Elevating India’s tourism industry

To elevate India’s tourism industry to new heights, it is important to explore the potential of investment in the tourism sector. Suman Billa, Director, Technical Cooperation & Silk Road, UNWTO, spoke how crucial investment is in tourism, at present and that UN is propagating the idea of investment in travel and tourism within the countries.

Janice Alyosius

The Federation of Indian Chambers of Commerce and Industry (FICCI) aims to catapult India’s tourism industry in the post-Covid era and to encourage investment in tourism infrastructure development. To revive the tourism industry, the FICCI organized the 6th National Tourism Investors Meet (NTIM) to bring together different stakeholders from the Investment and business community along with the Ministry of Tourism, State Govt s, and Financial Institutions. To elevate the India’s tourism industry to new heights, experts explored the potential of investment in the tourism sector, during the event. Bihar was selected as the ‘Theme State’ for the investor meet.

SumanBilla, Director, Technical Cooperation & Silk Road,  UNWTO, said, “UN is propagating the idea of investment in travel and tourism within the countries. Investment is crucial at this point now than it has ever been before.”  He spoke about, how the travel and tourism sector has taken the biggest hit due to COVID. He added, “We have seen a lot of businesses with no international invoicing for the past year or so..”

Forward linkage

Talking about the impact of COVID on domestic and international business, several businesses got impacted in the past one year. Despite the dip in business, a lot of entities are buying businesses that are going blip, as a way of consolidating their footprints and as a way for its forward linkages. “Stressed companies which are in difficulties have been bought over by their stronger rivals because they feel that, once the pandemic is over, they will be able to come back much stronger. Similarly, in terms of forward linkages we have seen instances where tour operators have bought off their transport suppliers to ensure their forward linkage stays intact when the business resumes.”

Stock markets

If we look at the way the stock markets have responded to COVID, we see big companies investing in travel and hospitality regardless the dip in business. “The valuations of the tourism properties tend to be close to the pre pandemic level, we also see a lot of activities of the private equity players who are going in and investing big time in business even in travel and hospitality enterprises and especially in India because this is where they see a large amount of growth that is likely to come. The world today assumes that we are very close to recovery and therefore they are putting their money.” said Billa. He also said that we need to be proactive and should reach out to the prospective investors.

Creative destruction

Billa explained his idea of creative destruction; “We all know that the world, post pandemic, is going to be very different from the one we knew before. If we are a destination, it would be surprising if post pandemic we start with the same products and same businesses that we had earlier, as the world has changed tremendously since then.  Every business and every product that is out there has been questioned, investigated and have taken new forms. There are several new ideas, new products that have come which makes more sense in the present situation.”

The government needs to facilitate the system of creative destruction; that means to replace the outdated products with new ones  in the changing world, emphasized Billa. “Two things we need to focus on, the first is encourage and ensure that we create a framework for new business to come in with new products.  And the second is the impact of digitalization as apart of creative destruction. One fact that we see now is; anything can be digitized. Not just the way tourism services are being sold but also the way they are experienced in terms of tour guides. So, essentially the post pandemic world is going to be muchdigitalized and that’s going to chip away the core business of tourism sector.  Lots can be done through electronic mediumt.” In the end he mentioned, “The most important thing of having investment forums like this is, not for us to come together but see, what we need to do, to be able to support our industry and create avenues for them to try and flourish.”