(R. K. Singh) Atithi Devo Bhavah Guest Management

First Edition, 2009
ISBN 978 93 80075 45 7
All rights reserved.
Published by:
Global Media
1819, Bhagirath Palace,
Chandni Chowk, Delhi-110 006
Email: [email protected]
Table of Contents
1. Atithi Devo Bhavah
2. India: An Incredible Tourist Spot
3. Atithi Devo Bhavah Campaign
4. Indian Tourism and Hospitality Facilitation
5. Role of India in International Tourism
6. Opportunities and Challenges
7. Developmental Initiatives
8. Destination Management
9. Guests and their Well-Being

Atithi Devo Bhavah
India is amongst the most widely

preferred tourist destinations today -
a phenomenon that is encouraged by
the adage Atithi Devo Bhavah, which
denotes the respect and honour that
is meted out to the tourists who visit
this country. The Ministry of Tourism
has launched the Atithi Devo Bhavah
campaign to attract more number of
tourists and the end-results speak
volumes about the progress. The
concept is aimed at capacity building
for service providers and
stakeholders in the tourism sector to
make the tourists aware of the
benefits in India and the need to treat
them with traditional care and utmost
courtesy.
This book is a one stop manual
on what tourism in India entails.
Taking an insightful and in-depth look
into the factors which make India an
attractive and fascinating destination
on a tourist's itinerary, it also acts as
an invaluable guide for those in the
hospitality industry. It is hoped, that
being an illumi-nating and insightful
look into the tourist destination that
india is, and what it means for the
tourism industry in this country, the
book would account for an enriching
and satisfying reading experience.
1
India: An Incredible Tourist Spot
India is one of the worlds oldest living civilisations and

also the worlds largest democracy, which has made
stupendous progress among developing nations. It is a
land where temple elephants exist amicably with the
microchip.
Indias impressive variety of history and culture, from
the ancient Gangetic kingdoms to the present state,
harmoniously blend to form a unique atmosphere in
more than a million square kilometres of scenic sights.
Placid backwaters and lagoons, bays and rough lava-
rocked seas, marine estuaries with fish, crashing surf,
powdery golden sand or palm-fringed shores... incredible
India has them all.
The economy is booming and so is incredible India.
Various initiatives are under way in the tourism sector
with the sole objective of providing visitors to the country
with a world-class experience that differentiates itself as a
spiritually enhancing, culturally enriching, physically
invigorating and mentally rejuvenating experience.
Tourism is a major social phenomenon of the modern
society with enormous economic consequences. Its
importance as an instrument for economic development
2 Atithi Devo Bhavah
and employment generation has now been well

recognized the world over. The existing Tourism Policy
provides a framework for development of tourism with
the objective of reaping the socio-economic benefits of the
sector. The traditional treatment of a visitor in India is
based on the mythological concept of Atithi Devo Bhavah
(Guest is God). This is the latest mantra of the Indian
tourism sector.
The Ministry of Tourism has launched the Atithi
Devo Bhavah campaign last year under its ambitious
programme to attract more number of tourists and the
end-results speak volumes about the progress. The
concept is aimed at capacity building for service
providers and stakeholders in the tourism sector to make
the tourists aware of the benefits in India and the need to
treat them with traditional care and utmost courtesy. This
has been further boosted by the National Tourism Policy
2002, which revolves round a framework - government-
led, private sector-driven and community-welfare
oriented. The Tenth Plan approach to the sector is also
aimed at ensuring that the tourist to India gets physically
invigorated, mentally rejuvenated, culturally enriched,
spiritually elevated and feels India within him.
STATUS OF INDIAN TOURISM INDUSTRY

The tourism industry is a composite of service providers
which includes travel agents, tour operators, air, rail and
sea transportation operators, guides, hotels, guest houses
and inns, restaurants and shops selling handicrafts,
souvenirs, clothing footwear, leather items and other
objects of interest to the tourists. The common factor
about these service providers is that all are involved in
meeting the requirements of international and domestic
tourists. These service providers are generally in the
India: An Incredible Tourist Spot 3
private sector. Public sector institutions such as the

national or state departments of tourism are involved in
planning, development and management of tourism-
related service providers.In many cases they even provide
direct services to the tourists. Left to itself, the industry
will develop naturally, but not necessarily, optimally on a
sustainable basis. If the industry is properly planned,
developed and managed at all levels of government in
partnership with the private sector, it will strengthen the
countrys cultural structure and natural heritage and lead
to positive economic results including enhanced
employment and income opportunities especially in rural
areas.
The 1982 Tourism Policy was drafted in a different
socio-economic milieu in an environment of an economy
with strict licensing procedures. Foreign investment in
the economy was not anticipated, development of new
technology was not envisaged and there was no focus on
balanced development of various regions.The Policy did
not differentiate specifically the roles of the government
and the private sectors and there was no emphasis on the
latters role in the development and promotion of
tourism.
In the post-liberalisation period various developments
in the tourism sector have taken place. The sector has
been accorded the status of export house and various
incentives like income tax exemptions, interest subsidy
and reduced import duty are available to the hotel
industry, travel agents, tour operators and tourist
transport operators.Several incentives have been made
available for attracting private investment in tourism
projects including those under the Liberalised Exchange
Rate Management System (LERMS).
The economic reforms introduced by the Centre are
integrating India into the global economy and making
Indian industry internationally competitive. Foreign

direct investment and technical collaborations form a
major platform of the economic reforms. With a view to
attracting investment in this sector the hotel and tourism-
related industry has been declared as a high priority
industry for foreign investment. It is now eligible for
automatic approval of direct investment upto 100 per cent
of foreign equity.
Non-Resident Indian (NRI) investment is allowed
upto 100 per cent automatically. In a fast-changing world,
the relationship between suppliers and users of
technology, agreements have to be recognised. To
promote technology upgradation in the hotel industry,
approvals for technology agreements are now available
automatically subject to the fulfillment of certain
conditions. Applications for automatic approvals for
foreign investment or technology agreements and
management contracts can be made to the RBI for
according such approvals and the entrepreneurs can
approach authorised dealers for release of foreign
exchange.
Tourism development in India has passed through
many phases. At Government level the development of
tourist facilities was taken up in a planned manner in
1956 coinciding with the Second Five Year Plan. The
approach has evolved from isolated planning of single
unit facilities in the Second and Third Five Year Plans.
The Sixth Plan marked the beginning of a new era when
tourism began to be considered a major instrument for
social integration and economic development. But it was
only after the 80s that tourism activity gained
momentum. The Government took several significant
steps. A National Policy on tourism was announced in
1982. Later in 1988, the National Committee on Tourism
formulated a comprehensive plan for achieving a
sustainable growth in tourism. In 1992, a National Action

Plan was prepared and in 1996 the National Strategy for
Promotion of Tourism was drafted. In 1997, a draft new
tourism policy in tune with the economic policies of the
Government and the trends in tourism development was
published for public debate. The draft policy is now
under revision.
The proposed policy recognises the roles of Central
and State governments, public sector undertakings and
the private sector in the development of tourism. The
need for involvement of Panchayati Raj institutions, local
bodies, non-governmental organisations and the local
youth in the creation of tourism facilities has also been
recognised.
The other major development that took place were the
setting up of the India Tourism Development Corporation
in 1966 to promote India as a tourist destination and the
Tourism Finance Corporation in 1989 to finance tourism
projects. Altogether, 21 Government-run Hotel
Management and Catering Technology Institutes and 14
Food Craft Institutes were also established for imparting
specialised training in hoteliering and catering.
TOURIST ATTRACTIONS
India is a country known for its lavish treatment to all
visitors, no matter where they come from. Its visitor-
friendly traditions, varied life styles and cultural heritage
and colourful fairs and festivals held abiding attractions
for the tourists. The other attractions include beautiful
beaches, forests and wild life and landscapes for eco-
tourism, snow, river and mountain peaks for adventure
tourism, technological parks and science museums for
science tourism; centres of pilgrimage for spiritual
tourism; heritage trains and hotels for heritage tourism.
Yoga, ayurveda and natural health resorts also attract

tourists. The Indian handicrafts particularly, jewellery,
carpets, leather goods, ivory and brass work are the main
shopping items of foreign tourists. The estimates
available through surveys indicate that nearly forty per
cent of the tourist expenditure on shopping is spent on
such items.
TOURISM AND ECONOMIC GROWTH

Domestic tourism is as old as the Indian society.
According to available statistics, domestic tourism has
grown substantially during the last one decade. It
increased to 167 million in 1998 from just 64 million in
1990, thus registering a compound annual growth of 12.8
per cent.
The growth of inbound tourism since Independence
has been quite impressive. It was just around 17 thousand
in 1951. From this level it rose to 2.36 million in 1998.
Tourism receipts on the other hand have grown at a
phenomenal rate of 17 per cent to Rs.11,540 crore in 1998
from Rs.7.7 crore in 1951. Tourism has emerged as an
instrument of employment generation, poverty alleviation
and sustainable human development. During 1998-99,
employment generation through tourism was estimated
at 14.79 million. Foreign exchange earnings from the
tourism sector during 1998-99 were estimated at Rs.12,011
crore. Tourism has thus become the second largest net
foreign exchange earner for the country. Tourism also
contributed Rs.24,241 crore during 1998-99 towards the
countrys Gross Domestic Product (GDP).
THRUST AREAS
In order to speed up the development of tourism in the
country several thrust areas have been identified for
accomplishment during the Ninth Five Year Plan. The

important ones are development of infrastructure,
products, trekking, winter sports, wildlife and beach
resorts and streamlining of facilitation procedures at
airports, human resource development and facilitating
private sector participation in the growth of infra-
structure.
O RGANISATIONS
The organisations involved in the development of
tourism in India are the Ministry of Tourism with its 21
field offices within the country and 18 abroad, Indian
Institute of Tourism and Travel Management, National
Council for Hotel Management and Catering Technology,
India Tourism Development Corporation, Indian Institute
of Skiing and Mountaineering and the National Institute
of Water Sports.
CELEBRATIONS
During the Golden Jubilee celebrations of India as a
Republic, the Ministry of Tourism made special efforts to
publicise the tourism potential of India. The first-ever
Indian Tourism Day was celebrated on January 25, 1998.
Bauddha Mahotsav was organised from 24th October to
8th November 1998. The Year 1999 was celebrated as
Explore India Millennium Year by presenting a
spectacular tableau on the cultural heritage of India at the
Republic Day Parade and organising India Tourism Expo
in New Delhi and Khajuraho. The Wong La Millennium
was held from April 1999 to January 2001. A special
calendar of events has been formulated for highlighting
contributions to Millennium events by various places in
all the States. An official website of the Ministry of
Tourism has also been created for facilitating
dissemination of information on tourism.
CONSTRAINTS
The major constraint in the expansion of international
tourist traffic to India is non-availability of adequate
infrastructure including adequate air seat capacity,
accessibility to tourist destinations, accommodation and
trained manpower in sufficient number. Poor visitor
experience, particularly, due to inadequate infrastructural
facilities, poor hygienic conditions and incidents of
touting and harassment of tourists in some places are
factors that contribute to poor visitor experience.
To sum up, Indian tourism has vast potential for
generating employment and earning large sums of
foreign exchange besides giving a fillip to the countrys
overall economic and social development. Much has been
achieved by way of increasing air seat capacity,
increasing trains and railway connectivity to important
tourist destinations, four-laning of roads connecting
important tourist centres and increasing availability of
accommodation by adding heritage hotels to the hotel
industry and encouraging paying guest accommodation.
But much more remains to be done. Since tourism is a
multi-dimensional activity, and basically a service
industry, it would be necessary that all wings of the
Central and State governments, private sector and
voluntary organisations become active partners in the
endeavour to attain sustainable growth in tourism if India
is to become a world player in the tourist industry.
POTENTIALS OF TOURISM INDUSTRY

Tourism provides enormous opportunity for employment
generation. According to an estimate the travel and
tourism industry would have directly generated 9.3
million jobs in India. The travel and tourism industry
includes activities such as accommodation, transport,
catering, entertainment, recreation and other travel-

related services. The travel and tourism economy which
expresses the impact of travel and tourism and its flow-
through effect across the wider economy would have
generated 17.4 million jobs in India.Travel and tourism
jobs are rapidly generated at relatively low cost, are
concentrated in small business and local communities,
provide significant opportunities for women and young
people, offer education, training and skills development
and protect and revitalise traditional arts and crafts.
Integrated development of infrastructure including
basic amenities and onsite facilities like accommodation,
restaurants, entertainment and shopping facilities in
identified tourist centers is a primary requirement for
achieving any large-scale expansion in the tourist traffic.
Poor visitor experience particularly due to inadequate
infrastructural facilities, poor hygienic conditions,
incidence of touting and harassment of tourists in some
places and the unscientific approach to taxation policy
which includes heavy imposts on hotel room rents, sales
tax on food and beverages, heavy excise on liquor,
prohibitive customs duty on imported tourist vehicles
and taxes on interstate tourist transport are factors that
adversely affect the flow of tourist traffic to the country.
As a service industry, it is also necessary to achieve high
standards of professionalism in providing services to the
tourists.
The new tourism policy would take into account the
role of Indian tourism as an engine for economic
development, employment generation, social integration
and promotion of its cultural image abroad. It takes into
account the various barriers and constraints that it faces
and find a solution to overcome them so as to be able to
develop and promote tourism to greater heights.
NEW INITIATIVES IN TOURISM SECTOR

The Tourism Ministry, through tourism offices abroad,
undertakes a series of promotional activities in tourist
generating markets for increasing the number of tourists
visiting India. These include advertising, participation in
fairs and exhibitions, organizing seminars, workshops
and road shows, publication of brochures, joint
advertising support and inviting media personalities, tour
operators and opinion makers to visit the country under
the Hospitality program of the Ministry. In India, the
focus is to create infrastructure in rural areas having
potential for tourism. The objective is to showcase rural
life, art, culture and heritage at rural locations and in
villages, which have core-competency in terms of craft/
handloom/textiles etc.
For the last four decades, there has been a sweeping
revolution in the tourism sector across the world. The
number of tourists worldwide has been growing and it is
expected to swell to 1.5 billion and the receipts from it are
estimated to cross 2000 billion US dollars. India has taken
note of the boom in the tourism sector and geared itself to
meet the challenges. As a result, tourism in the present
day world did not confine itself to hotels, restaurants and
sea beaches alone its arena touched rural areas (Rural
Tourism), health sector (Health Tourism) and
environment (Eco-tourism). That is why it is said
necessity is the mother of invention. The governments
policy is to take the benefits of tourism to people in rural
areas to ensure socio-economic development of the
village, society and the nation altogether.
Despite several constraints facing the tourism sector,
Indias share in world tourist arrivals was 0.44 per cent in
2004. The constraints include shortage of air seat capacity,
high air fares, shortage of hotel accommodation and high
hotel tariffs, deficiencies in infrastructure such as airports,

roads, railways, facilitation of entry to India by
International tourists, multiplicity and high level of
taxation, restricted land use policies for tourism protects
and absence of single window approach.
The government has prepared 20 year Perspective
Plans for tourism development in the country. The
tourism policy encourages private sector to act as a main
spring of the activities and impart dynamism and speed
to the process of development as well as conservation,
attaches importance to the improvements and
environmental upgradation of the protected monuments
and the areas around them.
The Ministry has undertaken studies on taxes levied
by the state/central governments in the Indian Tourism
sector and the impact of Civil Aviation Policies on
Tourism in the country. The study on taxes has
highlighted the problem of high rate of taxation and
multitude central and state level taxes leading to high
cost of packages. The study has recommended
rationalization of taxes like expenditure tax, service tax,
customs duty and taxation of Aviation Turbine Fuel
(ATF), need for introduction of new incentives to increase
tourism expenditure and volume and promotion of
investment in the industry.
The government has decided to stimulate investment
and encourage the state governments to develop unique
tourism products suited to their genius. The aim is to
enhance the employment potential within the tourism
sector as well as to foster economic integration through
developing linkages with other sectors. The new
approach is to:
Position tourism as a major engine of economic
growth;
Harness the direct and multiplier effects of tourism

for employment generation, economic development
and providing impetus to rural tourism;
Provide a major thrust to domestic tourism which will
act as a spring-board for growth and expansion of
international tourism;
Position India as a global brand to take advantage of
the burgeoning global travel and trade and the vast
untapped potential of India as a destination;
Acknowledge the critical role of private sector with
government working as an active facilitator and
catalyst;
Create and develop integrated tourist circuits based
on Indias unique civilization, heritage and culture in
partnership with States, Private Sector and other
agencies.
The government has set up a monitoring mechanism for
expediting projects sanctioned in the last ten years. In the
8th and 9th Plans, as many as 2,526 projects were
sanctioned and these were supposed to be completed
within 30 months from the date of sanction. The delay in
implementation of the projects by the state governments
led to slow progress in these works. As a result some of
the projects sanctioned during the 8th plan are still
incomplete.
In order to ensure timely implementation and also
coordination between various departments involved in
the projects sanctioned under the schemes for Circuit
Development, Destination Development and Rural
Tourism, the Ministry of Tourism has requested all the
State governments and Union Territory Administrations
to constitute State level Monitoring Committees under the
Chairmanship of Secretary (Tourism) including the
district authorities concerned, representatives of the
implementing agencies such as CPWD, HUDCO, ASI,

Indiatourism and local authorities.
Health Tourism
The Ministry of Health & Family Welfare and the

Ministry of Tourism have jointly formed a Task Force
with a view to promoting India as a Health Destination
for persons across the globe so as to gainfully utilize the
health care expertise and infrastructure available in the
country. The new domestic and global campaigns for the
current year focus on India as a destination for niche
segments like Medical Tourism, Cruise Tourism, and
Spiritual Tourism. The aim is to expand the range of the
tourism products in India both for the domestic and
international consumers. The Ministry has also promoted
Monsoon Tourism in various states.
The government has taken up a number of steps to
increase foreign tourist arrivals to India. They include:
Creation of World Class Collaterals, Centralized
Electronic Media Campaigns, Direct cooperative
marketing with tour operators and wholesalers overseas,
Greater Focus in the emerging markets, particularly in the
Region of China; North-East Asia and South East Asia,
Participation in Trade Fairs & Exhibitions, Optimizing
Editorial PR and Publicity, Use of Internet and Web
marketing, Generating Tourist Publications, Reinforcing
hospitality programmes including grant of air passages to
invite media personnel and tour operators and Launching
of Road Shows in key source markets of Europe. The
government of India has introduced a new category of
Medical Visa (M-Visa), which can be given for specific
period to foreign tourists coming to India for medical
treatment.
Conference and convention tourism
Conference and convention tourism is another segment

gaining increasing importance in the modern world. The
government of India, recognising the emerging
importance of meetings and conventions, has announced
several schemes to increase the capacity of existing
infrastructure and to construct world-class international
convention centres through private-public partnership in
Delhi, Mumbai, Goa, Bangalore, Kochi, Hyderabad and
Thiruvananthapuram.
Cruise Tourism
Golf tourism and cruise tourism are other new products

on the anvil. Even film tourism through promotion of
Indian locales among foreign filmmakers has become
quite popular. India is also a shoppers paradise with its
traditional handicrafts from different regions of the
country along with the most modern shopping malls in
cities across the country.
The government has constituted a high-power
Steering Group to formulate Cruise Shipping Policy in the
country. The recommendations of this Group include
formation of Working Groups to look into issues like -
immigration, customs clearances, quarantine restrictions,
identification of ports, infrastructural facilities,
connectivity, taxation issues, tourism related issue and
cabotage to develop cruise shipping policy for India. On
the Eastern part of the country, Tuticorin Port and
Chennai Port, have been identified.
Eco-Tourism
India, a region with the worlds greatest bio-diversity

with varied natural locales, is an ideal destination for eco-
tourism, which has been recognised as a priority tourism

product for India. The goal is to develop the country into
a sustainable tourism destination. Wildlife tourism,
associated with its world-famous national parks and tiger
reserves, Himalayan tourism, island tourism at the
Andamans and Laccadives are some of the products of
the countrys eco-tourism sector.
The National Eco-Tourism Policy and Guidelines
aim to preserve, retain and enrich natural resources and
to ensure regulated growth of Eco-Tourism with its
positive impacts on environmental protection and
community development. Under this guidelines, the
government has prioritized several projects in Himachal
Pradesh, Uttaranchal and Uttar Pradesh in 2005-06.
TOURISM BOOM
There has been a global tourism boom in the recent times.
Tourism has already achieved the distinction of being the
worlds largest export industry. India had received just
over 16,800 international tourists in 1951. The arrivals
increased to 1.7 million in 1990 and further to 2.64 million
in 2000. The growth rate between 1990 and 2000 has been
4.46 per cent per annum. A higher growth rate of 6.4 per
cent has been achieved in the year 2000 over the previous
year. However, Indias share in world tourism arrivals
has remained virtually stagnant at 0.38 per cent from 1995
onwards.
India with about 42 per cent share in the arrivals is
the major receiver of international arrivals in the South
Asia region in the year 2000 and yet its growth rate lags
far behind that of many countries in the region. The
tourism receipts of India went up from US$ 2583 million
in 1995 to US$ 3168 million in 2000 showing an annual
average growth rate of 4.17 per cent as compared to the
worlds average growth rate of 3.2 per cent during this

period. However, in 2000 Indias growth rate of 5.3 per
cent compares very poorly with many of the neighboring
countries such as China (15 per cent), Hong Kong China
(10.7 per cent), Malaysia (27 per cent), Thailand (12.5 per
cent), Macau (25 per cent), Iran (28.4 per cent) and
Pakistan (14.5 per cent).
There has been a phenomenal growth in domestic
tourism in the country during the last one decade. The
domestic tourist visits increased from 63.8 million in 1990
to 210 million in 2000. Some of the recent initiatives taken
by the Government to boost tourism include grant of
export house status to the tourism sector and incentives
for promoting private investment in the form of Income
Tax exemptions, interest subsidy and reduced import
duty. The hotel and tourism-related industry has been
declared a high priority industry for foreign investment
which entails automatic approval of direct investment up
to 51 per cent of foreign equity and allowing 100 per cent
non-resident Indian investment and simplifying rules
regarding the grant of approval to travel agents, tour
operators and tourist transport operators.
As a result of Incredible India campaigns, the foreign
tourist arrivals increased from (-) 6 per cent in 2002 to
23.5 per cent in 2004. An estimated 3.54 million foreign
tourists arrived in India during 2004. The foreign
exchange earnings in 2004 in terms of rupees registered a
growth of 32.9 per cent. In absolute terms, the foreign
exchange earnings increased from Rs.16,429 crores to
Rs.21,828 crores. The Bureau of Immigration has
estimated that about 6.2 million Indians went abroad
during 2004 as compared to 5.4 million in 2003 and 4.9
million in 2002.
The tourist arrivals during January-June, 2005 also

registered an increase of 18.6% over the arrival in
corresponding period of 2004. Foreign exchange earnings
through tourism up to, June this year has registered an
increase of 25.2%. Total earnings during the period were
Rs.12527.04 crore and in Dollar terms 2821.21 million, up
by 26.4 per cent. The number of tourists including those
from foreign countries visiting Cellular Jail in Port Blair
(Andamans) during the last three calendar years has gone
up from 48,594 in 2002 to 55,912 in 2003 to 94,311 in 2004.
The number of foreign tourists visiting the 8 North
Eastern States has gone up from 22,047 in 2002 to 29,478
in 2003 to 39,437 in 2004. The amount sanctioned for
various projects for development of tourism in the north-
eastern states has gone up from Rs.1807.30 lakh in 2002-
03 to Rs.4310.68 lakh in 2003-04. In 2004-05, a sum of
Rs.6979.10 lakh has been sanctioned. Of this, Nagaland
has got a major share of Rs.2165.69 lakh followed by
Rs.1285.70 lakh (Arunachal Pradesh) and Rs.1086.35 lakh
(Mizoram) and Rs.963.30 lakh (Meghalaya).
Assam has witnessed a gradual increase in the inflow
of domestic as well as foreign tourists. As many as
19,53,915 domestic and 6,409 foreign tourists had visited
Assam in 2002. This was against 21,56,675 domestic and
6,610 foreign tourists visiting the state in 2003. In 2004,
the number of domestic tourists has gone up to 22,88,093
and that of foreign tourists to 7,285.
P ROMOTIONAL C AMPAIGN
There has been an increase of 26.8 per cent during 2004
and 13.2 per cent during 2005 in foreign tourist arrivals to
the country. Foreign Exchange earnings during the same
period increased by 35 per cent and 20.2 per cent
respectively in dollar terms. The first three months of

2006 saw a further increase of 12.1 per cent in foreign
tourist arrivals to the country, as compared to the
corresponding period in 2005.
Incredible India campaign was given a new
dimension with the Colour of India and Wellness
Campaign in the global market. These campaigns also
went on to win several awards internationally. In
addition to the global campaign, the domestic tourist
market of 367 million was targeted for the first time
through a series of campaigns such as Taj - 350 years,
Andaman and Nicobar Islands, North Eastern India,
including Sikkim, Jammu and Kashmir, Eastern India,
Central India, Southern India, Buddhist Circuit, etc.
A series of Incredible India road shows were also
organised in important overseas markets with
participation of senior level delegations from India.
Infrastructural facilities in the country are being
augmented in a well-planned manner, in partnership
with the states and the private sector.
A tourists dream holiday lies in visiting a good
product. With an open sky policy providing better air
connectivity the aviation system has been radically
liberalised. The imbalance in demand and supply has
been corrected. In addition 12 airports are being
developed as model airports within the next five years.
The plan is to make these airports cater to 40 million
international and 65 million domestic travellers by 2010.
In order to overcome the shortage in the accommodation
sector, efforts are afoot to build 150,000 hotel rooms in the
next four years. The new scheme of Incredible India Bed
and Breakfast has been inaugurated to cater to more
tourists.
The government has decided to open three new

Institutes of Hotel Management - one each in Haryana,
Uttranchal and Jharkhand. The CBSP (capacity building
for service providers) schemes were launched in their
revised form to ensure quality tourism service through
various training programmes in public-public
partnership. More than 40,000 people were given training
under the CBSP scheme.
Product diversification is also being given due
consideration and importance. Medical tourism, a new
product, has recently been launched and is being
promoted in key markets. On the advice of the
government, the Indian Health Care Foundation - an
NGO (non-governmental organisation) affiliated with CII
(Confederation of Indian Industry) - has prepared the
accreditation norms, price banding for identified hospitals
and identified specialised medical services along with a
list of hospitals, which could be used for health tourism
purposes.
The recent introduction of the Medical Visa would
help in the growth of Medical Tourism. Under this visa, a
patient along with an attendant can come to India for a
period of one year, which can be extended further up to
three years.
Seventy-four per cent of the people reside in villages
and no tourism experience of India can be complete
without an experience of this product. Hence, a Rural
Tourism Scheme has been launched with the objective to
showcase rural life, art, culture and heritage in villages,
which have core-competency in terms of craft/
handloom/textiles etc.
The new Athithi Devo Bhavah (guest is god) campaign
is a social awareness campaign aimed at creating
awareness and sensitising all levels of society about the
importance and economic benefits of tourism. The main

components of the campaign are training and orientation
to taxi drivers, tourist guides, immigration officers, tourist
police and other service providers in this industry. We
firmly believe that tourism is everybodys business and
are committed to providing the visitor an unforgettable
experience.
2
Atithi Devo Bhavah Campaign
Atithi Devo Bhavah is a pioneer initiative by Ministry of

Tourism, Government of India that will help tap into the
full potential of tourism in India. Ministry of Tourism,
Government of India has introduced Atithi Devo
Bhavah Programme a nation wide campaign that aims
at sensitising key stakeholders towards tourists, through
a process of training and orientation. The programme is
aimed at capacity building for service providers and
stakeholders in the tourism sector to make the tourists
aware of the benefits in India and the need to treat them
with traditional care and utmost courtesy. The endeavour
is to boost tourism in India, which in turn would act as a
catalyst for Indias economic growth.
A IMS
Atithi Devo Bhava aims at creating awareness about the
effects of tourism and sensitizing people about
preservation of our rich heritage and culture, cleanliness
and warm hospitality. It also re-instills a sense of
responsibility towards tourists and re-enforces the
confidence of foreign tourist towards India as a preferred
holiday destination. The entire concept is designed to
complement the Incredible India Campaign.
BACKGROUND
In 2005 India had 3.3 million visitors, but when you
consider that Singapore gets 7 million a year. Thailand 9.6
million a year. Malaysia 11.5 million. There is no reason
why India cant aim to increase our numbers by 100%.
And that too would be just a beginning. However to do
this we need to change our attitude towards those who
visit us. Often tourists are Mistreated, Cheated and
Rudely dealt with.
Its simple logic, if someone in a house is rude to you,
as a guest, you dont encourage your friends and
relations to go there. This is perhaps the reason why in
spite of an incredible wealth of Tourist spots, Cultural
Attractions, Natural Wonders and Destinations for the
soul, India still isnt amongst the top 15 tourist
destinations Of the world. The time has definitely come
to get together to change this.
The Atithi Devo Bhavah campaign targets the general
public as a whole, while focusing mainly on the
stakeholders of the tourism industry. The main
components of the campaign are training and orientation
to taxi drivers, guides, immigration officers, tourist police
and other personnel directly interacting with the tourists,
while simultaneously creating a brand equity for the
trained persons.
Atithi Devo Bhavah involves Sensitisation, Screening,
Induction, Training and Orientation, Certification and
Feedback of key stakeholders of the Tourism industry in
India. It s a nationwide campaign aimed at sensitising
people about Indias rich cultural heritage, its
preservation, cleanliness, hospitality and bringing out an
attitudinal shift among the masses towards tourists. It is a
symbolic representation of Indias age old hospitality and
Atithi Devo Bhavah Campaign 23
with this campaign, we are trying to re-install in the

stakeholders a sense of pride and responsibility towards
tourists, while positioning India as a popular tourist
destination worldwide. The Ministry of Tourism is thus
looking at both the macro and micro perspective by
promoting destinations on the one hand and bringing
about a sea change in the mindset and behaviour of
people, on the other.
INSPIRATION BEHIND THE PROGRAMME

Respect has always been an integral part of the Indian
soul. From time immemorial we have always respected
our teachers, our elders, our parents and our guests.
Perhaps this is why a great Indian Emperor once
observed: In Hindustan our manner is very respectful
and our hearts are always open.
In many ways, at that time India was the ultimate
destination for the enlightened travelers. Now, thousands
of years later, we can bring that golden age back again.
This inspired us to go back to those years, when Indian
hospitality set the standard for the world. And we found
the keystone of what we want to do.
Or guest is blessed.
Our visitor is God.
That how we arrive at our mission called:
Atithi Devo Bhavah
SEVEN POINT ATITHI DEVO BHAVAH PROGRAMME

Atithi Devo Bhavah is a seven point programme of
hospitality and training. These points are:
Samvedan Sheelta or Sesitisation
Here we will sensitise the various sections of the tourism

industry about how each of them to contribute for the
growth of the tourism industry and how they will benefit
from it.
Prashikshan or Training and Induction
This involves explaining to them the needs and

expectation of the tourist, how they should respond and
behave in order to satisfy them needs and meet those
expectations.
Prerna or Motivation
This is motivation to participate in this programme

through various measures e.g. awards for the best worker
in the segment. Because when you are enthused you can
do wonders.
Pramani Karan or Certification
Certification to ensure standards shall be done at an

appropriate stage in the training programme.
Pratipushti or Feedback
Feedback shall be obtained from tourists about the

Service they have received and the experience they had,
in order to improve the training programme on a
continuous basis
Samanya Bodh or General Awareness
The mass media communication campaign will be

undertaken to create general awareness among the public
about the necessity and the benefits of the Atithi Devo

