Gujarat Tourism & Aviation: Exploring Investment Opportunities

www.pwc.
com/in
Draft
As part of Vibrant Gujarat 2011 preSummit events, a Seminar on Gujarat Tourism & Aviation was organized in Ahmedabad on 06 December 2010 by Gujarat Tourism and FICCI. PwC was the Knowledge Partner for the same. This PwC Report documents the key discussions held and way forward from the Seminar. It is for internal usage of iNDEXTb and other Government of Gujarat agencies and departments only. December 2010
Gujarat Tourism & Aviation Exploring Investment Opportunities
Gujarat Tourism & Aviation: Exploring Investment Opportunities Seminar Proceedings & Way Forward: December 2010
Table of Contents
Introduction Inaugural Session Dignitaries on the Dais Session Details Opening Remarks Address by Mr. Vipul Mittra, IAS Address by Mr. Jaynarayan Vyas, honourable minister Vote of Thanks Panel Discussion on Tourism List of Panellists Discussion Proceedings IL&FS and its role in Gujarat Tourism Development Saraf Hotels view on the Gujarat Hotel Industry Suggestions from ITC Medical Tourism: growth and prospects Questions & Answers (Q&A) Session Concluding Remarks Panel Discussion on Aviation List of Panellists Discussion Proceedings Chairmans opening remarks Gujarat Civil Aviation Scenario Creation of MRO hub in Gujarat Opportunities in the Aerospace Sector Airline industry and Tourism Questions & Answers (Q&A) Session Concluding Remarks Conclusions & Way Forward Tourism Medical Tourism Civil Aviation Annexure 1: Sample Press Coverage of the Seminar Livemint 4 5 5 5 5 5 7 9 11 11 11 11 12 12 13 14 16 18 18 18 18 19 21 23 23 24 25 26 26 27 28 29 29
Page 2 of 33
The Times of India Sify Finance DeshGujarat
31 32 33
Page 3 of 33
Introduction
With the launch of the Khushboo Gujarat Ki campaign featuring the living legend and icon of the Indian film industry Mr. Amitabh Bachchan, the tourist inflow to Gujarat has witnessed a phenomenal upswing. Of course, this campaign is not the sole reason for this sudden growth in tourist traffic. The fact is that a lot of groundwork has taken place in the State, in terms of infrastructure development, domestic road-shows for tourism promotion and relevant policy changes all of these combined with a powerful advertisement campaign have led to the growth. The year on year growth between respective months in 2009 and 2010, one would notice that the international tourist traffic has gone up in the range of 30-80% while the domestic tourist traffic has increased by 14-30%. Month (2010) Feb Mar April May June July August Sept Total international tourists 36,858 32,203 30,878 33,507 28,641 27,186 25,200 26,524 Total domestic tourists 1,608,383 1,457,398 1,515,878 1,487,892 1,543,484 1,438,199 1,485,900 1,625,615 Total tourists YOY growth in international tourists 33.3% 51.8% 57.7% 65.7% 81.3% 77.5% 54.5% 58.3% YOY growth in domestic tourists 31.3% 20.5% 18.2% 14.8% 24.2% 23.5% 15.1% 20.6%
1,645,241 1,489,601 1,546,756 1,521,399 1,572,125 1,465,385 1,511,100 1,652,139
To help the Tourism sector grow, the State Government has also started impressive work to boost up the interstate Civil Aviation infrastructure and services. In the above contexts, Gujarat Tourism and FICCI organized a Seminar on Gujarat Tourism & Aviation (Seminar) in Ahmedabad on 06 December 2010. About two hundred delegates attended the Seminar representing various segments of the hospitality and aviation industry and several key issues were discussed. Besides, eight intentions for investments in the Tourism Sector worth Rs. 1,160 crore were submitted to the Government during the Seminar this will create an employment of around 1,760 in the State. This Seminar was one in the series of seminars on various other focus sectors being organised as Vibrant Gujarat 2011 pre-Summit events, for which PwC is the Knowledge Partner. This PwC Report documents the key discussions held during the Seminar, the way forward and some of the key actionables that emerged from the event.
Page 4 of 33
Inaugural Session
Dignitaries on the Dais
Name Mr. Rahul Chakravarty Mr. Vipul Mittra, IAS Mr. Jaynarayan Vyas Mr. Kamlesh Patel Mr. Anoop Shukla, IFS
Organization FICCI Government of Gujarat Government of Gujarat Tourism Corporation of Gujarat Ltd. (TCGL) Tourism Corporation of Gujarat Ltd. (TCGL)
Designation Jt. Director Secretary, Department of Tourism & Civil Aviation Honourable Minister for Health & Family Welfare, Tourism, Devasthan Pilgrimage Development Chairman Managing Director
Session Details Opening Remarks

Mr. Chakravarty opened the Inaugural Session by welcoming the fellow dignitaries on the dais as well as all the attendees. Tourism is the largest contributor in terms of revenues and employment opportunities, he informed. He went on to say that this particular sector has the potential to grow at much higher rates once development of supporting infrastructure is ensured. Gujarat is in the process of creating large investment opportunities in the Tourism sector by adopting favourable policies. Just like the Industrial Policy, the Solar Policy and similar such policies have benefited the various industrial sectors, the soon to be announced Tourism Policy shall set the ball rolling for the Tourism Sector. It would lead to several investment and employment opportunities over and above the ones that exist already. Mr. Chkaravarty stressed that Tourism also leads to employment generation in backward and remote areas. He revealed that there are altogether about 50 categories of employment under the Tourism industry. Gujarat is already the growth engine of India; it should now strive towards becoming the Gateway to India, he concluded.
Address by Mr. Vipul Mittra, IAS

Mr. Mittra shared his views on three facets of Tourism policy, infrastructure and private sector investments. These finally need to be combined with a campaign to create an impact. The moment a campaign takes
Page 5 of 33
place, tourist numbers start going up and thereafter the private sector starts filing the demand supply gap, he said. This was the reason, he explained, why Gujarat Tourism was hyped up in a big way by roping in Mr. Amitabh Bachchan. Also, once Governments initiatives are followed up with private sector investments rapid development takes off.
Mr. Mittra informed the delegates that a lot of initiatives have been taken up by the Tourism Department since the last Tourism Conclave organized by FICCI in June 2010. 1. He expressed his pleasure at the fact that Gujarat is now perfectly visible on not only the Indian tourism map but also on the world-map mainly due to the successful TV / print campaign Khusboo Gujarat ki, with Mr. Bachchcan projected as the States brand ambassador. 2. Gujarat Tourism Road-shows were carried out in various parts of the country where several travel agents, tour operators, press and media agents were met all this has brought Gujarat Tourism into focus. 3. Land deals and investments have started majorly in Gir, Somnath, Kutch, Saputara, Ambaji, Dwarka and other tourist locations in the State: a. land prices in Gir have increased by about 5 to 6 times as a result of the tremendous interest shown by investors in this area; b. the honourable minister has taken upon himself the task of upgrading the only hill station of Gujarat - Saputara; c. there are huge plans for upgrading Ambaji Parikrama, a replica of 51 shakhti peeths, is being developed around the Gabbar mountain; and d. infrastructural works worth Rs. 50 crore in the next 1-1.5 years have already been sanctioned for Dwaraka . 4. Laser shows and Light & Sound shows (with Mr. Bachchans voiceover) are being worked out for several locations in Gujarat. 5. Tourism Policy - in view of Vibrant Gujarat 2011, the Government is about to declare certain initiatives for the Tourism industry by way of announcing a new Tourism Policy.
Page 6 of 33
Land prices in Gir have increased by 5 to 6 times in the past few months owing to tremendous investor interest.
Mr. Mittra ended his address by reaffirming that tourism in Gujarat is finally in the big league. The State Governments vision is to see Gujarat amongst the top three tourism states in the country. The new logo of Gujarat Tourism shows an asiatic lion a true representative of the State. The secretary invited everyone to be a part of this journey and to make this lion race past everyone in the country. The lion is now stirred up, awake and ready to charge, he concluded.
Address by Mr. Jaynarayan Vyas, Honourable Minister

