09/12/2002

Newly released tourism satellite accounting (TSA) research shows that Travel & Tourism Demand in the South Indian State of Kerala should grow by 11.6 per cent per annum over the coming decade. This is the highest estimated growth rate in the world, eclipsing the 10.2 per cent estimated for Turkey, the world's fastest growing tourism destination and India (9.7 per cent). The high level of tourism consumption is the result of forecast growth in domestic and international tourism.

Even more remarkable, Kerala is projected to register a record growth of 23.5 per cent in terms of visitor exports, or external account earnings, from Travel & Tourism over the next ten years. India's estimates for this period are 14.3 per cent while the world average is only 6.5 per cent.

Significantly, in 2001, while India's visitor exports suffered a decline of 4.8 per cent as a result of the events of 11 September 2001, Kerala's visitor exports actually increased by 11 per cent over 2000. This suggests that visitors feel more secure in Kerala than in other parts of the country.

Government expenditure at US$25.4 million (Rs127 crores) is only 1 per cent of total expenditure. Over the next decade this is expected to grow to only 1.1 per cent of the total, reflecting the apathetic attitude of government towards investing in Travel & Tourism. WTTC has pointed out that, while India's expenditure is below 1 per cent, other countries are spending much higher amounts.

Over the next ten years WTTC/OEF forecasts suggest Kerala will nearly triple its current level of Travel & Tourism Economy employment from 693,000 to 2.0 million jobs in 2012.

This has enormous significance for the state since creation of job opportunities is the single most important area of priority for government. Increased investment in Travel & Tourism will obviously have enormous spin-off benefits for the economy and the people.

Policy Recommendations
WTTC believes that some important policy changes are necessary if Kerala is to derive optimal benefits from its tourism potential.

• Most importantly, more money needs to be invested in tourism.
• Taxes need to be reduced. It needs to be recognized that air-conditioned rooms or imported liquor are not 'luxury' for foreign tourists but items of necessity, which they are used to in their own countries and elsewhere. Lowering taxes can actually result in increased revenue collection due to increased demand and lower tax evasion.
• Access needs to be improved. Bilateral air service agreements limit international flights to just Trivandrum and Cochin and foreign airlines are restricted in terms of seat capacity.
• Kerala's fragile eco-system and its backwaters and coastal lagoons need to be protected through the imposition of carrying capacity limits on visitation.
• Education ands training need to be seen as high priorities to ensure adequate skilled manpower to meet the growth in demand for Travel & Tourism.