Bhavah programme.
Swamitwa or Ownership
The Atithi Devo Bhavah programme is a movement we

will urge all segments of the Indian society to adopt, and
look upon as their own.
CHARTER OF ATITHI DEVO BHAVAH TRAINING PROGRAMME
Hygiene and Cleanliness
Hygiene and Cleanliness shall cover the areas of product

for e.g. vehicles like taxies, hotel rooms, restaurants,
shops, etc., personal hygiene & cleanliness of the person
providing the service and cleanliness of the monuments /
places of tourist interest.
Conduct and Behavior
The person concerned for e.g. the taxi driver / hotel

employee shall behave in courteous and polite manner
towards tourists.
Integrity and Honesty
The person providing service to the foreign tourists

should display honesty and integrity.
Safety and Security
The safety and security of the tourists shall be

ensured.
COMPONENTS OF THE ATITHI DEVO BHAVAH PROGRAMME
Training
In this we are going to train key stakeholders (of the

tourism industry) in terms of changing their attitude and
behaviour towards foreign tourists. The programme shall
cover 4 areas:
Hygiene - This include personal hygiene of the person
and also that of the product / service.
Conduct and behaviour - Politeness and basic courtesies
in interacting with the foreign tourists.
Integrity - This implies that the person does not cheat
the tourists and charges him a fair price for the service.
Safety and security - Person look after safety and
security of the foreign tourists.
Key stakeholders being covered in the training include
taxi drivers, baggage handlers at airport, tourist guides,
hotel staff, employees of tour operators, immigration and
customs officials etc.
Since these segments have diverse backgrounds,
education and levels of sophistication, the training is
divided into 2 categories:
Level 1 : Covers taxi drives, tourist guides and baggage
handlers and porters.
Level 2 : The tour operators, shop owners / staff, hotel
staff, immigration and customs officials.
This training programme is initiated at the following
places - Delhi, Mumbai, Hyderabad, Jaipur, Agra,
Aurangabad, and Goa. In the next financial year this
programme will be rolled out to other important cities in
India.
These people will be given certificates which shall be

valid for about 6 months after which they have to come
and get themselves re-trained. Till 31st March 2005, we
plan to train about 26,000 people. From April 2005 to
March 2006 these 26,000 people will be retrained and
another substantially large number of people will be
trained. Once a threshold level in terms of number of
people trained is achieved, we shall introduce Atithi
Devo Bhavah as a symbol of quality. Foreign tourists will
be told to look out for the Atithi Devo Bhavah badge /
sticker which will mean that the service is of certain
minimum quality.
PR Road Shows
Besides training we are also undertaking PR Road shows

with the tourism trade in order to get their active
participation and ownership of the Atithi Devo Bhavah
programme. Right now the contact programmes are being
conducted in 7 cities mentioned earlier. After April 2005
contact programmes will be conducted in other cities in
conjugation with the roll out of the training programme.
Mass Media Communication
We shall also be carrying out mass media communication

in newspapers, TV, cinema and outdoors to create general
awareness about the Atithi Devo Bhavah programme and
to communicate to key stakeholders as to how it is in
their own interest that foreign tourists be treated well and
should go back happily from our country.
Role of the India Tourism Offices
The India Tourism offices of Delhi, Jaipur, Agra, Mumbai,

Aurangabad, Goa and Hydrabad have a crucial role to
play in the campaign. They act as nodal agencies to

facilitate and coordinate the essential part of the
programme.
The nodal offices as we term it will have the
following roles:
a) Provide their cooperation and support to make the
training programmes run in an effective manner
b) Registering the stakeholders who are contacting them
for the purpose of training and deciphering the
information to us, so that they can be contacted and
made a part of the training programme
c) Re-registration of the stakeholders who underwent a
training programme after six months, the stakeholders
will approach them for the purpose of re-training and
re-certification.
3
Indian Tourism and Hospitality
Facilitation
Hospitality refers to the relationship process between a

guest and a host, and it also refers to the act or practice of
being hospitable, that is, the reception and entertainment
of guests, visitors, or strangers, with liberality and
goodwill. Hospitality frequently refers to the hospitality
industry jobs for hotels, restaurants, casinos, catering,
resorts, clubs and any other service position that deals
with tourists. For an in depth understanding of the term
of hospitality, the starting point is the etymology of the
word itself. The word hospitality derives from the Latin
hospes, which is formed from hostis, which originally
meant a stranger and came to take on the meaning of
the enemy or hostile stranger (hostilis) + pets (polis,
poles, potentia) to have power. Furthermore, the word
hostire means equilize/compensate. If now you combined
the above etymological analysis with the story of
Telemachus and Nestos you can start develop in your
mind the concept and idea of hospitality.
First of all Telemachus is a complete stranger for
Nestor, however he was hosted and treated more than
warmly. In the Homeric ages, hospitality was under the
protection of Zeus. The God of the Gods. The semantic
behind this was to highlight the fact that hospitality for
Ancient Greeks was of the utmost importance. A stranger

lost in the night could be invited inside the house of a
Greek family, been fed, offered wine and only after he/
she was feeling at home could be asked to tell his/her
name.
After having welcomed Telemachus, Nestor asks his
unknown guest to introduce himself to find out that he
was the son of Odysseus. By that time, the man in front
of him was a complete stranger, a hostis as described in
the etymological analysis of hospitality at the beginning.
Nonetheless, Telemachus was equilized with his host.
Another meaning that is included in the etymology of
hospitality. Note also that one of the Nestors sons slept
on a bed close by Telemachus to take care that he should
not suffer any harm.This means that hospitality for
Ancient Greeks include also the idea of protection. Lastly,
Nestor put a chariot and horses at Telemachus disposal
so that he could travel the land route from Pylos to
Sparta in two days, having as charioteer Nestors son
Pisistratus. The last element of hospitality as can be
realized is guidance. To cut a long story short, hospitality
is about compensating/equilizing a total stranger with
the host, making him feel protected and at the end of his
hosting, guiding him to his next destination an so on.
Now bring in mind how many times you have been
asked for your passport or credit card before even
entering your room after a long and exhausting journey.
Bring also in mind how many times has a waiter
invaded your hotel room while having a shower,
despite the do not disturb sign and lastly remember
how many times have you been looking for a TAXI
outside the entrance of a hotel in a foreign city while the
bellboy or the concierge or whoever responsible was
absent.
Indian Tourism and Hospitality Facilitation 31
Contemporary usage seems rather different from

historical uses that lend it personal connotations. Todays
hospitality conjures images of throwing good parties,
gracious hosts entertaining, etiquette, Martha Stewart or
even talk shows, or, the hospitality services industry as it
relates to the entertainment and tourism business. On the
other hand, hospitality used to be, and may still be, a
serious duty, responsibility, or ethic. Hospitality ethics is
a discipline that studies this usage of hospitality.
Since hospitality is such a prosaic word, one which
every culture and tradition can relate to, in consequence
it seems to be a candidate for having something like a
universal meaning or agreement, if not positive value. In
the western context, with its dynamic tension between
Athens and Jerusalem, two phases can be distinguished
with a very progressive transition: a hospitality based on
an individually felt sense of duty, and one based on
official institutions for organized but anonymous social
services: special places for particular types of strangers
such as the poor, orphan(s), ill, alien, criminal, etc.
Perhaps this progressive institutionalization can be
aligned to the transition between Middle Ages and
Renaissance.
Indian hospitality is legendary. The maxim of
hospitality in India has crossed generations and is not
only learned but truly believed by each individual. The
Sanskrit saying, Atithi Devo Bhavah, or the guest is
truly your god, dictates the respect granted to guests in
India. Each one is treated with the utmost consideration
and each Indian extends more than his hand to a visitor.
From the Indian man on the street, who when asked for
directions, accompanies his company to their destination,
to an Indian couples wedding invitation to a foreign
visitor, to the sign reading, The Holy City Welcomes
You at the Varanasi airport, India extends her arms wide
to make a guest feel at home. Indian hospitality is not

only spontaneous but also quiet. The Indian people are as
Geeta Heble, a proud Indian woman, describes, not
ostentatious in speech or in treatment of guests. For all
Indians, hospitality, though not ostentatious, is a priority.
The Indian people feel that their guests must be given
proper hospitality, which certainly requires extreme care
and attention.
Although the head male of the clan, usually the
grandfather or great grandfather, is the most prominent
symbol of the family, the women are the backbone of
traditional hospitality. Despite fulfilling her duty as a
wife and a mother, a true Indian woman takes pride in
herself, her family, and her house and will not let a guest
go away unfed or unhappy from her home. An Indian
woman shows her talents and her warmth through food
and is known for her ability to serve fare to her guests,
whether they be invited or uninvited.
As soon as a guest arrives, every amenity is offered.
The woman of the house provides water for the guest
upon entry and then asks any preferences for food or
drink. Then, female guests gather in the kitchen with the
women as they prepare delicious food while male guests
gather with other males to discuss news or events. When
the food is prepared, the entire family and the guests sit
down to eat. Customarily, the family talks of members
health, childrens progress in school, and relationships
while they eat. In addition, the guests are usually asked
the details of any recent travels or tragedies. The majority
of the conversation is done by the hosting family who
attempt to show their pride in hospitality by not
forgetting to mention every detail.
Once the main meal is finished, whoever wishes to
retire, does so. Whoever is awake will talk with the
guests and partake in more intimate conversation or a

few games. If any children are up, they will always try to
teach the guest new games, but if not, the time after a
meal provides quality moments for the female guests to
really get to know the women and the male guests to
really get to know the men. Unlike the intense period of
food preparation, the women, at this time, are more
personal and laid back. Their duty, as a cook and host,
has been done. When time comes for the guest to retire,
each family, in accommodating guests, takes important
criteria into the decision such as the number of guests,
the bathing and sleeping facilities, privacy for a lady
guest, space for children, and the luxury of attending
waiters. Traditionally, the best bed in the house is given
to the honored guest.
HOSPITALITY SERVICES
The concept of hospitality services, also known as
accommodation sharing, hospitality exchange, and
home stay networks, refers to centrally organized social
networks of individuals who trade accommodation
without monetary exchange. While this concept could
also include house swapping or even time share plans, it
has come to be associated mostly with travelers and
tourists staying with one another free of charge.
Since the 1990s, these services have increasingly
moved away from using printed catalogs and phone trees
to connect users towards Internet websites. These have
grown exponentially since 2000 and as of March, 2007
over 500,000 people are registered users of these
networks. These vary in operational structure, place
different emphasis on graphical vs. textual formatting,
and cater disproportionately to specific geographic
regions.
In 1949, Bob Luitweiler founded the first hospitality

service called Servas Open Doors as a cross national, non-
profit, volunteer run organization advocating interracial
and international peace. The next earliest began in 1965
when John Wilcock set up the Travelers Directory,
originally as a listing of his mutual friends willing to host
each other when traveling. This later became the
Hospitality Exchange in 1988 when Joy Lily rescued the
organization from imminent demise.
Hospitality Club is the direct successor Hospex, the
first Internet-based service, operating out of Poland since
1992. It is currently the largest hospitality exchange
network, growing rapidly. CouchSurfing is a newer but
also rapidly growing hospitality exchange organization
founded in 2004. Just as all the individual services have
their own individual creation stories and organizational
histories (often including demise and resurrection), many
also have specific niche markets that they cater to
including students, activists, religious pilgrims, and even
occupational groups like police officers. However, the
trend in recent years points to a greater consolidation of
users in networks without a specific group, value, or
lifestyle affiliation.
In essence, these systems employ reciprocity users
gain access to other users information only by posting
their own. Required fields normally include name and
contact information, though newer services encourage
users to include more detailed personal material,
including likes and dislikes, hopes and dreams, and even
photographs. Of course, more information included tends
to improve the chances that someone will find them
trustworthy enough to host or stay with while traveling.
It is very much akin to online dating services.
Benefits
Monetary Savings
Staying in private homes means that travelers can save

lots of money on accommodation that they would usually
be spending on hotels or hostels. Used over a long period
of time (2 to 4 weeks), this strategy can cut overall travel
budgets in half, or even more combined with hitchhiking.
These savings can then be passed on towards more
generously patronizing local establishments or simply
staying abroad for longer periods of time.
Local Economic Sustainability
Many tourist vacations today are sold in package form,

often including flights, hotels, rental cars, sightseeing
tours, and coupons for chain restaurants and bars. While
this makes purchasing more convenient, it also puts more
money in the hands of large multinational corporations
exploiting the synergy strategy of marketing their
products in the context of their subsidiary companies
operating in other markets. Many years ago, this might
have been termed collusion; today, however, it is the
norm. This comes at the expense of locally owned
independent businesses. Accommodation sharing helps to
break apart this monopoly and hopefully redirects some
of the tourist revenue back to the local or national
economy.
Ecological Sustainability
While this is especially important in more rural travel

venues where hotels are often built in very picturesque,
though fragile environments, every night stayed at a
locals home means that much less demand for such hotel
rooms. Also, if accommodation sharing does in fact
increase the length of average stays, it may reduce the

amount of trips to and from different locations and back
home again, thus reducing the overall fuel expenditures
in the process.
Local Contact
Ostensibly, one of the primary reasons we travel is to

experience what life is like for people living in other
countries. Making interpersonal connections and fostering
understanding of different cultures may in the long run
also be important to international relations. However,
even in our increasingly globalized world supposedly rife
with diversity, in many popular travel destinations we
find tourists milling around tourist enclaves where the
companies they patronize back home have set up shop to
cater to their desires while they are abroad. Sociologist
George Ritzer has referred to this phenomenon as the
McDonaldisation of society and the more recently, the
globalization of nothing. The location of hotels near
these centers only fosters more convenient envelopment
of the tourist dollar. During hospitality exchanges, hosts
want to show off their local knowledge and exciting off
the map venues. Not only may travelers get a distinctly
different experience, but they will also get a feel for the
everyday lives of local residents.
Reciprocity
These systems foster richer and more convenient travel

experiences not so much on the premise of altruism, but
on the basis of social exchange theory. Implicit in the
agreement to host travelers is the ability to ask to be
hosted by them in the future. If one enjoys having
interesting guests in their home, this works out well for
both parties. It works comparatively better if you are
visited by travelers from a locale you find particularly

attractive. Thus, hosting someone from New York City in
Gainesville, FL seems to be an unbelievable opportunity.
Moreover, if you are a Westerner visiting someone in a
developing nation, your stay might be the only way that
this individual or family could afford a trip to a rich
nation. This may mean more than just a relaxing vacation
for such disadvantaged parties.
Authenticity and Adventure
Tourism has always searched for these two qualities, but

much like Midas and his golden touch, the reach of
tourism has to a large extent destroyed the opportunity to
encounter them in most places. Unluckily, the experience
has been thoroughly commodified by everyone who
wanted to secure their opportunity to make a buck in the
process. Accommodation sharing offers a way out of this
bind and a viable alternative to having ones desires
manipulated by corporate conglomerates who never had
the best interests of the place or the people foremost in
their minds.
Drawbacks
Lack of Guarantee
There is no contractual agreement between users in these

systems. Reservations are made, but if they are for some
reason broken, there is no higher authority to which one
could plead for a refund or other compensation. The only
repercussion will be the poor rating you give that user
and your only consolation will be that your warning will
deter others from visiting or hosting them. For those who
feel insecure unless their travel arrangements are written
in stone before departure, this system will not be
comforting.
Potential Interpersonal Conflict or Awkwardness
There is a chance that guest and host will not get along.
Perhaps there will be scheduling or ideological conflicts.
Maybe you will find that hosts or visitors have
misrepresented themselves. Perhaps the experience will
not live up to your expectations. Intense interpersonal
communications in advance and a flexibility once you
have arrived is your best bet. These experiences require
additional planning and courtesy towards the demands of
your host. Thus, your living conditions, length of stay,
and overall experience will be circumscribed by the living
conditions you enter into.
Digital Divide and Demographic Segregation
The average user is a young white person who speaks

English and lives in a developed nation. While there are
many users who do not fit this description, the more
different they are, the less likely they will be involved.
This is especially true for persons living in the developing
world who likely do not have easy access to the
fundamental prerequisite for using these services:
computers and the Internet. Thus, the sample population
found in searches of these databases are really much less
diverse than a geographical representation of worldwide
users might suggest.
Security
There is a distinct possibility that someone will abuse the

system and that innocent users (especially women) will
get hurt. All services include disclaimers that require
users to waive their rights to hold anyone but themselves
responsible for any harm that may come to them in using
the system. They advise that the best defense mechanism
is to only involve oneself with users that have extensive

personal information and interpersonal networks within
the system that have been verified by others. It does seem
entirely plausible that someone clever and patient enough
might be able to invent an entire group of complex user
identities and build histories convincing enough to fool
even more cautious patrons.
Still, the difference between these systems and the
other social networking platforms popular nowadays on
the web is that any agreement reached through the
accommodation sharing medium is contingent on actually
meeting other people face-to-face. Other web scams are
easier because interpersonal interactions rely so much on
putative identities that are never actually verified in the
real world. However, this does not diminish the greater
risk to physical well being that this kind of traveling by
definition must entertain. The best advice is to meet
unknown persons in public spaces first, and try to meet
some of their acquaintances in person before agreeing to
a hospitality exchange.
HOSPITALITY ETHICS
Hospitality Ethics is used to refer to two different, yet
related, areas of study:
The branch of business ethics that focuses on the
commercial hospitality and tourism industries.
The philosophical study of the general moral
relationships and obligations that hold between guests
and hosts.
As a standard of conduct, hospitality has been variously
considered throughout history as a law, an ethic, a
principle, a code, a duty, a virtue, etc. These prescriptions
were created for negotiating ambiguous relationships
between guests, hosts, citizens, and strangers. In many

ways, these standards of behavior have survived into the
present day in the commercial hospitality industry, where
descendents of the ancient ideas continue to inform
current standards and practices.
Despite its ancient origins and ubiquity amongst
human cultures, the concept of hospitality has received
relatively little attention from moral philosophers, who
have tended to focus their attention on other ethical
concepts, e.g. good, evil, right, and wrong. Yet, the Ethic
of Hospitality preceded many other prescriptions for
ethical behavior: In ancient Middle Eastern, Greek and
Roman cultures, the Ethic of Hospitality was a code that
demanded specific kinds of conduct from both guests and
hosts. Beyond antiquity, this ethic has lived on in various
cultures, subcultures, traditions, and religions.
M ISSION OF INDIAN H OSPITALITY

The intangibility of service makes seeing hospitality as an
industry a little difficult for many people. Often when
people think of industries, they picture large
manufacturing complexes with towering smokestacks and
noisy production lines. These industries produce tangible
products that usually can be handled, stored for future
use, and uniformly produced. Service, on the other hand,
is an intangible product. Respect shown to a guest cannot
be held in the hands; pulling out a chair for a guest
cannot be stored for future use; and acceptable practices
in one culture may be considered rude in another,
rendering uniformity in service impractical.
Some business related to hospitality also produce
tangible products, such as special kitchen equipment used
in commercial restaurants. But for most hospitality
businesses, the main business is the creation of
memorable experiences through furnishing services.

Restaurants and hotels have a two-fold purpose: to satisfy
the physical and psychological expectations of guests.
They accomplish this through providing a good product
(the meal or the room) and a good service (delivering the
meal or room appropriately).
Product Delivery
Delivery of an intangible product naturally leaves room

for conflicting perceptions of its quality. Not only might
people within the industry disagree on some theoretical
points, but customers and employees may also view the
service delivery from quite different perspectives. A once-
in-a-lifetime experience for the guest is often a routine
occurrence for the employee. The guest is investing time,
money, and emotions in the hope of receiving a
pleasurable experience. All these are lost if the service
fails to meet that expectation. The employee, however,
can merely resolve to do better with the next guest.
Service does not run on a continuum from good to
poor. Such a scale is impossible because the variables
involved in determining good or poor service - guest
expectations and the firms image - are not fixed. Even
the concept of value or relative worth is based upon guest
perception. It is fair to say, however, that most guests
want quality service at a fair price.
Guests perceive good service on the basis of their
own expectations of the hospitality staff. Similarly, value
based on the customers expectations in relation to how
much they spend for the service and how much they
would spend for a similar service elsewhere. Certainly,
people do not expect the same services from a low-priced
hotel as they do from a high-priced hotel. However, what
they do expect are the same or better services at the hotel
or restaurant where they are guests than at the

competition.
Good service is often equated with the number of
amenities, the degree of personal attention/interaction, or
the speed of service delivery. While these factors are
related to service, identifying them with service quality is
misleading. Service, and service quality, are contextually
defined by the guests expectations as well as the
organizations image.
The period of time in which a customer directly
interacts with a service is known as the service encounter.
That interaction may take place with either personnel or
the physical facilities and other visible elements. If the
hospitality establishments advertising leads a guest to
expect valet parking, the presence or absence of such
service affects the guests perception of the firm. In
human interactions, both guests and employees bring to
the encounter certain expectations and personality traits.
What do guests expect of hospitality establishments?
The specific answer may vary, but will always include
that guests want, expect, and demand service - service
delivered in a courteous, efficient manner.
Guests measure the quality of service by comparing
the services received with what they expected to receive,
given the type of establishment offering the service. Five
general elements comprise the scale by which service may
be judged:
(1) tangibles,
(2) reliability,
(3) responsiveness,
(4) assurance, and
(5) empathy.
Since a majority of these are an assessment of human

interaction, how an employee performs during a service
encounter contributes heavily to the perception of quality
service. Most employee-guest interactions that
significantly influence the guests perception of
satisfactory or dissatisfactory service fall under one of
three general categories:
1. Employee response to service delivery system failure.
2. Employee response to customer needs and requests.
3. Unprompted and unsolicited employee actions.
Service does not need to be spectacular to be
considered good. In some settings, good service is almost
unnoticeable, because everything goes along according to
the guests expectations. Generally, it is only when the
service falls outside the limits of the guests expectations
that it is deemed satisfactory or unsatisfactory.
Marketing Service Businesses
The product that hotels and other service organisations

offer is very different from the product offered by other
businesses because our products are intangible. Its
difficult to measure the satisfaction that a guest has
received when he is served a cocktail as many variables
are involved.
The differences between an organisation selling
tangible products and onethat sells intangible products
are the following:-
The nature of the product is different
Customers are more involved in the production
process
People are part of the product
Its harder to maintain quality control standards

There are no inventories
The time factor is more important
Distribution channels are different
Achieving Superior service in a less than perfect world
To ensure that superior service is provided
consistently Managers must develop strategies and
ensure that these strategies are implemented.
To start with every company must have a Mission
statement, which are the general business objective of
the company.
Strategic Planning
To achieve the mission statement a proper course of

action must be undertaken the first step being a SWOT
analysis of the company. This will help managers
formulate their strategies as the SWOT will help them
evaluate how well the company is serving current
markets.
The next step is implementing the strategies laid out.
For this it is essential that the Managers must explain
their strategies to employees. The organisational structure
must be changed in order to implement the strategy. Also
the employees of the company must share the same
values and ethics as those of the company. Finally it is
important that regular monitoring and evaluation must
be done to see if the strategies were effective in achieving
the organisational objective.
Most businesses in the hospitality industry have a
capacity constraint, as it is not possible to increase the
quantity of the product during peak periods and decrease
it during off peak periods. For example in the winter
months occupancy in hotels in India is 100% and it is not

possible to accommodate all the guests yet new rooms
cannot be added suddenly nor can the number of covers
in a restaurant be increases. To some extent restaurants
can accommodate more guests by taking reservations or
asking walk-in customers to wait till a table is available
and hence the demand can be managed. Just as managing
demand is difficult so also increasing and reducing
supply is also difficult. Some hospitality firms follow a
chased demand strategy in which capacity is varied to
suit the demand level Generally staff reduction during off
peak periods is a way of managing supply.
Strategic Service Vision
It is important to concentrate on two aspects to ensure

that strategies are successful.
1. Target a market segment
2. Focus on a service strategy
Target a market segment: There is no such thing as a
product or service that appeals to everyone. Customer
needs vary and it is important to concentrate on one type
or group of customers and ensure that there needs are
met. For example if your target customer is a busy office
executive who has only half an hour to spare for lunch
and you modify your restaurant menu from a casual caf
menu to a fine dining restaurant menu he may not find it
suitable for his needs. Also people who like fine dining
restaurants will not come to your restaurant as they will
find it too casual for the experience they are looking for
and hence you will not be satisfying either group of
customers.
Focus on a service strategy: Once you have decided the
market segment you are targeting ensure that the service
you provide meets the needs of this segment. To

elaborate using the earlier example a customer who has
only half an hour for lunch must get his food served in 7-
10 minutes so that he has enough time to finish his meal.
If it takes longer he will choose to go somewhere else
next time even if the quality of your food and service is
excellent.
Successful hospitality companies focus a good deal
of management attention on establishing quality
standards for services, communicating these standards to
employees through training programs, and measuring
performance. For example Haldirams ensures that all
there products are hygienically served thus ensuring that
guest feel safe eating Chaat. This service standard that
they have set helps them to meet the needs of the
customer and also ensures consistency in there service
and product.
An effective service strategy must also provide a
means of achieving levels of productivity that will satisfy
the businesss economic goals as well as customer
expectations. One way managers do this in service
companies is by job restructuringchanging the nature of
the work or the way it is done.
Carrying on from the previous example about
Haldirams: They serve there chaat in sealed containers
hence a plate of Gol Gappas is served much faster than if
the server was actually putting one filled Gol gappa at a
time in front of the customer. Along with controlling the
quality of service goes controlling payroll and other costs
involved in providing that service. Any hotel or
restaurant could schedule more than enough employees
to give good service all the time, but that would not be
profitable.
Delivering on the Service Promise
It is essential that you deliver the service that you

promise to the customer consistently every time to ensure
repeat business. Just creating a mission statement is not
enough. Given below are some points to ensure that you
deliver Good service consistently.
1. Dont forget who you are. Dont change your product
or your service standards suddenly as this will mean
that you are not satisfying the needs of your target
market segment.
2. Encourage every employee to act like a manager:
Empower your staff so that they feel confident taking
decisions themselves.
3. Hire good people and keep them happy A high staff
turnover would mean that service would suffer hence
it is important to take good care of your human
resources. The Disney organisation believes very
strongly in recruiting by values - and that it is then
their responsibility to find where an individual can
make the best contribution.
4. Handle moments of truth correctly
5. Respond in a timely manner.
4
Role of India in International Tourism
The travel and tourism as an industry earns more foreign

exchange than any other single sector. Its multiplier effect
means the influence is felt across many non-related
industries. A tourist can be from a nearby town or from
overseas and is defined as a person travelling for
pleasure. The activities on offer for any visitor domestic
or international are part of the fabric of the tourism
industry. People on holiday, those visiting friends or
relatives, travelling for business or sport need a whole
range of services. They need a way of finding out about
your business. They need transport from where they live
their point of origin. They need transport once they have
reached their destination. They need accommodation.
They need food and drink. They need activities to
entertain them. If you provide any of these things you are
in the tourism industry.
Tourism is not a quick fix for a declining region. It is
a competitive industry where the rewards are subject to
seasonal highs and lows and changing fads in
destinations can shrink your supply of visitors - as can
economic difficulties in the countries where your overseas
visitors come from. Shocking international events such as
September 11 can potentially have a dramatic effect on
Role of India in International Tourism 49
the numbers of overseas visitors-decreasing numbers

from certain markets yet increasing interest from others.
Experience has shown that these effects are not always
long-lasting if a destination still holds appeal for the
traveler. Despite these pitfalls, the potential for
supplementing your local economy through tourism
makes it worth investigating.
In order to cater for visitors facilities have to be
provided which are also available to local population.
Local businesses servicing those who service the visitor
also get a boost - the multiplier effect in action. If your
area is successful in attracting tourists it may also attract
outside investment in your businesses. And whatever
your local asset is that attracts visitors, whether it is
snow, sand, mountain or bush, it is more likely to be
looked after if income is derived from it. Tourism can be
a rewarding yet exhausting industry. Remember that
your visitors are likely to need your services at times of
the day and days of the week when you would much
rather not be working. You will be on duty while others
are enjoying themselves.It is therefore important to enjoy
your work and a genuine interest in people must be a
prerequisite to entering the tourism industry.
Tourism, if successful, can leave a very large
footprint on your area. Its impact on local facilities such
as transport, shops and places to eat can cause friction
and resentment between people making money from
tourists and those who feel their quality of life is
compromised.
Volumes of people passing through a region cause
wear and tear on infrastructure that is often repaired or
replaced at the expense of the community as a whole.
Striking a balance between attracting visitors and
maintaining a quality of life for local residents is a serious
challenge. The week or two a tourist spends with you is

likely to be their one break from a year of work and
routine. If you are successful it will be a highlight to be
remembered for many years. If this is so they may well
come back. Even if they cant come back they will tell
their friends, show them the holiday snaps and the
souvenirs.
Tourism is about people caring for people. Given
below are two definitions of Tourism: The sum of
phenomena and relationships arising from the interaction
of tourists, business suppliers, host governments, and
host communities in the process of attracting and hosting
these tourists and other visitors.
GROWTH OF INTERNATIONAL TOURISM

Since the Second World War, the growth of international
tourism has been phenomenal. Annual tourist arrivals
worldwide increased from 25 million in 1950 to 450
million in 1990. Between 1969 and 1979, the World Bank
encouraged developing countries to invest in tourism as a
strategy for attracting foreign investment, and the
governments of developing countries began to see
tourism as a means to redistribute resources from North
to South. In the words of the World Tourism
Organization (WTO), tourism became one of the most
important economic, social, cultural and political
phenomena of the twentieth century.
Today tourism is often described as the worlds
biggest industry on the basis of its contribution to
global gross domestic product (GDP), the number of jobs
it generates, and the number of clients it serves.
However, these conclusions are based largely on arrivals
statistics, which focus on international tourism and
therefore hide the significance of domestic tourism. These
statistics may also underestimate regional tourists

traveling by land rather than air or sea. Statistics
produced by the World Travel and Tourism Council
(WTTC) indicate that tourism generates 11 percent of
global GDP, it employs 200 million people, and transports
nearly 700 million international travelers per year-a figure
that is expected to double by 2020.
According to the World Tourism Organization,
international tourism:
accounts for 36 percent of trade in commercial services
in advanced economies and 66 percent in developing
economies;
constitutes 3-10 percent of GDP in advanced
economies and up to 40 percent in developing
economies;
generated US$464 billion in tourism receipts in 2001;
Is one of the top five exports for 83 percent of
countries and the main source of foreign currency for
at least 38 percent of countries.
Multiplier Effect
The Multiplier effect is a basic economic concept, which

refers to changes in the level of activity that brings
further changes in the level of other activities throughout
the economy. When an injection of expenditure into an
economy leads to an increase in national income more
than the original injection, this is the multiplier effect. In
other words, the multiplier effect is the effect from
continuous respending of incomes. There are different
types of multipliers, such as the sales or transaction
multiplier, the output multiplier the employment
multiplier, government revenue multiplier and the import
multiplier.
The multiplier indicates how many times that the

injection of original spending circulates through a local
economy. As a result of respending, it benefits the local
people. According to Tourism: Economic, Physical and
Social Impacts, tourists expenditures in a destination
creates new incomes and outputs in the region which, in
turn, produce further expenditures and incomes. How
to calculate the multiplier and how does it work in
tourism? Some examples will be given to illustrate the
economic concept of multiplier effect. The income
multiplier considers three levels of impact created by the
change in tourist expenditure, which includes direct
spending, indirect spending and induces spending.
IMPACTS OF TOURISM
Direct impact: A tourist stays in a hotel and eats at the
food establishment there. The tourist pays for the hotel
accommodation, food and beverages.
Indirect impact: Upon receipt of the tourist dollars,
the process of respending begins. The hotel makes pay-
ments to its employees, suppliers, and so on.
Induced impact: The employees receive incomes and
consume on goods and services. The supplier replenishes
its stock makes payments of wages to their employees etc.
This is induced effect of the tourists initial expenditure,
which creates further economic activities.
The various reasons for why people travel can be
placed into five broad categories:
1. Recreation. Recreation includes leisure and activities
related to sports, entertainment, and rest. Beach
vacations, ski vacations, and adventure travel such as
white-water rafting all fall into this category.
Destinations such as the Caribbean, Disney World, and

national parks benefit largely from recreational travel.
2. Culture. People travel for cultural reasons as well-a
desire to learn about things and places that interest
them. These interests can be historical, ethnic,
educational, or they can relate to-the arts or religion.
3. Business. Business travel is a significant portion of all
travel. This category includes individual business
travelers as well as travelers attending meetings and
conventions. The trend now is to combine business
and recreational travel-thus business meetings and
conventions are held at resort hotels, theme parks, and
even on cruise ships, and spouses and even children
often come along.
4. Visiting Friends and Relatives (VFR). Research has
shown that much travel involves visiting friends and
relatives. This is difficult to measure, however, and
has little economic impact compared to recreational,
cultural, or business travel.
5. Health. Many persons travel to visit diagnostic centers
and receive treatment at clinics, hospitals, or spas such
as the Mayo Clinic in Rochester, Minnesota, or the
Canyon Ranch in Tucson, Arizona. This type of travel,
too, has relatively little economic impact.
GLOBAL STATUS OF TOURISM

Although global recession and the September 11, 2001,
events are estimated to have resulted in a temporary
decline in travel and tourism demand in 2001-02,
international and domestic tourism is expected to boom
over the next two decades. The World Travel and
Tourism Council (WTTC) estimates a 4.5 per cent per
annum increase in the total amount of travel and tourism
economic activity between 2002 and 2012. This is largely

attributed to a rise in global wealth, liberalisation of
international airspace, cheaper flights and the use of the
Internet as a travel tool. The earnings from tourism have
made it one of the worlds largest industries and the
fastest growing sectors of global trade accounting for 10.7
per cent of global gross domestic product (GDP), 12.8 per
cent of global exports, 8.2 per cent of global employment
(or one in every 12.2 jobs), and 9.4 per cent of global
capital investment.
Tourism in the least developed countries is growing
faster than the world average, holding the promise of
prosperity for many. International tourist arrivals
worldwide reached 698 million in 2000, generating $ 595
billion revenues.
International tourism flows are expected to reach 1.5
billion by 2020 and revenue estimated to cross $ 2000
billion. Today, only 3.5 per cent of the world population
travels internationally but the number of Asian,
particularly Chinese, tourists is predicted to grow
enormously as the region becomes more integrated with
the global economy.
The scale of world domestic tourism, on the other
hand, exceeds world international tourism by a ratio of
10:1. In India, for every interna-tional tourist, there are 80
domestic tourists. Domestic tourism can form the basis of
a viable and sustainable tourism industry in India.
Consumer trends in tourism are gradually changing
and require an appropriate response in terms of both
policy formulation and investment. Current market
trends indicate that:
Long haul travel will grow faster than intra-regional
travel. A growth of 24 per cent is expected by
2020.People with less time for leisure are likely to take
more frequent but shorter trips nearer home, opening

up opportunities for neighbouring country tourism.
The experienced traveller wants authentic, off-the-
beaten-track vacations in remote and less well-known
places as against luxurious five-star vacations, leading
to an interest in rural and ethnic tourism.
The increase in the number of people with lots of
money but little leisure time has resulted in a growing
emphasis on rest and relaxation, and wellness and
health holidays.
The elderly population in key tourismgenerating
markets has shown a preference for cultural tourism
against sun-and-sand vacations.
There is notable and increasing interest in spiritualism.
The demand for eco-tourism and naturebased holidays
is expected to double and even triple in the next 20
years.Sports and adventure holidays continue to be
popular with the young.
The interest in cultural tourism, spiritualism, wellness
holidays, eco-tourism and rural tourism would tend to
favour India, provided the country can avail of the
opportunities offered to maximise its natural advantages
in these areas. The development of new tourism products
and destinations during the Tenth Plan must be based on
market research and demand, keeping the source markets
and the age groups of the tourists in mind. At the same
time, the Government must develop new source markets
nearer home and make India a safer destination for
women tourists and family holidays.
INDIAS PLACE IN WORLD TOURISM