Parallels between the existing Tourism sector and the earlier Industrial Sector of Gujarat The honourable minister informed the audience that about three and a half decades ago, Gujarat was ranked 8th in terms of industrialization. Same concerns that are bugging the tourism industry today, were bothering the overal industrial sector in Gujarat back then. Connectivity to Gujarat was very bad. There was hardly any industrial demand and thus land prices were considerably low (for example land at Vapi used to sell at Rs. 4.5 per sq mt. while that at Umargam at Rs. 7.5 per sq. mt. which people used to call costly).
During those times, the Government was often asked what incentives would be provided for setting up industries in such backward areas. The minister cleared the stand around the philosophy of providing incentives. Incentives should not be considered as rewards. A Government provides incentives only to compensate for something that may not be available presently. It is the real business opportunity that ultimately matters he explained. Finally, by 1990s when he left the bureaucracy to join politics, Gujarat was already amongst the top-most industrialized states in India. The honourable minister was of the firm opinion that Tourism will now develop in Gujarat just like the way other industries have developed over the years.
Page 7 of 33
Talking further about the meaning of development itself, he said that development is a very ambigious term for the simple reason that development for one could mean destruction for another. However, if development is considered as something that provides opportunity and quality of life, then tourism sector automatically becomes very important. Also, he remarked that development is a long term activity and incremental in nature. If one is able to travel a defined path in a more or less continously accelerated pace, one will finally achieve the developed state. Gujarat made a good beginning in Tourism two years ago and if the pace is maintained, it should soon reach the numero uno status in the country. Tourism in the context of overall Services Sector Describing the three sectors of industry primary (agriculture), secondary (manufacturing) and teritiary (services), the honourable minister remarked that in India, more than 60% of the GDP comes from the services sector. Manufacturing accounts for around 20% while agricultural input is around 17%. Mr. Vyas claimed that the services sector will eventually make India the second / third largest economy in absolute terms. By 2050, the services sector should be contributing to more than 80% of Indias GDP. If that is the case, a very good future for Tourism is obvious because it after all is a part of the overall services sector.
By 2050, the Services sector may be expected to contribute to more than 80% of Indias GDP.
However, it may be noted that Tourism, unlike other services sector (like software, banking, courier), is not unifocal or uni-activity dominated. Mr. Vyas opined that the confluene of economic, socio-cultural and technological aspects make this sector special. Tourism is more complex than any other sector, because of its significant dependency and inter-relationship with all other sectors. Robust growth of tourism in India Not restraining his speech to just Gujarat, Mr. Vyas highlighted some of the key statistics that present a robust picture of the overall Tourism scenario in India: tourism in India is expected to grow at a CAGR of 7.9% between 2010-1015; outbound tourists numbers have increased by 0.87 million; currently , the tourism industry employes 1 out of every 12 employed Indians this would go up to 1 out of 10 in a few years time; domestic tourist traffic has been growing at a CAGR of 12.9% in India (the honourable minister remarked that the time has come to focus on comforts of domestic tourists - such as neat, clean and affordable food - good quality food-chains should be made available at a gap of every 200 km); Indian tourist foreign exchange earnings is growing at a CAGR of 8%; the total FDI in the tourism and hospitality sector in 2009 exceeded USD 550 million (should have reached a billion this year); in 2010, the cruise tourists number is expected to be up by over 30% from last year; and the number of Medical Tourist arrivals in India is expected to increase at a CAGR of about 25% from 2009 to 2013 (should touch USD 2 billion by 2013 for India this is a conservative figure if we look at Singapore or Thailand which are small countries with limited talents; Mr. Vyas felt that India has the potential to touch 2 million medical tourists by 2013). Special factors in favour of Gujarat Tourism Mr. Vyas highlighted some interesting special factors that would work in favour of Gujarat Tourism, such as: Travel time between Ahmedabad and Mumbai will soon reduce to 4.5 hours once the work on expressway is over this will lead to higher number of tourists flocking the State Positive effect of increase in agricultural income Agriculture production in 2001 was Rs. 10,400 crore which crossed Rs. 50,000 crore last year. And this was made possible with just 10% of Narmada water available for irrigation. Once Gujarat has recourse to
Page 8 of 33
even 50% of Narmada water, agricultural income should jump to about Rs. 150,000 crore. This would lead to higher disposable income with farmers a large portion of this would obviously be spent on luxuries including that for dining in restaurants. Gujarat is no. 1 in the world in eye donation, knee joint replacements, piles operation, single location kidney transplant, cancer care, blood donation (in blood-donation, Ahmedabad as a city is ranked no. 1 in India and no. 5 globally). Current activities in Gujarat The honourable minister shared some of the recent activities in the Gujarat Tourism sector, that are clear indications of the growth trends: McDonlads has already made a decision to expand its chains - other food chains would follow; a dozen new medical colleges (2,200 5,000 beds) are being setup in the State; Narayana Hrudayalaya is also coming up; international hotel chains are coming up (the recently opened Marriott is a good example; next in line is Hyatt); the state-of-the-art international airport in Ahmedabad is scheduled to get started soon; and the recently organized birds conference at Khijadia Bird Sanctuary was a roaring success the single day revenue of the sanctuary crossed Rs. 25,000 (which typically never exceeds Rs. 1,500 Rs. 2,000).
Policy Announcements The honourable minister made the following two announcements1 for the hotel industry: 1. Electricity duty that is currently charged at commercial rates for hotels, will soon be charged at industrial rates applicable for all new hotels; and 2. Interest rates shall be subsidized by 6% upto a ceiling of Rs. 5 million.
Conclusion Mr. Vyas concluded his talk by reiterating that by 2020, Ahmedabad and Gujarat will be numero uno in tourism development. Today is the most opportune time to invest in the Gujarat Tourism sector because the growth curve is steep instead of having reached a plateau, he lured the investors adding that the diversity of Gujarat is a clear advantatge for them.
Vote of Thanks
As Mr. Shukla from TCGL thanked the attendees for coming in large numbers to participate in the Seminar, he also shared some important figures in order to highlight the immense investment opportunities in the Gujarat Tourism sector. What is happening in tourism in Gujarat should be made known to each one of you in such a nice manner that all of you who are present today can be early birds, he said. Being an early investor is essential since once investment scenario starts getting crowded, land prices at all the favourable locations typically go up. Comparing tourist traffic in February 2009 and the same month this year, he pointed out that both domestic and international tourist numbers have grown by over 35% (YOY). With these figures in mind, he emphasized that infrastructure facilities, especially in terms of hotels and restaurants, need to be augmented at the same rate and this is immense investment potential for private players exists. As per estimates, at least 1,000 hotels would be required in the State within the coming two years - this would mean creating about 1 lakh rooms or 1.5 lakh beds. Investment locations
1
Gujarat Tourism shall issue Government Resolutions enacting these announcements shortly.
Page 9 of 33
Talking about locations to invest money in, Mr. Shukla made it clear that starting all the way from South of Gujarat, there are very limited places in the State where investment opportunities do not exist in this sector. For example in South Gujarat, Rs. 150 crore has already been sanctioned and work is on for master-planning of the Valsad Saputara area. Similarly, TCGL has appointed architects to work on master-planning of sixteen beaches of Gujarat. Some of the other specific locations for investment that he mentioned included: the development of Nargol, Ummargam and Suali beaches that would require about Rs. 10,000 crore worth of investment; Navsari & Surat that have great potential for development of Business Tourism facilities; and the Five S of tourism investment in Gujarat - Saputara, Somnath, Sidhpur, Sasan and Suali beach: these would require a minimum investment worth Rs. 50,000 crore. Recalling the recently conducted Gujarat Tourism road show in Mumbai, Mr. Shukla mentioned how significantly the participation had gone up, compared to earlier road-shows by the Government. He was of the opinion that if this confidence continues, then the private players will soon help Gujarat become the number one Tourism State in India, as envisioned by the honourable minister and the secretary.
The Five S of tourism investment in Gujarat - Saputara, Somnath, Sidhpur, Sasan and Suali beach - would require a minimum investment worth Rs. 50,000 crore.
Page 10 of 33
Panel Discussion on Tourism

