus helps in diversifying the economy
- Government Revenues: It helps in increasing governmental revenues by generating profits.
- Standard of living: Tourism Entrepreneurship helps in improving the quality of the life because of the higher level of income and thus leads to improved standards of living
- Preservation of Heritage & Tradition: Tourism helps in reinforcing preservation of heritage and tradition so that large number of the tourists can be attracted.
- Enhancement of cultural heritage: Visitor’s interest in local culture offer employment for artists, musicians, and other performing artists, thus helps in enhancing the cultural heritage
- Enhancement of local facilities: Tourism entrepreneur provides tourists the basic amenities and recreational facilities that may be used by a local population
- Favourable image: Tourism helps in breaking down language barriers, socio cultural barriers, class barriers, racial barriers, political barriers, and religious barriers and thus creates a favourable worldwide image for a destination.
- International peace & cooperation: It promotes a global community by supporting international understanding and peace all over the world.
- Summary:
India is rich in heritage and thus can attract large number of the tourists all over the world. Tourism has developed recently to a great extent but still there is large scope in India. There is a lot to explore in India. Tourism has a major economic impact on the country, as it helps in generating foreign exchange, employment and income but this economic impact can be generated only if the tourism resources will be explored. So, for the proper utilization of the tourism a resource there is a dire need of the Tourism entrepreneurs who can make use of the local resources to the fullest. Thus, tourism Entrepreneurship can bring new life to the tourism of the country and thus helping in more foreign exchange and contributing to the economic development of the country.