The World Tourism Organisation forecast indicates an
increasing tourism preference towards East Asia, the
Pacific, West Asia and South Asia, although Europe and

America still remain the worlds foremost tourism
destinations commanding 77 per cent of the global
market. East Asia/Pacific achie-ved the highest rate of
growth of 14.5 per cent in tourism and travel in 2000
followed by West Asia and South Asia. With this gradual
shift in focus, the outlook for the growth of tourism in the
region is promising. In Asia, China has emerged as a
leading tourist destination and is poised to become the
worlds top tourist destination by 2020.
Table 1. Share of India in World Tourist Arrivals

Year World Tourist Tourist Arrival Share of India in
Arrivals to India World Tourism
(1) (2) (3) (4)
1995 544.9 2.12 0.39%
1996 575.3 2.29 0.38%
1997 597.8 2.37 0.38%
1998 617.4 2.36 0.38%
1999 641.1 2.48 0.38%
2000 685.5 2.65 0.39%
2001 683.8 2.54 0.37%
2002 702.8 2.38 0.34%
2003 690.9 2.73 0.39%
2004 766.0 3.46 0.45%
2005 808.0 3.92 0.49%
* Provisional
The WTTC has identified India as one of the worlds

foremost tourist growth centres in the coming decade.
After Turkey, India is expected to achieve the fastest rate
of growth of the total amount of economic activity likely
to be generated by travel and tourism, at 9.7 per cent over
the next 10 years. Also, the largest employment creation
after China is expected to take place in India over the
same period. The growth in visitor exports or spending
by international tourists, is likely to be the fastest in India

at 14.3 per cent per annum over the next decade. On the
whole, the WTTC forecast for India is promising, subject
to key policy issues that affect the growth of the sector
being addressed.
Table. 2. Estimated foreign exchange earnings per tourist in

Selected countries of the world and in indias
Neighborhood in 2005
Country Average per tourist estimated
foreign exchange earnings
(In US $)
(1) (2)
WORLD 844
France 556
Spain 862
USA 1653
Italy 970
China 626
INDIAS NEIGHBOURHOOD
Sri Lanka 984
Hong Kong 685
Malaysia 520
Thailand 763
Singapore 892
Indonesia 863
INDIA 1462
If India is to realise its enormous potential in tourism it

must provide exclusive world-class tourism products and
destinations to compete successfully for a larger share of
the Asian tourism market. Today, outbound tourism from
India far exceeds visitor traffic to the country partly
because 820 there is a lack of world-class destinations
within the country and partly because the domestic
tourism policy has been largely directed towards those in

the lower end of the spending spectrum. The high
spender from India prefers to visit neighbouring
countries as he gets better value for money.
The scope and reach of domestic tourism will have
to be broadened in the Tenth Plan through the
development of competitive destinations that match
international standards in terms of price and quality and
also satisfy the international traveller.
Table 3. International tourist arrivals by regions (in millions)

Region 2000 2001 2002 2003 2004 2005*
WORLD
Arrivals 685.5 683.8 702.8 690.9 766 808
% Annual Change 6.9 -0.3 2.8 -1.7 10.9 5.6
AFRICA
Arrivals 28.6 29.2 29.9 30.8 33.4 36.8
% Annual Change 4.9 2.3 2.2 3.1 8.4 10.0
AMERICAS
Arrivals 128.2 122.2 116.6 113.0 125.9 133.6
% Annual Change 5.1 -4.7 -4.5 -3.1 11.4 6.1
ASIA & THE PACIFIC
Arrivals 114.9 120.5 131.1 119.3 145.4 156.7
% Annual Change 12.3 4.9 8.8 -9.0 21.9 7.8
EUROPE
Arrivals 389.6 387.8 397.3 399.0 424.5 441.6
% Annual Change 5.8 -0.5 2.4 0.4 6.4 4.0
MIDDLE EAST
Arrivals 24.3 24.0 27.9 28.8 36.3 39.7
% Annual Change 13.0 -1.0 16.1 3.4 26.0 9.5
INDIA
Arrivals 2.6 2.5 2.4 2.7 3.5 3.9
% Annual Change 6.7 -4.2 -6.0 14.3 26.8 13.2
Share of India 0.39 0.37 0.34 0.39 0.45 0.49
* Provisional
Indias international arrival figures have not been

able to keep pace with neighbouring countries and have
been exceeded by Thailand, Malaysia, Indonesia, Dubai
and the Maldives. Since 1995, Indias share of the world
market has remained virtually stagnant at 0.38 per cent,
while domestic tourism has grown at a phenomenal rate
and India now accounts for 4.6 per cent share of domestic
tourism worldwide.
Table 4. International tourism receipts by regions (in billion us $)
Region 2000 2001 2002 2003 2004 2005*
WORLD
Receipts 476.4 464.4 482.3 524.2 633 682
% Annual Change 3.7 -2.5 3.9 8.7 20.8 7.7
AFRICA
Receipts 10.6 11.6 12.1 14.3 19.1 21.3
% Annual Change 2.8 9.4 4.3 18.2 33.6 11.5
AMERICAS
Receipts 131.0 120.0 113.8 114.4 132.1 145.3
% Annual Change 9.3 -8.4 -5.2 0.5 15.5 10.0
ASIA & THE PACIFIC
Receipts 89.0 91.8 100.4 96.6 127.7 138.9
% Annual Change 7.5 3.1 9.4 -3.8 32.2 8.8
EUROPE
Receipts 232.5 228.3 243.2 285.1 328.2 347.4
% Annual Change -0.7 -1.8 6.5 17.2 15.1 5.9
MIDDLE EAST
Receipts 13.2 12.7 12.9 13.9 25.5 28.6
% Annual Change 10.0 -3.8 1.6 7.8 83.5 12.2
INDIA
Receipts 3.2 3 2.9 3.5 4.8 5.7
% Annual Change 5.3 -4.0 - 3.9 19.7 37.1 20.2
Share of India 0.66 0.66 0.62 0.69 0.76 0.84
* Provisional
In terms of tourism receipts, India has shown relative

buoyancy because of the interest shown by visitors in
traditional handicraft items and particularly in diamonds.

The Tenth Plan visualises a mutually supportive role for
tourism and handicrafts by encouraging haats and
shilpgrams and recognising shopping as an integral part
of the tourism experience to promote the Made in India
brand.
Table 5. Foreign tourist arrivals to india (in million)

Year Arrivals (in Million) % Change over the
previous year
1991 1.68 ---
1992 1.87 11.3
1993 1.76 -5.5
1994 1.89 6.9
1995 2.12 12.6
1996 2.29 7.8
1997 2.37 3.8
1998 2.36 -0.7
1999 2.48 5.2
2000 2.65 6.7
2001 2.54 -4.2
2002 2.38 -6.0
2003 2.73 14.3
2004 3.46 26.8
2005* 3.92 13.2
* Provisional
Table 6. Foreign tourist arrivals in india during 2006 (january-july) and
corresponding figures for 2004 & 2005
Foreign Tourist Arrivals (Nos.) Percentage Change
Month 2004 2005 2006* 2005/04 2006/05
January 337345 386260 444753 14.5 15.1
February 331697 389081 428325 17.3 10.1
March 293185 367068 407446 25.2 11.0
April 223884 260825 325249 16.5 24.7
May 185502 229172 262860 23.5 14.7
June 223122 258822 286257 16.0 10.6
July 272456 292345 331227 7.3 13.3
Total 1867191 2183573 2486117 16.9 13.9
* Provisional
India receives the largest number of overseas tourists

from the United Kingdom, which is its largest source
market, followed by the United States, Sri Lanka, France,
Germany, Canada, Japan, Australia and Singapore.
Table 7. Share of top ten markets for india in Tourist arrivals during 2005
(in million)
Country Arrivals % Share
UK 0.647 16.5
USA 0.618 15.8
Canada 0.156 3.9
France 0.151 3.8
Sri Lanka 0.137 3.5
Germany 0.129 3.3
Japan 0.102 2.6
Malaysia 0.098 2.5
Australia 0.096 2.4
Singapore 0.071 1.8
Others 1.715 43.9
Total 3.920 100.0
Table 8. Share of top ten countries, as also india, in international tourist

arrivals during 2005 (in mill ion)
Country Arrivals % Share
France 76.00 9.41
Spain 55.58 6.88
USA 49.40 6.11
China 46.81 5.79
Italy 36.51 4.52
UK 29.97 3.71
Mexico 21.92 2.71
Germany 21.50 2.66
Turkey 20.27 2.51
Austria 19.95 2.47
India 3.92 0.49
Other 426.17 52.74
World 808.00 100.00
Of the tourists coming to India, 27.5 per cent are in the

age group of 35-44 years, 23.4 per cent in the age group of
25-35 years and 20.8 per cent in the age group of 45-54
years. Women constitute only 30.5 per cent of Indias total
international arrivals. Repeat visitors account for 44.9 per
cent of the overseas visitors.
Table 9. Indias foreign exchange earnings through tourism (in rs. Crores)
Years Earnings % Change
1991 4318
1992 5951 37.8
1993 6611 11.1
1994 7129 7.8
1995 8430 18.2
1996 10046 19.2
1997 10511 4.6
1998 12150 15.6
1999 12951 6.6
2000 14238 9.9
2001 14344 0.7
2002 14195 -1.0
2003 16429 15.7
2004* 21603 31.5
2005* 25172 16.5
* Provisional
A substantial number of these may be non-resident

Indians, as hotel reservations do not correspond to the
number of international arrivals in the country. The
average length of stay of foreign tourists in the country in
1998 was 31.2 days. Domestic tourism, on the other hand,
is largely pilgrimage-oriented and requires improvement
in travel facilities and pilgrim destinations.
Table 10. Indias foreign exchange earnings through Tourism (in million $)
Years Earnings (In Million US $) % Change
1991 1861 --
1992 2126 14.2
1993 2124 -0.1
1994 2272 7.0
1995 2583 13.7
1996 2832 9.6
1997 2889 2.0
1998 2948 2.0
1999 3009 2.1
2000 3168 5.3
2001 3042 -4.0
2002 2923 -3.9
2003 3533 20.9
2004* 4769 35.0
2005* 5731 20.2
* Provisional
An important highlight of the India tourism during 2005

was an increase of 20.2% witnessed in the foreign
exchange earnings in dollar terms. The estimated foreign
exchange earnings during the year touched the level of
US $5731 million during 2005 against US $ 4769 million
during 2004 - - a growth of about US $960 million in one
year.
Table 11. Foreign exchanage earnings during 2006 (january-july) and

corresponding figures for 2004 & 2005(in rs. Crores)
Month Foreign exchange earnings % change
(in rs. Crores)
2004 2005* 2006* 2005/04 2006/05
January 2084.59 2326.20 2722.07 11.6 17.0
February 2049.70 2343.18 2635.98 14.3 12.5
March 1811.71 2210.62 2434.32 22.0 10.1
April 1368.42 1649.96 2127.44 20.6 28.9
May 1133.82 1452.72 1673.91 28.1 15.2

June 1363.76 1637.29 1847.26 20.1 12.8
July 1776.60 2048.78 2308.98 15.3 12.7
Total 11588.60 13668.75 15749.96 17.9 15.2
* Provisional
Table 12. Foreign exchanage earnings during 2006 (january-july) and

corresponding figures for 2004 & 2005 (in million us $)
Months Earnings (In Million US $) % Change
2004 2005* 2006* 2005/04 2006/05
January 460.67 532.19 632.43 15.5 18.8
February 452.96 536.07 594.64 18.3 10.9
March 400.37 505.74 547.17 26.3 8.2
April 304.77 378.38 473.44 24.2 25.1
May 252.51 333.15 368.56 31.9 10.6
June 303.72 375.47 401.23 23.6 6.9
July 384.87 470.08 497.27 22.1 5.8
Total 2559.87 3131.08 3514.74 22.3 12.3
Another important feature of India tourism during 2005

was the per tourist earnings in India. It was observed that
on an average, per tourist foreign exchange earnings in
India was about US $1462 against the estimated world
average of US $844. Even when the average earnings per
tourists are compared with those of the top world tourist
generating countries or with countries in Indias
neighborhood, it was highest in India with an exception
of USA.
Table 13. Share of top ten countries, as also india, in international tourism
receipts during 2005*(in billion us $)
Sl.No. Country Tourism Receipts* % Share
1 USA 81.68 12.0
2 Spain 47.89 7.0
3 France 42.28 6.2
4 Italy 35.40 5.2
5 China 29.30 4.3
6 UK 30.37 4.5
7 Germany 29.20 4.3
8 Turkey 18.15 2.7
9 Austria 15.47 2.3
10 Greece 13.73 2.0
India 5.73 0.8
Others 332.80 48.8
World 682.00 100.0
* Provisional
Table 14. Domestic tourist visits (in million)

Years Number of Domestic %Change
Tourist Visits
1991 66.7 ---
1992 81.5 22.2
1993 105.8 29.8
1994 127.1 20.1
1995 136.6 7.5
1996 140.1 2.6
1997 159.9 14.1
1998 168.2 5.2
1999 190.7 13.4
2000 220.1 15.4
2001 236.5 7.5
2002 269.6 14.0
2003 309.0 14.6
2004 366.2 18.5
2005* 382.1 4.3
* Provisional
Table 15. Share of top ten states/uts in domestic tourist visits during 2005
States/UTs % Share*
Andhra Pradesh 24.5
Uttar Pradesh 24.3
Tamil Nadu 11.3
Karnataka 6.5
Rajasthan 4.9
Uttaranchal 3.7
Maharashtra 3.7
West Bengal 3.6
Bihar 2.3
Gujarat 2.2
Other 13.0
Total 100
* Provisional
Table 16. Indian nationals going abroad (in million)

Years Departure %Change
1991 1.94 --
1992 2.16 11.3
1993 2.73 26.4
1994 2.73 0.0
1995 3.06 12.1
1996 3.46 13.1
1997 3.73 7.8
1998 3.81 2.1
1999 4.11 7.9
2000 4.42 7.5
2001 4.56 3.2
2002 4.94 8.3
2003 5.35 8.3
2004 6.21 16.1
2005* 7.18 15.6
Table 17. Economic Benefits of Tourism

Indicators Year India World
Contribution of 2002 - 03 5.83% NA
Tourism to GDP 2003 - 04 5.90% NA
2004 - 05 NA 10.4% (2004)
2005 - 06 NA 10.6% (2005)
Employment in 2002 - 03 38.6 million NA
Tourism Sector 2003 - 04 41.8 million NA
2004 - 05 NA 214.697 million
2005 - 06 NA 221.568 million
The high spent in India can be mainly attributed to more

number of days spent by a foreign tourist in India
compared to other countries besides the visit of high end
tourist to India. According to the foreign tourist survey
conducted by India, a foreign tourist from the top 15

international markets for India spend from 7 to 18 days in
India, the overall average being 16 days.
IMPACT OF TOURISM POLICY

Tourism Policy, as a statement of intent by the
Government, would form the reference point for action
and criticism. Any initiative by Government in Tourism
by way of legislation or direct investment is envisaged
within the framework of Tourism Policy. The debates in
Parliament had taken recourse to the received policy of
the Union Government while making references to
particular cases. The backdrop of a policy always serves
as a guideline for further executive and legislative
initiatives. It would be cynical to regard these policy
statements as mere exercises in eloquence and additions
to the already existing volumes of wishful thinking.
Furthermore, Policy statements by Government
should be viewed in their evolutionary stance. It would
be a negation of the democratic content of our political
system to view a Policy statement as a static and rigid
formulation, at a point in time, applicable for years to
come. Thus, since 1982, various initiatives undertaken by
the Government need to be perceived as additions or
modifications to the received Policy.
While it may be argued that these changes in the
policy are only marginal and superficial from the
viewpoint of equity and social justice, it would be an
oversimplification to view the latest policy statement as
nothing but the nth version of the Policy formulated in
1982. Recognising the all-pervading inertia that looms
large in matters governmental, one is often tempted to
deny the scope for lobbying which makes possible the
desired modifications in the policy corpus. In short,
policy, as a body incorporating proactive intentions, is

amenable to periodic reviews and possible modifications.
The issues stressed in the preceding paragraphs
provide the framework within which Tourism Policy
needs to be considered. In brief, there is more to policy in
tourism than is found in the Tourism Policy. Perhaps, the
links within a macro-economic framework need no
special mention.
The first ever Tourism Policy was announced by the
Government of India in November 1982. It took ten long
years for the Government to feel the need to come up
with a possible improvement over this. Thus the National
Action Plan for Tourism was announced in May 1992.
Between these two policy statements, various legislative
and executive measures were brought about. In
particular, the report of the National Committee on
Tourism, submitted in 1988 needs special mention. In
addition, two five-year plans - the Seventh and the Eighth
- provided the basic perspective framework for
operational initiatives.
The Seventh Plan advocated a two-pronged thrust in
the area of development of tourism, viz., to vigorously
promote domestic tourism and to diversify overseas
tourism in India. While laying stress on creation of beach
resorts, conducting of conventions, conferences, winter
sports and trekking, the overall intention was to diversify
options available for foreign tourists.
The Tourism Policy, 1982 was more an aggressive
statement in marketing than a perspective plan for
development. Its main thrust was aimed at presenting
India to the foreigners as the ultimate holiday resort.
With a view to reach this destination, the following
measures were suggested by the Policy:
1. To take full advantage of the national heritage in

arriving at a popular campaign for attracting tourists;
2. To promote tourist resorts and make India a
destination of holiday resorts;
3. To grant the status of an export industry to tourism;
4. To adopt a selective approach to develop few tourist
circuits; and,
5. To invite private sector participation into the sector.
The Planning Commission recognised tourism as an
industry by June 1982. However, it took ten years to
make most of the States to fall in line and accord the
same status within their legislative framework. At the
beginning of the Eighth Plan (1992-97), 15 States and 3
Union Territories had declared tourism as an industry.
Four States had declared hotels as an industry.
The National Committee on Tourism was set up in
July 1986 by the Planning Commission to prepare a
perspective plan for the sector. Within the broad
framework of the Seventh Plan, the Committee had to
evolve a perspective plan for the coming years.
The Committee, headed by Mr. Mohammed Yunus,
submitted its recommendations in November 1987. The
list of Members was as impressive Mr. S.K. Mishra
(Secretary, Department of Tourism), Mrs. Kapila
Vatsayan, Mr. K.L. Thapar, Mr. Rajan Jaitley, Mr. A.B.
Kerker, Mr. R.K. Puri and Mr Pran Seth. The Committee
in its Report recommended that the existing Department
of Tourism be replaced by a National Tourism Board. It
suggested that there be a separate cadre of Indian
Tourism Service to look after the functioning of the
Board. It also submitted proposals for partial privatisation
of the two airlines owned by the Union Government.
By September, 1987, the Central Government

declared more concessions for the sector: these included
tax exemption on foreign exchange earnings from tourism
(a 50% reduction on rupee earnings and a 100% reduction
on earnings in dollars), a drastic reduction in tariff on
import of capital goods, and concessional finance at the
rate of 1 to 5% per annum.
The Tourism Development Finance Corporation was
set up in 1987 with a corpus fund of Rs. 100 crores. Until
then, the sector was financed on commercial lines by the
Industrial Development Bank of India, Industrial Credit
and Investment Corporation of India and other
commercial banks.
The National Action Plan for Tourism, published in
May 1992, and tabled in the Lok Sabha on 5 May 1992,
charts 7 objectives as central concerns of the Ministry:
socio-economic development of areas;
increasing employment opportunities;
developing domestic tourism for the budget category;
preserving national heritage and environment;
development of international tourism;
diversification of the tourism product.,
and, increase in Indias share in world tourism (from
the present 0.4% to 1% during next 5 years)
As per the Action Plan, foreign exchange earnings are
estimated to increase from Rs.10,000 crores in 1992 to
Rs.24,000 crores by 2000 AD. Simultaneously, the Plan
aims at increasing employment in tourism to 28 million
from the present 14 million. Hotel accommodation is to
be increased from 44,400 rooms to 1,20,000 by 3 years.
Other provisions in the Action Plan include a
discontinuance of subsidies to star hotels, encouraging
foreign investment in tourism and the setting up of a

convention city for developing convention tourism.
The Action Plan envisages the development of
Special Tourism Areas on lines of export processing
zones. Special Central assistance is to be provided for the
States to improve the infrastructural facilities at
pilgrimage places. It proposes to set up a National
Culinary Institute, and projects a liberalised framework
for recognition of travel agents and tour operators.
The Eighth Plan document makes a special mention
that the future expansion of tourism should be achieved
mainly by private sector participation. The thrust areas as
enumerated in the Plan include development of selected
tourist places, diversification from cultural related
tourism to holiday and leisure tourism, development of
trekking, winter sports, wildlife and beach resort tourism,
exploring new source markets, restoration of national
heritage projects, launching of national image building,
providing inexpensive accommodation in different tourist
centres, improving service efficiency in public sector
corporations and streamlining of facilitation procedures at
airports.
The Eighth Plan aims at luring the high spending
tourists from Europe and USA. It also envisages a master
plan to integrate area plans with development of
tourism. This is envisaged to ensure employment
opportunities for the local population.
In April 1993, the Government announced further
measures aimed at export promotion. The existing Export
Promotion of Capital Goods Scheme (EPCG) was
extended to tourism and related services. Against the
existing 35%, the tourism sector would now pay an excise
duty of 15% only on capital goods import, subject to an
export obligation of 4 times the cargo, insurance and
freight (CIF) value of imports. With an obligation period

of five years, this came as a boon to the hotel industry.
The cost of construction had also come down by 20%.
In addition to the above policy pronouncements by
the Union Government, our planners had envisaged the
possibilities of developing specific regions on a zonal
plank. Special area programmes like the Hill Area
Development Programme and the Western Ghats
Development Programme form part of the overall
national plan.
The Eighth Plan document stipulates that the
strategy in such designated special areas is to devise
suitable location-specific solutions, so as to reverse the
process of degradation of natural resources and ensure
sustainable development. This approach perhaps needs to
be integrated into the project of special tourism areas,
now being made popular by the Government.
Administrative Control and Developmental Compromises
The federal principles enshrined in the Indian
Constitution require that the tourism sector be treated as
a State subject. As such, the Department of Tourism
(under the Ministry of Civil Aviation and Tourism at the
Centre) undertakes certain promotional and
developmental activities with a view to enhance the
sectoral potential. The Department has certain regulatory
functions to perform involving the hotel industry, travel
agencies and tourist operators. Over the years, there has
been considerable erosion of powers so far as State
Governments are concerned. The sustained campaign for
privatisation in all the policy documents has left limited
space of operation for the States.
The public sector is increasingly being perceived as
an agent of inertia than of change and hence the pressure
for a hands-off policy. On the other hand, the Union
Government has been usurping the powers of the State

with some pretext or the other. Promotion schemes,
designed at the Centre, are transferred for
implementation at the State level.
The special Central Assistance, for example, granted
for the development of infrastructure at the pilgrim
centres, carries with it a pre-defined scheme and mode of
execution. Furthermore, there are occasions when the
Centre forces the State Governments to extend certain
subsidies and concessions to the sector. The terms of such
concessions would have been fixed by the Centre and the
States would have no choice but to fall in line.
For example, during the State tourism ministers
conference in December 1991, the States were urged to
freeze water and electricity rates for 10 years. They were
also asked to exempt certain hotels from local and state
taxes for 10 years. Seventeen circuits and destinations
were identified under the National Action Plan for
development through Central assistance and investment
by the States and the private sector. The centres were
identified by the Centre and the States were asked to do
the needful. There were also times when the federal
division of power resulted in operational contradictions.
For instance, by 1989, many foreign hotel chains like
Hilton, Hyatt, Penta and Kempinski had applied for
licenses for investing in India. However, the revenue
departments of the respective States failed to locate and
allocate land for the construction of hotels. The scheme,
thus, fell flat. Curiously, the Union Government was not
hesitant to make use of Constitutional provisions when it
suited its interests.
The Yunus Committee had suggested the creation of
the Tourism Board on lines of the existing Railway Board.
(Perhaps, it was the brainchild of Mr. K.L. Thapar, then
adviser to the Planning Commission, in charge of

Transport and Tourism Sector. Being from the Railway
Service, it is not surprising that Thapar thought about a
Tourism Board). To begin with, the empowered
committee of secretaries challenged the idea of creation of
a Board.
It was said that the Railway Board as an
independent entity was created for historical reasons. It
would be difficult for tourism to be looked after by a
Board, because legally the sector would come under the
Industrial (Development) Act. It was also found that such
a Board would not be viable financially. In 1991, the
think-tank on tourism created by Minister Madhavarao
Scindia rejected the idea of a Board in toto. It was
emphasised that the Board cannot be in charge of a sector
that is basically under the jurisdiction of the States.
There is a vast potential for development of tourism
in the country. Tourism should be accorded the status of
an industry. Private sector investment will have to be
encouraged in developing tourism and public sector
investments should be focused only on development of
support infrastructure. Thus the seeds of private
initiatives were sown during the Seventh Plan. The
Government took the matter of privatising the tourism
sector seriously by 1988. It was during the tenure of Mr.
S.K. Mishra as Tourism Secretary that the talk of inviting
private investment into the sector began.
The Government permitted foreign equity
participation up to 5 1 %in tourism projects. Foreign
charters were allowed to operate in the country for the
first time. Foreign companies were allowed to repatriate
their profits to the extent of 3%. The structural adjustment
programme, initiated in June, 1992, paved the way for
privatisation in almost all sectors of the economy.
The Annual Plan (1992-93) document emphatically

enunciated the Governments position vis-a-vis tourism:
(T)he future growth of tourism will have to be achieved
mainly through private initiative. The State will
contribute to tourism by planning broad strategy of
development, provision of monetary and fiscal incentives
to catalyse private sector investment. The process of
privatisation brought in its wake big investments and
private involvement at various levels.
As an offshoot, environmental considerations were
thrown to the winds and there were instances of large
scale human rights violation. The self- correcting nature
of policy made provisions for stricter controls in this
regard. More seriously, privatisation meant alienation of
the majority of our population and their deprivation.
Employment generated in tourism is generally seasonal
and ill paid. The private sector- induced pockets of
tourism had the potential of turning into centres of
pollution, drug trafficking and prostitution.
The Seventh Plan proposed that tourism be declared
an industry. However, it took time for the States to
implement this, even though they agreed in principle.
The smokeless industry had the advantage of generating
maximum value-added, because of low-cost inputs. The
Tourism Policy Statement carried certain provisions in
favour of the hotel industry. It stated that there should be
provision for depreciation in the balance sheets of hotels.
Being an export industry, hotels were to be given
excise concessions. The provisions of the Monopolies and
Restrictive Trade Practices (MRTP) Act were relaxed for
hotels, because any hotel with 300 or more rooms would
have incurred an investment of Rs. 25 crores. The
document also hinted at lower tariffs for power and
water and regulations for easy import of equipment. As a
follow-up, hotel and shipping were added to the list of 27

industries exempted from Section 22 A of the MRTP Act.
The arena of policy formulation should be self-
evaluating and self-correcting. In the case of Tourism
Policy, this has proved to be the plus point. As an
illustration, the Policy statement of 1982 made no
mention of infrastructure development. The successive
governments at the Centre failed to create proper tourism
infrastructure, thus resulting in loss of traffic. This lacuna
was corrected in the National Action Plan. However,
much of this change was due to intensive lobbying by
such agencies like the Indian Association of Tour
Operators (IATO), the Travel agents Association of India
(TAAI) and the Indian Hotels and Restaurants
Association (IHRA). It is for the voluntary agencies and
pro-people forces to exploit the avenue of lobbying at
various levels. The environmental implications of tourism
development did not form part of the 1982 Policy.
Our successive policy pronouncements in the realm
of tourism falls within the liberalising framework of the
macro- economic policy environment. The Finance Bill,
1988, had assured 50% tax exemption on foreign exchange
earnings in the sector, and a further 50% exemption if re-
invested. In effect, it amounts to 100% tax concession.
Luxury hotels enjoy exemptions of all kinds with a view
to encourage tourism earnings. These tax exemptions
coupled with provision of soft loans to the sector led to a
boom in the tourism related private investment.
In line with the new directions and priorities
envisaged for India tourism, the Government of India has
formulated a new Tourism POlicy to guide development
of the tourism sector. The key elements of the National
Tourism Policy, 2002 are:
Position tourism as a major engine of economic

growth
Harness the direct and multiplier effects of tourism
and providing inpetus to rural tourism.
Focus on both international and domestic tourism
Position India as a global brand to take advantage of
the burgeoning global travel and trade and the vast
untapped potential of India as a destination.
Acknowledges the critical role of the private sector
with overnment acting as a proactive facilitator and
catalyst.
Create and develop integrated tourism circuits based
on Indias unique heritage in partnership with States,
private sector and other agencies.
Ensure that the tourist to India gets physically
invigorated, mentally rejuvinated, culturally enriched
and spiritually elevated.
The New Tourism Policy has outlined the following
policy initiatives for the tourism sector:
The new policy is built around the 7-S Mantra of
Swaagat (welcome), Soochanaa (information),
Suvidhaa (facilitation), Surakshaa (security), Sahyog
(cooperation), Sanrachnaa (infrastructure) and Safaai
(cleanliness).
The new policy envisages making tourism a catalyst
in employment generation, wealth creation,
development of remote and rural areas, environment
preservation and social integration. The policy also
aims to spruce up economic growth and promote
Indias strengths as a tourism destination that is both
safe and at the same time exciting.
The policy proposes the inclusion of tourism in the

concurrent list of the Constitution so as to enable both
the central and state governments to participate in the
development of the sector.
No approval is required for foreign equity of up to
51 per cent in tourism projects. Enhanced equity is
considered on a case-to-case basis. NRI investment is
allowed up to 100%.
Approvals for Technology agreements in the hotel
industry are available on an automatic basis, subject
to the fulfilment of certain specified parameters.
Concession rates on customs duty of 25% for goods
that are required for initial setting up, or for
substantial expansion of hotels.
50% of profits derived by hotels, travel agents and tour
operators in foreign exchange are exempt from income
tax. The remaining profits are also exempt if
reinvested in a tourism related project.
Approved hotels are entitled to import essential goods
relating to the hotel and tourism industry up to the
value of 25% of the foreign exchange earned by them
in the preceding licensing year. This limit for
approved travel agents/tour operators is 10%.
Hotels located in locations other than the four major
metro cities are entitled to 30% deduction from profit,
for a ten-year period.
The expenditure tax has been waived in respect of
hotels located in the hills, rural areas, places of
pilgrimage or specified place of tourist importance.
TENTH PLAN APPROACH TOWARDS TOURISM