List of Panellists
Name Mr. Vithal Kamat (Session Chairman) Mr. Paritosh Gupta Mr. Amit Saraf Dr. Dipak Dave Mr. Ranvir Bhandari
Organization Kamat Hotels IL&FS Infrastructure Development Corporation Ltd. Saraf Hotels ITC Maurya
Designation CMD CEO (also COO - IL&FS) Senior Orthopaedic Surgeon Vice President, North Region, and GM
Discussion Proceedings IL&FS and its role in development of Gujarat Tourism

Mr. Paritosh Gupta, COO of IL&FS and CEO of IL&FS Infrastructure Development Corporation Ltd. informed that IL&FS has beeen in existence for the past 23 years and that IL&FS Infrastructure Development Corporation Ltd. is the project development arm of the IL&FS group. They work with 27 State Governemnts across all aspects of infrastructure projects and try to act as a bridge between investors and Government to ensure bankable and viable projects that meet all the regulatory requirements. Talking about their ongoing work in Gujarat pertaining to the Tourism sector, Mr. Gupta revealed that they were approached by the Government of Gujarat in May 2010 to deliver 50 tourism projects within six to seven months. The entire assignment was eventually split into the following six sub-sectors (EoI was issued a week ago) with a total of 39 projects. Sub-sector Eco tourism projects Beach projects Way-side amenity projects Business tourism projects Religious tourism projects Rural and cultural tourism projects No. of Projects 7 11 11 6 3 1
Page 11 of 33
Mr. Gupta promised that issues pertaining to land, environment and finances shall be resolved for each of the above proposed projects.
Saraf Hotels view on the Gujarat Hotel Industry

Mr. Amit Saraf from Saraf Hotels recalled his visit to Ahmedabad five years ago, when he had to decide whether he needed to setup a hotel in the city. Back then, he had decided against it. However, the vast difference in infrastructure development and various initiatives from Government since then have finally resulted in his group coming up with a four star Hyatt hotel at Ashram road in Ahmedabad. Mr. Saraf lauded the efforts being taken up by the Government, but he also remarked that availability of land was indeed a challenge. With the growth that the State has seen and is seeing, the private land owners are not willing to sell land at reasonable rates, he expressed his concern. Value of land is very crucial for hotel projects. He requested the Government to enhance the speed of approvals because when the project cost is land intensive (which is the case for hotel industries), the interest component is typically high. The faster a project can be executed, the better it is for the investor.
Suggestions from ITC

ITC has over 100 hotels and is still counting. ITC hotels operate under the following four brands: ITC prefixed hotels (luxury segment present in most metros); Welcome Hotel Grand (5 star in metros / mini-metors); Fortune (good quality - value for money); and Welcome Heritage Brand (restored palaces, forts and haveli). Mr. Ranvir Bhandari, Vice President, North Region, and GM - ITC Maurya gave his insights into the following aspects of the hotel industry that Gujarat should be aware of. Investment climate When the global financial meltdown hurt the world GDP, the hospitality industry suffered in the process as well. Today, to make investments in this sector, the right investment climate must exist. Mr. Bhandari complimented the government by acknowledging that Gujarat has indeed done well to boost investment climate in the State. Security and safety is another big issue in this sector, in which again, Gujarat has done a pretty good job, Mr. Bhandari said. Training needs Bricks and mortars dont make the hotel industry it is about people, Mr. Bhandari remarked. Gujarat should put greater efforts in ensuring that more training facilities catering to the hospitality industry are set-up in the State. Environmental considerations Todays investments are not about economic value alone. In the speed of development and wealth creation, environment is being depleted significantly. Therefore todays investments should also create value for the environment by ensuring that the depleting resources are replenished and societal values are retained. Mr. Bhandari suggested that building designs should look at monuments of the future. Whilst it is important that the services that are provided be of world class, the raw materials used should also be friendly to the environment. Mr. Bhandari was of the opinion that if Gujarat has to work out a USP, it is very important that the triple bottomline strategy is adopted (social, economic and environmental). He informed that in most ITC hotels, one leaves behind zero carbon foot print because the properties have been turned water positive, waste watercleaning positive etc. Two of the ITC properties even have LEED plaltinum ratings (in Bangalore and Gurgaon respectively). Building Design Laws
Page 12 of 33
Mr. Bhandari made it clear that some of the Government laws pertaining to building designs are archaic and need to be looked at afresh. Some States have moved fast in this regard and therefore Gujarat should try matching the pace. Incentives Any investor in the hotel industry would like to bring down the main cost of building and land which is quite high. Mr. Bhandari requested that the hotel industry be treated like any other infrastructure industry and therefore the same incentives and rebates must be given. This is very fundamental, he remarked. Fast-track approvals Mr. Bhandari announced that ITC is very happy to invest in Gujarat and is working to bring all its brands to the State. But he requested the Govenment that implementation should be put on fast-track mode. In response to Mr. Kamats question in the same context, he informed that ITC took between 6 to 8 months to get all the permissions for setting up its latest property in Gujarat which as Mr. Kamat remarked, was a long duration. Mr. Kamat further added that if projects have to be put on fast-track, a single window system should not have more windows inside it.
Medical Tourism: growth and prospects

Focussing his talk around Medical Tourism, Dr. Dave set the context by highlighting that Indias share in the global Medical Tourism market is expected to be around 2.4% by 2012 (USD 2 billion). The estimated growth projection for medical tourists for the next few years is very high at 19%, he informed. Competitors and target countries for Gujarat For Gujarat, the overseas competitors in this sector are mainly Thailand, Malaysia & Singapore while the domestic competitors are the metros and some of the other big cities such as Pune. He also suggested that though USA and UK are great countries for attracting NRIs, for targeting international medical tourists, one should focus upon countries in Africa, Middle East, Fiji, Maldives, Madagascar etc. Some of the plus points for Gujarat in attracting medical tourists that were highlighted are: it has got good hospitals with advanced medical facilities at about 30% lesser cost on average; there is no waiting time; the State has good infrastructure with good connectivity of Ahmedabad to most important cities in the country; good English speaking population; and a peaceful environment with warm & helping society. Growth drivers & patient expectations Orthopaedics (especially joint replacements), cancer care, renal transplant, cardiac & GI surgeries. urology, IVF, cosmetics, obesity treatment, neurology etc. are some of the key services for which, Dr. Dave expected patients to come to Ahmedabad (and Gujarat). Patients in turn typically expect the following: availability of good services (responsibility of the hospitality industry); efficient treatment (responsibility of doctors); proper overall facilities (joint responsibility); and reasonable cost for availing the services and facilities (joint responsibility). Issues and suggested remedies Dr. Dave highlighted the following issues with tentative solutions for some of them: Accreditation: Gujarat has good hospitals but many of them lack international accreditation Government may need to take up this issue; Ambience: good ambience and cleanliness in the hospitals are currently an issue should be improved if international tourists have be to attracted in larger numbers (even the city should be kept as clean as possible); Food: in Gujarat, almost all hospitals serve only vegetarian food this needs to be changed;
Page 13 of 33
Translators: hospitals in Pune have appointed translators already, Gujarat should catch up soon; Overcharging issues: international tourists should never be charged any extra fee just because they are coming from overseas doctors need to be extremely transparent in this regard; Visa on arrival if put in place, would be extremely helpful, so Government should consider providing this for Medical Tourists; Legal issues: Government should proactively help the international medical tourists in case of death and legal matters and police enquiry during stay should be more courteous; Package tours: the travel agents need to come up with better packages for the patients relatives for sight-seeing and leisure (Thailand and Malaysia already offer this); Government incentives: on the lines of the recently announced incentives for the hotel industry, even hospitals should be given industry status - Electricity Duty should be charged at industrial rates and incentives in the area of property tax should also be provided; and Marketing of Gujarat as a Medical Tourism Destination: one or two hospitals alone cannot take care of selling brand Gujarat as a Medical Tourism hot-spot; thus Government should support the industry in marketing it - satellite centres may be opened in developing countries and stalls and booklets at various forums should be distributed. Mr. Kamat the Session Chairman also added the following key points: 1. Dentistry is another good area to focus upon; 2. In London, the minimum waiting time for getting a heart operation executed is 1.5 years, so this particular segment clearly provides a good market to tap; 3. Value for money should be offered at all times; and 4. Good quality tour operators should take care of the relatives because the relatives might bring more patients the next time.
Questions & Answers (Q&A) Session

