The tourism industry's investment potential is intrinsically linked to the number of visitors and tourists attracted to a destination. To capitalize on this potential, it becomes imperative to develop tourism infrastructure, services, and facilities that can cater to the growing demand. This, in turn, creates opportunities for investors, leading to the realization of investments in the sector.
The Ministry of Tourism, Government of India has been traditionally working on boosting people movement into the country. Through brand ‘Incredible India’, the Ministry of Tourism has been making efforts to build the demand side for tourism in India through greater tourism arrivals. Over the years, concerted efforts on building the demand side through brand ‘Incredible India’ has resulted in India recording its highest International Tourist Arrival number in 2019 of 17.91 million tourists with a CAGR of 6.4% between 2014-2019.
In terms of money movement and building the supply side for tourism in India through private sector investments, Invest India as the National Investment Promotion and Facilitation Agency has been supporting the Ministry of Tourism, Government of India through a dedicated Industry Development and Investment Promotion Division at the Ministry. The collaboration has helped streamline efforts on tourism investments and establish certain best practices. These best practices were also showcased as takeaways during the recent Annual Investment Meeting (AIM), Abu Dhabi during a session organized by the United Nations World Tourism Organization (UNWTO) for Investment Promotion Agencies (IPAs) of Least Developed Countries (LDCs). Key highlights of the best practices established are as follows:
1. Embracing a Destination-Centric Approach:
In line with modern tourism trends, the Ministry has adopted a destination-centric approach, recognizing that tourists choose their destinations based on holistic experiences. Consequently, all investment-related endeavors are now routed from a destination point of view. This includes creating comprehensive destination profiles, project profiles, and implementing strategies to promote opportunities, target investors, and facilitate investment through meticulous planning, development, and management.
2. Promoting Convergence and Ease of Doing Business:
Tourism, being a multi-ministerial mandate, necessitates a whole-of-government approach. To address issues related to ease of doing business and the availability of investible projects, the Ministry, in coordination with other line ministries and government institutions, has mapped out programs and schemes that align with tourism objectives. This concerted effort aims to foster convergence and effective collaboration among various stakeholders, enabling investor-friendly changes and policy tweaks in close coordination with departments such as the Ministry of Commerce & Industry and the Ministry of Finance.
3. Investor centric approach for creating policies, easing compliances, and capacity building of key actors in the investment lifecycle:
The Ministry has adopted an investor-centric approach in all its investment endeavors. This includes streamlining policies, simplifying compliances by introducing national models to replace the burden of multiple licenses and permits, and providing capacity building support to district and unit-level tourism staff. By focusing on the needs and requirements of investors, the Ministry aims to create a conducive environment that encourages investment in the tourism sector.
4. Diversifying public private partnerships:
‘Through the private sector, we attract anything and everything, that benefits the tourism sector in India. This isn’t just limited to capital and money inflows.’
Public Private Partnership for the Ministry of Tourism isn’t just limited to money inflows through capital investments now. It includes partnerships, collaborations, knowledge / data sharing, and everything else from a non-financial angle too which will positively benefit some aspect of the tourism industry in India. For example, the Ministry through Invest India is looking to enter into data sharing partnerships with online travel agencies & aggregators to access key data for making better marketing and policy decisions. This is alongside the efforts being made to attract global hoteliers and other mainstream tourism investors to establish their presence in India.
5. Harnessing the Creative Economy:
Modern tourism is moving from economic value being generated from the tangible to the intangible. While many years ago, a particular attraction was the main source of economic gain in a said destination, now the experience along with associated local activities, purchase of products, and community interactions are additional streams of economic revenue apart from the main attraction. That said, the creative and cultural industries, along with the larger creative economy become a new source economic, inclusive, and sustainable growth for tourism and visitor economies. Investment related efforts through creative spaces and co-creation of these spaces through funds from HNIs, institutional investors, private companies, and others is a key step in this regard. The Ministry of Tourism is using the same as a key lever to provide more growth to the visitor economy and the larger national economy.
The collaborative efforts between Invest India and the Ministry of Tourism, Government of India, have led to the establishment of best practices in attracting investments to the country's tourism sector. The Ministry of Tourism, Government of India has recognized the interconnectedness between people movement and money movement in the tourism sector. Efforts have been made to boost tourism arrivals through initiatives such as the "Incredible India" brand, resulting in record numbers of international tourists visiting the country. These endeavours contribute to economic growth, sustainable development, and the creation of a vibrant visitor economy. Through continuous refinement and implementation of these best practices, India strives to position itself as a leading global tourism destination.
This article has been co-authored by Sai Aditya.