The travel and tourism sector creates more jobs per
million rupees of investment than any other sector of the
economy and is capable of providing employment to a

wide spectrum of job seekers from the unskilled to the
specialised, even in the remote parts of the country.
The Tenth Plan approach towards tourism signifies a
distinct shift from the approach adopted in earlier Plans.
Apart from acknowledging the wellaccepted advantages
of developing tourism for the promotion of national
integration, international understanding and earning
foreign exchange, the Tenth Plan recognises the vast
employment generating potential of tourism and the role
it can play in furthering the socio-economic objectives of
the Plan. In order to create a supportive environment for
the promotion of tourism, the New Tourism Policy, 2002,
that is to be implemented during the Tenth Plan, will
generate awareness about the benefits of tourism for the
host population. It will mobilise state governments to use
tourism as a means for achieving their socio-economic
objectives, encourage the private sector to enhance
investment in tourism and provide legislative and
regulatory support for sustainable tourism and to protect
the interests of the industry and the consumer.
The policy envisages involving the rural sector in the
promotion of rural, heritage, adventure and eco-tourism
and will promote the development of competitive high
quality products and destinations. Most importantly, it
will remove the barriers to growth and resolve
contradictions in policy to achieve inter-sectoral
convergence of activities that help the growth of tourism.
The initiatives taken by the state so far have not
yielded the desired result and Indias tourism
performance has failed to match its potential even as
countries not blessed with its natural and cultural
endowments have taken the lead in reaping the benefits
of tourism development for their people. The reasons for
this poor performance need to be speedily addressed to

enable tourism to make an appropriate contribution to
national development. As observed in the Planning
Commission Report of the National Committee on
Tourism, the public sector made a significant contribution
to the growth of tourism in the initial stages of planned
development by providing a reasonable infrastructure
base. During the Ninth Plan it was recognised that a
reappraisal of the role of the State in tourism
development and the extent of its participation was
needed as it is neither necessary nor feasible for the State
to make large investments in areas that are best left to the
initiative of the private sector.
The state can contribute through infrastructure
development, the planning of broad development
strategies, the provision of fiscal and monetary incentives
to catalyse private sector investment and devise an
effective regulatory and supervisory mechanism to
protect the interests of the industry and the consumer.
The acceptance of this view also led to the
commencement of the process of disinvestment in 18
hotels of the India Tourism Development Corporation
(ITDC) hotels.
The ITDC will have to redefine its role in the Tenth
Plan. The State can also play an effective role in ensuring
that tourism development does not harm the
environment. The interaction between tourism and
environmental pollution requires sensitive handling.
There is comp-lementarity, not conflict, between the high
quality environmental requirements of tourism and the
imperatives of maintaining the ecological balance.
Objectives of Tenth Plan
Tourism in India has tended to be regarded as an elitist

activity conducted primarily for the purpose of earning

foreign exchange. Its vast potential as an engine of
growth and employment generater has remained largely
untapped. Although, with 25 million jobs, India ranks
second in terms of number of persons employed in travel
and tourism, yet the contribution of the sector as a
percentage share of all employment is amongst the lowest
in the world. The Tenth Plan objective is to integrate
tourism with the socio-economic objectives of the Plan by
creating 3.6 million jobs a year through the promotion of
domestic and international tourism and to enhance
Indias share of international arrivals from 0.38 per cent
to at least 0.62 per cent by 2007.
Role of the Department of Tourism
Being the nodal agency for the development of tourism in

the country, the department of tourism needs to make
greater efforts to co-ordinate and integrate the policies of
central ministries that have an impact on the
development of tourism and to mobilise state
governments and the private sector to develop unique
and competitive tourism products and destinations.
Crucial decisions affecting tourism are taken by
other ministries viz. the Ministries of Finance, Home,
Civil Aviation, Surface Transport, Environment and
Forests, Urban Development, Rural Development, Ocean
Develop-ment etc. The Department of Tourism has
tended to concentrate largely on its role as the promoter
of international tourism and generator of foreign
exchange earnings while paying relatively less attention
to inter-sectoral policy co-ordination and the all-
important development of tourism infrastructure and
product quality. In the Tenth Plan, the Department will
redefine and expand its role and work towards
intersectoral convergence and policy integration to

remove the barriers to the growth of tourism.
Barriers to Growth
There are several factors that are responsible for the

inadequate growth of the tourism sector in India. These
are: barriers related to approach, barriers that discourage
private investment, factors that affect competitiveness
and factors that affect the long-term sustainability of
tourism. The effective and early removal of these barriers
during the Tenth Plan is an essential determinant for the
success of the New Tourism Policy.
The need for a national consensus on the role and
level of tourism deve-lopment in the country has been
voiced repeatedly but a concerted effort to achieve a
consensus has not been made. Tourism should not be
limited by state or regional boundaries if distortions in
policies are to be avoided. It is important that a consensus
among all states is evolved through the National
Development Council (NDC) and the barriers to the
growth of tourism removed.
Tourism has been denied the priority it deserves
over successive Plan periods because its potential as an
engine of economic growth has not been appreciated.
This is visible in the low allocation of resources.
Allocation to tourism has averaged 0.16 per cent of the
total Plan outlay from the Third Plan to the Ninth Plan.
In the Tenth Plan, it is likely to receive an allocation of
0.72 per cent.
According to the WTTC, India is one of the lowest
spenders on tourism - 153rd out of 160 countries - while
its neighbouring competitors and China invest far more:
Malaysia (5.1 per cent), Nepal (5 per cent), Indonesia (8.4
per cent), Maldives (15.7 per cent), China (3.8 per cent).
The growing domestic and international demand, which

is set to boom, reinforces the need for higher investment.
Failure to measure up additional investment demand for
domestic tourism is likely to lead to the over-exploitation
of existing facilities, discouraging foreign visitors while
leading to an increase in the outflow of high-spending
domestic tourists from the country.
Most State Governments give scant importance to
tourism even though they virtually control the tourism
product located within their boundaries. They are
responsible, inter alia, for local infrastructure, transport
systems, sanitation and hygiene, leisure and recreation,
law and order, the upkeep of local monuments and the
general well-being of the tourist. Their support and
participation is essential for tourism to succeed and
spread its benefits among the host population. Their lack
of interest has resulted in an unprofessional ad hoc
approach that acts as a deterrent to the growth of
tourism. The approach of the state governments needs to
be focused, highly professional and result-oriented if
India is to avail of the opportunity that the currently
favourable market trends have to offer.
Apart from the State Governments, the private sector
plays a vital role in the growth and development of
tourism. Although the Central Government and certain
state governments have, from time to time, announced
incentives to involve the private sector in tourism
development, the results achieved have fallen short of
expectations. To provide a conducive environment for
private sector investment, it is important to realise that
the travel and tourism sector is adversely affected by the
lack of synergy in inter-sectoral policies. The growth of
the sector requires well-integrated and co-ordinated
policies and stability in approach. Contradictions and
arbitrary changes in policy send confused signals to the
investor. Unless infirmities in policy are expeditiously

removed well before the end of the Tenth Plan period,
the New Tourism Policy is unlikely to succeed.
Being a long haul destination, India is more
conveniently accessible by air and cannot be easily
reached by rail or road. A restrictive air transport policy
has a very deleterious effect on tourist traffic. There are
insufficient connections to most tourism destinations. The
situation could be eased if the large number of regional
airports could open up as international airports.
The existing international and national airports also
require improvement. The price of aviation turbine fuel
needs to be lowered to make air transport competitive
and affordable. Today, it is cheaper to travel by air to
neighbouring countries from India than to travel to
certain parts of India itself. A more liberal aviation
bilaterals regime and a new aviation policy to benefit the
economy of the country as a whole rather than the
national carriers alone would greatly aid the development
of tourism.
Central and state governments need to evolve a
taxation regime, which is revenue generating without
being burdensome. Accommodation and transport taxes
tend to be very heavy in certain states while the excise
policy in others is extremely harsh. The land policy in
some states makes the setting up of a hotel a formidable
exercise and as many as 48 clearances are required for the
construction and running of a hotel. Such policies deter
private sector investment. The importance of protecting
private investment in tourism must also be appreciated
and activities such as mining, unauthorised construction,
encroachments and haphazard development around
tourist resorts must be prevented through appropriate
legislation and public support.
As tourism is a highly competitive industry; the

traveller has a wide range of choices and looks for good
value for money. The lack of quality infrastructure,
uncompetitive rates, indifferent or poor product quality,
difficulty in getting access to information on travel and
tourist destinations, untrained service providers, and
above all, the lack of hygiene, have an enormously
negative effect on the competitiveness of the tourism
product.
A world class destination requires professional
planning to prevent haphazard, uncontrolled growth,
spatial and land use planning, strict architectural controls,
sewerage infrastructure and water treatment plants. It
requires improvement of entry points and appropriate
facilitation services. The lack of a visaon-arrival regime
on account of security considerations places India at a
disadvantage vis--vis its competitors. It is necessary that
India strikes a balance between security considerations
and the need for tourism development and reviews its
visa policy to permit tourists from its major source
markets to obtain visas on arrival.
Equally important is the behaviour of the host
population. Training programmes are required not only
for hotel managers but also for tourist guides, taxi-
drivers, staff at eating places, porters etc., as the manner
in which they conduct themselves affects the tourists
experience of the country. Important dos and donts in
terms of a code of ethics need to be inculcated among the
service providers. During the Tenth Plan, the Department
of Tourism will organise capacitybuilding programmes
for service providers through mobile training units.
A major impediment to the growth of tourism in
India has been the lack of awareness about the benefits
that it can bestow upon the host population. Unless the
host population, both in the rural and urban areas, is

supportive of tourism, it cannot become a vibrant
economic force. The rural sector, in particular, has been
largely ignored in tourism development and has
consequently been deprived of the benefits of
employment and income generation accruing from
tourism.
The Tenth Plan will seek to rectify this, particularly
in view of the world-wide interest in rural tourism. While
an awareness campaign that elicits local support for
travel and tourism is essential for the long-term growth
of the sector, it is also important to create awareness
about the environmental impact of tourism by generating
respect for the carrying capacities of tourist destinations.
This is imperative as excessive exposure of ecologically
fragile areas to human interference can lead to irreparable
environmental degradation.
As the demand for ecotourism is expected to grow
enormously in the next decade, it is important to have
regulations in place to prevent such damage. The local
population must be convinced of the need to support
such regulations in the interest of long-term
sustainability. Indias hill resorts have already suffered
seriously from a lack of concern for their carrying
capacities and the unchecked influx of tourists during the
summer months. If Indias forest sanctuaries and pristine
beaches are not to suffer the same fate, attention will
have to be paid during the Tenth Plan to obtaining
regulatory and public support for sustainability concerns.
The Tenth Plan Strategy
The Tenth Plan strategy is to work towards a national

consensus on the role of tourism in national development
and to focus on the removal of barriers that hamper its
growth. To make public sector investment more effective,

it is necessary to work towards the inter-sectoral
convergence of policies and programmes that could
benefit tourism.
The New Tourism Policy envisages a framework,
which is Government-led, private sector driven and
oriented towards community welfare, with the
Government creating the legislative framework and basic
infrastructure for tourism development, the private sector
providing the quality product and the community
providing active support. The overall vision of the
development of tourism embodied in the new policy will
be achieved through five key strategic objectives. These
are:
(i) Positioning tourism as a national priority.
(ii) Enhancing Indias competitiveness as a tourist
destination.
(iii) Improving and expanding product development.
(iv) Creation of world class infrastructure.
(v) Effective marketing plans and programmes.
Positioning Tourism as a National Priority
A concerted effort will be made, through the NDC, to

arrive at a consensus on the role of tourism in the
development agenda of the nation. Inclusion of tourism
in the Concurrent List of the Constitution will provide
constitutional recognition to the tourism sector and
enable the central government to legislate for tourism
development. A proposal to this effect has been circulated
by the Department of Tourism to the state governments
for comments and has also been discussed at a Chief
Ministers conference and a majority of the states have
agreed to the proposal. Other initiatives include the
setting up of Tourism Advisory Council with key

stakeholders functioning as a think tank and the
constitution of a Group of Ministers on Tourism to
improve policy integration and co-ordination.
The adoption of a tourism satellite accounting system
is underway to gauge more precisely the contribution of
tourism to the national economy. A national awareness
campaign in order to create a popular movement in favour
of tourism is being planned through a professionally
managed communication strategy. Most importantly, the
efficiency of public investment in tourism supporting
activities will be improved through effective inter-sectoral
coordination and prioritisation.
Enhancing Indias Competitiveness as a Tourist Destination
As air capacity available to India is woefully short during

the peak travel months, ranging from October to March,
especially for the main tourism originating regions such
as North America, Western Europe and South Asia, it is
necessary to open Indias skies to increase capacity and
help enhance tourism. Additional seat capacity from the
major tourism generating destinations would significantly
benefit the national economy and provide a major
impetus to tourism. Improvement in the standard of
facilities and services at the international and national
airports will need to be speeded up by employing
professional manage-ment agencies and by privatising
and leasing out airports.
To enhance Indias competitiveness as a tourist
destination, it is proposed to simplify the visa procedures
and consider strategies for the speedy issue of visas
including electronic visas and visas on arrival. An
attempt will be made, through a consensus, to reduce the
heavy and multiple taxes that reduce the competitiveness
of the Indian tourism product. Special tourism police will

be deployed at major tourist destinations during the
Tenth Plan to provide security to travellers and promote
India as a safe destination.
Improving and Expanding Product Development
Product development strategy during the Tenth Plan will

be related to the special interests of tourist target markets.
Cultural and heritage tourism will be expanded. India
has a vast array of protected monuments with 22
world heritage sites, 16 of which are monuments. The
integrated development of areas around these
monuments provides an opportunity for the
development of cultural tourism in India.
For the development of beach and coastal tourism, a
number of sites on the west coast of India will be
identified for the development as beach resorts by the
private sector. The sites will be offered on long term
lease at preferential terms. These sites will primarily
be on the beaches of Goa, Kerala, and North
Karnataka because of easier access by air. During the
Tenth Plan Kochi in Kerala and the Andaman and
Nicobar Islands will be developed as international
cruise destinations because of their proximity to
international cruise routes and their exotic appeal.
Indias unmatched variety of cuisine is becoming
increasingly popular in the world and will be
developed as a special attraction. It is proposed to
create a highly skilled workforce of culinary
professionals through an innovative incentive scheme
not only for India but also to promote Indian cuisine
internationally.
Village tourism will be promoted as the primary

tourism product of India to spread tourism and its
socio-economic benefits to rural areas.
Indias great wildlife variety has not been developed
as a tourist attraction. Wildlife sanctuaries and national
parks will become an integral part of the Indian
tourism product. Priority will be given to the
preparation of site and visitor management plans for
key parks. The quality of tourist facilities available at
the parks will be enhanced after a prioritisation of
parks. Tentatively these will be: Corbett National Park,
Kanha National Park, Bandhav Garh National Park,
Kaziranga, Madhumali, Bharatpur, Periyar,
Ranthambore, Little Rann of Kutch, Chilka, and the
Sunderbans.
India has the greatest adventure tourism assets in the
world in the Himalayas and its rivers. Mountain-based
adventure activities will be developed and promoted.
Regulations and certification for adventure tourism
operators will be introduced so that the minimum
standards of safety and conservation are met.
India receives only a minuscule proportion of the
global meetings, conventions and exhibition market.
It is important that India develops a world class
international convention city not just for the sake of
tourism development but also for international and
domestic trade and commerce. Indias most unique
tourism product during the Tenth Plan will be holistic
healing and rejuvenation packages. In focussing on
this, it will capture the essence of Indian culture for
international and Indian visitors alike.
Indias fairs and festivals, some of which are already
well established such as the Pushkar mela, the Desert
Festival at Jaisalmer, the Kumbh Mela etc. will be
promoted as unique products of India. The Festivals

of India programme will be re-introduced in the top
12 future markets for India - initially with an annual
event in the United Kingdom and the United States,
to be followed by triennial events in the other markets.
Shopping will be recognised as an integral part of
tourism. The development of dedicated shopping
centres for traditional crafts designed along the lines
of village haats such as Dilli Haat and Shilpgram will
be encouraged and information on where to procure
specific crafts made available through shopping
guides.
Delhi will be positioned as the cultural capital of India
supported by an ongoing and vibrant calendar of
cultural events. The development of such a niche-
based special interest productmix will position India
as a unique and competitive destination.
Creation of World Class Infrastructure
The need for physical infrastructure for tourism ranges

from ports of entry to modes of transport to destinations
(airways, roadways, railways or waterways), to urban
infrastructure such as access roads, power, water supply,
sewerage and telecommunication. This underscores the
need for inter-sectoral convergence of infrastructural
schemes and programmes that could support tourist
destinations.
The road network is vital for tourism as almost 70
per cent of passengers in India travel by road. Many
tourist circuits are entirely dependent on roads. The
current government plan for the road system in the
country covering both inter-state highways and
improvements to rural roads directly supports tourism
development. There is urgent need to construct and
improve highways linking the 22 world heritage sites and

places of tourist significance. The Ministry of Road
Transport and National Highways will collaborate with
the Ministry of Tourism in this effort.
The Indian railway system can also become an
enormous asset to the development of the tourism and
hospitality industry in the country. The railways hold a
special fascination for foreign tourists who wish to travel
the country. For the vast majority of domestic tourists
also, the railways is the most affordable means of travel
linking the length and breadth of the country.
Introduction of special tourist trains with pre-set
itineraries and private sector participation will be
encouraged.
The Indian Railways plan to establish 100 hotels at
railway stations to serve specific tourist centres. The
private sector will be given incentives to operate these
hotels on long-term leases. These hotels will provide
clean and inexpensive accommodation for budget
tourists. The Indian Railways also owns a number of
heritage structures, which, if effectively maintained and
marketed, could serve, both as railway stations and
places of tourist interest. India has five hill railways,
which compare with the best hill railway systems in the
world. The enormous tourist potential of these products
will be tapped during the Tenth Plan. As steam-hauled
trains like the Royal Orient, Buddha Parikrama, Palace-
On-Wheels and Fairy Queen are extremely popular with
tourists, steam traction for special tourist segments will
be continued. Trains like the Shatabdi and the Rajdhani
with a special tourism and hospitality focus will be
planned both for foreign and domestic tourists.
Indias 7,000-km coastline and her mighty rivers will
be tapped for the promotion of cruises. Care will be taken
to develop world class tourism products. As the Ministry

of Tourisms financial assistance to the states has not been
able to have the desired impact in terms of creating of
world class tourism infrastructure, the emphasis must
shift to the development of specific travel circuits as
internationally competitive destinations and the
convergence of resources and expertise for these circuits.
The availability of trained manpower is essential to
achieve excellence in the tourism sector. At present, there
are 21 Institutes of Hotel Management and Catering
Technology (IHM&TC) and 13 Food Craft Institutes in the
country. In addition, a good number of accredited
institutes also cater to the growing demand in the service
sector. It is estimated that only 50 per cent of the
requirement of the market is met by these institutes. Five
new Institutes of hotel management would be set up in
the Tenth Plan - three in the newly created states of
Uttaranchal, Jharkhand and Chhattisgarh and two in the
northeast. In addition, 15 more Food Craft Institutes will
be set up in the Tenth Plan, and efforts will be made to
take culinary crafts and training to the rural areas
through mobile training units. A new scheme on capacity
building to train service providers in the unorganised
sector such as small hotels, dhabas, restaurants and other
eating joints is also proposed.
Strategy for Effective Marketing
As there is fierce competition for tourists from Indias

source markets, India needs to change its traditional
marketing approach to one that is more competitive and
modern. It needs to develop a unique market position,
image and brand, which cannot be held by any other
competitor. Indias positioning statement will capture the
essence of its tourism product to convey an image of the
product to a potential customer. This image will be

related not only to its ancient Vedic civilisation with a
cultural heritage that continues to thrive especially in its
rural areas but also to its essentially secular nature.
In the Tenth Plan, an extensive market research
programme will be launched in the target source markets
and tourism products developed to cater to the interests
of each source market. An effective and ongoing market
representation presence will be established with the
travel trade in each source market and an Internet portal
set up in various languages to provide information, a
description of the product and the product requirements
of the target market segments. The Internet has a great
impact on the marketing of travel and tourism. It has
already established itself as a channel through which
tourism organisations can promote their destinations and
products. Indian tourism will utilise both the Internet and
other emerging interactive technologies to avail of the
benefits to be gained.
The Path Ahead
The tourism sector needs a national consensus on the role

and place of tourism in national development and the
early removal of impediments that have hitherto
handicapped its growth. The Tenth Plan target of the
creation of 18 million jobs through tourism requires a
substantial investment of Rs. 38,800 crore at the rate of 47
jobs per one million rupees of investment, both from the
public and the private sector.
Public sector investment, though limited, can be
made more efficient through the intersectoral
convergence of policies and programmes supportive of
tourism. An integrated inter-sectoral investment plan that
provides effective infrastructural support to tourism
through the Ministries of Railways, Surface Transport,

Shipping, Civil Aviation, Urban Development, Rural
Development and Environment and Forests etc. can be
achieved through the preparation of a tourism component
plan. Private sector investment can be enhanced by
removing the barriers to growth and expediting critical
policies that are being evolved. Public and legislative
support will be essential for the sustainable development
of the sector.
5
Opportunities and Challenges in
Hospitality Industry
Economic liberalisation has given a new impetus to the

hospitality industry. Today it costs an average of US0-80
million to set up a five-star hotels with 300 rentable
rooms in India. The gestation period is usually between
three and four years. Movements in real estate prices
have to be watched, though they have stabilised in the
past three years or so. Non-five-star hotels are obviously
cheaper and have have smaller gestation periods, but
international chains are expected to go into the five-star
category.
The Indian hospitality industry is growing at a rate
of 15 percent annually. The current gap between supply
and demand is expected to widen further as the economy
opens and grows. A rapidly growing middle class, the
advent of corporate incentive travel and the multinational
companies into India has boosted prospects for tourism.
Indias easy visa rules, public freedoms and its many
attractions as an ancient civilisation makes tourism
development easier than in many other countries.
Many foreign companies have already tied up with
prominent Indian companies for setting up new hotels,
Opportunities and Challenges in Hospitality Industry 97
motels and holiday resorts. The entry of McDonalds,

Pepsicos Kentucky Fried Chicken, Dominos and Pizza
Hut have given an international glitz to the hospitality
sector. Several international chains including Sheraton,
Holiday Inn, Intercontinental, Hyatt, Radisson,
BestWestern, Days Inn, Hilton, Quality Inn, Ramada Inn,
Meridien, Kempenski, Four Seasons Regent, Accor, and
Marriott International are entering or expanding their
hotel network in India.
Hotels in India have an infinite variety that you can
hardly fathom. Much like the diversity of its national
culture, the hospitality industry in India too has different
ways of treating different guests coming from different
parts of India as well as from all over the world. Hotels
in India have understood that the only way to survive in
the rat-race is by providing anything and everything that
a customer asks for.
The hospitality industry has taken up the arduous
task of providing guests with an unprecedented level of
comfort. Be it hotels in Mumbai or hotels in Delhi, the
wish of the guest is their order. People stay in hotels for
various reasons and the hotels are trying to identify the
exact requirement of the guest in order to provide
customized service.
The economic growth of India has had an impact on
the hospitality industry too. Traveling is now no more
limited to leisure tourism only. People travel extensively
for the sake of business and the hotels are cashing in on
it. Today, the utility of a hotel is not just limited to being
a place for relaxation, it is also used as a place of meeting.
No wonder, hotels across India are furnishing themselves
with meeting facilities.
Hotels in Pune and Mumbai, the economic nerve
center of India, are making sure that the guests on
business tours get the best of facilities and are not

troubled by petty matters. To help them focus on the
business, the hotels are going all out to make them as
comfortable as possible. Food too is not a problem.
Whatever your food-habits are, vegetarian or non-
vegetarian, hotels throughout India will serve you
according to your choice of food.
Making hotel reservation in India is not at all a
difficult proposition or a cause of concern. Most hotels
now-a-days have the facility of online hotel booking.
With the click of a mouse you can reserve a room in
luxury hotels across India. If you are on a tour and are on
the look out for unadulterated luxury, there are many
hotels in India from which you can pick and choose.
Eco-tourism is gaining momentum and hotels are
upgrading their facilities so that people who come to
enjoy nature do not end up confined in a jungle of brick
and concrete. Various hotels and resorts in India are
offering package tours and safari tours to the guests.
Hotels located near reserved forests and sanctuaries are
especially benefited by the prospect of eco-tourism.
Indian hotels are offering facilities that match
international standard.
WORLD OF HOTELS
The healthy economy at the beginning of the twentieth
century ushered in the Golden Age of hotels, during
which time a number of large hotels were constructed in
the United States. On its heels came the Great Depression,
a time when banks failed, unemployment skyrocketed,
and travel sharply decreased. Many of the hotels that
survived the depression are nowhighly familier - Statler,
Ritz-Carlton, and Hilton, to name a few. Another major
economic boom occurred in the 1980s. Tax incentives to
investors, expectations of higher demand, and a growing

economy helped fuel extensive hotel development. In the
late 1980s and early 1990s, however, further development
was curtailed and the industry was seriously hurt by
excessive room supply, economic recession, and
elimination of tax incentives. In recent years, there have
been more hotel rooms available than guests to fill them.
The lodging industry is steadily emerging from this crisis
situation. An economy recovery, an increase in domestic
demand and international travel, and a slight but
significant upturn in occupancy rates are all expected to
help return the lodging component of the hospitality
industry to profitability.
Classification of Hotels
Because of constant changes, staying current just with

who is offering what and where can be difficult for the
guest. The necessity for classifying hotels came about
when hotels began to differ from one another enough to
appeal to different group of people. Long gone are the
days when the guest had two choices - luxury hotels or
budget hotels.
Hotel entrepreneurs such as Kemmons Wilson
created a third option when they built facilities intended
to serve middle-class families. These property classes had
clear-cut boundaries in the beginning. Potential guests
knew they could expect more services at a luxury hotel
than a budget motel, and something in between at a
midpriced hotel. As the economy in general boomed and
room supply increased, hoteliers focused on setting
themselves apart from the crowd by offering specialized
accommodations. No longer just a place to sleep, hotels
were appealing to conventioneers, business groups, and
special-interest groups. Descriptive hotel classifications
helped potential guests locate suitable lodgings, and as

such, became a valuable marketing tool. As this diversity
flourished, so did competition for customers and brand
loyalty. As properties continually upgraded their services,
boundaries between the descriptive labels blended into
one another.
Old systems of classification were not as clear. For
instance, the Marriott brand, once recognizable as a
midpriced hotel, began to include hotels classified as
economy (Fairfeilds Inns), business (Courtyard),
extended-stay (Residence Inns), all suite (Marriott Suites),
and upscale (Marriott Hotels and Resorts). Other chains
also began to cater to a myriad of guests - from business
to pleasure travelers and from individuals to groups.
Consequently, lodging classification became more
complex. Facilities were then grouped according to size,
amenities offered, price, type of guest (business or
pleasure), or type of hotel (luxury, full-service, or
economy, extended stay to name a few). Many facilities
fit two or more categories, and did so in order to attract
different types of guests.
Motels and hotels are the most widely recognized
forms of lodging. They can be found almost anywhere -
from the center of a huge metropolis to the streets of a
small town. For the most part, hotels and motels attract
transient guests who need a place to stay for a night or
two while traveling for business or pleasure. Hotels that
specialize in residence or extended-stay accommodations
serve guests looking for more permanent lodging.
Hotels
From the age of grand hotels to the troubled 1990s, the

hotels has been the most fabled type of lodging. Varying
greatly in style and service, most hotels share a similar
structure. They generally have more than two stories with

guest rooms located along common hallways. Guests
rooms usually have a bed, bath, telephone, and television.
In addition to housekeeping, services may include
luggage assistance, access to a business center for use of a
photocopier or fax machine, and availability of recreation
facilities, restaurants, or bars. Hotels are most often
located in or near business districts, travel destinations,
and airports.
Motels
Motels offered fewer amenities and were less expensive

to build and operate than downtown hotels. The lower
rates, basic accommodations, roadway locations, and lack
of a central lobby were well-suited for the new overnight
automobile traveler. Motels are generally less formal than
hotels. Guests usually carry their own luggage, and free
parking is available, often adjacent to the guests room.
Many motels provide swimming pools and restaurant
service. Guests who prefer to save money may opt for a
budget motel that has smaller rooms, no pool, and fewer
amenities.
All-suite hotels
Unlike regular hotels, all-suite hotels rent only suites,

often combing living space with kitchen facilities, or a
bedroom section with an attached parlor. To keep rates
competitive with other hotels, many all-suite hotels have
small lobbies and no public meeting rooms. Some do not
offer restaurant or bar facilities. As the market has
expanded, through, some all-suite hotel hotels have
reintroduced public areas and limited foodservice.
Convention hotels
Convention hotels provide meeting and banquet facilities

for large groups (usually five hundred or more) booked
in their guest rooms. Because they target groups, these
hotels need large lobbies to accommodate group arrivals.
They also have a high percentage of double-occupancy
rooms and emphasize food and beverage services.
Convention hotels may also offer concierge floors to cater
to individual guests needs.
Classifying Hotels by Service
At one time, hotels differed distinctly by the services they

offered. Recognizing that all guests do not expect the
same services nor have the same amount to spend on
lodging, the hotel industry offered a variety of services at
different prices aimed at particular markets (groups
whose members have similar expectations and budgets).
Familiarity with these labels is helpful in understanding
guest perception as the transition is made from one
system to another. Also, classifications short history
shows how dynamic the industry is and how important
service is at all levels. Classifying hotels by service
contains four broad categories: luxury, full-service,
limited-service, and economy.
Luxury Properties
Traditionally, independent hotels offer the finest

accommodations money can buy. Luxury properties are
descendants of the grand hotels, featuring expensive,
lavishly decorated public areas and the high levels of
customer service. They offer the finest cuisine and the full
range of amenities from shampoos and hair dryers to
private Jacuzzis and fireplaces. Whether parking your car,
carrying your luggage, or delivering room service, staff

members - including concierges, bell persons, front desk
attendants, and wait staff - are well-trained and efficient.
Luxury resorts offer the finest entertainment and
recreational facilities available. A part of luxury
properties attraction is their ability to perpetuate an
exclusive image by charging high rates. Hotels in the
category include Four Seasons and Ritz-Carlton
properties, the Waldorf-Astoria, and the Trump Plaza in
New York.
Full-service Hotels
Featuring properties operated by Hilton, Hyatt, Westin,

and Marriott, this category of hotels attempts to offer a
wide range of services at lower rates than luxury hotels.
Full-service hotels generally offer clean, well-decorated
hotels with meeting and restaurant facilities, a limited
room-service menu, and a variety of recreational
activities. Although not as extravagant as the luxury
properties, fullservice hotels generally have large,
attractive public areas. The ratio of service of the
concierge or other staff may be limited to designated VIP
floors. Some all-suite and extended-stay hotels with good-
sized public areas also fit into the full service category,
with amenities like in-room coffeemakers, microwave
ovens, and refrigerators.
Limited-service Facilities
Lodging establishments like Days Inn, Hampton Inn, and