Does Gujarat have trained work-force to serve international tourists? In response to this question, Mr. Kamat repliled that all big hotel chains typically have their own training and coaching centres. As far as educational institutes are concerned, as more and more hotels come up, more institutes get established. He also highlighted the need to especially include training of women in all training programmes. Mr. Saraf added that although the hospitality services sector did not offer a large salary till recently, it is definitely not the case now. We would see many training institutes coming up in Gujarat, he said. Mr. Bhandari commented that most of the motels internationally are run by Gujaratis thus hotel business is definitely not new to them. Gujaratis today are big spenders. They love to travel, go out and eat out. They need to look inwards. A lot of them are spending money in other states and other countries. Same hospitality culture that Gujaratis set abroad may be maintained in the State itself. Affiliation with a world class institute will also help. Complimenting Mr. Saraf on his point about wages, Mr. Bhandari said that the false perception about the hospitaliy industry not offering great jobs can be corrected with sustained awareness initiatives such as those by way of roadshows. Mr. Kamat added that training institutes are requried for the tour operators also, especially in the area of foreign language training. As an example, for people from Spain, the knowledge of Spanish language for the operator is almost a must; similary at least one African language is an asset if the international tourist is from Africa. What would the Government of Gujarat be doing to increase manpower in the hospitality industry? Mr. Kamat replied that this question would be put up to the Government. What is the typical investment required in the hotel industry? Mr. Kamat replied that the figure ranges between Rs. 60 lakh to Rs. 2 crore per room depending on the location, and the brand.
Page 14 of 33
Amongst the list of Projects that IL&FS has proposed, why is nothing available on marine tourism given that even the best expressway has a traffic jam of 15-20 minutes at the entry point in Vadodara? Mr. Gupta replied that IL&FS is indeed aware of the marine tourism possibilities but given the time constraint of only six months to come up with proposals, they had to exclude this aspect in the current phase. Sharing his experience, he said that currently, there is too much of regulation in this sector. Althouth inland waterways and coastal waterways are important sectors, today they are not viable from economic viability perspective. India is not ready as yet. In North East, there are locations where waterways are the only way to reach but even there projects are not taking off. Mr. Kamat added that given that water transport is the cheapest transportation mode in the world, three parallel lines - for water, railway and road should be developed eventually, especially for a State like Gujarat which has Indias longest coastline.
The hotel industry investment range: Rs. 60 lakh - Rs. 2 crore per room.
Are IL&FS feasibility reports available in the public domain? Mr. Gupta replied that the reports are currently with the Government but would be made available to the shortlisted investors after the EoI stage. What is the Government doing about tourism development in remote villages? Mr. Shukla responded to this question by informing that just as one example, the Dwaraka development that he had earlier talked about covers several remote villages. How does the future of prohibition look like in Gujarat? If sambhar can be sold like liquor, why does one need to sell liquor? answered Mr. Kamat. He said that even with the prohibition policy, it made business sense to invest in Gujarat if the prohibition policy is revoked at any time in the future, it would only be an added advantage a bonus.
Page 15 of 33
The Shivrajpur beach is being developed but apparently the Government has given permission for construction of ports in the area; what is the clear vision? While Mr. Shukla said that the proposed port will not come on the beach itself (it will be 1 to 2 km away), Mr. Kamath tried to emphasize on the possibility of port-activities and tourism-activities co-existing together. He gave the example of the Rotterdam port to corroborate his comment. How much of green development strategies have been taken care of by IL&FS? Mr. Gupta informed that IL&FS has a company called IL&FS Eco-smart. Their projects are carbon neutral. He believed that his team must have looked at environmental and R&R issues. Mr. Saraf added that today, most consultants always advice on green development in the planning stage of hotels and other tourism infrastructure projects. Why have no tourism projects been proposed around the Narmada Dam and adjoining areas even when Government has announced it as a priority area for development? Mr. Shukla informed that the Kevadiya dam has been allocated to SSNL for development while TCGL is working on master-planning of Rajpipla. Thus, these areas are indeed being developed.
Concluding Remarks
To conclude the Panel Discussion, Mr. Kamat invited all the dignitaries on the dais to propose one strategy each to build the Gujarat brand. He also talked about the five Ps that when put together lead to Progress, Peace and Prosperity - they are: product; price; packaging; publicity; and people.
Page 16 of 33
In response to Mr. Kamats question about branding strategy, Mr. Bhandari from ITC said that perception is reality over the years, reality may be completely different but people nurture the perception once created. Therefore to create a brand, Gujarat should wipe out all earlier perceptions through a single window approach and at the same time ensure that there is not much gap between reality and perception. Promise what you deliver, he advised. Mr. Sarafs answer was - credibility. He was of the opinion that brands are not created in a day - it takes time and effort. However, he said that Gujarat has the advantage that Vibrant Gujarat is already a well known brand now and thats the reason why his group has already invested in the State. Gujarat shall be a superpower in India in next ten years, he claimed. Dr. Dave limited his response on the brand-building question to the domain of Medical Tourism. He said that the need was to systemize an honest, efficient, transparent and cost effective treatment in the State, preferably by involving Government, doctors and hospitals together, so that ultimately the society, at large, is benefited. Like Mr. Bhandari, Mr. Gupta from IL&FS also said that the brand Gujarat is already established. Proactiveness and professionalism (already exists) will help. Facilitation approach, instead of regulatory would also go a long way in creating an even bigger brand, Mr. Gupta said.
Page 17 of 33
Panel Discussion on Aviation

List of Panellists
Name Mr. Vipul Mittra, IAS Capt. Ajay Chauhan Col. V. K. Nagar Capt. Charlie J. Weir (Retd.) Mr. Uttam Kumar Bose
Organization Government of Gujarat Government of Gujarat Ahmedabad Aviation Academy Ahmedabad Aviation Aeronautics Ltd. Ventura Airways
Designation Secretary, Tourism & Civil Aviation Director Civil Aviation
Topic Session Chairman Gujarat Civil Aviation Scenario Creation of MRO Hub in Gujarat
Chief Flying Instructor
Opportunities in the Aero Space Sector Airline Industry & Tourism
Discussion Proceedings Chairmans opening remarks

Mr. Mittra opened the session by establishing the vision for the recently established public company Gujarat State Aviation Infrastructure Ltd. (GUJSAIL). Once GMB was created in the late 1980s, the ports sectors started growing at rapid rate. GUJSAIL aims to do the same for the airports sector in the State. Growth of the Ahmedabad Airport The Tourism Secretary shared his experiences of being the District Collector of Ahmedabad during 1996-97 when the Ahmedabad airport was in such a nascent stage that there used to be only 2 or 3 flights in the entire day. Back then, for receiving the VIPs, vehicles could go all the way inside the airstrip. Setting that as the background, he tried to make the delegates realize how fast the city has grown over the last ten to fifteen years today there are so many flights flying every day that it is difficult to count them! In fact, today Ahmedabad airport is one of the most profitable airports in India. Gujarat Governments vision for airports in other parts of the State Mr. Mittra revealed that though Surat has got a good airport (besides Ahmedabad and Vadodara), connectivity is a major issue there. The Government of Gujarat desires to connect various places in Gujarat by air, not just by
Page 18 of 33
aircraft but by focussing on heli-tourism. Many tourists would like to fly from Ahmedabad to Ambaji, Saputara, Dwarka, Shirdi etc. so there is a demand for aircraft / helicopter services. In fact he informed that helicopter services would be operated during the Runn Utsav in Kutch, between Bhuj and Dordo. Another important aspect that Mr. Mittra brought forth was that in order to promote civil aviation, not only airstrips are required, but the State also needs airport led development of the entire surrounding area where an airport / air-strip is proposed. Mr. Mittra promised that a new Civil Aviation Policy should be out before Vibrant Gujarat. The Policy will tackle with issues pertaining to both infrastructure and connectivity.
Gujarat Civil Aviation Scenario

Capt. Ajay Chauhan spoke on the Gujarat Civil Aviation Scenario. I have been the director of Civil Aviation in the State for the last seven years, but major development has happened only in the past one year, he expressed his satisfaction at the recent developments in this sector. He summarized the evolution of the Civil Aviation sector in the State: Year 1973 Role of Civil Aviation Agency in Gujarat The Civil Aviation division was started with the purpose of helping the farmers by aerial spraying on various crops like Sugarcane, Cotton, Groundnut, Tuvar etc. by helicopters and fixed wing aircrafts Cloud seeding operation for artificial rains started VIP travel took off State Government setup its own Directorate Through GUJSAIL, the aim now is to bring Civil Aviation industry to Gujarat in order to create an aviation hub in the State
1980s 1990s 2000 2010
Statistics Capt. Chauhan had some very interesting statistics to share with regards to the number of airports in the State, the operating airlines and the air traffic etc. some of them are listed below.
551 planes fly over Ahmedabad every day.