Quality Suites & Inns were once considered limited-
service facilities. Usual offerings included simple, clean
rooms with a telephone, free cable television, swimming
pools, and an adjacent restaurant. Staff services, other
than housekeeping, were limited, but some offered a few
extra amenities such as complimentary shampoo and

lotion to distinguish themselves from the economy
properties. The remaining all-suite hotels fit into this
category because of their limited services and amenities,
and small public areas.
Economy Properties
Once offering only the basic bed and bath facilities,

economy properties focus on more values for the dollar
with clean and low-priced lodging. Economy properties
generally did not offer meeting and recreational facilities
or food and beverage services, with the possible
expectation of a vending area featuring prepackaged
snacks and video games. Staff was limited to only those
required to provide basic front office services, security,
and housekeeping services. Generally, the smaller guest
rooms of the economy hotels offered one or two double
beds and a separate bathroom equipped with no more
than towel and soap.
Marketing Segmentation
The lodging industrys target market is all the potential

guests of lodging properties -whether visiting relatives,
conducting business, or relaxing on vacation. Because the
total market is so vast, marketers break it into market
segments - smaller, identifiable groups with common
characteristics. These segments can be defined using any
set of characteristics, such as those found in geographic,
demographic, or psychographic information. Often,
information from different sources is combined. For
example, one hotel may first narrow its target segments
by focusing on one geographic area. The segments may
then be further narrowed by financial status. By
continuing this process, marketers can find increasingly
more precise targets. Marketing narrow targets is a more

efficient use of marketing dollars but is also the most
expensive form of marketing, since most companies must
tarb t several segments at once.
The most common marketing segment is defined by
trip purpose-either business or leisure. In an effort to
maximize their occupancy rates, most lodging facilities
attempt to attract members of both groups since their
differences are sometimes complimentary. For instance,
business guests are more likely to need lodging from
Monday through Thursday, and hoteliers can lessen the
weekend slack by planning specials for leisure guests
who are more likely to travel on weekends. Not all of the
differences balance one another so nicely, however. Since
many of the needs of both groups are often specific to
each, different marketing strategies are necessary.
Business Guests. Business travel is the most important
source of guests for 80 percent of all hotels. For this
reason, recognizing and catering to the special needs of
the business traveler is vital to the success of the lodging
industry. Traditionally, business travel is high on
weekdays and low on weekends, with the average trip
lasting approximately 3.5 days. During their stay,
business travelers usually spend the majority of their time
working. This means their needs are specific: well-lighted
workspaces; a telephone; and access to equipment like
personal computers, modems, photocopies, or facsimile
machines.
The business segment can be further defined by
socioeconomic and psychographic factors. Some business
travelers are on limited budgets, while other spare no
expense for their accommodations. This letter group often
expects VIP treatment and luxury accommodations. In
some cases, business travelers need lodging for extended
periods. For conferences, business guests may need access
to meeting and banquet facilities. The possible segments

are legion.
DEVELOPMENT OF HOTEL INDUSTRY

Indias hotel industry has entered the global stage,
supported by its growing economy and the development
of the Incredible India tourism brand. Previous security
concerns due to the Kashmir situation have reduced due
to improved relations with Pakistan. Meanwhile the cost
of travel has fallen following the governments
liberalisation of the airline industry. Given that these two
main barriers to travel have been tackled, not
surprisingly, hotel performance has benefited.
With India capturing the attention of the world,
Deloitte has responded by dedicating the 18th edition of
the HotelBenchmark Survey to report each month on the
countrys hotel performance.
To put the size of Indias gigantic domestic market
into perspective, it equates to over one third of total
international arrivals received by all markets globally.
While current mid-market players like Choice Hospitality
India, Best Western, Fortune Park and Sarovar Park Plaza
have catered for domestic tourism for some time - this
market has recently exploded and demand is growing.
As the domestic market continues to expand, the
escalating economy provides the rising middle classes
with increased disposable income. The arrival of low cost
airlines and the associated price wars have given
domestic tourists more options than ever before. The
Incredible India destination campaign has also helped
the growth of many domestic markets including religious
tourism. As a next step, the government has recently
launched the Atithi Devo Bhavah (ADB) campaign aimed
at increasing awareness of tourism in India.
To respond to the needs of this growing giant,

companies like Choice and Best Western plan to
significantly increase their portfolio over the next two
years, by 100% and 50% respectively. Other hotel
companies have also taken steps to ensure they benefit
from the countrys huge domestic demand. Indian Hotels
launched its IndiOne brand with huge success last June in
Bangalore. Accor has entered into a joint venture with
InterGlobe Enterprises to introduce 25 Ibis branded
hotels, the first will arrive in 2006. InterContinental
Hotels Group is also introducing their economy brand,
Holiday Inn Express, with ten properties planned,
starting later this year. Marriott has also announced plans
to introduce the Courtyard brand in India.
Catching the eye of the international market
Despite the international market being significantly
smaller than Indias domestic market, it also shows
promising growth. The countrys appeal to international
visitors has previously been affected by the political
situation in Kashmir as well as the global events of the
past few years. However this has now improved due to
relative geo-political stability and international economic
growth. Tourism in India is also benefiting from the
stronger economies of Indias two major source markets,
the United Kingdom and the United States. The peace
talks with Pakistan have also improved the situation,
with the ongoing cricket test series between the two
countries further instilling confidence of future harmony.
Currently corporate travel dominates the
international arena. The Indian subsidiary of Kuoni
estimates that 80% of foreigners staying in their hotels are
there on business. While corporate business will naturally
continue to expand as the economy grows, there is
enormous untapped potential in the countrys leisure
market. Incredible India has focused not only on
promoting traditional holiday attractions and cultural

experiences, but on defining unique markets from
medical to religious tourism. In fact, India has already
seen growing Japanese arrivals due to the promotion of
Buddhist travel.
But India still faces many challenges in attracting the
international traveller. This will continue whilst the
government addresses the quality of Indias
infrastructure. Although the World Travel and Tourism
Council rated India second in price competitiveness (after
Brazil) there are many factors which need to be dealt with
to encourage foreign visitors. Poor roads, overstretched
railways and old airports discourage international
travellers. Add to that hotel taxes higher than most Asian
countries and a bureaucratic visa process - and you start
to get a clear picture of the challenges facing India.
According to the new India edition of the
HotelBenchmark Survey by Deloitte, the growth in
hotel performance is impressive. As indicated in the
graph below, all markets tracked by the survey reported
double-digit growth in the twelve months to February
2005 compared to the same period the previous year. This
is not surprising given the global economic growth in
2004, Indias bustling domestic economy and reduced
travel barriers.
Amongst the unique features of the hotel industry in
India is the sheer volume of the domestic market. Hotels
receive twice as many domestic guests as international
guests. With most branded supply in India sitting in the
top tier of the market, the hotel industry is currently very
top heavy. While many companies are addressing the
needs of the growing domestic market for more
economical hotel products, most projects are still in
development. Future growth of the hotel industry will
not be helped by archaic land laws that make

construction of new hotels time-consuming and
expensive.
What is interesting to note, is that the demand for
hotel rooms far exceeds the countrys supply. While an
opportunity exists to develop the hotel industry to meet
this demand, India experiences large seasonal shifts in
demand and corporate travellers currently represent the
bulk of guests. Due to the lack of a widely distributed
business mix, annual occupancies and average room rates
in India did not rank very high in the 2004
HotelBenchmark Global Ranking Index. The industry
must explore ways to seize untapped potential demand
whilst addressing the down-time to maintain profitable
operations. Developing a more diverse business mix is
key.
The opening up of the aviation industry in India
brings exciting opportunities for hotels; as they rely on
airlines to transport 80% of international arrivals.
Increased airline activity has stimulated demand and has
helped to improve Indias troubled infrastructure.
Increased competition will lead to the development of
new and improved services. In addition to new aviation
brands, many existing companies have ordered new
planes. This is long overdue considering state-owned
Indian Airlines has not purchased a new plane in 16
years.
The open skies policy has benefited both
international and domestic travel. On the international
front, the capacity and availability of destinations serving
India continues to grow. In late 2004, India and the UK
agreed to double (in phases) the number of direct flights
per week. Earlier this year, Malaysia Airlines announced
their plans to add 18 new routes in India within the next
five years. Jet Airways and Air Sahara, two privately

owned airlines have launched services to other South
Asian destinations, and will shortly launch services to
Singapore. The increasing competition in the domestic
airline industry will continue to drive the growth of
Indias domestic market. In May, two new private
domestic airlines (SpiceJet and Kingfisher Air) are
expected to enter the market. They will compete head on
with current operators Jet Airways, Air Sahara and Air
Deccan. It is expected that the tumbling cost of travel will
continue, given the growing number of seats available.
The government has expanded the scope of airline
liberalisation with its approval in January for private
airlines to fly all international routes excluding the Gulf.
To qualify the government requires a company to have a
fleet of at least 20 planes and five years domestic
experience. Jet Airways and Sahara will be able to benefit
immediately. In three years time Indias state-run carriers
will also have to share their Gulf routes. These routes
currently earn them most of their operational revenue
and profit. The recent IPO (Initial Public Offering) by Jet
Airways was over-subscribed several times - indicating
the confidence this industry has gained over recent years.
The aviation industry in India will drive future
tourism growth, with the continued increase of flights
and options for travel. But the question remains, can the
countrys accommodation meet the increasing
expectations of the global traveller? Hotel supply must
catch up with demand whilst creating a healthier
business mix. Mid-market properties especially need to
respond to the growing middle class. But even as the
hotel industry joins the airlines in responding to Indias
thriving economy and driving future tourism growth -
infrastructure challenges could still prevent India from
grasping its full tourism potential. Encouragingly major
government initiatives such as Incredible India and tax

policy revision are well underway. With the growth of
the economy expected to continue, and considering the
size and dynamics of the domestic market, Indian hotel
performance will be exciting to watch over the coming
years. Future performance should reflect a country of vast
opportunities, especially as mid-market products develop
to satisfy the countrys thriving domestic market.
Growth of the travel industry has been spurred by a
continuing need for fast, accurate and cheaper travel
options. Technological breakthroughs with a trend
towards automated platforms are driving the growth of
this industry. But when it comes to hospitality, which is
an integral part of the tourism industry, the situation is
different.
The distribution dynamics are changing across all
industries but the hospitality industry has been little slow
to catch up since it is a very fragmented industry. The
West is enough proof that technology is historically
changing the way we function. The customer is becoming
more and more technology-savvy even as we speak. The
industry needs to overcome its general reluctance to
invest in new ideas and technologies and look for
applications that will drive the bottom line. This includes
using distribution channels, agents and intermediaries to
develop customer information sources, and using
technology to bring customers what they want - in real
time anywhere in the world.
But in future the industry has to think on greater
investment in technology, e-commerce and
commoditisation. The constant pressure of business
targets, sales figures with rising competitiveness in the
Indian market has made it vital that focus on customers
needs is viewed as providing opportunities to business.
Ongoing expansion of the distribution system continues

to facilitate bookings and increased consumer skills in
navigating the Web are generating a huge upswing in
online reservations of hotel bookings.
Indias major hotel chains develop more robust
online marketing and distribution strategies and online
intermediaries race to become one-stop shops for hotel
deals. However, currently, business generated through
the Internet by the hospitality segment is almost
negligible. But within the next two to three years the
numbers is expected to go up. The industry has realised
that it helps shift the controls from the intermediary to
the consumer. So hotels that will be technology-savvy
and have the rate parity will be able to generate a large
chunk of business through the Internet.
As hotels grow into large multi-location outfits with
increasing size and business volumes, to sustain in a
dynamics environment, they need to keep abreast with
well-established IT infrastructure that simplifies its daily
workings. The future of the hotel technology lies on Inter
Protcol (IP), say IT experts. Therefore, hotels need to
upgrade their IT-enabled services and simultaneously
integrate various operational platforms. The increasing
use of IT applications has given a new meaning to
service; effective service is measured vis--vis guest
convenience using technology know-how.
DESIGNING A SUCCESSFUL HOTEL

In the past several years, hoteliers have responded ever
more boldly to their guests demands for both luxury and
aesthetic sophistication. The result has been the emergence
of new trends in hotel design, which at one extreme
increasingly blur the border between lodging, lifestyle, and
living theatre, and at the other seek to reinvent the more
discreet manners and style of the grand hotels of the late

nineteenth century. Newly built hotels are being admired
throughout the world by travelers and architects, and this
strikingly illustrated survey features the best new designs.
An interesting evolution in hotel design over past several
decades. At the beginning of the 20th century, the wealthy
traveled in grand style at a leisurely pace, with vast
amounts of luggage and, quite frequently, large numbers
of staff. The design of the hotels that catered to them
reflected that style, in size, proportion and atmosphere.
The tumult of the 20s, 30s, and 40s disrupted travel
patterns, but when people began traveling more
consistently in the ensuing years, the look and feel of
hotels changed.
Opulence and exclusivity are associated with
innovative and somewhat theatrical design, rather than
traditional signifiers like Persian carpets and wood
paneling. Built-in case pieces, flat-screen televisions and
simplified bedding materials are used to maximize
guestrooms space. Furthermore, bathrooms have become
more spacious and an important part of guestroom design.
What worked a decade ago for the guestroom does not
work today. The concept of zones within the room has
not changed, there is still a sleeping, relaxing, working,
dressing and bathroom zone but the way in which these
zones are now laid out and have started to overlap has
changed and is continuing to evolve with the increased
focus on guest life-style.
The guestroom must be able to function on a number
of levels in addition to providing a comfortable place to
sleep. For the business traveler, the room should be able
to function as office and meeting space. At then end of
the day, literally, it should also feel more like an
entertainment area than strictly a bedroom. Technological
capabilities that enable the guest to accomplish various
tasks from the privacy of the room are highly desirable

Interactive in-house television systems that let the guest
review the bill, order movies, check e-mail and check out
are increasingly popular.
But it certainly is not just the guestroom that is critical
to effective design. Public areas are increasingly being
incorporated into the rhythms of the guest experience.
Many newer hotels use their lobbies or spaces
immediately adjacent as gathering places, most frequently
putting a bar or lounge next to or in the lobby. The activity
is now seen as fashionable, where a hushed, silent lobby
remains at a minority. The creation of large scale
residential settings where the guest almost feels like they
are at a party at a friends house is becoming a concept
for hotel lobbies and public area spaces.
The set area boundaries of the past are melting away
to give us the ability to cross-utilize spaces depending on
the demand for each area at different times. There are
also critical elements of the exterior design which are
different now from ten years ago and can have an impact
on customer perception. With increased competition, hotels
must be creative in attracting guests attention, before they
even enter the lobby. wwsith so many new hotels around
the world in mixed-use complexes, the entrance to the
hotel are often the only exterior part of the hotel the guest
sees.
Luxury properties are housed in buildings whose
overall appearance is very plain. Chic resort hotels,
particularly in warm climates, have definitely pushed
owners towards more innovative architecture and the use
of more luxurious materials. In addition to spas which
have become increasingly popular in recent years, other
amenities, such as media rooms, libraries, screening rooms
and full-fledged theaters, are now being considered as
developers are looking to add new dimensions to the

guests perception of overall value, and which lend a
unique aspect to the hotel atmosphere. These areas offer
obvious benefit to the individual traveler, but can also be
used very creatively for groups and incentives as ways to
generate additional revenue. The guest is better traveled,
more educated, sophisticated and surrounded by design
elements through all forms of media therefore the
expectations are far more difficult to meet. Another trend
in hospitality design is the designer touch. Armani just
announced the opening of its new hotel in Dubai,
following the Palazzo Versace and Bulgari openings.
In any case or era, the success of a hotels design can
be gauged by how well it has anticipated and met the
tastes and needs of its guests. More importantly, the
continuing success of an innovative change lies in how
functional that change is. New just for the sake of being
new doesnt last long. Comfort and practicality are all
important, and this is often forgotten in striving to achieve
avant garde and stylish design. The architecture creates
the base, whether the building is an old or modern one,
and defines the overall feel of the hotel. Some hotels are
architecturally beautiful but lack a human dimension.
Design has to create a sense of intimacy and
proportions to which the guest can relate, leaving him in
comfort and at ease. A touch of excitement and glamour
will also help. Good design should be visually exciting
and original. It should be functional but above all it should
offer great comfort.As is true of any successful business
person, hoteliers must know and anticipate what their
guests want. Whatever changes are instituted, they must
continue to fulfill their brand promise to the customer.
This is not to say that very forward-thinking innovations
wont work, but they must be delivered in a context which
is consistent with the customers expectations. Any design
component must be regarded from the point of view of

how it will enhance the overall guest experience, and how
will it augment guest satisfaction.
No hotel company operating today can be unaware
of the swift pace of global change and its impact on every
facet of the hospitality industry. With just five years left
in this century, we can expect change to be the only
constant. New business practices are evolving virtually as
fast as our technologies, while resistance to change has
become one of the primary causes of business failure.
The future success of hotel organizations will be
driven in large part by the ability to foreseeand
capitalize on change. Beyond this truism, however, there
is an urgent need to identify what will be required in the
competitive environment of the future with its intense
focus on serving customer needs. The hospitality
industryas is the case with business generallyis subject
to deep currents of change set in motion as economic and
social systems shaped in the industrial era evolve to a
knowledge-based era driven by technology advances.
In this period of global transition, it behooves hotel
organizations to examine the key factors that will not only
define success, but the ability to survive in coming years.
Its mission was to identify the characteristics needed to
lead successful businesses in the next century. These
executives offer a number of compelling messages
regarding the key success factors of the future. Customers
will have the strongest influence on the corporation in the
year 2000. Indeed, these executives believe that the
customer will be king in the new century. Exceptional
leadership was by far the attribute most frequently cited
by CEOs and senior executives; the consensus appears to
be that successful companies in the year 2000 will be led
by corporate visionaries.
A strategic planning focus is not only essential, but

must embody a concept of planning for the future that
anticipates change, rather than being based exclusively on
historical models. In structuring organizations for the
future, companies must build management capabilities to
deal with one of the most critical challengesdiversity in
the marketplace. Employing information technology to
drive business success in this information-driven era is not
only the path of least resistance, but vital to virtually every
aspect of operations. Recognizing that the hotel industry
has a somewhat split personality reflecting the inherent
conflicts between its real estate and operational aspects, it
is important to understand the industrys real estate origins
and how they are shaping the challenges ahead.
The origins of the industrys real estate persona are
embodied in the classic theory of location - if we build
it, they will come. As a result of this building complex,
the industry has tended to have a real estate and asset
orientation, rather than a customer focus. From the hotel
company perspectiveespecially that of the brand-oriented
chainthe varied interests of a diffused property
ownership group can be quite different than the singular
interest of the chain that operates and markets the
properties. Even when the ownership of geographically
dispersed hotel properties is controlled by a single hotel
organization, the financial structuring tends to be property-
specific. Corporate financial strategies are frequently
subjugated to the needs of the last property deal brought
into the companys fold. Each property in a so-called
chain, is frequently the subject of a unique and
distinctive ownership and financial structure. This
phenomenonquite common in the real estate sector, but
unusual for business enterprises generallymakes for
elusive economies of scale in the structuring and financing
of property-driven expansion.
Collectively, these factors have produced low

comparative returns in real estate, although criticism
leveled at commercial real estate returns is somewhat less
germane to the hotel industry, where management and
franchise fees can produce high returns for those
companies where property ownership is held by third
parties. While hotel chains have adopted traditional
corporate frameworks, there are a number of
predominantly real estate-driven, family-owned businesses
in the hotel sector that continue to operate as relatively
unstructured organizations. In meeting the future, these
businesses will need plans, people and processes in order
to establish viable corporate forms that can compete in
tomorrows marketplace and capitalize upon its
opportunities.
In todays changed environment, the hotel
organization must deal with a number of new realities.
Investors in our industry are no longer satisfied with long-
term capital appreciation and psychic income that
heretofore were often the justification for otherwise
seemingly uneconomic investments in hotel property or,
indeed, hotel chains. The first reality is that there is a very
specific and identifiable relationship between bottom line
performance and value. Improvements in business
operations raises values. It is not surprising, therefore, that
the new owners attracted to this industry in recent years
have new sets of demands. This transformation from an
old-guard group of investors and owners to income and
return-driven newcomers has meant that the once quiet
enjoyment of operators in their management of hotels for
third parties is being disturbed, interrupted and
overturned. These challenges all take place in an
environment where capital has become extremely selective
in markets that have little stability. A global shortage of
capital will not remain a short-term problem, and future
hotel organizations must have a stronger alignment to

capital providersa critical customer group. Hotel
companies will need to compete by offering better returns
and performance than in the past.
Hotel chains have found their development timetables
quashed in recent years, making it difficult to achieve goals
of critical mass often required to improve performance.
These factors are driving consolidation in the brand
sweepstakes. Capital markets, therefore, continue to
favour well-established companies, a reality that must
drive entrepreneurial organizations to meet the future now
by planning for an evolving corporate context in which
to operate. Hotel developers, owners and management
companies will all need to develop new strategies, skills
and processes that look forward to the competitive
demands of the future. These ultimately must address
issues related to vision and planning, as well as
organizational skill sets and processes to attract and retain
customers. To stake a claim in the future, current business
practices should be examined in light of what can be
expected to be the key success factors in the year 2000.
As the information age produces greater worldwide
integration of business activities, a global knowledge base
will become invaluable. Success in local and regional hotel
markets will be shaped decisively by a global business
environment that defines capital movement, customer
expectations and applications of new technologies.
If the customer is king in the 21st century, hotel
organizations will be best served by focusing less on their
hotel assets as measures of success, and more on their
customers. This involves a fundamental shift in viewing
the real estate asset as the wealth creatorto the customer
as the key to building shareholder wealth. A customer
focus must imbue business decisions at all levels of
developing and operating a hotel organization. Pursuing

such a course will inevitably impact shareholder wealth.
To accomplish this, however, customers need to participate
in the product development process.
Fully realizing a customer focus in the industry poses
a significant challenge. The hotel industry must confront
problems due to conflicts between operational needs and
real estate goals. Quite simply, an operator must remain
customer-focused, but the short-term strategies to meet
these needs may be inconsistent with the long-term
objectives of property owners. Balancing those goals will
be essential.
A customer focus implies a significant shift in what
drives hotel developmentplacing primary emphasis on
the customer with the locations to follow. Nevertheless, a
hotel organization with its large investment in fixed
assetsthe real estatecan never be as nimble as a
consumer products company in adjusting products and
services to match rapid shifts in the marketplace. The
Japanese taught us that the concept of zero defects in
products and services can yield tremendous benefits. But
today an even more rigorous standard dominatesquality
that surprises. In practical terms, the hotel industry finds
it extremely difficult to meet the standard of zero defects
in service. Hotel services are based primarily on people,
not computers or other equipment. Quality that surprises
takes the concept of zero defects a step further. Yesterdays
surprising product or service is todays status quo.
Twenty years ago, a business executive did not expect
a consistent and predictable level of service wherever he
or she traveled in the world. Today that is a standard
not the exceptionas is the expectation for sophisticated
technology in hotel rooms to support business needs. With
customer discrimination so acute, it is not surprising that
brand loyalty is a diminishing commodity in the hotel

industry.
Find the ingredients for visionary leadership. Todays
hotel organizations need to recognize the need for
visionary leadership. The ability to forecast the futureto
anticipate change rather than react to itwill be one of
the single greatest determinants of market dominance in
the years ahead. The old command and control model
of leadership is giving way to a focus on leadership in
ideas, information, inspiration, vision and teamwork. For
the most part, failing organizations tend to be over-
managed and under-led. The leader sets the tone for the
moral character, the vision, the corporate culture and the
fiber of the institution.
While visionary leadership is essential, it must be
linked to business operations and foster a risk bias, rather
than a procedural bias. This will allow the organization
to stretch and, in turn, change. And it must be shared by
empowered professionals and staff throughout the
organization, including those who meet the customer.
Overcoming the resistance to change can be a daunting
task, particularly in large hotel organizations in which
diversions from the status quo may threaten established
management lines. It suggests that a culture based on
conformance may need to be replaced by an emphasis on
flexibility, learning and cooperation.
Management competencies will need to be aligned in
order to achieve the desired result. For many
organizations, this may mean a shift from traditional
hierarchies typical of companies in an industrial era to a
flatter organization with a more transparent interface
between leadership, organizational functions and
employees. Create a defensible position through corporate
strategy. For many of the industrys leaders, vision is
driven by the strategic planning process, a function which

has become critical for success.
Strategic planning, however, has at times been a step-
child in the hotel industry, and it is often the first to be
cut when organizations are downsized. It is clearly in
transition. There also has been a tendency to decentralize
and simplify this functionboth actions of potential
benefit. Strategic planning must be led by the top people
in the organizationthe CEO and COO. On the other
hand, it should be close enough to the customer to ensure
that planners can listen to and be influenced by
customer needs.
Beyond the ability to envision the future, core
management capabilities will make the differencethey
are essential. A clear vision without the management skills
to support it cannot be a recipe for success. First and
foremost, hotel management must have strategic
development skills and the ability to integrate complex
factors affecting success. Market volatility has become the
norm, in part caused by the rapidly changing tastes of
customers. Customers are increasingly approaching the
hotel industry with widely different social, economic and
political backgrounds, to say nothing of employees. Being
able to deal with these diversities in a positive and
constructive fashion that capitalizes on the differences,
rather than working to find ways to mitigate them, is the
clear path for successful management in the future.
The organization will also need to be imbued with a
sense of entrepreneurship that reacts proactively to the
markets diversity. Traditional organizations that follow
well-documented rules must give way to leaders who can
balance a sense of discipline with that of flexibility. Talent
and resources must be marshaled and leveraged. In an
industry with high fixed costs and labour intensity, the
concept of leverage in the hotel business is an all-important

one. Improving labour productivity through technology
must be a goal for todays forward-looking hotel
organization. Management must also be able to narrow
the gap between the employer and the employee, forcing
a flatter organization in the process. This will put
management closer to the customer and speed the two-
way communication process up and down the
organization.
The traditional role of information technology (IT) as
a back office support for accounting and bookkeeping has
clearly moved front and center stage. IT today influences
all aspects of business from corporate strategies to
organizational structureand from the very business
processes it is designed to support to performance
measurement. In a world where the customer is king,
IT must also deliver in two critical areas: sales and
marketing and customer service. Technology was once
viewed as a way to reduce costs by replacing people. That
attitude has been firmly supplanted by one that seeks IT
support for the creative work that all organizations must
pursue. IT must allow organizations to react more speedily
to market needs and, of course, produce the fulfillment of
customer demands both quickly and accurately. To do this
IT must operate on a decentralized basis. IT delivers, but
it has to be the right information to the right people, and
it needs to be done on a timely basis.
Starting a Hotel Business
The hotel business has picked up pace with more and

more people taking to traveling. Steps for start a hotel:-
Do proper market analysis and feasibility study
Make sure that the hotel is located strategically and
is easily accessible to the tourists
Make sure that the hotel is located strategically and

is easily accessible to the tourists
Hire a specialist interior designer to design your hotel
to suite a specific theme
If you are planning to open a luxury hotel then be
sure to choose a location within the main city near
major attractions.
In case of a cheap hotel the best place is on the
outskirts of the city where more tourists looking for a
cheap accommodation are likely to come
Make sure to provide online hotel reservation services
with proper cancellation rules
Be sure to open an online website for your hotel and
register it with travel services
Make sure to offer special discounts and best deals
on a regular basis
Offer combination deals by partnering with l ocal car
rental companies and airlines
How to start a hotel business is not very important; though
the part that plays the most important role is the planning.
Building a Hotel
If you are planning to build a hotel then there are certain

steps that you need to follow. Steps are
First and most importantly you should do a market
analysis and feasibility study. The best way to do this
is by hiring an independent consultancy. The hotel
planning should be carried out based on the study
Making use of the study report layout a plan for your
hotel, that includes the hotel location hotel
architecture, rates and amenities to offer
After determination of these key factors hire an

engineer to build your hotel. Interior designers can
be consulted to fix the hotel design
Frame proper laws and regulations for your hotel
along with getting proper registrations and rights
Promote your hotel online by opening a websites and
submitting the links to the databases of online
reservation services
Make sure to provide online reservation facilities for
you hotel in your website
Offer best deals and special offers on a regular basis
Role of Hotel Manager
Hotel managers are responsible for operations, including

reservations, food services, housekeeping and conventions.
In a small hotel, one manager usually makes all the
important daily decisions, whereas in a large
establishment, a general manager hires a number of
managers to be in charge of individual departments.
Ask yourself if you have excellent interpersonal,
communication and organizational skills. They are
necessary for a successful hotel management career.
Obtain a college degree in hotel management or
restaurant management. Remember that a food
services department contributes greatly to the profits
of a hotel; a successful restaurant manager can his or
her career advance quickly.
Take advantage of work-study programmes offered by
many colleges so that you will gain solid experience
working in hotels.
Expect to go through a hotels training programme
once you are hired after college. During the first
couple of years you will be handling only relatively

mundane duties, instead of providing your input on
issues such as staffing, hotel decor or conventions.
Understand that you might be offered a position as a
front office manager, a food and beverage manager, a
convention services manager, or any of a number of
administrative positions after your training period. If
you are successful at different managerial positions,
your career will benefit in the long run.
Be aware that a promotion might require you to
relocate for a few years if you work for a hotel chain
that has properties throughout the country.
COSTS OF DEVELOPING A HOTEL

The process of developing a hotel requires packaging five
componentsland, improvements, furniture and
equipment, pre-opening and operating capitalin a
manner that meets the needs and desires of travelers
visiting the marketplace. This delicate balancing act
requires precise coordination of design, function and cost.
The hotel development process starts with the land
acquisition. Generally, the land component cost represents
between 10% to 15% of the total project cost. When land
cost exceeds 20%, project feasibility could be in doubt. The
improvements represent the actual building with all its
mechanical, electrical and plumbing systems. The cost of
the improvements is directly related to construction
quality, spatial utilization, design consideration and the
local development cycle. During the building boom of the
late 1980s and, to a lesser extent, today increased
construction activity produces a more rapid rise in building
development costs.
The large amount of furniture and equipment within
a hotel is unique to this form of commercial real estate.
Depending on whether the property has foodservice or

not, the furniture and equipment component generally
represents between 10% and 20% of the total project cost.
As hotels start installing more expensive technology,
expect these percentages to increase, which could affect
the balance between cost and value. Another two
components unique to the hotel industry are pre-opening
expenses and operating capital. Pre-opening costs include
items such as initial marketing, recruiting and training.
For large convention hotels, these, activities can occur
years before the property opens and often represent a
significant expenditure. Operating capital is the money
needed to purchase inventories and supplies. Once a hotel
becomes operational, its actual working capital diminishes.
When government has commonly stepped in, support
has focused on the development of key hotel properties
deemed essential to stimulate business travel and tourism,
and create new jobs. Formal public/private alliances in
these cases have often opened the door to lower-cost
financing of hotel development, as well as a host of other
incentives to stimulate private investment. Public entities
have at their disposal a wide array of programmes and
financial vehicles that can assist in making a hotel project
feasible and thus contribute to an areas overall economic
well-being. The potential to access lower-cost financing,
tap redevelopment incentives, structure favourable land
lease terms, secure site improvements and other
alternatives should not be overlooked by hotel developers
when development projects have a clear link to public
interests.
The interdependent economics of convention centers
and the hotels that serve them create opportunities for
public/private partnerships of benefit to government
entities and private investors. The evolution of public/
private partnerships to support development of convention
headquarters hotels, as a result, offer an excellent

foundation for examining how public sector financing and
other incentives can support private hotel investment.
Most cities require a convention headquarters hotel
to market their convention center successfully. Yet many
mid- to upper-tier cities often lack sufficient hotel
inventory that can be specifically committed to this
purpose. Conversely, room nights generated from a
convention center are often insufficient to exclusively
support a convention headquarters hotel serving the
meetings and trade shows so important to local economies.
Further complicating the problem, convention
headquarters hotels often incur higher than typical
development costs due to the amount and quality of public
areas required.
A need for public/private partnerships to support the
economic feasibility of a convention headquarters hotel.
This hotel, in turn, will support the public investment
made in a convention center, as well as generating other
local economic benefits. They also evidence the range of
options available to the public sector to support private
hotel development. While these types of incentives most
often may be used to support convention hotels, they may
also be important tools for other types of hotel projects in
which there is a strong relationship between public
interests and private investment.
Convention facilities in these cities may be located in
areas peripheral to hotel concentrations. In addition,
existing hotel operators are often reluctant to commit the
room inventory required to serve convention delegates
typically offered in package deals at lower room rates
while simultaneously reducing rooms available to serve
guests that make up their core business. The basic
economics in hotel development and operations pose
additional challenges. Convention-oriented hotels are

typically 10 to 20 percent more expensive to develop than
a comparable size, group-oriented hotel.
At the same time, room rates for a convention hotels
core market segment may run 20 to 30 percent below
comparable business hotels due to discount package deals
negotiated for delegates as part of convention attendance.
To remain successful, a convention center must attract
annual national bookings in the range of 25 to 30 events
that have a minimum of 2,500 participants each. These
bookings, however, on average support occupancies of
only 30 to 35 percent in terms of total room nights. As a
result of these factors, convention center hotel properties
must either achieve higher average occupancies, develop
other sources of business or realize higher room rates
attributable to non-convention guests to succeed.
Convention hotels can often attract alternative sources
of revenue, including sponsoring convention and meeting
trade separate from a convention center. Sources of
business may include smaller group business, commercial
activity, and wholesale and tour operator business.
Nevertheless, the hotel is in most cases fundamentally
dependent on the convention center for its core business.
To entice new development, local government entities
must often work jointly with hotel developers to overcome
the obstacles that tend to make these hotels more costly
to develop and less profitable to operate.
What tools can government bring to bear to attract
private hotel investment by improving their economics.
The city acquired land, provided a 45-year lease with
attractive terms and furnished off-site improvements, as
well as site utilities. The hotel additionally was awarded
the food & beverage concession for the convention center,
and real estate property taxes were abated during
construction. Tax increment financing was used to support

public improvements, while real estate taxes were abated.
In addition, the hotel was supplied with convention center-
owned parking at prevailing market rates. More recent
public/private partnership successes include the Westin
Hotel venture in Providence, Rhode Island, which involved
a $290 million bond issue, that covered the convention
center, hotel and parking. A Sheraton Hotel at the Jefferson
Center in Birmingham, Alabama, involved a $148 million
low-interest bond offering, guaranteed by JCA and
supported by city and county occupational taxes.
Convention and Visitors Bureau has contended that
a convention hotel within walking distance is required to
make the city more competitive for attracting large
conventions. Yet the downtown Los Angeles hotel market
has been weak since the onset of the recession early in
this decade, a condition which has been further
exacerbated by the Los Angeles riots in 1992 and the
Northridge earthquake last year. Downtowns primary
convention hotels, all located within seven blocks of the
convention center, collectively posted occupancies in the
mid-50 percent range last year with projected occupancies
edging toward 60 percent this year. Thus far, it has been
concluded that a major new convention hotel is not
economically feasible, even with generous public
incentives. These initiatives demonstrate the range of
strategies available to the private sector to attract private
hotel investment. At their best, these partnerships make
it possible to reduce hotel development costs, set the stage
for more profitable hotel operations, and allow a
government jurisdiction to safeguard public investment
and achieve local economic development goals.
Generally, public contributions that can drive
development of a hotel may include land at favourable
lease terms, off-street parking facilities, construction/use
rights of public space and marketing support. Hotel

developers may also be granted the convention centers
food and beverage service concession. This ancillary
revenue can be an important step to offset the lower room
rates often associated with delegate business. Among the
contributions made by the hotel developer are equity
funding, the track record of team members, a superior
product development plan, and strong management and
marketing. In addition, the public and private entities must
have controls in place to ensure that relationship objectives
are maintained. A convention headquarters hotel, for
example, must commit room nights to the convention
center, even at the cost of displacing higher rated business.
Conversely, the convention center must book events,
which generate room nights, perhaps foregoing higher
revenue-generating consumer shows that tend to be
oriented to a local audience. A range of successful private/
public techniques are available to further these
partnerships:
Site Control
Land values in urban or resort environments are generally

very high with these costs typically representing a
significant component of hotel development. Government
participation is often essential, either by writing down the
market value of a property or purchasing a property to
lease to a hotel owner on a long-term basis at an economic
cost. Miami Beachs experience is instructive. The city in
1992 expanded its existing convention center located near
City Hall, a location remote from Miami Beachs highly
developed existing hotels. No new major hotels have been
developed in 27 years. Studies commissioned by the city
addressed several pivotal issues. It was determined that
none of the existing hotelsclustered primarily at some
distance along the coastlinewould or could continuously
sell room nights to major national conventions that desire

to book the citys convention center. Additionally, major
hotel developers would be unlikely to develop a new hotel
away from the beach area without significant incentives.
To advise the city on incentive parameters required
to entice developers and financial institutions in the
development and financing of the 800-room hotel. Among
the most important of the incentives was site control.
Arthur Andersen advisors concluded that the citys
purchase of the site adjacent or proximate to the
convention center was essential. It was further determined
that the hotel site should have ocean-front exposure. After
analysis of three potential locations, the city purchased an
ocean-front site at a cost of $24 million. The site is five
blocks from the citys convention center.
Low-cost Financing
In the past five years, new full-service hotels have been

extremely difficult to finance. Convention hotels,
furthermore, are generally regarded as being of even
higher riska result of the uncertainty related to
occupancies and above-average development costs. As a
result, public financing can be the key element in making
a convention center hotel feasible. Again, a number of
options are available to the public sector. While tax-
exempt public bond issues are subject to private purpose
limitations, there are techniques which can blend in public
funding to privately owned and operated hotel ventures.
These include financing and leasing back the public areas
of a hotel facility. Public revenues from hotel taxes or real
property taxes may be designated for the facility through
non-tax exempt issues. In addition, cities, counties and
other government entities may offer certain operating
guarantees, such as payment of debt service, for a specified
period of time.
In some cases cities have made equity investments

in convention hotels. The municipality may become the
junior equity partner in the hotel with first-in risk capital,
and last-out return. In a broad policy sense, the citys
rate of return is potentially greatly enhanced by an
improved local economy, higher visitation and associated
tax revenues. Bond financing, and public ownership of the
asset, for example, is a cornerstone of the financing
structure for a new convention center hotel at McCormick
Place, the final phase of its exposition center.
Other Public Incentives
Local governments also have incentive options that will

have significant impact on the economies of building a
convention headquarters hotel. These include incorporating
public spaces and amenities, such as joint parking or
meeting facilities to reduce the overall cost of the
convention hotel. Municipalities may also provide property
tax abatements, as well as redevelopment zone benefits
such as expedited permitting and access to other public
funding sources.
From a development and operational standpoint,
there are a number of challenges facing hotel companies
as they consider convention headquarters hotels. In
addition, many deals have failed because a city has
insufficient resources to close a transaction, or lacks an
understanding of the resources it can bring to bear in
support of these developments. What is fundamentally at
stake is shifting a portion of the risk from the developer
to public entities, since the public jurisdiction stands to
benefit economically if the hotel is a success.
More than a standard Request for Proposal (RFP) to
attract a quality developer is often needed. The public
sector must understand what types of incentives it has
available to drive a projectand the best way to frame

the RFP process. And it will clearly require specialized
expertise to ensure that financial incentive structures make
the most of available opportunities and that the
expectations are realistic.
In setting parameters for competitive bidding on these
projects, municipalities or other public jurisdictions need
to be specific about certain factors, such as the hotel size,
design, quality of facilities and amenities, and
management. But rather than defining the competition in
a rigid envelope, it is more important to ensure that
respondents customize a proposal that meets the citys
criteria and defined needs, and includes financial
structures crafted to match the public resources available.
Clearly defined procedures for evaluation of proposals are
also crucial. Hotel development can generate a significant
stream of economic benefits for a community including
support for a tourism industry, job creation and an
expanded tax base. Public incentives to support private
hotel investment, as a result, can become a decisive
component required to assure that public economic
development goals are achieved.
CHALLENGES IN HOTEL TECHNOLOGY ARENA