In Gujarat there are totally 17 airports: o 9 civil airports under Airport Authority of India (AAI) of which seven are active; o 3 civil airports under the Gujarat State Government (Amreli, Mehsana and Mandvi); o 3 Indian Air Force (IAF) airports; and o 2 private airports Additionally, there are two airports in Daman & Due to which the State has access.
Page 19 of 33
68 flights depart / arrive in Ahmedabad everyday connecting the city to 18 destinations (including international destinations like Sharjah, Doha, Dubai, Kuwait and Singapore; Ahmedabad - London flight service will start shortly). 551 planes fly over Ahmedabad every day. There are 13 airlines operating in Ahmedabad includes all major domestic carriers and four international carriers. Airports / airfields under planning stage Captain Chauhan informed that 11 new airports / airstrips are in the pipeline covering the following routes / locations: To be developed in the first phase: Palitana Bhavnagar; Ankleshwar Bharuch; Ambaji Banaskantha; Dwarka Jamnagar; To be developed subsequently: Mandavi Kutch Bhuj; Morbi Rajkot; Rajkot; Parsoli Navsari; Rajpipala Narmada; Dholavira Kutch; and Dahej Bharuch Airports for above locations shall belong to the following four categories based on the demand assessment: small airports at district level (spread over about 100 hectares of land); major airports (spread over about 200 hectatres of land would allow aircraft of the size of Boeing 737 to land / take-off); international / 4C airports (spread over 1,000 hectares of land with 10,000 to 11,000 ft long runways where aircrafts like Boeing 747 can land and take-off); and international intercontinental airports (spraed over 2,500 hectares with about 3 to 4 runways). Upcoming Civil Aviation Policy Taking of Mr. Mittras announcement about the upcoming Civil Aviation Policy, Captain Chauhan shared further insights on the cardinal points of the Policy, such as: creation of airports and helipads (helipads even at Taluka level); setting up of MRO facilities (focus area); setting up of Freight & Cargo facilities at all airports; providing intra-state air connectivity services (for example, once flight services from Surat to Bhavnagar are started, travel time would come down dramatically); reduction in Aviation Turbine Fuel (ATF) tax in such a way that airlines get benefitted a new company called ATF Trading company shall be created with participation of GSPC and GUJSAIL; establishing aviation training institutes including ground, technical and flying training (focus area); providing airfield lease agreements - will help the private partners who come to invest in the State in the Civil Aviation sector; providing aero-sporting and other facilities for the youth of Gujarat (focus area); and setting up of GUJSAIL to bring investment in the State by enabling single window clearances. Other focus areas for Civil Aviation Department Other than those focus areas already indicated above, Capt. Chauhan also shared a few more focus areas like: operationalizing regional airlines for inter state connectivity; providing helicopter services and helipads at Taluka levels (next to expressways); and modernization of the hangar at Ahmedabad airport (so that aircraft maintenance may be provided there). MoU Status
Page 20 of 33
Of the 17 MoUs signed in Vibrant Gujarat 2007 and 2009 MoUs worth Rs. 13,000 crore are already in various stages of implementation, told Capt. Chauhan.
Of the 17 MoUs signed in Vibrant Gujarat 2007 and 2009 in the Civil Aviation Sector MoUs worth Rs. 13,000 crore are already in various stages of implementation.
Creation of MRO hub in Gujarat
Col. Nagar started his talk by presenting an interesting parallel between the film industry and the civil aviation industry. In both these industries, there are both the glamorous roles and the non-glamourous ones to play. What one gets to see in our industry are pilots and cabin crew the glamourous aspect. However, much of the civial aviation work actually happens behind the scene work of the aircraft engineers, the technicians who maintain the aircraft and other such people, Col. Nagar said. To highlight how dilligently the behind the scene people work, he quoted an insightful statisitic 90% of accidents are due to pilot error and not due to technical fault. The General Aviation Segment Col. Nagar described the way the Aviation Industry is structured as represented by the figure below: Genaral Aviation Airlines / Cargo
Aviation
Civil Aviation Military Aviation
General Aviation typically includes company / private flights, flight-training, air-ambulance, police aircraft, aerial surveys and mapping, flower / leaflet dropping, charters, skydiving etc. Col Nagar contrasted the scenario for General Aviation in USA and that in India - in the States, the total number of airports being used for the purpose of General Aviation is much more than the ones being used for airlines and cargo business, while in India this segment of the Aviation Sector is in its nascent stage and has just started to catch up. Need for an MRO MRO refers to Mainatnance, Repair and Overahaul. Col. Nagar explained how each part of an aircraft needs to be checked, repaired and certified periodically. Every component has to be overhauled after a specific period of time - these activites happen continuously. The avionics components, the airframe and the engines are the three basic parts of an aircraft that need regular maintenance / overhaul. To stress upon the labour involved in these maintenance activities, he informed that for each hour of flight, even more hours of ground work go into it. Also, for maintenance of each component of the aircraft, one needs an expert. MRO requirements Shedding light on some of the key requirements for setting up an MRO facility, Col. Nagar mentioned the following three aspects: a hangar (where servicing can happen); workshops / labs (sensitive avionics and aircraft instruments need to be tested here); and
Page 21 of 33
manpower (most important). MRO market & growth Currently the global MRO market is valued at around USD 47 billion. It is expected to grow to about USD 65 billion by 2030. Talking about India, Col. Nagar remarked that as it stands today, the MRO sector is hardly inspiring in the country. There are very few MRO units located in metros that can be counted on fingertips Gujarat doesnt have any so far. Overall, India accounts for a small fraction of the global market at USD 5 million, but is expected to capture about 6-7% of the global market by 2018 (by when the Indian market size should reach about USD 1.6 billion).
The Global MRO market stands at around USD 47 billion - India accounts for only a meagre USD 5 million of the total.
Till the economy had not opened up, there were only 2 airlines in India and hence they could be self sufficient in terms of maintenance. However, once the low cost flights were initiated by Deccan Airways it resulted in an airlines boom. Today there are about 1,000 aircrafts in India that need maintenance. Growth in number / capacity of MRO units couldnt catch up with the growth of the airline industry. As a result, today airlines have to send their aircrafts abroad for maintenance where they are charged by the hour and these charges are very high, since outside India, manpower is extremely costly (almost double in the developed countries). Col. Nagar quoted some of the factors that would lead to MRO growth in India: a) increase in size of active fleet; b) going abroad (Singapore, Dubai etc.) has it own problems besides higher cost (waiting time etc.); c) Indian policies are favourable for setting up MRO units in the country - Govenment is having a serious look at this sector and small abberations will be smoothened out very soon; and d) ageing of fleet with ageing, number of inspections as well as frequency keeps on increasing leading to higher maintenance requirements. Col. Nagar informed that about 15% of the total operating costs of an airline service provider goes to MRO services in that, fuel accounts for most of the cost while the second highest cost is that of manpower. Unless India has the required manpower and MRO facility, the country would keep losing this 15% to foreign countries, Col. Nagar highlighted.
15%: share of MRO services

in total airline operating costs.
In the last part of his presentation, Col. Nagar highlighted some of the important benefits that Gujarat as a State offers in attracting investments to this sector: number of aircrafts is clustered around metros in India; in the western region Mumbai is the only MRO hub, but with space and traffic constraints; 12 domestic airports and 1 international airport in the State additionally a number of other airports can be used for setting up of MRO facilities;
Page 22 of 33
Ahmedabad can become the second hub of MRO in western region (after Mumbai) because of available airspace and groundspace (a hangar already located at Ahmedabad International Airport); weather pattern in Ahmedabad is much better (Delhi has the problem of fog during winter while Mumbai has troubles during monsoon); Gujarat provides excellent infrastructure; Gujarat has industry friendly Government; and availability of adequately trained local manpower in the State (Col. Nagar said that he has been running an aircraft maintenance engineering college in Gujarat and a lot of the alumni are working in USA, Canada and other locations of India).
Opportunities in the Aerospace Sector

Picking up on Col. Nagars opening remark, Capt. Weir reiterated that typically when one thinks of aviation one always links it to airlines and tourism. These are interlinked but there are plethora of opportunities that exist beyond this, he said. Capt. Weir informed the delegates about the offset program run by Government of India, which in a one-line summary provides that foreign companies who get a contract to supply to Indian defence sector have to invest a part of that money into the same sector in India. Capt. Weir expressed his faith in the Gujarati industry when he said that as it stands today, the industry is capable of mingling with the aviation sector with little tweaks here and there. He shared a thoughtful insight into this sector there was no dip in the military aeroplanes manufacture during recession. It was the Indian industry that stood the recession the best including the aviation sector. In the next ten years, things will only get better. Domestic and international air-traffic as well as sales and manufacture of aeroplanes are going up consistently. Capt. Weir felt that following are some of the key pointers that those planning to work in the aviation sector must be aware of: OEMs requirements are increasing, leading to new investment opportunities; regulation is going to exist - every pin is inspected and has to pass stringent quality norms; advantage Gujarat the manufacturers in the State can produce things at lower prices; and sub-components and support equipment have their own market; Capt. Weir concluded his presentation with the following key recommendations: three states AP, Karnataka and Maharashtra, are currently taking the entire benefits from GoIs offset policy Gujarat Government must try to capture this; a five year road map should be prepared; the process of facilitation should be continued; and while taking advantage of the offset funds, the industrialists should not stray too far from their niche areas.
Airline industry and Tourism

Mr. Bose of Ventura Airways said that the airline industry is a key indicator of the economic growth of any country. When the GDP is growing, the airline industry also grows and when the airline industry goes down, GDP goes down as well. Talking about expansion, he cautioned that an airline should expand its business to a new route, only when the time is right. The airline industry is extremely cash intensive, very volatile and considerably complex. Further elaborating upon the complexity of airlines operations, Mr. Bose informed that there are around 14 different agencies working at the same time to dispatch an aircraft. It is a human-based industry where human beings are interacting across the movement, Mr. Bose said and added that the manner in which these human interactions are handled creates the difference in service from one airline to another. What do you finally get from an airline? movement of a passenger from point A to
Page 23 of 33
point B. Now, every airline does that. Similarly, everybody is providing food. Ticket rates are also very similar. So how do you rate airlines? It is the feeling that the passenger carries eventually, he explained. Besides the right timing, he also emphasized on the right size of aircraft that should be employed while expanding, otherwise the operation will not be economically viable. Typically for inter-state circuits, small sized aircrafts should be put in place first, and then one may grow gradually to bigger aircrafts. Linking aviation to tourism, Mr. Bose commented that unless aviation connectivity between locations is increased, tourism will not grow at a higher rate. Once air service connectivity is provided, the yield goes up and thus tourism growth happens. Similarly connectivity also leads to industrial growth.
Questions & Answers (Q&A) Session
What is the cost per passenger per seat in the airline industry? The cost is typically expressed in seat-miles. The cost for bigger aircrafts (like A320 with speeds of about 850 km/hr) is between Rs. 10-14 per seat-mile. For smaller ones with speeds of around 350 km/hr, the cost is always higher. For example, the Ahmedabad Bhuj route would cost between Rs. 5,000 6,000 per person. Helicopters are much costlier - for example a 10 seater in a one hour sector would typically cost around Rs. 40,000. What explains the current losses in the airline industry? Mr. Bose explained that though few airlines were making losses in the past, it is not the case anymore. There was a race between two airlines to become big in terms of capacity earlier, but the moment size of the fleet was reduced, losses disappeared. One cannot fight in the airline industry. It has to be operated under strict guidelines. Right now, people are making money. He indicated that more airlines would be coming up shortly. How much time does it take to get an airline on lease and start operation? Mr. Bose answered that it takes a minimum 4 to 6 months time and personal relationships usually help.
Page 24 of 33
What are the active MoUs of VG 2007 and 2009? In response to this question, Capt. Chauhan gave a quick update on the previously signed MoUs: MoU for development of Ankleshwar airport: Government is in the process of acquiring land; MoU with Ahmedabad Aviation Aeronautics for manufacture of smaller planes: work is on; MoU with Bharti Udan for setting up of training facilities in Mandvi: work is progressing (boundary issues to be sorted out); Deccan Aviation MoU for cargo: they have setup a cargo facility and when the international airport comes up, they will create a logistics hub; Honeywell: they are looking for land at present; Rajpipla aerospace activities: low lying water levels is an issue, being worked out; MoU with Pavan Hans: the company will supply helicopter services; studies have already been done; Dwarka airport development most of the land has already been acquired; few minor issues related to private sector land are being taken care of currently.
Concluding Remarks
Mr. Mittra laid emphasis on the two major milestones in the Gujarat Civil Aviation Sector: a new company GUJSAIL; and a new Civil Aviation Policy He informed that earlier, Civil Aviation in the State had been handled by just a Directorate, but now a dedicated company (GUJSAIL) will take care of this sector. Office is being set up and professionals are being recruited to run the company. Talking further about the upcoming Policy, he informed that it has two parts: a) those pertaining to land (he remarked that castles after all cannot be built in air); and b) benefits / facilities / incentives to be given to airlines Government is working on these right now. He informed that currently Saurashtra is connected to Mumbai but not to Ahmedabad. Therefore, Government is trying to work out special incentives (like minimum guarantee of seats, Government traffic to be directed to these airlines etc.) to connect these two regions. Under the new policy, traffic will be ensured for some of the routes. Mr. Mittra did take note of the difficulty in acquiring land be it from private landholders or even transfer from one department to another. He assured everyone that the Government is recruiting land acquisition experts to expedite the solutions to land related issues. Another land related challenge specific to development of airports, pointed out by Mr. Mittra was that airstrips require land parcels that need to be of a considerably long length. We have pockets of gauchar, kharaba and all kinds of Government land. The process of creating a land bank for this purpose will take some time. But when it takes off, it will be very fast, Mr. Mittra said. Also, taking ahead what he had said in his opening remarks of the session on Civil Aviation, he once again highlighted that the real profit lies in landside development around the airport. Unless that happens, private sector will not come in a big way. Once the interest of the private sector (making money out of a venture) and Government (making people move fast) converges, things will move, he opined. He also revealed that Government is keenly looking for more partners for development of airfields and airstrips in the State.
Page 25 of 33
Conclusions & Way Forward