Many of the challenges in the hotel technology arena have
been created by policies and practices of hotel companies
themselves. In order to achieve success, a substantial
number of hotel companies may need to change key
elements of how they measure, fund, and purchase
technology. Despite the level of interest among CEOs and
CIOs within the industry, technol-ogy cost measurement
has proven extremely elusive. There is a widespread view
among many companies that, while service delivery
models for technology are attractive, the current offerings
on the marketplace seem too expen-sive in comparison to

acquisition costs.
While this may be true in some cases, there are
fundamental issues with attempts to compare service
models with capital spending models. First, current hotel
accounting standards make it virtually impossible to
measure technology costs. Most technology costs within
the hotel are buried within departmental budgets. Costs
for a single technology initiative typically span across
departmental borders. Technology that is provisioned by
management companies or franchisors is often priced to
the hotels at an amount that bears at best a loose
relationship to underlying costs.
Second, many of the costs borne within the service
model are typically excluded when estimating the total
cost of ownership of an alternative capital-acquisition
based solution. Internal cost calculations rarely include the
time of all of the IT and non-IT management and staff
needed to manage the operation on an ongoing basis.
Furthermore, hotel companies rarely hold internal service
departments to the same service-level agreements that they
insist upon with external service providers.
In order to manage technology spending
appropriately, the hotel industrys accounting, budgeting
and Return on Investment (ROI) analysis approaches need
to:
Clearly identify technology costs by category,
regardless of which department funds them.
Clearly measure or, at a minimum, estimate, in-direct
costs of technology projects, including management
staff time, burdens on support de-partments such as
accounting and human resources, and similar
resources.
Measure technology costs actually incurred by the

hotel, management company, and franchi-sor levels,
and paid to third-party (unrelated) vendors. Too often,
technology projects are mis-analysed and under-
funded because a manager or franchisor imposes a
cost on a hotel that covers the provision of both
technology-based and non-technology services. The
hotel experiences a single price for the service and
may not be able to assess the technology com-ponents
independently.
Make explicit assumptions about technology refresh
costs, and in particular about the organisational costs
when change is generational (as is often the case with
the capital acquisition model) vs. incremental (as is
more common with the service model).
Identify costs shared among multiple applications as
infrastructure, and evaluate infrastructure costs within
the context of all supported applications and
operations rather than just the single application that
forced an upgrade or replacement
Hotels should establish, and owners should demand,
explicit technology reserves, just as they create reserves
to refurbish the hotels physical plant. The need to spend
money on an ongoing basis to ensure a stable but evolving
technology environment is not optional, but rather is a
cost of staying in business. While it may be possible to
defer a given expenditure from one year to the next,
technology refresh cannot be put off forever any more than
can refurbishment of the physical plant.
The need to measure shared infrastructure costs,
discussed above, is generated by the need to budget for it
separately from end-user projects. A solid technology
foundation within each hotel and hotel company is
required to operate any of the more modern hotel systems.
Today, the property management system, the sales

system, the local presence of the central reservation system,
the office automation software, and many other
applications often share the network infra-structure and
workstations, which taken together can account for half
or more of the hardware costs within a hotel. In the future,
PABXs, telephone handsets, in-room entertainment and
Internet services, door locking, and energy control systems
(among others) will likely share the same infrastructure.
The cost of maintaining reasonably current technology
for the shared infrastructure elements cannot reasonably
be burdened on any one application and justified by the
projects ROI. Rather, infrastructure costs should be
determined, component by compo-nent, with reasonable
lifetimes, and an annual budget established for technology
refresh. The particular systems being deployed or
upgraded within a given budget year may dictate which
infrastructure elements are refreshed first, but should not
be expected to provide the financial justification for
infrastructure elements that would eventually be needed
with or without the project.
An example of this approach is the widespread use
in other industries (and in isolated pockets within the hotel
industry) of leasing models for technology infra-structure.
Many companies, for example, routinely replace all PCs
on a three-year cycle. The vendor that provisions the PCs
(whether internal or external) charges the users a monthly
lease rate that enables it to deliver, install, maintain, and
replace PCs. This maintenance and replacement cycle
allows every technology project to assume that it has the
workstations needed, at a current level of technology. The
incremental cost of the project is affected only if it creates
the need for additional workstations.
Vendors within the hotel technology community each
have their own business models and agendas. Ultimately,
however, the hotels are their customers, and those vendors

who listen to hotels and who provide technology that
hotels can use more effectively, will prosper along with
their clients. Hotel companies should talk with their
current vendors and determine their willingness to commit
to the standards. If vendors understand that their future
business from enough hotel companies is dependent on
their operating within a standard technical and business
framework, most of them will adapt very quickly. There
are no requirements imposed by these standards that have
not been widely adopted by the technology communities
in other industries. Individual vendors may balk, but at
the end of the day, it is the hotels money to spend with
the vendors who can best serve their needs.
The hotel industry as a whole, and individual hotel
properties in particular, have failed to embrace the
establishment of adequately funded and qualified technical
staff. While there are many structural reasons why hotel
technology has failed to deliver to its potential, many could
have been avoided, or could be compensated for, if an
adequate IT skill base were available. Only a few hotel
companies, mostly larger ones, have embraced this
concept.
As an industry, we would not promote an accountant
or front desk clerk to the top position in food and
beverage, yet hotels routinely promote unqualified staff
into key technology positions. If the food is bad and the
restaurant service surly, we find a qualified F&B manager
and give him or her what is needed to succeed. When
technology fails to deliver to expectation, we find the staff
member who seems to know how to use a computer and
ask them to solve it. This is akin to selecting, for the next
F&B manager or Executive Chef, someone who likes to
eat.
For many hotels, and particularly those lacking

centralised support from a chain or management company,
hiring qualified IT staff can be an immense challenge. An
IT professional sufficiently skilled to manage all of the
technology in a midsized or large hotel can command a
salary equal to or greater than that of the General
Manager.
Larger management companies, chains, and third-
party service providers are inherently in a better po-sition
to attract qualified staff with the necessary range of
expertise. It is for this reason that most larger companies
and some service vendors have begun pulling technology
out of hotels, wherever feasible, operating it in a
centralised or regionalised environ-ment, and delivering
it as a service to hotels. This is not to say that hotels do
not need their own IT staff, or to suggest that it would
allow hotels to continue to get by with the current
insufficient levels of IT skills. Rather, it will allow a
competent IT manager within a hotel to deliver and
support a broad range of technol-ogy services cost
effectively.
TRENDS AND OPPORTUNITIES

It is boom time for Indias Tourism and Hospitality
sector. Driven by a surge in business traveller arrivals
and a soaring interest in India as a tourist destination, the
year 2006 has been the best year till date, with foreign
visitor arrivals reaching a record 4.5 million. Foreign
tourist arrivals have grown by 10-15 per cent in the last
one year. Over the last few months, tier-II cities like
Jaipur, Gurgaon, Hyderabad, Pune, Bangalore are seeing
growth both in occupancy and room rates. While
occupancy is around 75-80 per cent, room rates are up by
15-20 per cent in these markets.
Table 1. Foreign tourist arrivals and foreign exchange earnings

Year Foreign Tourists Estimated foreign
Exchange Earnings
Number Growth Million Growth
in Lakh Rate US$ Rate
1998-99 23.97 1.1 2993 2.7
1999-00 25.05 4.5 3036 1.4
2000-01 26.99 7.7 3168 4.3
2001-02 24.28 -10.0 2910 -8.1
2002-03 24.54 1.0 3029 4.1
2003-04 29.33 19.5 3979 31.4
2004-05 36.03 22.8 5029 26.4
2005-06 40.53 12.5 5931 17.9
The importance of tourism for the Indian economy is

evident from the fact that it contributed to 5.9 per cent of
the Gross Domestic Product and provided employment to
41.8 million people. The year 2006 was not only a record
year for Indias inbound tourism but was the fourth year
showing a double-digit increase in arrivals. Moreover,
arrivals recorded a double-digit growth in all 12 months
of last year even during the lean months of summer
and the monsoon period.
The 4.5 million arrivals recorded were 13 per cent
above the level of 2005 and reflected an average annual
growth of nine per cent over the six year s from 2000. In
a bid to encourage the tourism sector further, the
Government is planning to infuse equity capital of over
US$ 55.5 million for reviving Ashok Hotel, Samrat Hotel
and Hotel Janpath in New Delhi. Further it has spent a
sum of US$ 16.2 million has been spent in the current
fiscal on the Incredible India campaign to promote
tourism both in the domestic and overseas markets. The
Government has also proposed to declare a conditional
10-year tax holiday for all tourism projects in the country.
While companies would enjoy full tax exemption up to 50

per cent of the profit, for enjoying tax benefits for balance
amount they would be required to re-invest that part of
the profit in tourism projects.
With the tourism sector revealing immense
potential, global hospitality majors are exploring plans of
entering India. These include Dawnay Day, Whitbread,
Jumeirah, Golden Tulip, Istithmar and Mandarin
Oriental. While hotel companies like Golden Tulip are
looking to launch budget hotels, others like UKs
financial and real estate major, Dawnay Day and
Whitbreads Premier Travel Inn, are launching cookie-
cutter business models. The Jumeirah and the Mandarin
Oriental are the hi-end luxury hotel brands looking to set
base in the country. Dubais leading alternative
investment house, Istithmar, is looking to invest in luxury
hotels in key gateway cities around the world and
emerging markets.
Hospitality majors from India and abroad are likely
to pump in close to US$ 1 billion in the next 2 years into
the sector. Travel portals are cashing in on the booming
demand for hotel rooms. There has been a surge in hotel
booking on travel portals in the past 12 months. Online
travel industry is a US$ 800-million industry in India, that
is, about 14 per cent of the entire travel industry.
With India becoming a major hub for medical
tourism, leading corporate hospitals like Apollo, Fortis
and Wockhardt are eyeing alliances with foreign airlines
to reach out to prospective markets. The alliances provide
a win-win situation, as foreign carriers are also believed
to be exploring similar opportunities in India.
A study by McKinsey and Confederation of Indian
Industry (CII) says that at its current pace of growth,
healthcare tourism alone can rake over US$ 1.7 billion
additional revenues by 2012. Medical tourism is now a

US$ 299 million industry, as about 100,000 patients come
each year. The country needs to exploit the cost
advantage it can offer to a health tourist, the study said.
Medical tourism, Adventure tourism, Heritage
tourism, Wellness tourism, Pilgrimage tourism, Golf
tourism, Eco-tourism, Wildlife tourismthe scope for
theme travel is also vast in India. Significantly, the 100
per cent foreign direct investment regime in tourism
permitted through the automatic route will help boost the
countrys tourism. With the country hosting the 2010
Commonwealth Games, this share will only increase to
about 1.5 per cent in 2010, from a mere 0.52 per cent in
2006. India?s tourism industry is poised to grow to about
US$ 90 billionfrom the current US$ 39 billionin the
coming decade.
The economy performed extremely well during
2003/04, with GDP growing by 8.2%. While agriculture
accounted for most of the rebound, other sectors also
showed a strong performance. Industry grew at above
7.0%. Services, which account for more than half of total
GDP, expanded 8.7%. A key component of Services - the
trade, financial services, hotels, insurance, transport and
communications component -expanded by a seven-year
high of 11.2% amid a credit-fuelled consumer spending
spree.
The economys buoyancy, together with initiatives
by the erstwhile NDA government - to improve Indias
deficient infrastructure, divest loss-making enterprises
and ease restrictions on foreign investment, and perhaps
most importantly, make peace with neighbouring
Pakistan - did much to convince the world of Indias
investment worthiness. More than $10 billion in foreign
capital poured into India in 2003/04. However, this sense
of bullishness has been somewhat dampened, following

the NDA governments failure to return to power in the
General Elections in April-May 2004, despite having done
well in state elections last year.
The present Congress-led United Progressive
Alliance (UPA) governments efforts to open up the
economy are being thwarted by its main ally, the Left
government. There are essential ideological differences
between the two main parties: the Congress is
progressive in outlook and both Prime Minister Singh
and Finance Minister Chidambaram have been
champions of reform; the Left, on the other hand, is not
in favour of liberalisation and disinvestment. This has led
to a sense of uncertainty as to the course government
policy will take, causing foreign investors to hold back,
and wait and watch, at least for the time being.
The Reserve Bank of India and leading research
agencies have forecast a GDP growth of 6.0-6.5% in 2004/
05, taking into account the likely adverse effects on
agriculture of a late and erratic monsoon. However,
recent data on first quarter (April-June) performance
reveals the economy has, in fact, done better than
expected. GDP growth for the period April-June 2004 is
7.4%. Agricultural production witnessed higher-than-
expected 3.4% increase.
Manufacturing grew at 8.0% during this period,
exceeding the strong growth momentum witnessed in
2003/04. Demand for manufactured goods has, and will
continue to, benefit from low interest rates, inexpensive
and easily available financing options, and an overall rise
in the purchasing power of Indias population, over the
last number of years. The trade, financial services, hotels,
insurance, transport and communications component,
which accounts for 50% of the Services sector, registered
an 11.0% increase. Services and Industry will continue to

drive the economy in the current fiscal.
In the economys favour is its health: the balance of
payments position is stable, a current account surplus is
forecast for 2004/05 and Indias foreign exchange reserves
are amongst the highest in the world. Moreover, the
finance minister has strongly emphasised the
governments commitment to liberalisation and key
reform initiatives, assuring that they will be
implemented, even if there is a delay. The government
is also contemplating using a part of the foreign exchange
reserves towards major infrastructure development. The
new government has been concerned about inflation,
which has been rising steadily over the past three
months, and touched a four-year high of 8.0%. The
increase is the result of seasonal factors and the higher
prices of fuels and manufactured goods.
The year 2003 was an outstanding year in terms of
inbound tourism, with tourist arrivals reaching 2.73
million. The strong growth in tourist arrivals in 2003 is
partly attributable to the outbreak of SARS in east Asia,
as well as the war on Iraq, which resulted in India being
perceived as a safe region to visit. The more fundamental
reason, however, relates to a strong sense of business and
investment confidence in India: inspired by Indias strong
GDP performance, and initiatives taken by the erstwhile
Prime Minister, to make peace with Pakistan, strengthen
ties with the developed world and open sectors of the
economy to private sector/foreign investment.
Significantly, the bulk of international arrivals in India,
both in 2003 and 2004, have been business travellers.
Domestic travel, both business and leisure, also
benefited from a thriving economy. Prior to being voted
out of power, the NDA government implemented certain
important measures to provide a much-needed boost to

travel & tourism. These included the abolishment of the
inland air travel tax of 15%; reduction in excise duty on
aviation turbine fuel to 8%; and removal of a number of
restrictions on outbound chartered flights, including
those relating to frequency and size of aircraft. The
provision included allowing Indian charters to land at all
airports in the country, and Indian passport holders to
travel on inbound charters.
The new government, it appears, is taking active
interest in developing tourism in India. The continued
Incredible India campaign has had a strongly positive
impact on tourist arrivals in 2004. Definite efforts are
being made to communicate the Brand India message:
India made its presence strongly felt at the WTTC-
promoted Global Travel & Tourism Summit held in Doha,
Qatar in May this year.
An important new development is the governments
recent decision to treat convention centres as part of core
infrastructure, allowing the government to provide
critical funding for the large capital investment that may
be required. The government has identified Delhi,
Mumbai and Goa as the markets to develop these
convention centers, which is likely to further fuel demand
for hotel rooms. Another effort is the decision to
substantially upgrade 28 regional airports in smaller
towns, slated to be completed by 2006. Expressions of
interest have been received for the proposed privatisation
of the Delhi and Mumbai international airports, but, as
expected, the Left government has opposed the move.
Substantial investments in tourism infrastructure are,
undoubtedly, essential for this industry to continue to
evolve and grow, and ultimately achieve its potential.
The upgrading of national highways connecting various
parts of India has opened new avenues for the

development of budget hotels alongside. Taking
advantage of this and certain other key locations is the
Tata group that has developed IndiOne, a 101-room
economy hotel outside Bangalore; they hope to duplicate
this across India in the next few years. Another hotel
chain called Homotel, being promoted by Sarovar Park
Plaza group is also likely to compete in this new
economy segment. International majors like Accor are
also planning to bring in Ibis into India.
The year 2004 has been a record year in tourist
arrivals, as is evident from data on foreign arrivals for the
first eight months of the year. According to provisional
estimates of the Ministry of Tourism, January to August
2004 saw approximately 2,093,600 visitors to India, 25.8%
more than in the corresponding period of 2003. Growth
has been spurred by large increases in airline passenger
capacity: international airlines have added more than
4,000 seats a week on international routes to India in the
last six months alone.
Increases in passenger capacity will play a
significant role in fuelling growth in travel & tourism.
British Airways has recently been permitted to triple its
flights to India, and carriers from Australia are now
allowed to offer 4,500 seats a week to India, more than
double existing capacity. Moreover, Indian private
carriers have recently commenced flights to the SAARC
region, and have asked the government to be permitted
to fly to East Asian countries. Capacity increases will not
only bring in more international arrivals, but will, over a
period, reduce airline fares to India, which are currently
amongst the highest in the world.
Assuming a stable economic and political climate
worldwide, the outlook for inbound tourism - both
business and leisure - is strongly encouraging. Many

international investors, particularly those who have
invested heavily into China in the past few years, are
now looking at India as the next opportunity. Conde Nast
Traveller, in its readers travel awards for 2004, has
placed India at number six among the worlds tourist
destinations.
Domestic tourism will continue to develop rapidly
and will be the real driving force for this industry over
the next decade or so. This segment will be helped by the
growing wealth base of Indias population and
discounted fare options. A significant new development
is the arrival of low-cost carriers, pioneered in India by
Air Deccan, with other industry players such as Air India
and Indian Airlines readying themselves to enter the low-
cost market.
According to recent estimates of the WTTC, Indian
tourism will grow at 8.8 per cent over the next 10 years,
which would place India among the most rapidly
growing tourism markets in the world. A longer term,
sustained growth of the industry depends on how
successfully several issues are addressed - relating to old
and poorly facilitated airports, inadequate hotels, poor
road and transport infrastructure, high levels of taxation
and a bureaucratic visa processing system. As of now, at
least, India is clearly taking steps in the right direction.
Future Trends
Results of the recent Indian Hotel Industry Survey shows

that the industry is robust at present, and there are clear
indications are that the next two to three years will be
even stronger. Certain markets are already seeing huge
un-accommodated demand during weekdays, with
average rates in some of these markets witnessing
unprecedented increases. Recent indications are that the

hotels in south Mumbai have also started to see
improvements in performance. This effectively means
that Mumbai is poised to see good growth in terms of
both occupancy and room rate increases as demand
outpaces supply. Goa and Delhi are also expected to see
some rate increases.
The Goa market has performed exceptionally well
and in the years to come will be one of the best
performing markets. The city over the past two years has
seen substantial increases in rooms supply, despite this
demand continues to outstrip supply, resulting in
occupancies to go up marginally even in the current year.
At present there is not much new hotel activity planned
for Goa, making this one of the preferred location for
investment. Another market performing extremely well is
the Pune market.
The sharp upturn in Bangalores performance is
beyond what most hotel owners and developers had
anticipated. Existing hotel owners can expect a windfall
gain this year as well as for the next few years, until new
supply enters the market. The Leela Bangalore is amongst
the biggest beneficiaries; this hotel is already setting
records for highest average rates in the country for a
business hotel.
The trends witnessed in Delhi in 2004 have been
quite positive. Occupancies have picked up over the past
few months, especially in hotels closer to Gurgaon. These
hotels enjoy much healthier occupancies than city centre
hotels which, in fact, are pulling down overall occupancy
levels.
Opportunities for the Indian hotel sector continue to
be in the budget and mid-market segment: we anticipate
these segments to witness huge growth and expansion, in
the next year or two. The luxury segment is set to

perform extremely well over the next few years until the
supply- demand gap is bridged.
The average rates to grow in all major cities across
India. New opportunities lie in the extended stay
segment, which many potential developers are currently
shying away from. Also, owners interested in developing
extended stay properties are keen to partner with existing
branded chains already operating in India. This is an area
where specialized serviced apartment chains like
Oakwood and Ascot have tremendous scope for
involvement. This is particularly true in destinations that
are near large concentrations of IT and related services
development.
Medical tourism could also be the next big thing,
and, while we are yet to see any development in this
area, we consider that there could be some potential. If
world class convention centres are indeed developed in
Mumbai, Delhi and Goa, these cities are sure to benefit.
Similarly the further liberalization of the aviation sector
would mean additional tourists, and with supply unable
to keep pace with demand, nearly all segments of the
hotel industry would see improvement.
Hotels in metro cities, with an average rate of Rs
2,600-3,000, and hotels in non-metro cities, with an
average rate of Rs 1,800-2,400, are likely to experience
rapid growth in demand in the next year or two. Cities to
watch out for, in terms of development opportunity, are
Pune, Goa, and certain pockets in major cities like Delhi
(west) and Mumbai (mill lands).
In response to the rapid growth of the hotel market
in India over recent years, hotel performance in India is
booming. Lower costs of travel following the
liberalisation of the airline industry as well as reduced
security concerns due to improved relations with

Pakistan have helped boost performance.
A strong economy and increasing inward investment
have elevated Indias international profile. With a
domestic tourism market roughly one third of the total
international arrivals received by all global markets - its
exciting to watch. The evolving business dynamics in
India continue to provide the hospitality industry further
potential for impressive growth as an international
destination.
Hotel companies are responding to the growing
domestic market by adding India to their development
agenda for mid-scale products. Infrastructure and geo-
political concerns continue to limit Indias ability to
develop as a tourist destination. Fortunately recent
government initiatives including the liberalisation of the
airlines and tourism awareness campaigns such as
Incredible India and Atithi Devo Bhavah take India
one step closer to achieving its true potential.
6
Developmental Initiatives for
Tourism Sector
In order to develop tourism in India in a systematic

manner, position it as a major engine of economic growth
and to harnessits direct and multiplier effects for
employment and poverty eradicationin an environ-
mentally sustainable manner, the National Tourism
Policy was formulated in the year 2002. Broadly, the
policy attempts to:
a. Position tourism as a major engine of economic
growth;
b. Harness the direct and multiplier effects of tourism
and providing impetus to rural tourism;
c. Focus on domestic tourism as a major driver of
tourism growth.
d. Position India as a global brand to take advantage of
the burgeoning global travel trade and the vast
untapped potential of India as a destination;
e. Acknowledges the critical role of private sector with
government working as a pro-active facilitator and
catalyst;
f. Create and develop integrated tourism circuits based

on Indias unique civilization, heritage, and culture in
partnership with States, private sectorandother
agencies; and
g. Ensure that the tourist to India gets physically
invigorated, mentally rejuvenated, culturally enriched,
spiritually elevated and feel India from within.
h. Keeping is view the basic principles and guidelines
of the Tourism Policy, the Ministry of Tourism has
been broadly implementing the following schemes/
programmes during the 10th Five Year Plan:
Scheme for Product/ Infrastructure Develop-ment
and Destination & Circuits
Scheme for Integrated Development of Tourist
Circuit
Scheme of Assistance for Large Revenue
Generating (LRG) Projects
Scheme of Capacity Building for Service Providers
(CBSP)
Scheme of Rural Tourism
Scheme of Financial Assistance to States for
Organization Tourism Related Events
Scheme of Central Financial Assistance for
Information Technology (IT) Projects
Scheme for support to Public Private Partnership
in Infrastructure Development (Viability Gap
Funding)
Scheme of Market Development Assistance (MDA)
Capital Subsidy
Time Share Resorts (TSR)
Market Research- Professional Services.
Developmental Initiatives for Tourism Sector 153
R EVISED G UIDELINES OF S CHEME FOR P RODUCT /

I NFRASTRCUTURE D EVELOPMENT FOR D ESTINATIONS AND
CIRCUITS
In the 9th Plan assistance was provided in the following
fields:
1. Construction of budget accommodation.
2. Tourist complexes.
3. Wayside amenities.
4. Tourist Reception Centre.
5. Refurbishment of monuments.
6. Special tourism projects.
7. Adventure and sports facilities.
8. Sound and Light shows and illumination of
monuments.
These schemes were merged into following two schemes
during the 10th five year plan.
1. Integrated Development of Tourist Circuits
2. Product/Infrastructure and Destination Develop-ment.
In order to carefully regulate the Product Development
the above two schemes are now merged into one scheme
Product/Infrastructure Development for Destinations and
Circuits. This scheme will have the following two
components;
a) Major destinations and circuits development
b) Rural Tourism infrastructure development
Major Destinations and Circuits Development
The focus under this revised scheme will be on the

improvement of existing product and developing new
tourism products to the world standard. It will also focus
on Integrated Infrastructure Development of the tourist

sites. These tourist sites/destinations would be carefully
selected based on its tourism potential. The aim would be
to provide all infrastructure facilities required by the
tourists within such destinations and circuits.
Master Planning of these destinations and circuits
will be undertaken so as to develop them in an integrated
holistic manner. The aim will be convergence of resources
and expertise through coordinated action with State
Governments/U.Ts and Private Sectors. Tourist
Destinations and Circuits in each State would be
identified in consultation with the State Governments and
would be taken up for development. This would include
activities ranging from preparation of a master plan to
implementation of the master plan. Projects to be taken
up under this scheme should follow an integrated,
projectised, area development approach. Comprehensive
DPRs should be prepared for each project after
consultations with all the stakeholders.
Definition of a destination: Destination is a place of
tourist interest. For being eligible under this scheme the
destination must be among the most visited sites in the
State, or a recognized Heritage monument. A group of
tourist attractions located in the same village, town or city
would also qualify.
Definition of a Circuit: A tourist Circuit is defined as a
route on which at least three major tourist destinations
are located such that none of these are in the same town,
village or city. At the same time they are not separated by
a long distance. It should have well defined entry and
exit points. A tourist who enters at the entry point should
get motivated to visit all the places identified on the
circuit. The objective of having a tourist circuit is to
increase the total number of visits to all the destinations
on the circuit on the one hand and to provide to the

tourist the attractions of all the destinations located on
the circuit.
Identification of tourist destinations and Circuits: The
destinations & circuits will be selected on the basis of its
tourism potential in consultation with the State
Governments. The Destinations/ Circuits to be taken up
for development will be identified by the Ministry of
Tourism at the beginning of each year. A tourist circuit
could be limited to a State or it could be a regional circuit
covering more than a State/UT. The identification of the
project, the implementing agency, and the mode of
channelisation of funds would be done in consultation
with the State Govt./UT Administration.
Funding pattern of the project: The Ministry of Tourism
would bear 100% of the project cost based on the project
plan and estimates submitted, excluding the items which
are the exclusive responsibility of the State Governments,
as mentioned at para 8 below. While there may be no
ceiling on project cost, Government of India contribution
would be capped at Rs. 25 crore for destination
development and Rs.50 crore for circuit development for
identified major destinations and circuits based on tourist
traffic. However, the existing ceiling of Rs.5 crore and
Rs.8 crore for destination and circuit respectively would
continue for other projects. In respect of each large project
involving central financial assistance of Rs.25 crore and
above, the Ministry should formalise MOUs with State
Government and other stakeholders indicating the works
to be undertaken by them in physical and financial terms.
Total project should include contribution from State
Government and contribution from other stakeholders.
State Government contribution towards land,
rehabilitation package, O&M and external infrastructure
like water supply, electricity and roads, as envisaged in
para-8 below, should be quantified in the DPR. The

provisions for preparation of comprehensive DPRs for
Destinations/Circuit Project will be as follows:
a) Large Destinations/Circuit Project involving central
financial assistance of Rs.25 crore and above will be
assisted towards the cost of DPR preparation
amounting to 50% of the total cost of DPR preparation
or Rs.15 lakh, whichever is lower.
b) As far as the assistance towards preparation of DPR
for smaller projects of destination/circuits are
concerned, the assistance will be limited to 50% of the
total cost of DPR preparation or Rs.10 lakh, whichever
is lower.
Activities/items under State/UT component: The State/UT
Governments will be fully responsible for the following
components of the project:
i) Making the land available for development.
ii) Implementation of rehabilitation package, where
shifting of dwellings or commercial units is required.
However, the Government of India would provide
assistance for construction of Tourist Reception
Centres including shopping complexes to house the
displaced shops.
iii) Operation, maintenance and management of the assets
created.
iv) External infrastructure like Water Supply, Electricity
and Roads (not covered under para 9 (iv) below)
Activities/items under Central component: The assistance
under this scheme will be focussed on development of
public goods instead of private goods. There should also
be convergence with other programmes of Government
and duplication shall be avoided. The following works
may be taken up under the Scheme under the Central
component-
i. Improvement of the surroundings of the destination.