The following table summarizes the key success parameters of the Seminar:
Parameter Speakers International participants Domestic participants Registrations for Vibrant Gujarat 2011 (online) Investment Intentions submitted Value of proposed Investments (Rs. Crore) Expected Employment Total no. 9 2 195 50 8 1,161 1,760
Some of the important way forward and recommendations / suggestions / advice to the Government as well as the private sector that emerged from this Seminar are listed below:
Tourism
Notes for Government: Gujarat is already the growth engine of India; it should now strive towards becoming the Gateway to India; Government should enhance the speed of approvals for hotel projects because as these projects are land intensive. Hotel industry should be treated like any other infrastructure industry similar incentives and rebates must be given as are given to the industrial sector. Training related: Government should put greater efforts in ensuring that more training facilities catering to the hospitality industry are set-up in the State; training of women should be given special focus in all training programmes; training institutes are required for the tour operators also, especially in the area of foreign language training if Gujarat has to work out a USP, it is very important that the triple bottom-line strategy is adopted (social, economic and environmental); some of the Government laws pertaining to building designs are archaic and need to be looked afresh; given that water transport is the cheapest transportation mode in the world, three parallel lines - for water, railway and road should be developed eventually, especially for a State like Gujarat which has Indias longest coastline; and Gujarat should wipe out all earlier perceptions through a single window approach and at the same time ensure that there is not much gap between reality and perception.
Page 26 of 33
Notes for the private sector: in Gujarat, both domestic and international tourist numbers have grown by over 35% (YOY); travel time between Ahmedabad and Mumbai is expected to reduce to 4.5 hours (once the work on expressway is over) this will lead to higher number of tourists flocking the State; increase in agricultural income of rural Gujarat will create great demands for the restaurant industry in the State; today is the most opportune time to invest in the Gujarat Tourism sector because the growth curve is steep - being an early investor is essential since once investment scenario starts getting crowded, land prices at all the favourable locations typically go up; Investment opportunities At least 1,000 hotels would be required in the State within the coming two years - involving creation about 1 lakh rooms or 1.5 lakh beds. Sixteen beaches of Gujarat including Nargol, Ummargam and Suali beaches Focus of tourism development in Gujarat would be - Saputara, Somnath, Sidhpur, Sasan and Suali beach Navsari & Surat have great potential for development of Business Tourism facilities; IL&FS along with TCGL has come up with 39 tourism projects (EoI already out); and Building designs should look at monuments of the future - whilst it is important that the services that are provided be of world class, the raw materials used should also be friendly to the environment.
Medical Tourism
Notes for Government: Gujarat has good hospitals but many of them lack international accreditation Government may need to take up this issue at its end; Visa on arrival if put in place, would be extremely helpful to promote this industry; Government should proactively help international medical tourists in case of death and legal matters and police enquiry during stay should be more courteous; Government Incentives: on lines of the recently announced incentives for the hotel industry, even the hospitals should be given an industry status - Electricity Duty should be charged at industrial rates and incentives in the area of property tax should also be provided; Government should support the industry in marketing it - satellite centres may be opened up in developing countries and stalls and booklets at various forums should be distributed; and systemize an honest, efficient, transparent and cost effective treatment in the State, preferably by involving Government, doctors and hospitals together. Notes for the industry (hospitals / doctors / tour operators): though USA and UK are great countries for attracting the NRIs, for targeting international medical tourists, one should focus upon countries in Africa, Middle East, Fiji, Maldives, Madagascar etc.; almost all hospitals serve only vegetarian food this needs to be changed; hospitals in Pune have appointed translators already - Gujarat should catch up soon; international tourists should not be charged extra fee just because they are coming from overseas doctors need to be extremely transparent in this regard; the travel agents and tour operators need to come up with more and better packages for the patients relatives for site seeing and leisure (Thailand and Malaysia already offer this);
Page 27 of 33
Civil Aviation
Notes for Government: 15% of the total operating costs of an airline service provider goes to MRO services unless the Government creates required manpower and MRO facilities, the country would keep losing this percentage to foreign countries; three states AP, Karnataka and Maharashtra, are currently taking the entire benefits from GoIs offset policy Gujarat Government must try to capture this; and a five year road map for Civil Aviation in the State should be prepared; Notes for the private sector: tourists would like to fly from Ahmedabad to Ambaji, Saputara, Dwarka, Shirdi etc so there is a demand for aircraft / helicopter services in these routes; while taking advantage of the offset funds, the industrialists should not stray too far from their niche areas; and Government is keenly looking for more partners for development of airfields and airstrips in the State.
Page 28 of 33
Annexure 1: Sample Press Coverage of the Seminar

Livemint
06 December 2010
Hyatt, Kamat to enter hospitality business in Gujarat

Juniper Hotels Pvt. Ltd (JHPL), which has a tie up with Chicago-based Hyatt Hotels Corp., is setting up a five star hotel in Ahmedabad under the brand name Hyatt Regency at an investment of Rs 400 crores, while Kamat Hotels (India) Ltd is planning to set up two three star hotels Gujarat with an approximate investment of over Rs 50 crore, officials of the firms said. With tourist inflow rising in Gujarat, hospitality sector players have started showing their interest in setting up new hotels and restaurant. Juniper Hotels Pvt. Ltd (JHPL), which has a tie up with Chicago-based Hyatt Hotels Corp., is setting up a five star hotel in Ahmedabad under the brand name Hyatt Regency at an investment of Rs 400 crores, while Kamat Hotels (India) Ltd is planning to set up two three star hotels Gujarat with an approximate investment of over Rs 50 crore, officials of the firms said. "We are setting up a 300 room, five star hotel in Ahmedabad on Ashram Road. We have already acquired two acres of land for this project which will be completed by 2013. The hotel will have The company will invest Rs 400 crore in this project," Amit Saraf, vice president, JHPL, said on the sidelines of a seminar 'Gujarat Tourism and Civil Aviation Exploring Investment Opportunities' jointly held by Gujarat government and the Federation of Indian Chambers of Commerce and Industry (Ficci). JHPL owns Grand Hyatt in Mumbai. He said with rising tourist arrivals and commercial activities gaining pace in Gujarat , the demand for good hotels has also gone up. "We have timely entered the state," Saraf said. Vithal V. Kamat, executive chairman and managing director of Kamat Hotels Ltd, said the firm which had pulled out from Gujarat 20 years ago has revived its plans for the state. "We used to own a hotel in Vapi, (in Valsad district of Gujarat) but we closed it down 20 years ago. However, now with good infrastructure development in the state we have revived our focus on the state," Kamat said. The firm is currently scouting land in major towns including Ahmedabad to set up two hotels, he said. "We will set up a three star hotel with 80 room capacity under the brand name of Orchid while another hotel with same capacity will be set up under the brand name of Vits," he said. He added per room investment will be Rs 30 lakh which turns out to be around Rs 50 crore for both the hotels which will come up by 2013. Kamat said the firm will also set up 10 highway restaurants in the state. "We are also planning to set up 10 highway restaurants in Gujarat with an investment of Rs 15 crore. This is a very viable business in Gujarat as demand for highway food joints in the state is tremendous," he said. Similarly, McDonalds India, which has 24 highway restaurants across including one in Gujarat , is planning to add 30 highway restaurants in the state within the next three years. "We see a bright opportunity in highway restaurants as most tourists prefer to travel by road in the state. We will be setting up 30 highway restaurants in the state with an estimated investment of Rs 2.5 crore in each restaurant," said Nishit Pandey, director alliance, corporate affairs and administration, Hard Castle Restaurants Pvt Ltd that manages McDonalds restaurants. However, viability of more hotels in Ahmedabad is in doubt, said Narendra Somani, president, Gujarat Hotels Association, a body of hotel owners in Gujarat. "I don't think that additional capacity will be very viable in Ahmedabad as total capacity in the city is 2,000 room (three and five star hotels) while average occupancy rate is only 60%-70%. In peak seasons, the occupancy rate goes up to 80% and some time 100%," Somani said. He said by 2011, another 1,000 room capacity is likely to be added which will not leave any room for the late comers. "Mariott Courtyard and Gateway Hotel are the only two five star hotels in Ahmedabad and these two hotels also reduce their rates considerably during the off
Page 29 of 33
season. If third five star hotel enters then it may create a price war in hotels during off seasons," he said. Somani is also the chairman of Bhagwati Banquets and Hotels Ltd which operates hotels in Ahmedabad, Surat and Rajkot under the brand name of The Grand Bhagwati. He added highway restaurant business is more viable as very few branded food chains are there in Gujarat. "There are very few big players in highway restaurants in the state which includes Reliance Fresh and Honest. There is more room for highway restaurants in Gujarat than three star-five star hotels," Somani said.
Page 30 of 33
The Times of India