This would include activities like landscaping,
development of parks, fencing, compound wall etc.
ii. Illumination of the Tourist destination and the area
around and SEL Shows etc.
iii. Providing for improvement in solid waste
management and sewerage management, Public
Conveniences, etc.
iv. Improvement of road connectivity leading to the
tourist sites, especially from the National Highways/
State highways and other entry points.
v. Construction of Wayside Public Conveniences
vi. Construction of Budget Accommodation, Restaurant
& Wayside Amenities including one time assistance
for its air-conditioning and furnishings. This
component will be supported only in selected places
of Jammu & Kashmir and all North Eastern States,
and Eco-tourism projects where private sector
investment is not forthcoming or not possible.
vii. Procurement of equipments directly related to tourism,
like Water Sports, Adventure Sports, Eco-friendly
modes of transport for moving within the Tourism
Zone and equipments for cleaning of the tourist
destination will be eligible for 25% grant.
viii. Construction of public buildings which are required
to be demolished because of implementation of the
Master Plan.
ix. Refurbishment of the Monuments.
x. Signages and display boards showing Tourist Area
Maps and documentation on places of interest at the
locations.
xi. Tourist Arrival Centres, Reception Centres,
Interpretation Centres
xii. Improvement of municipal services directly related to

Tourism
xiii. Other work/activities directly related to tourism.
Release of Funds: The funds would be released to the
implementing agency as indicated in Para 6 above in
three instalments for identified destination and circuit
amounting to Rs.25 crore and Rs.50 crore respectively,
once the detailed cost estimates of the projects are
received. On sanction of the project, the first instalment of
50% of the approved Central Financial Assistance (CFA)
will be released to the implementing agency. The second
instalment of 30% will be released after receipt of 50%
utilisation certificate of the previous instalment. The
balance 20% would be released on the completion of the
work and on receipt of the Utilisation Certificate.
However, CFA in two instalments would be released for
other destination and circuit sanctioned for Rs.5 crore and
Rs.8 crore respectively. The first instalment in this case
will be 80% of the approved CFA on sanction of the
project and second instalment will be balance 20% of the
approved CFA on the completion of the work and on
receipt of the Utilisation Certificate.
Codal formalities: The Implementing agency shall
follow all codal formalities while awarding contracts and
procurement of equipment and ensure complete
transparency in its transactions. There would not be any
compulsion to execute projects through CPWD. The
execution of projects would primarily be the
responsibility of State Governments and local agencies.
However, whenever a project is to be driven by the
Central Government, central agencies could be engaged
both for project preparation and for implementation with
consent of State/U.T. Govt. concerned.
Management of assets created: The infrastructure and

assets created will be maintained and managed by the
State/UT Governments or their agencies with no financial
commitment to Govt. of India. The sustainable
maintenance plan for the assets to be created must be
built into the project proposal for this purpose.
Monitoring Committee: State level Monitoring
Committees would be set up under the Chairmanship of
the respective Secretary (Tourism) of the State/UT
Government. This Committee would consist of a nominee
of the Ministry of Tourism, Govt. of India and a nominee
of the implementing agency. This committee will monitor
the physical and financial progress of the sanctioned
projects and submit the reports to the Ministry on regular
basis. The Committee will be responsible for completion
of projects within the stipulated period.
Rural Tourism Infrastructure Development
Tourism growth potential can be harnessed as a strategy

for Rural Development. The development of a strong
platform around the concept of Rural tourism is definitely
useful for a country like India, where almost 74% of the
population resides in its 7 million villages.
Across the world the trends of industrialization and
development have had an urban centric approach.
Alongside, the stresses of urban lifestyles have led to a
counter-urbanization syndrome. This has led to
growing interest in the rural areas. At the same time this
trend of urbanization has led to falling income levels,
lesser job opportunities in the rural areas leading to
desertion of villages. Rural Tourism is one of the few
activities which can provide a solution to these problems.
Besides, there are other factors which are shifting the
trend towards rural tourism like increasing levels of
awareness, growing interest in heritage and culture and

improved accessibility, and environmental consciousness.
In the developed countries, this has resulted in a new
style of tourism of visiting village settings to experience
and live a relaxed and healthy lifestyle. This concept has
taken the shape of a Rural Tourism Product.
Under this Scheme, thrust will be to promote village
tourism as the primary tourism product to spread tourism
and its socio-economic benefits to rural and new
geographic regions. Key geographic regions would be
identified for development and promotion of Rural
Tourism. The implementation would be done through a
Convergence Committee headed by the District Collector.
Activities like improving the environment, hygiene,
infrastructure etc. would be eligible for assistance. Apart
from providing financial assistance the focus would be to
tap the resources available under different schemes of
Ministry of Rural Development, State Govts. and other
Ministries/Departments of the Govt. of India.
Definition of Rural Tourism: Any form of tourism that
showcases the rural life, art, culture and heritage at rural
locations, thereby benefiting the local community
economically and socially as well as enabling interaction
between the tourists and the locals for a more enriching
tourism experience can be termed as rural tourism. Rural
tourism is essentially an activity which takes place in the
countryside. It is multi-faceted and may entail farm/
agricultural tourism, cultural tourism, nature tourism,
adventure tourism, and ecotourism. As against
conventional tourism, rural tourism has certain typical
characteristics like: it is experience oriented, the locations
are sparsely populated, it is predominantly in natural
environment, it meshes with seasonality and local events
and is based on preservation of culture, heritage and
traditions.
Identification of villages: Each State/UT Govt. would

be requested to furnish proposals for promotion of Rural
tourism. Based on the merits, the proposals would be
identified for implementation in the country.
Preparation of detailed plan for implementation of the
project: After short listing the proposals, the State/UT
Govts would be requested to draw up a detailed plan of
action. The thrust here would be to achieve convergence
between the different schemes of the Govt. of India and
the State Govts. It should be ensured that at least 50% of
the project should be implemented through achieving
convergence of different schemes. Assistance upto Rs.3.00
lakh would be provided to the State Govt. for engaging
an expert for preparing the project report.
Assistance under the Scheme: A maximum of Rs. 50
lakh would be sanctioned under this scheme. The
activities listed under the para 19 could be taken up.
Permissible activities: The following works may be
taken up under the Scheme:
i) Improvement of the surroundings of the village. This
would include activities like landscaping, development
of parks, fencing, compound wall etc.
ii) Improvements to roads within the Panchayat limits.
This shall not include any major road which connects
the village.
iii) Illumination in the village.
iv) Providing for improvement in solid waste
management and sewerage management.
v) Construction of Wayside Amenities.
vi) Procurement of equipments directly related to tourism,
modes of transport for moving within the tourism
zone.
vii) Refurbishment of the Monuments.

viii) Signages.
ix) Reception Centres.
x) Other work/activities directly related to tourism.
xi) Tourist Accommodation.
Constitution of a Convergence Committee: A Convergence
Committee would be set up under the District Collector
with all stakeholders as members, to oversee the
implementation of the project. Since, there is a need for
flexibility and innovation while implementing such
projects, therefore, this Committee will also decide to
change sanctioned items based on new perceptions
emerging during implementation within overall project
plan and cost already sanctioned keeping the Ministry of
Tourism informed for record.
Execution of the works: The execution of the work
would be entrusted to any Central Govt./State Govt.
agency and the funds would be released directly to the
implementing agency by the Govt. of India as
recommended by the State Govt.
Instalments of release: On sanction of a work the first
instalment of 80% of the sanctioned amount of CFA will
be released. The second instalment of 20% would be
released on submission of the UC and completion
certificate.
Codal formalities: The implementing agency shall
follow all codal formalities while awarding contracts and
procurement of equipments and ensure complete
transparency in its transactions. While executing the
works the implementing agency shall follow the Schedule
of rates prescribed by the CPWD or the State PWD or Zila
Parishad/Panchayat or DRDA or Rural Engineering
Department. However, if there is any item of work to be
undertaken does not have rates prescribed by any one of

the above mentioned agencies then the District Collector
could certify the reasonableness of the rates.
Management of assets created: The infrastructure and
assets created will be maintained and managed by the
State/UT Governments or their agencies with no financial
commitment to Govt. of India. The sustainable
maintenance plan for the assets to be created must be built
into the project proposal for this purpose.
S CHEME FOR I NTEGRATED D EVELOPMENT OF T OURISM

CIRCUITS
Under this Central Financial Assistance scheme the
Ministry of Tourism Government of India has been
extending assistance to States for development of tourism
infrastructure. Experience has shown that in the past
funds under the CFA have been used to fund a large
number of small isolated projects, spread throughout the
length and breadth of the country resulting in the
resources being spread very thinly. Therefore, in order to
provide quick and substantial impact, during the 10th
Five Year Plan, this new scheme of Integrated
Development of Tourist Circuits have been taken up. The
objective of the scheme is to identify tourist circuits in the
country on an annual basis, and develop them to
international standards. The aim is to provide all
infrastructure facilities required by the tourists within
these circuits. The Ministry of Tourism aim at
convergence of resources and expertise through
coordinated action with States/UTs and private sector.
1. Definition of a Circuit
A tourist Circuit is defined as a route on which at least

three major tourist destinations are located such that none
of these are in the same town, village or city. At the same

time they are not separated by a large distance such that
a tourist would not like to cover them in a sequence. It
should have well defined entry and exist points. A tourist
who enters at the entry point should get motivated to
visit all the places identified on the circuit. The objective
of having a tourist circuit is to increase the total number
of visits to all the destinations on the circuit on one hand
and to provide to the tourist the attraction of all the
destinations located on the circuit.
2. Identification of the Circuit
The Circuit to be taken up will be identified by the

Ministry of Tourism at the beginning of each year, in
consultation with the State Government. While selecting
the Circuit, the tourism potential of the places included
would be borne in mind. It will be ensured that a circuit
is identified for each State/UT in the full Plan period. A
circuit could be limited to a State or it could be a regional
circuit covering more than a State/UT. The identification
of the project, the implementation agency, and the mode
of channelisation of funds would be done in consultation
with the State Government/UT Administration.
However, for projects in the protected areas under ASI,
the implementing agency would be ASI/CPWD or any
other agency to be decided by the Ministry of Tourism.
The Ministry of Tourism would bear 100% of the project
cost (Capital cost only, except for Refurbishment of
Monuments where it would be 66:33 i.e. CFA of 66%)
based on the project plan and estimates submitted,
excluding the items which are the exclusive responsibility
of the State Governments as listed in para 3. The
maximum amount that could be sanctioned under this
scheme would be Rs. 8.00 crores.
3. Funding pattern
All activities agreed to by the Ministry of Tourism will be

funded on 100% basis i.e. 100% of the capital cost would
be borne by the Ministry of Tourism, Government of
India, subject to the ceiling of Rs. 8 crores (except, for
refurbishment of Monuments where CFA would be 66%).
However the State/UT Governments will be fully
responsible for the following components of the project.
i) Making the land available for development.
ii) Implementation of rehabilitation package, where
shifting of dwelling or commercial units is required.
However the Government of India would provide
assistance for construction of Tourist reception centers
including shopping complexes to house the displaced
shops.
iii) Maintenance and management of the assets created.
iv) Any other item decided by the High Power
Committee.
v) External infrastructure, like water supply, Electricity
and Roads.
4. Permissible activities
The following works may be taken up under the Scheme:

i. Improvement of the surroundings of the destination.
This would include activities like landscaping,
development of parks, fencing, compound wall etc.
ii. Illumination of the Tourist destination and the area
around the SEL Shows etc.
iii. Providing for improvement in solid waste
iv. Construction of budget accommodation, wayside
amenities.
v. Procurement of equipment directly related to tourism,

like water sports, adventure sports, eco-friendly modes
of transport for moving within the tourism zone.
vi. Construction of public buildings which are required
to be displaced because of implementation of the
master plan.
vii. Refurbishment of the monuments.
viii. Signages.
ix. Tourist arrival centers/reception centers/interpretation
centers.
x. Other work/activities directly related to tourism.
5. Release of Financial Assistance
On sanction of a work, the first installment of 30% of the

approved CFA will be released, and the second
installment of 50% will be released on receipt of
utilization certificate of the first installment. The balance
would be released on completion of the work.
6. Codal formalities
The executing agency shall follow all codal formalities

while awarding contracts and procurement of equipments
an ensure complete transparency in its transactions.
7. Management of assets created
The infrastructure and assets created will be maintained

and managed by the State Government/UT
Administration of their agencies with no financial
commitment to Government of India, except for those
assets which are created in the protected areas of ASI.
8. Prescription of the Schedule of Rates
While executing the works, the executing agency shall

follow the Schedule of rates prescribed by the CPWD or
the State PWD.
9. Submission of the utilization certificates
The executing agency shall furnish the utilization

certificate through the State Government for release of
second instalment, a completion certificate has also to be
furnished through the State Government before the
release of the final installment. In case the works are
executed by a Central Agency in a protected area the UC
would be obtained from them directly.
10.Monitoring Committee
A State level monitoring committee would be set up

under the Chairmanship of the respective Secretary
(Tourism) of the State Government. The Committee
would comprise a nominee of the Ministry. of Tourism of
Government India, and a nominee of the executing
agency.
SCHEME OF ASSISTANCE FOR LARGE REVENUE GENERATING

PROJECTS
1. Preamble
It is recognized that the development of tourism

infrastructure projects requires very large investment that
may not be possible out of the budgetary resources of the
Government of India alone. In order to remove these
shortcomings and to bring in private sector, corporate
and institutional resources as well as techno-managerial
efficiencies, it is proposed to promote large revenue
generating projects for development of tourism

infrastructure in public private partnerships and in
partnerships with other Government / Semi-Government
agencies.
2. Scope of the Scheme
Large revenue generating project, which can be

admissible for assistance under this scheme, should be a
project, which is also a tourist attraction, or used by
tourists and generates revenue through a levy of fee or
user charges on the visitors. Projects like Tourist trains,
Cruise vessels, Cruise Terminals, Convention Centres,
Golf Courses etc. would qualify for assistance. However,
this is only an illustrative list.
Hotel & Restaurant component will not be eligible
for assistance under the scheme either on a stand-alone
basis or as an integral part of some other project. Besides
hotel & restaurants, procurement of vehicles and sports
facilities like stadiums will also not be eligible for
assistance under the scheme.
3. Promoters of Project
While considering projects for Grant-in-aid under this

scheme, priority will be given to projects promoted by
private sector and the projects with public private
partnership. However, in some cases where private sector
participation is not possible or is not forthcoming, then
the proposals/projects promoted by State Govts. State
PSUs, Central Govt, Ministries/Departments like
Railways, ASI and Central agencies like Port Trust and
CPSEs will be eligible.
4. Eligibility for assistance
Justification for providing assistance/subsidy would be

ascertained on the basis of feasibility study/DPR at the

stage of consideration of the project by the Competent
Authority. While selecting projects, priority would be
given to projects which have strong private sector
participation and involve least subsidy outgo. The
projects selected for assistance under this scheme would
not be eligible for subsidy from other schemes of Central
Government or State Governments. Similarly, the projects
which have already availed subsidy/financial assistance
from any other scheme of the Central or State Govt.,
would not be eligible for Government of India assistance
under this scheme.
5. Requirement of a Special Purpose Vehicle (SPV)
A SPV would have to be set up by the implementing

partners in case a private party is promoting the project,
prior to the consideration of their project under this
scheme. However, where the promoter of the project is a
State Govt., State PSU or Central Agencies like Port trust
or Central PSU, a separate SPV need not be required. In
both the cases, a separate Project Management Group
would be required and separate accounts would be
maintained for the project.
The Project Management Group, where SPV has to
be set up will consist of (i) MD/CEO of the SPV (ii)
Project Director/Manager (iii) Finance Director (iv) A
representative of the State Govt. to be nominated by
them. In the other cases, the Project Management Group
will consist of (i) MD/CEO of State PSUs/Central PSUs/
Statutory Body, (ii) State Tourism Secretary(where State
Govt. is directly involved), (iii) Project Director/Manager
(iv) Finance Director of the Central/State PSU/Statutory
Body or the Director-Finance Department of State
Government.
6. Appraisal/Feasibility Report
All project proposals under this scheme must be

accompanied by project appraisal carried out by an
independent public financial institution. Grant-in-aid for
preparation of DPR would be admissible at 50% of the
actual cost subject to a maximum of Rs.25 lakh per
project. No Grant-in-aid would be admissible for
preparation of Feasibility Report.
Public financial institutions, in this case, will include
a public financial institution under Section 4A of the
Companies Act, 1956 and any institution notified by the
Government as authorized to discharge the functions of a
public financial institution under this Scheme. Anyone of
these institutions could also fund the large revenue
generating projects admissible under the scheme.
7. Norms for Funding
The amount of assistance under the scheme would be

released to Government agencies or PSUs, if the project is
promoted by them. In case a private party is promoting
the project, the assistance would be released to SPV
through the financial institutions. The quantum of
subsidy for the projects will normally be determined
through a competitive bidding process, with a cap of
Rs.50 Cr. subject to a maximum of 25% of total project
cost or 50% of equity contribution of the private
promoter, whichever is lower.
Specific reasons will be required to be brought on
record in case competitive bidding process is not adopted
for determining the quantum of subsidy. The minimum
equity stake of the private promoter would be 51%,
wherever the private sector participation is envisaged in
the projects.
The total project cost in this case will mean the total
of:
i. Capital cost of the project, including cost of land,
material, labour, transport, consumables, testing,
commissioning, overheads, contingencies, interest
during construction, insurance and supervision
(including any taxes and levies);
ii. Pre-operative cost such as formulation, development,
design and engineering; and
Expenses related to fund mobilization if required, such as
fees for financial services and brokerage.
The assistance would preferably be credit linked and
back ended and would be released in three installments.
The first installment, limited to 25% of the assistance to
be provided by the Ministry, will be released only after
25% of the total cost of the project has been contributed
by the promoters. The second installment, limited to 50%
of the assistance to be provided by the Ministry, would
be disbursed only after 50% of the promoters amount is
contributed. The last installment of balance 25% of the
assistance, to be provided by the Ministry, will be
released after the project is fully functional.
8. Recovery of Government Grant
In case the project does not succeed, and there is any

default by the promotees, the Financial Institution can
recover its loan component and also recover the Grant-in-
aid component on behalf of Ministry of Tourism.
9. Approval Procedures
The project proposals will be appraised by SFC/EFC

depending upon the cost of the project before obtaining
approval of the competent expenditure sanctioning
authority.
10. Monitoring and Evaluation
The financial institution, which is funding the project,

will be responsible for regular monitoring and periodic
evaluation of project compliance with agreed milestones
and performance levels. In case there is no financial
institution involved in the project then an agency will be
designated while sanctioning the project for regular
monitoring and evaluation as stated above and the cost
for the same will be met out of the scheme. Ministry of
Tourism will have a separate Monitoring Group
consisting of the concerned Joint Secretary & Director in
charge of the scheme alongwith Financial Controller to
regularly monitor and review the sanctioned projects.
CAPACITY BUILDING FOR SERVICE PROVIDERS SCHEME

(CBSP)
A large segment of people are involved directly and
indirectly in the tourism industry. Professional expertise
is required for specialized vocations in this field. At
present there are Food Craft Institutes (FCIs) and Institute
of Hotel Management (IHMs) where technical training is
being provided to persons for the Hospitality Industry.
Tourism training is being provided by the Indian Institute
of Tourism and Travel Management, Gwalior, its Eastern
Regional Centre at Bhubneswar, and through its various
Chapters located at different places in the country to
persons for taking up professions in the Travel and
Tourism Industry. The tourism service providers are both
in the approved/ organized and also the unorganized
sector. The IHMs and FCIs cater mainly to organized
sector i.e. Hotels and Restaurants. At the same time, there
are a large number of persons who are engaged in the
unorganized sector such as small hotels, road side eating
places, ticketing/ travel agencies, dhabas etc.
There is a segment of tourism service providers who

are engaged in other professions but come in contact with
the tourist. These persons, such as staff at bus/ railway
stations, police personnel, immigration staff at airports,
coolies, taxi/ coach drivers, staff at monuments, guides
etc.
The tourists come in contact with various service
providers and it is this experience they have while
interacting with the cutting edge governs their experience
of India as a tourist destination. It was therefore felt
necessary that this large number of service providers are
given certain inputs which can improve their behavior
and service levels. Therefore a scheme was formulated
wherein these service providers in the unorganized sector
are given some inputs so as to upgrade their behavior
and service skills.
Some of the important areas being covered under the
training include Health & Personal Hygiene, Cleanliness,
Basic Service techniques, Cooking Techniques, Garbage
Disposal, Etiquette and basic manners, basic nutrition
values. Energy saving and basic tourism awareness,
Communication skills, Behaviour Skills, First Aid, Client
Handling & Behaviour Skills etc.are also covered in the
training programmes. The duration of the course ranges
from 1 day to 3 days.
The implementing agencies have been given
flexibility in devising the training programmes/ modules.
However, general parameters have been fixed.
Under this scheme the institutions are conducting
Training using their own infrastructures in their own
premises or are providing the training at site of the
service providers. In the case of IHMs and FCIs the
Faculty and students are being used widely. A large
number of the Service providers are located around the
tourist sites and therefore such persons have to be trained

at their place of work. Similarly, the IITTM has been
providing training to such persons either at their own
campuses at Gwalior and Bhubneswar or at the sites like
at Railway Stations, Taxi Stands, etc.
The scope of the implementing agencies has been
enlarged as detailed below:
India tourism offices, Institutes of Hotel
Management, Food Craft Institutes, Indian Institute of
Tourism and Travel management, NCHM&CT, Tourism
Departments of State / UT Governments, State Tourism
Development Corporations, India Tourism Development
Corporation (ITDC), State/Centre Training/academic
institutions. The specialized academic training institutes
in the private sector engaged in giving training in the
hospitality sector.
Funds are provided to the implementing agencies by
the Ministry of Tourism as per the Guidelines of CBSP
Scheme.
SCHEME OF RURAL TOURISM

Tourism growth potential can be harnessed as a strategy
for Rural Development. The development of a strong
platform around the concept of Rural tourism is definitely
useful for a country like India, where almost 74% of the
population resides in its 7 million villages. Across the
world the trends of industrialization and development
have had an urban centric approach. Alongside, the
stresses of urban lifestyles have led to a counter-
urbanization syndrome. This has led to growing interest
in the rural areas. At the same time this trend of
urbanization has led to falling income levels, lesser job
opportunities in the rural areas leading to an urbanization
syndrome in the rural areas. Rural Tourism is one of the
few activities which can provide a solution to these

problems. Besides, there are other factors which are
shifting the trend towards rural tourism like increasing
levels of awareness, growing interest in heritage and
culture and improved accessibility, and environmental
consciousness.
In the developed countries, this has resulted in a
new style of tourism of visiting village settings to
experience and live a relaxed and healthy lifestyle. This
concept has taken the shape of a formal kind of Rural
Tourism. Under this Scheme, thrust is to promote village
tourism as the primary tourism product to spread tourism
and its socio-economic benefits to rural and its new
geographic regions. Key geographic regions are identified
for development and promotion of Rural Tourism.
The implementation is done through a Convergence
Committee headed by the District Collector. Activities
like improving the environment, hygiene, infrastructure
etc. are covered for assistance. Apart from providing
financial assistance, the focus is to tap the resources
available under different schemes of Department. of Rural
Development, State Governments and other concerned
Departments of the Government of India.
1. Definition of Rural Tourism
Any form of tourism that showcases the rural life, art,

culture and heritage at rural locations, thereby benefiting
the local community economically and socially as well as
enabling interaction between the tourists and the locals
for a more enriching tourism experience can be termed as
rural tourism. Rural tourism is essentially an activity
which takes place in the countryside. It is multi-faceted
and may entail farm/agricultural tourism, cultural
tourism, nature tourism, adventure tourism, and eco-
tourism. As against conventional tourism, rural tourism

has certain typical characteristics like; it is experience
oriented, the locations are sparsely populated, it is
predominantly in natural environment, it meshes with
seasonality and local events and is based on preservation
of culture, heritage and traditions.
2. Identification of Villages
Each State/UT Govt. would be requested to furnish one

proposal for promotion of Rural tourism. Based on the
merits and after a joint inspection by the Deptt. Of
Tourism, and the State/UT Govt. if required ten
proposals would be identified for implementation in the
country.
3. Preparation of Detailed Plan for Implementation of the

Project
After shortlisting the proposals, the State/UT Govts

would be requested to draw up a detailed plan of action.
The thrust here would be to achieve convergence
between the different schemes of the Govt. of India and
the State Govts. It should be ensured that atleast 50% of
the project should be implemented through achieving
convergence of different schemes. Assistance upto Rs. 3
lakhs would be provided to the State Govt. for engaging
an expert for preparing the project report.
4. Assistance under the Scheme
A maximum of Rs. 50 lakhs would be sanctioned under

this scheme. The activities listed under the para 5 could
be taken up.
5. Permissible Activities
The following works may be taken up under the Scheme-

i) Improvement of the surroundings of the village. This
would include activities like landscaping, development
of parks, fencing, compound wall etc.
ii) Improvements to roads within the Panchayat limits.
This shall not include any major road which connects
the village.
iii) Illumination in the village.
iv) Providing for improvement in solid waste
v) Construction of Wayside Amenities.
vi) Procurement of equipments directly related to tourism,
modes of transport for moving within the tourism
zone.
vii) Refurbishment of the Monuments. (66:33 basis, i.e.
CFA of 66%)
viii) Signages.
ix) Reception Centres.
x) Other work/activities directly related to tourism.
xi) Tourist Accommodation.
6. Constitution of a Convergence Committee
A Convergence Committee would be set up under the

Collector to oversee the implementation of the project.
7. Execution of the Works
The execution of the work would be entrusted to any

Central Govt./State Govt. agency and the funds would be
released directly to the implementing agency by the Govt.

of India as recommended by the State Govt.
8. Installments of Release
On sanction of a work the first installment of 30% of the

sanctioned amount of CFA will be released. The second
installment of 50% would be released on submission of
the UC for the first installment. The balance would be
released on the completion of the work.
9. Following Codal Formalities
The executing agency shall follow all codal formalities

while awarding contracts and procurement of equipments
and ensure complete transparency in its transactions.
10. Management of Assets Created
The infrastructure and assets created will be maintained

and managed by the State/UT Governments or their
agencies with no financial commitment to Govt. of India
except those assets created in the protected areas of ASI.
11. Prescription of the Schedule of Rates
While executing the works the executing agency shall

follow the Schedule of rates prescribed by the CPWD or
the State PWD.
12. Submission of the Utilisation Certificates
The executing agency shall furnish the Utilisation

Certificate through the State Government for release of
the second installment. A Completion Certificate has also
to be furnished through the State Govt. before the release
of the final installment.
SCHEME OF FINANCIAL ASSISTANCE TO STATES FOR

ORGANISING TOURISM RELATED EVENTS
Under this scheme, the Ministry of Tourism provides
financial assistance to States/UTs for organizing events
for promotion of tourism. The conditions for providing
the financial assistance are as under:-
1. Definition of Event
An event can be a fair, festival, show, seminar, conclave,

convention relating to tourism and has a national/
international impact and will build a Brand Equity for
India. The events which would fall in this category will
be those which transcend the boundaries of State, and are
focused on promotion of tourism domestically and
internationally. These will not include local events like -
fairs, festivals, celebrations etc.
2. Number of Events per Year
The Ministry of Tourism will provide financial assistance

for only one event per State/UT, in one financial year,
subject to availability of funds and the relevance of the
event to being a national level tourist attraction.
3. Financial Limit
The financial assistance by the Ministry of Tourism will

not exceed Rs.15 lakhs for each event.
4. Permissible Activities
The activities permissible under the financial assistance

would include creation of semi-permanent structures,
seating arrangements, lighting, sound, remuneration to
artists, lodging & boarding, production of posters,
pamphlets, advertisements in newspapers, hiring of

space, transportation etc.
5. Publicity to Ministry of Tourism
Adequate publicity to the Ministry of Tourism would be

given in the different advertisements or media releases
issued by the State Tourism. Department of Tourisms
logo and website would also be given due publicity.
6. Contribution of State/UT in the Event
The State Government organizing the Event should

contribute at least 50% of the total expenditure involved.
7. Release of Financial Assistance
The amount shall be released in 2 installments. The first

installment being 80% and the balance 20% shall be
released as reimbursement after full details of
expenditure (including State/UT components) and
Utilization Certificate for the amount released by Ministry
of Tourism and a brief note on the advantages gained as
a result of the event. These should be furnished to the
Ministry of Tourism latest within 6 months of the
conclusion of the event. The final installment shall be
released after received of Utilization Certificate from the
State. State Government should ensure that the accounts
of the previous year event must be submitted before
applying for the next event.
8. Special Provision for North Eastern States
A maximum amount of Rs.10 lakhs per annum will be

given to the North Eastern States irrespective of the
number of festivals.
9. Proposal for Financial Assistance
The proposal for the financial assistance should include

in detail the break-up of expenditure and the agencies
involved in organizing the event. The proposal should
also include the names of sponsors if any and the amount
being contributed by them.
10. Codal Formalities
The State Governments/UTs must follow all codal

formalities while spending the money released by the
Ministry of Tourism as financial assistance.
SCHEME OF CENTRAL FINANCIAL ASSISTANCE FOR IT

PROJECTS
The Ministry of Tourism, Government. of India has in the
recent past taken major initiatives in the field of
Information Technology with a view to benefit the
tourists. The aim of these initiatives have been:
a) To bring improvement and efficiency at Government
of India Tourist Offices, and the Ministry
Headquarters;
b) To provide improved & quality tourist information to
tourists; and
c) To provide improved tourist facilitation.
In order to encourage the State Tourism Departments to
take major IT initiatives for improved tourist information
and facilitation as well as marketing and publicizing their
tourist products. To achieve this Central Financial
Assistance for IT was formulated to extend assistance to
the State/UT Governments to enable them to adopt wide
spread use of Information Technology in their tourism
products and services comprising publicity, promotion
and marketing etc. Under this scheme, assistance up to

50% of the IT project is given to the State/UT
Governments subject to the following conditions:
1. The CFA on IT projects will be on 50:50 basis. The
CFA will be restricted to an annual ceiling of Rs.75
lakhs for each state/UT irrespective of number of
projects. 90% of the central component will be released
as 1st installment.
2. The State/UT Governments should submit their IT
proposals for Central Financial Assistance by 30th of
October for consideration during the financial year.
3. State/UT Governments should give a write up on the
scope and benefits of the project duly supported by a
project/feasibility report preferably prepared by a
professional agency/organization. An officer not
below the rank of Director Tourism should certify the
project report.
4. The project should be supported in revised Form P
with full details of the Hardware/Software to be
procured/developed and terms and conditions of the
procurement and how its going to benefit the state.
The State/UT Government should clearly mention the
cost of the project with state share, schedule of
implementation, implementing agency, date of
completion and method of funding.
5. The State/UT Government will bear all expenses for
the operation and maintenance including recurring
charges of the project and a prescribed undertaking
to this effect should be sent along with the proposal.
6. The State/UT Governments should ensure that the
details of the hardware/software components
submitted with the project should remain the same at
the time of actual procurement. If there are any
changes in the procurement prior approval of Ministry

of Tourism has to be obtained before procurement of
hardware/software.
7. Central Financial Assistance up to 90% of the share
of the Ministry of Tourism, GOI will be released to
the State/UT Government as an advance subject to
the production of a proof for placement of order for
procurement/development of Hardware/Software.
The balance amount of the Central Financial
Assistance in full will be released to the State/UT
Governments on production of proof of codal
formalities followed, copy of placement order,
completion certificate and production of proof of
utilization of funds for the purpose for which it was
released.
8. Special assistance (100%) to new states and north
eastern states on case to case basis with approval of
Secretary (Tourism).
9. Details of Hardware and Software to be considered
for Central Financial Assistance is as follows:
Sl. No. Hardware Software
1. Desktop Computer Operating Software Windows all
versions
2. Laptop Computer Application Software all versions
3. Scanner Software for Networking & VPN
4. Printer Software for MIS

5. LCD Projector Software for Online Payment
Gateway
6. CD Writer Software for GIS & Multimedia
7. Slide Projector CD ROMs (Thematic, Walk-
through, Virtual Reality and
Photo CD)
8. Visualizer Specialised Software like
Photoshop, Corel Draw, Oracle,
SQL Server, Linux, Autocad, etc.