07 December 2010
State signs MoUs to promote interstate tourism

Next time if you want to drive down to the last abode of Asiatic lions in Junagadh and also visit the golden temple in Amritsar, there is no need to contact two tour operators. Gujarat tourism department is here to assist you to make arrangements for you even in Amritsar, Punjab. The state tourism, to bring in tourists to Gujarat and to market its sight-seeing spots, has entered into a pact with Karnataka, Punjab and Rajasthan for inter-state tourism. The state is working on modalities to sign similar a deal with Goa tourism department too. The tourism department has started selling north Gujarat with Rajasthan and is promoting Shamlaji, Kesariyaji, Udaipur, Chittorgarh, Haldighati, Nathdwara, Charbhuja, Ranakpura, Mount Abu in Rajasthan spots along with Ambaji, Kumbharia, Modhera and Bahucharaji. Tourism secretary, Vipul Mitra, said the state has entered into memoranda of understanding with Rajasthan, Karnataka and Punjab, which has a large number of NRI visitors. "The MoUs will help towards mutual promotion of tourism, showcasing each others' cultural heritage to tourists and felicitating inbound travel into respective states," Mitra said. The states will mutually market their accommodation facilities and tourism packages. Sources said that the next in the line is Goa where the state is planning to promote wildlife, religious and beach tourism. Officials said that Goa has pacts with five other states, including Meghalaya, Rajasthan, West Bengal, Karnataka and Sikkim. Manish Sharma, president of Gujarat Association of Tour Operators, said that signing the MoU is in the interest of the state. "Rajasthan has been promoting Gir and the effect is that schools from Rajasthan have visited Gir for watching Asiatic lions." "We have been promoting Rajasthan and they have been offering joint packages along with Somnath and Dwarka apart from Gir. Around 20 to 22 per cent of the tourists who arrived in the state were through interstate tourist operators," he added. Jayendrasinh Jadeja, member of GATO, said, "This should have begun much before. But the government did not pay attention. But now with chief minister Narendra Modi taking tourism seriously, the state is set to promote inter state-tourism, which is a good sign."
Page 31 of 33
Sify Finance
07 December 2010
Aviation, Tourism to see a combined Rs 80,000 crore MoUs in VGGIS'11

Tourism and hospitality industry in Gujarat is expected to see heavy investment inflow during the Vibrant Gujarat Global Investors' Summit (VGGIS) 2011, as the government has chalked out a lucrative hotel policy for new investors and proposed an up gradation of prominent tourist destinations including beaches, cultural heritage and religious monuments in the state. The minister of state for tourism and health, Government of Gujarat (GoG), Jaynarayan Vyas on Monday informed that tourist arrivals in the state is improving with rapid pace and the infrastructure development at key tourist destinations would provide growth to the industry. Addressing a seminar on 'Gujarat Tourism and Aviation: Exploring Investment Opportunities' in Ahmedabad, Vyas said, "In order to develop state tourism industry, the government has slashed electricity duties on the power used by hoteliers and also the government will provide interest subsidy of 6 per cent with an upper limit of Rs 50 lakh. Both the incentives will be applicable to any hotel unit coming up in the state. A government resolution will soon be issued by the department." The state hotel industry is charged with commercial power tariff for their electricity consumption despite the sector being considered as an industry in the state, where industries get a comparatively cheaper power. With the fresh announcement, the sector will have a relaxation of up to Rs 1.5 per unit on their power tariff. Further, the state government official informed that tourism in Gujarat will see a huge investment inflow during the upcoming VGGIS, scheduled to be held in Gandhinagar during January 12-13, 2010. Speaking on the sidelines of the event, Vipul Mitra, secretary, tourism and civil aviation, GoG said, "The tourism sector had seen Rs 50,000 crore worth of memorandum of understanding (MoUs) happening during the previous VGGIS held in 2009, while this year, the tourism sector is expected to see MoUs worth Rs 60,000 crore and aviation sector is believed to see an investment inflow of Rs 20,000 crore in the upcoming VGGIS, 2011." The state is preparing for privatisation of 12 airports, while new airports are chalked out for religious destinations like Dwarka and Ambaji. "At Dwarka, the airport project is awarded to the Kolkata-based SREI Infrastructure Ltd and the construction work is expected to be over by 1.5 years," said Mitra, adding that for Ambaji airport, the government is looking for partners. Banking on its 1600 km long coastal line, the Gujarat government has identified 14 beaches along the coastline to be developed for tourism purposes and to be promoted as entertainment zones. Vyas informed that some of the identified beaches include Mandvi beach in Kutch, Nargol in Valsad and Suvali beach near Surat, of these only Suvali beach is expected to see an investment inflow of Rs 7000 crore for the makeshift. The state offers investment opportunities for restaurant operators to set up their projects along the highways in a stretch of Vapi to Kutch. The government is proposing a restaurant with key amenities to be located at every 200 km gap on this stretch. The Gujarat government has floated a joint venture company, Gujarat Tourism Project Development Co Ltd, with 50:50 JV with IL&FS Infrastructure Development Corporation Ltd and Tourism Corporation of Gujarat Ltd, focusing on infrastructure and tourism projects in the state. The company has so far prepared 50 projects and they are slated to be placed in front of the investors in the upcoming investment summits.
Page 32 of 33
DeshGujarat
07 December 2010
Saputaras new lake will be twice bigger than the existing one
Gujarat government has taken up tourism development project at states only hill station Saputara in a big way, the Tourism minister Shri Jaynarayan Vyas told media persons on the sideline of Tourism and Aviation related seminar in Ahmedabad on Monday. Shri Vyas said the government is developing a new rock-filled water body in a style of lake which would be twice the size of present lake on the hill station. Even present lake has been deepened a meter more for extra capacity of water storage. There was a problem of setting up a sub station due to forest department rules, but now the problem has been solved and soon a new sub station will be set up to ensure continuous power supply at the hill station, the minister added. The minister also said that plots are now open for auction in Saputara and advertisement in this regard has been released. One can set up a restaurant, or build hotel or other entertainment infrastructure on the plot. Tender for houseboat facility in Saputara lake is already in process. The hill station is in process to get face lift with huge budget that the tourism department has allocated. According to Tourism Secretary Vipul Mitra, the entire process will take one and half to two years period to complete. But then you would find a completely new hill station at Saputara, Mitra adds. It is learnt that the government is developing Saputara hill station as perfect honeymoon destination of entire western Indian region. When things are in place, it is likely that Gujarat Tourism Brand Ambassador Amitabh Bachchan will come to Saputara for promotional ad shoot. It should be mentioned here that Saputara is located on Gujarat/Maharashtra border. It is located on route that connects Gujarat and Shirdi. Saputara is part of southern Gujarats tribal Dang district.
Page 33 of 33

Gujarat Tourism & Aviation: Exploring Investment Opportunities

Uploaded by

Copyright:

Available Formats

Gujarat Tourism & Aviation: Exploring Investment Opportunities

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Gujarat Tourism & Aviation: Exploring Investment Opportunities

Uploaded by

Copyright:

Available Formats

www.pwc.

Gujarat Tourism & Aviation Exploring Investment Opportunities

The Times of India Sify Finance DeshGujarat

1,645,241 1,489,601 1,546,756 1,521,399 1,572,125 1,465,385 1,511,100 1,652,139

Session Details Opening Remarks

Address by Mr. Vipul Mittra, IAS

Address by Mr. Jaynarayan Vyas, Honourable Minister

Panel Discussion on Tourism

Discussion Proceedings IL&FS and its role in development of Gujarat Tourism

Saraf Hotels view on the Gujarat Hotel Industry

Suggestions from ITC

Medical Tourism: growth and prospects

Questions & Answers (Q&A) Session

Panel Discussion on Aviation

Designation Secretary, Tourism & Civil Aviation Director Civil Aviation

Chief Flying Instructor

Opportunities in the Aero Space Sector Airline Industry & Tourism

Discussion Proceedings Chairmans opening remarks

Gujarat Civil Aviation Scenario

1980s 1990s 2000 2010

551 planes fly over Ahmedabad every day.

Civil Aviation Military Aviation

15%: share of MRO services

Opportunities in the Aerospace Sector

Airline industry and Tourism

Questions & Answers (Q&A) Session

Conclusions & Way Forward

Annexure 1: Sample Press Coverage of the Seminar

Hyatt, Kamat to enter hospitality business in Gujarat

The Times of India

State signs MoUs to promote interstate tourism

Aviation, Tourism to see a combined Rs 80,000 crore MoUs in VGGIS'11

You might also like