9. Portable Screen Website Development/Trans-
lation of website in foreign
languages.
10. Upgradation of Hardware Any other software for marketing
and publicity purpose.
11. Networking
12 Interactive/virtual
walkthrough CD ROM
on destinations
13 CDs/VCDs on culture,
traditional art forms
14 Launching of dynamic
tourism portals
15 Major revamping of the
existing sites
16 Remote Sensing Equipment
at monuments
17 Handy Audio Research
Kit (HARK) at monuments
18 IVRS facility for
dissemination of tourism
information
19 Pen Drive
20 Wireless set of North East &
Himalayan states
21 Coin operated sightseeing
Binocular in Hill regions
22 Photographic capability long
range telescope
23 Other hardware equipments
Ceiling proposed on CFA for different items:

i) Production of CD/VCD/DVD : Rs.10.00 lakhs
Maximum number of topics/themes allowed : Five
No. of copies of CD/VCD/DVD : 5000
Additional copies for participation in Intl tourism
fairs : 5000
ii) Preparation of CDs/VCDs on culture, traditional art

forms : Rs. 7.00 lakhs
No of themes allowed during a financial year :
Five
No of copies of CDs/VCDs : 5000
fairs : 5000
iii) Sponsored CD/VCD/DVD on culture, traditional art
forms : Rs. 5.00 lakhs
No of themes allowed during a financial year :
Five
No of copies for CD/VCD/DVD : 5000
fairs : 5000
iv) Web-sites
Launching of Tourism Portals : Rs. 10.00 lakhs
Revamping of existing sites/translation in foreign
languages : Rs. 10.00 lakhs
v) Remore Sensing Facility, HARK etc.
Remote Sensing equipment at each monuments :
Rs. 15 lakhs
HARK system Each monuments : Rs. 15 lakhs
vi) IVRS
IVRS facility for each connection :Rs. 5 lakhs
Information Kiosk for each site (5 at one site) :Rs.
10 lakhs
17. State/UT wise ceiling : Rs. 75 lakhs during a financial
year as central component relaxable for deserving
cases with the approval of the competent authority
and subject to availability of funds.
18. Year Wise ceiling for each States/UTs Rs. 75 lakhs

19. Special assistance to New and North East States 100%
on case-to-case basis.
The above terms and conditions are subject to change
based on a review to be made.
SCHEME FOR SUPPORT TO PUBLIC PRIVATE PARTNERSHIPS IN

INFRASTRUCTURE (VIABILITY GAP FUNDING)
A. Whereas the Government of India recognizes that
there is significant deficit in the availability of physical
infrastructure across different sectors and that this is
hindering economic development;
B. Whereas the development of infrastructure
requires large investments that cannot be undertaken out
of public financing alone, and that in order to attract
private capital as well as the techno-managerial
efficiencies associated with it, the Government is
committed to promoting Public Private Partnerships
(PPPs) in infrastructure development; and
C. Whereas the Government of India recognizes that
infrastructure projects may not always be financially
viable because of long gestation periods and limited
financial returns, and that financial viability of such
projects can be improved through Government support.
D. Now, therefore, the Government of India has
decided to put into effect the following scheme for
providing financial support to bridge the viability gap of
infrastructure projects undertaken through Public Private
Partnerships.
1. Short Title and Extent
(i) This scheme will be called the Scheme for Financial

Support to Public Private Partnerships (PPPs) in
Infrastructure. It will be a Plan Scheme to be

administered by the Ministry of Finance. Suitable
budgetary provisions will be made in the Annual
Plans on a year-to year basis.
(ii) The scheme shall come into force with immediate
effect.
2. Definitions
In this scheme, unless the context otherwise requires:

Empowered Committee means a Committee under
the Chairmanship of Secretary (Economic Affairs) and
including Secretary Planning Commission, Secretary
(Expenditure) and the Secretary of the line Ministry
dealing with the subject.
Empowered Institution means an institution,
company or inter-ministerial group designated by the
Government for the purposes of this scheme.
Lead Financial Institution means the financial
institution (FI) that is funding the PPP project, and in case
there is a consortium of FIs, the FI designated as such by
the consortium;
Private Sector Company means a company in which
51% or more of the subscribed and paid up equity is
owned and controlled by a private entity;
Project Term means the duration of the contract or
concession agreement for the PPP project;
Public Private Partnership (PPP) Project means a
project based on a contract or concession agreement,
between a Government or statutory entity on the one side
and a private sector company on the other side, for
delivering an infrastructure service on payment of user
charges;
Total Project Cost means the lower of the total

capital cost of the PPP Project: (a) as estimated by the
government/statutory entity that owns the project, (b) as
sanctioned by the Lead Financial Institution, and (c) as
actually expended; but does not in any case include the
cost of land incurred by the government/statutory entity;
and
Viability Gap Funding or Grant means a grant one-
time or deferred, provided under this Scheme with the
objective of making a project commercially viable.
3. Eligibility
1. In order to be eligible for funding under this Scheme, a

PPP project shall meet the following criteria:
(a) The project shall be implemented i.e. developed,
financed, constructed, maintained and operated for the
Project Term by a Private Sector Company to be
selected by the Government or a statutory entity
through a process of open competitive bidding;
provided that in case of railway projects that are not
amenable to operation by a Private Sector Company,
the Empowered Committee may relax this eligibility
criterion.
(b) The PPP Project should be from one of the following
sectors:
(i) Roads and bridges, railways, seaports, airports,
inland waterways;
(ii) Power;
(iii) Urban transport, water supply, sewerage, solid
waste management and other physical
infrastructure in urban areas;
(iv) Infrastructure projects in Special Economic Zones;
and
(v) International convention centres and other tourism

infrastructure projects;
Provided that the Empowered Committee may,
with approval of the Finance Minister, add or
delete sectors/sub-sectors from the aforesaid list.
(c) The project should provide a service against payment
of a predetermined tariff or user charge.
(d) The concerned Government/statutory entity should
certify, with reasons;
(i) that the tariff/user charge cannot be increased to
eliminate or reduce the viability gap of the PPP;
(ii) that the Project Term cannot be increased for
reducing the viability gap; and
(iii) that the capital costs are reasonable and based on
the standards and specifications normally
applicable to such projects and that the capital
costs cannot be further restricted for reducing the
viability gap.
4. Government Support
(1) The total Viability Gap Funding under this scheme

shall not exceed twenty percent of the Total Project
Cost; provided that the Government or statutory entity
that owns the project may, if it so decides, provide
additional grants out of its budget, but not exceeding
a further twenty percent of the Total Project Cost.
(2) Viability Gap Funding under this scheme will
normally be in the form of a capital grant at the stage
of project construction. Proposals for any other form
of assistance may be considered by the Empowered
Committee and sanctioned with the approval of
Finance Minister on a case-by-case basis.
(3) Viability Gap Funding up to Rs. 100 crore (Rs. One

hundred crore) for each project may be sanctioned by
the Empowered Institution subject to the budgetary
ceilings indicated by the Finance Ministry. Proposals
up to Rs. 200 crore (Rs. Two hundred crore) may be
sanctioned by the Empowered Committee, and
amounts exceeding Rs. 200 crore may be sanctioned
by the Empowered Committee with the approval of
Finance Minister.
(4) Unless otherwise directed by the Ministry of Finance,
the Empowered Institutions may approve project
proposals with a cumulative capital outlay equivalent
to ten times the budget provisions in the respective
Annual Plan.
(5) In the first two years of operation of the Scheme,
projects meeting the eligibility criteria will be funded
on a first-come, first served basis. In later years, if need
arises, funding may be provided based on an
appropriate formula, to be determined by the
Empowered Committee, that balances needs across
sectors in a manner that would make broad base the
sectoral coverage and avoid pre-empting of funds by
a few large projects.
5. Approval of project proposals.
(1) Project proposals may be posed by a Government or

statutory entity which owns the underlying assets. The
proposals shall include the requisite information
necessary for satisfying the eligibility criteria specified
in paragraph 3 above.
(2) Projects based on standardized/model documents
duly approved by the respective Government would
be preferred. Stand-alone documents may be subjected
to detailed scrutiny by the Empowered Institution.
(3) The Empowered Institution will consider the project

proposals for Viability Gap Funding and may seek the
required details for satisfying the eligibility criteria.
(4) Within 30 days of receipt of a project proposal, duly
completed as aforesaid, the Empowered Institution
shall inform the sponsoring Government/statutory
entity whether the project is eligible for financial
assistance under this Scheme. In case the project is
based on standalone documents (not being duly
approved model/standard documents), the approval
process may require an additional 60 (sixty) days.
(5) In the event that the Empowered Institution needs any
clarifications or instructions relating to the eligibility
of a project, it may refer the case to the Empowered
Committee for appropriate directions.
(6) Notwithstanding the approvals granted under this
scheme, projects promoted by the Central Government
or its statutory entities shall be approved and
implemented in accordance with the procedures
specified from time to time.
(7) In cases where viability gap funding is budgeted
under any on-going Plan scheme of the Central
Government, the inter-se allocation Between such on-
going scheme and this scheme shall be determined
by the Empowered Committee.
6. Procurement process for PPP Projects
(1) The Private Sector Company shall be selected through

a transparent and open competitive bidding process.
The criterion for bidding shall be the amount of
Viability Gap Funding required by a Private Sector
Company for implementing the project where all other
parameters are comparable.
(2) The Government or statutory entity proposing the

project shall certify that the bidding process conforms
to the provisions of this Scheme and convey the same
to the Empowered Institution prior to disbursement
of the Grant.
7. Appraisal and Monitoring by Lead Financial Institution
(1) Within four months from the date on which eligibility

of the project is conveyed by the Empowered
Institution to the concerned Government/ statutory
entity, the PPP project shall be awarded in accordance
with paragraph 6 above; provided that upon
application made to it by the concerned Government/
statutory entity, the Empowered Institution may
extend this period by not more that two months at a
time.
(2) The Lead Financial Institution shall, within three
months from the date of bid award, present its
appraisal of the project for the consideration and
approval of the Empowered Institution; provided that
upon application made to it by the concerned
Government/statutory entity, the Empowered
Institution may extend this period by not more than
one month at a time.
(3) The Lead Financial Institution shall be responsible for
regular monitoring and periodic evaluation of project
compliance with agreed milestones and performance
levels, particularly for the purpose of disbursement of
Viability Gap Funding. It shall send quarterly progress
reports to the Empowered Institution which will make
a consolidated progress report once every quarter for
review by the Empowered Committee.
8. Disbursement of Grant
(1) A Grant under this scheme shall be disbursed only

after the Private Sector Company has subscribed and
expended the equity contribution required for the
project and will be released in proportion to debt
disbursements remaining to be disbursed thereafter.
(2) The Empowered Institution will release the Grant to
the Lead Financial Institution as and when due, and
obtain reimbursement thereof from the Finance
Ministry.
(3) The Empowered Institution, the Lead Financial
Institution and the Private Sector Company shall enter
into a Tripartite Agreement for the purposes of this
scheme. The format of such Tripartite Agreement shall
be prescribed by the Empowered Committee from
time to time.
9. Revolving Fund
A revolving fund of Rs. 200 crore (Rs. Two hundred

crore) shall be provided by the Finance Ministry to the
Empowered Institution. The Empowered Institution shall
disburse funds to the respective lead financial Institutions
and claim reimbursement thereof from the Ministry of
Finance.
10. Guidelines
The Guidelines issued vide Ministry of Finance Press

Release as well as OM of F. No. 2/10/04-Inf. dated 19th
August 2004 stands withdrawn with immediate effect.
SCHEME FOR MARKET DEVELOPMENT ASSISTANCE (MDA)

The Marketing Development Assistance Scheme (MDA),
administered by the Ministry of Tourism, Government of

India, provides financial support to approved tourism
service providers (i.e. hoteliers, travel agents, tour
operators, tourist transport operators etc., whose turnover
include foreign exchange earnings also) for undertaking
the following tourism promotional activities abroad:
(A) Sales-cum-study tour
(B) Participation in fairs/exhibitions
(C) Publicity through printed material
A. Sale-cum-Study Tour
In order to encourage the small and medium level service

providers to go and promote Indian tourism products
abroad, Ministry of Tourism, Government of India
provides financial assistance to approved tourism service
providers for undertaking sale-cum-study tours to foreign
countries.
Terms and Conditions
1. Financial Assistance would be permissible on travel

expenses by air from India to any other country and/
or by air/eurorail from one country to another country
abroad, in economy excursion class fare @ 75% of the
fare. This would, however be subject to an upper
ceiling to Rs.75,000/- (Rupees seventy five thousands
only) per tour. No financial assistance is provided for
travel within India.
2. One sale-cum-study tour by the tourism service
provider to a particular country in one financial year
is eligible for MDA assistance.
3. The tour to single country or a group of countries shall
be for a minimum of two-nights stay abroad excluding
journey period.
4. Assistance shall be permissible to one regular

employee/Director/ partner/ proprietor of the
company.
5. The assistance would be available to tourism service
providers with foreign exchange earnings up to
Rs.10.00 crores (Rupees ten crores only) during the
preceding financial year.
6. The company shall not be under investigation or
charged/ prosecuted/ debarred/ black listed by
Ministry of Tourism, Govt. of India or any other
Government Agency. The service provider should
furnish a declaration to this effect.
7. The applicant would furnish a declaration in the
prescribed format as I hereby declare that I have
not claimed/received any financial assistance for this
sale-cum-study tour from Government/Government
Agency.
8. In case of more applications, priority would be given
to those service providers who have not availed
financial assistance in the past under MDA Scheme.
Procedure for Submission of Application
(i) The eligible tourism service provider shall obtain prior

approval of the Department of Tourism, Government
of India, before undertaking the tourism promotional
activity/tour abroad. The application shall be
submitted direct to the Additional Director-General
(Tourism), Department of Tourism, Transport Bhawan,
Sansad Marg, New Delhi, in the prescribed format at
least 14 days in advance, along with following
documents:
1. Proof of approval of the company by Department
of Tourism (Copy of approval letter is to be
attached)
2. Certificate of Foreign Exchange Earnings duly

certified by Chartered Accountant.
3. Details of financial assistance availed during the
last three years from the Government including
Ministry of Commerce/FIEO and Department of
Tourism.
(ii) After undertaking the tourism promotional activity/
tour abroad for which prior approval had been
accorded by the DOT, tourism service provider would
submit the application for MDA claim, in the
prescribed format, to the Ministry of Tourism,
Government of India, immediately on return to India
but positively within one month of his/her return to
India, along with the following documents:
(a) Details of financial assistance availed during the
Ministry of Commerce/FIEO & Department of
Tourism.
(b) Certificate of Foreign Exchange Earnings duly
(c) Self-certified copy of approval certificate issued by
the Ministry of Tourism.
(d) Legible photocopy of passport highlighting the
entries about departure from India and arrival in
India and also the countries visited. In case
passport does not have arrival/departure dates
regarding visits to various countries, documentary
evidence such as Hotel Bills, Boarding pass,
lodging pass, etc. may be submitted.
(e) Original air ticket/jacket used during the journey
along with three self-certified photocopies. The
following details should be given separately in a
statement:
i) Name of the Traveler

ii) Ticket number
iii) Flight No.
iv) Date of Departure from India
v) Sectors/countries visited
vi) Class in which traveled
vii) Economy excursion class fare for sectors/
countries visited.
(f) Brief Report about the tour and achievements.
(g) Claim form received after one month of return to
India or wherein the deficiencies in the claim as
intimated are not fully completed within 30 days
of the date of information given, would not be
entertained and would be rejected.
B. Participation in Trade Fairs and Exhibitions
The Ministry of Tourism, Government of India provides

financial assistance to approved tourism service providers
for participation in tourism related trade fairs and
exhibitions abroad.
1) Financial Assistance would be permissible on travel

expenses by air from India to any other country & by
air/eurorail from one country to another country
abroad, in economy excursion class fair and/or
charges of the built up furnished stall, electricity and
water charges etc. @75% to the service providing
companies. This would, however, be subject to an
upper ceiling of Rs.1,10,000/- ( Rupees One Lakh and
Ten Thousand only) per participation. No financial
assistance is provided for travel within India.
2) A maximum of only five participations in a particular

trade fair/exhibition by a tourism service provider
would be eligible for MDA assistance.
3) Assistance for travel expenses would be permissible
to one regular employee/ Director/partner/proprietor
of the company.
4) The assistance would be available to companies with
foreign exchange earnings up to Rs.10.00 crores
(Rupees Ten Crores only) during the preceding
financial year.
5) The company shall not be under investigation or
charged/ prosecuted/ debarred/ black-listed by
Ministry of Tourism, Government of India or any
other Government Agency. The service provider
should furnish a declaration to this effect.
6) The applicant would furnish a declaration in the
not claimed/received any financial assistance for
participation in this fair/exhibition from Government/
Government Agency.
7) In case of more applications, priority would be given

approval of the Ministry of Tourism, Government of
India, before proceeding abroad to participate in trade
fair/exhibition. The application shall be submitted
direct to the Additional Director-General (Tourism),
Ministry of Tourism, Transport Bhawan, Sansad Marg,
New Delhi, in the prescribed format at least 14 days
in advance, along with following documents:

of Tourism (Copy of approval letter may be
attached).
Ministry of Commerce/FIEO & Department of
Tourism.
(ii) After participating in the Trade Fair/ Exhibition
abroad for which prior approval had been accorded
by the DOT, tourism service provider would submit
the application for MDA claim, in the prescribed
format, direct to the Department of Tourism,
Government of India, immediately on return to India
but positively within one month of his/her return to
India, along with the following documents:
a) Details of financial assistance availed during the
Ministry of Commerce/FIEO and Department of
Tourism
b) Certificate of Foreign Exchange Earnings duly
c) Self-certified copy of approval certificate issued by
the DOT.
d) Legible photocopy of passport highlighting the
entries about departure from India and arrival in
India and also the countries visited. In case
passport does not have arrival/departure dates
regarding visits to various countries, documentary
evidence such as Hotel Bills, Boarding Pass,
lodging pass etc. may be submitted.
e) Original air ticket/jacket used during the journey

along with three self certified photocopies. The
following details should be given separately in a
statement:
i) Name of the Traveller
ii) Ticket number
iii) Flight No.
iv) Date of Departure from India
v) Sectors/countries visited
vi) Class in which travelled
vii) Economy excursion class fare for sectors /
countries visited.
f) Original copy of receipts/bank advice etc. along
with three photocopies, evidencing payment(s)
made; if applicable.
g) Brief Report about the participation and
achievements.
h) Claim form received after one month of return to
India or wherein the deficiencies in the claim as
intimated are not fully completed within 30 days
of the date of information given, would not be
entertained and would be rejected.
C. Publicity through Printed Material
The Ministry of Tourism, Government of India provide

financial assistance under the MDA Scheme to approved
tourism service providers for production of tourism
related publicity material for distributing in foreign
countries and in tourism related fairs and festivals abroad
in order to promote Indian tourism products.
1. Cost of production of publicity material like product

catalogue, brochure, information handout etc., for use
abroad during sales cum study tour, participation in
trade fair/exhibition, MOT sponsored buyer cum seller
meet/trade delegation etc., would be permissible for
assistance under MDA scheme @25% of the total
approved cost subject to an upper ceiling of Rs.15,000/
- (Rupees Fifteen Thousands only).
2. Assistance would be provided once in a financial year.
3. A copy of the publicity material is to be submitted
along with the claim.
4. Quotations from a minimum of three printers are to
be obtained and submitted along with the claim.
Assistance will be allowed on the lowest quotation
subject to the upper ceiling as mentioned above.
5. The company shall not be under investigation/
charged/prosecuted/ Debarred/ blacklisted by
Ministry of Tourism, Government of India or any
other Government Agency. The service provider
should furnish a declaration to this effect.
6. The applicant would furnish a declaration in the
not claimed/received any financial assistance for
production of this publicity material from
Government/Government Agency.
7. In case of more applications, priority would be given

approval of the Department of Tourism, Government

of India, before printing of publicity material for
distribution abroad. The application shall be submitted
direct to the Additional Director-General (Tourism),
Ministry of Tourism, Transport Bhawan, Sansad Marg,
New Delhi, in the prescribed format at least 14 days
in advance, along with following documents:
of Tourism (Copy of approval letter may be
attached)
Ministry of Commerce/FIEO & Ministry of
Tourism.
(ii) After distribution of the publicity material abroad for
which prior approval had been accorded by the DOT,
tourism service provider would submit the application
for MDA claim, in the prescribed format along with
necessary documents as indicated in the claim form,
direct to the Ministry of Tourism, Government of
India, immediately on return to India but positively
within one month of his/her return to India, along
with the necessary documents.
General Conditions Governing the MDA Scheme
1. For sale-cum-study tour, a tourism service provider

is eligible for financial assistance under MDA Scheme
for a maximum of two trips in one financial year.
2. For participation in fairs/exhibitions abroad, a tourism
service provider is eligible for financial assistance
under MDA Scheme to participate in two exhibitions/

fairs abroad in one financial year.
3. For production/printing of publicity material, MDA
would be available once in a financial year.
4. The financial benefit under MDA Scheme would be
given up to a maximum of only two times to the same
person in one financial year, irrespective of the
number of tourism service providing companies he/
she is associated with.
5. These revised MDA guidelines are in supercession to
guidelines issued vide this Departments letter No. 15-
TP(58)/2001 dated 21.8.2003.
6. These Revised Guidelines will come in force with
effect from 16th March, 2004 and till further orders.
PROFESSIONAL SERVICES - MARKET RESEARCH SCHEME

G UIDELINES
I. Objective of the Scheme :
To undertake the following by using professional Services

from
Consultant Agencies:
(i) Tourism related Surveys, Studies, Plans, Market

Research etc. for making available relevant data/
information/report /inputs to the Department for
policy making and planning purposes; and
(ii) Feasibility Studies and Detailed Project Reports for
specific tourism projects
II. Coverage of the Scheme:
The Scheme would mainly cover the following activities:

(i) Surveys/Master Plans/Studies to be undertaken by

Department of Tourism directly as per their own
requirements or for State Government/Stake Holders/
Tourism Industry;
(ii) Project specific DPRs/Feasibility Studies etc. for
Circuit/Destination Development for State
Governments/UT Administrations, through
professional consultants to be considered under the
Scheme of Product Infrastructure Development for
Destination and Circuits, pertaining to the States of
North East, Sikkim and J&K. Similar requests from
other States would be considered on Need Basis;
(iii) Collection, compilation, analysis and publication of
statistical data;
(iv) Meetings /Conferences etc. organized for the purpose
of getting inputs from Experts, State Governments,
Industry, Intellectuals, etc. for development of
Tourism;
(v) Funds will not be sanctioned for preparation of DPR/
Feasibility Report for Hotels, Tourists Resorts, etc.
However, Ministry of Tourism may consider
sanctioning of Surveys for determining the
requirement of hotel accommodation etc. in the
country.
III. Selection of Consultant:
(i) The Department of Tourism will maintain different

subject specific Panels of Consultants for getting
professional services for the purpose of Surveys/
Studies. The Panels will be prepared through an open
advertisement in the leading national dailies with the
approval of Secretary, Department of Tourism and
concurrence of Financial Adviser and their validity
will be normally 2 years.
(ii) The Department of Tourism will invite the proposals

from the empanelled Consultants. However, wherever
felt necessary, and where the estimated cost of
Survey/ Study/Report is likely to exceed Rs. 25 lakh,
the Ministry would invite Expression of Interest/Open
Tenders through advertisement in leading National
dailies, with the approval of Secretary, Department of
Tourism.
IV. Financial Limit:
(i) For preparation of DPRs/Feasibility Studies etc. for

projects under the scheme of Product/ Infrastructure
Development for Destination and Circuits, a maximum
assistance of Rs. 10 lakh will be provided.
(ii) For the preparation of DPRs/Feasibility Reports for
projects falling under the other Schemes like LRGP,
the financial limits as prescribed in the respective
Scheme will be applicable.
V. Release of Financial Assistance:
(i) For the projects taken up by the Department of

Tourism, release of Consultancy Fee will be in
appropriate installments. In such cases, an advance
payment may also be released before start of work,
on signing of work agreement and on submission of
Bank Guarantee by the Consultant.
(ii) In case of DPRs/feasibility studies taken up on the
request of States/UTs the Consultancy Fee would be
released to the Consultant directly after preparation/
submission of DPR etc., and its acceptance by the
State/UT Government concerned.
GUIDELINES FOR PROJECT APPROVAL AND CLASSIFICATION

OF TIME SHARE RESORTS
Hotels and other supplementary accommodation are an

integral part of a tourists visit to a place and the services
offered by them can make or mar a visit completely.
Vacation ownership popularly known as Time Share is
one of the fastest growing component of tourism. Time
Share Resorts (TSR) are increasingly becoming popular
for the leisure holidays and family holidays, etc. With the
aim of providing standardized world class services to the
tourists, the Government of India, Ministry of Tourism
has a voluntary scheme for classification of fully
operational Time Share Resorts in the 5 Star, 4 Star and 3
Star categories.
The Hotel & Restaurant Approval & Classification
Committee (HRACC) inspects and assesses the TSR based
on facilities and services offered.
Project approvals are also given in all the above-
mentioned categories at the project implementation stage.
Classified Time Share Resorts approved/approved
projects are eligible for various concessions and facilities
that are announced by the Government from time to time
besides, getting worldwide publicity through the
Indiatourism Offices located in India and abroad.
TSRs and Hotels are permitted for mixed use.
However, if the TSR intends to use as hotel also i.e.
mixed purpose, it must provide all facilities and
amenities as required or the specified star category of
hotel in accordance with the Guidelines.
TSRs will be used as vacation ownership. In no
circumstances apartments in TSR will be sold
individually for residential or any other purpose.
TSRs including heritage and resorts which are the

members of All India Resort Development Association
(AIRDA) will be considered for classification/project
approval.
Details of the criteria set and the documents required
are given in this document.
For classification and project approvals in the 5 Star,
4 Star and 3 Star, the applications along with the requisite
fees may be sent to:-
Hotel and Restaurants Division
Ministry of Tourism, Government of India
C-I Hutments, Dalhousie Road, New Delhi-110001.
General Terms, Conditions & Application Format For

Project Approval At Project Level & Classification Of Time
Share Resorts
1. The Ministry of Tourism approves TSR at project stage

based on documentation, which enables the TSR to
get certain benefits from the Govt. as may be
announced from time to time. The documents required
for project approvals are listed below.
2. Project approvals are valid for 5 years. Project
approvals of the Govt. of India, Department of
Tourism cease 3 months from the date that the TSR
becomes operational even if all its rooms are not
ready. The TSR must apply for classification within
these 3 months.
3. The Ministry of Tourism, Govt. India reserves the right
to modify the guidelines/terms and conditions from
time to time.
4. Application form. This covers
i. Proposed name of the TSR
ii. Name of the promoters with a note on their

business antecedents
iii. Complete postal address of the promoters/tel./
fax/email
iv. Status of the owners/ promoters
1. If Public/ private limited company with
copies of Memorandum and Articles of
Association
2. If Partnership, a copy of partnership deed
and certificate of registration
3. If proprietary concern, name and address of
proprietor/certificate of registration
v. Location of TSR site with postal address
vi. Details of the site
1. Area (in sq. meters)
2. Title owned/ leased with copies of sale/
lease deed
3. Copy of Land Use Permit from local
authorities
4. Distances from Railway station, airport, main
shopping centers (in Kms)
vii. Details of the project
1. Copy of feasibility report.
2. Star category planned
3. Number of apartments and area for each
type of room (in sq.ft.)
4. Number of attached baths and areas (in
sq.ft.)
5. Details of public areas Lobby/lounge,
restaurants, bars, shopping, banquet/
conference halls, health club, swimming

pool, parking facilities.
6. Facilities for the physically challenged
persons.
7. Eco-friendly practices and any other
additional facilities
(please indicate area in sq.ft for each facility
mentioned above at 5,6 &7)
Date by which project is expected to be
completed and operational.
viii. Blue prints/ sketch plans signed by owners and
architect showing
1. Site plan
2. Front and side elevations
3. Floor plans for all floors
4. Detail of guest room and bath room with
dimensions in sq.ft.
5. Details of Fire Fighting Measures/ Hydrants
etc.
6. Details of measures for energy conservation
and water harvesting.
ix. Air-conditioning details for guest rooms, public
areas
x. Local approvals by
1. Municipal authorities
2. Concerned Police Authorities
3. Any other local authority as maybe required.
4. Approval /NOC from Airport Authority of
India for projects located near Airports
The above mentioned approvals/NOCs are

the responsibility of the promoters/
concerned company as the case may be. The
Departments approval is no substitute for
any statutory approval and the approval
given is liable to be withdrawn in case of
any violations without notice.
xi. Proposed capital structure
1. Total project cost
a. Equity component with details of paid up
capital
b. Debt with current and proposed sources
of funding
xii. Letter of acceptance of regulatory conditions.
xiii. Please indicate whether the promoter intends to
give a few rooms or all rooms on a time- share
basis.
xiv. Application Fee
5. In the event of any changes in the project
plans, the approval must be sought afresh.
6. Authorised officers of the Department of
Tourism should be allowed free access to
inspect the premises from time to time
without prior notice
7. The TSR must immediately inform the
Department of the date from which the TSR
becomes operational and apply for
classification within 3 months of this date.
8. The fees payable for the project approval
and subsequent extension, if required are as
follows. The demand draft maybe payable
to Pay & Accounts Officer, Department of
Tourism, New Delhi .
Star category Amount in Rs.

5-Star 15,000
4-Star 12,000
3-Star 8,000
9. The promoters must forward regular
progress reports for each quarter failing
which the project approval would be
considered withdrawn.
10. All documents must be valid at the time of
application and a Gazetted officer or Notary
must duly certify copies furnished to the
Department. Documents in local languages
should be accompanied by a translation in
English/official language and be duly
certified.
11. For any change in the category the
promoters must apply afresh with a fresh
application form and requisite fees for the
category applied for.
12. Any changes in the project plans or
management should be informed to the,
Department of Tourism/Regional Directors
Office (For 3,2 &1 Star categories) (for 5-D,
5, 4 Star and Heritage categories) within 30
days otherwise the approval will stand
withdrawn/terminated.
13. Applicants are requested to go through the
checklist of facilities and services contained
in this document before applying.
14. Incomplete applications will not be accepted.
15. The Govt. India Ministry of Tourism
reserves the right to modify the guidelines/
terms and conditions from time to time
TSR Classification/ Reclassification
1. Classification for newly operational TSR must be

sought within 3 months of completion of approved
TSR projects. Operating TSRs may opt for
classification at any stage. However, TSRs seeking re-
classification should apply for reclassification one year
prior to the expiry of the current period of
classification.
2. If the TSR fails to reapply three months before the
expiry of the classification order, the application will
be treated as a fresh classification case.
3. Once a TSR applies for classification/ re-classification,
it should be ready at all times for inspection by the
HRACC. No requests for deferment of inspection will
be entertained.
4. Classification will be valid for 5 (Five) years from the
date of issue of orders or in case of reclassification
from the date of expiry of the last classification
provided that the application has been received within
the stipulated time mentioned above, along with all
valid documents. Incomplete applications will not be
accepted.
5. TSRs applying for classification must provide the
following documentation.
a. Application Form detailing
i. Name of the TSR
ii. Name and address of the promoters/owners
with a note on their business antecedents
iii. Complete postal address of the hotel with
tel. no/fax/email
iv. Status of the owners/ promoters
1. If Public/ private limited company with

copies of Memorandum and Articles of
Association
2. If Partnership, a copy of partnership deed
and certificate of registration
3. If proprietary concern, name and address
of proprietor/certificate of registration.
v. Date on which the hotel became operational.
vi. Details of hotel site with postal address and
distance from Airport/Railway Station/City
Centre/Downtown shopping area (in kms)
vii. Details of the hotel
1. Area (in sq. metres) with title owned/
leased with copies of sale/ lease deed
2. Copy of Land Use Permit from local
authorities
3. Star category being applied for
4. Number of rooms and area for each type
of room in sq.ft. (single/double/suites)
5. Number of attached baths
6. Details of public areas Lobby/lounge,
restaurants, bars, shopping area,
banquet/ conference halls, health club,
swimming pool, parking facilities,
facilities for the physically challenged
persons, Eco-friendly practices and any
other additional facilities. The area for
each facility should be indicated in sq.ft
7. Detail of guestroom and bathroom with
dimensions in sq.ft.
8. Details of Fire Fighting Measures/
Hydrants etc.
9. Details of measures for energy

conservation and water harvesting and
other Eco-friendly measures and
initiatives.
10. Air-conditioning details for guest rooms,
public areas Certificates/No Objection
Certificates (attested copies)
a) Certificate/ licence from Munici-
pality/ Corporation to show that
your establishment is registered as a
hotel
b) Certificate/ licence from concerned
Police Department authorizing the
running of a hotel
c) Clearance Certificate from Municipal
Health Officer/ Sanitary Inspector
giving clearance to your establish-
ment from sanitary/hygienic point of
view
d) No Objection Certificate with respect
to fire fighting arrangements from
the Fire Service Department (Local
Fire Brigade Authorities)
e) Public liability insurance
f) Bar Licence
g) Money Changers Licence
h) Sanctioned building plans/
occupancy certificate
i) If classified earlier, a copy of the
earlier Certificate of Classification
issued by Department of Tourism
j) For Heritage property, certificate

from the local authority stating age
of the property and showing new
and old built up areas separately.
k) Any other local authority as maybe
required.
l) Approval /NOC from AAI for
projects located near Airports
m) Please indicate whether a few rooms
or all rooms are to be let out on a
time-share basis.
n) Application fees
The above-mentioned approvals/No Objection
Certificates are the responsibility of the Owners/
promoters/concerned Company as the case may
be. The Departments approval is no substitute for
any statutory approval and the approval given is
liable to be withdrawn without notice in case of
any violations or misrepresentation of facts.
6. All applications for classification or re-classification
must be complete in all respects application
form, application fee, prescribed clearances, NOCs,
certificates etc. - incomplete application is liable
to be rejected.
7. TSRs will qualify for classification as Heritage
hotels provided a minimum 50% of the floor area
was built before 1935 and no substantial change
has been made in the facade. Hotels, which have
been classified/, re-classified under Heritage
categories prior to issue of these Guidelines will
continue under Heritage categories even if they
were built between 1935-1950.
8. The application fees payable for classification/

reclassification are as follows. The demand draft
maybe payable to Pay & Accounts Officer,
Department of Tourism, New Delhi .
Star Catgory Classification/Reclassification fees
in Rs.
3-Star 10,000
4-Star 15,000
5-Star 20,000
9. The classification committee will consist as follows:
(a) Chaired by Chairman(HRACC) or his
representative. Representatives from
AIRDA/FHRAI/HAI/IATO/TAAI/IHM/
RD/local Indiatourism office /Member
Secretary will constitute the other members
of the Committee.
(b) The Chairman and any 3 members will
constitute a quorum.
(c) The minutes will be approved by the
Chairman (HRACC).
(d) In case of any dissatisfaction with the
decision of HRACC the hotel may appeal to
Secretary(T), Government of India for review
and reconsideration within 30 days of
receiving the communication regarding
classification/reclassification. No requests
will be entertained beyond this period.
10. TSR will be classified following two stage
procedure.
The presence of facilities and services will be
evaluated against the enclosed checklist.
(a) TSRs will be required to adopt environment
friendly practices and facilities for physically
challenged persons.
(b) The quality of facilities and services will be

evaluated against the mark sheet.
11. The TSR is expected to maintain required
standards at all times. The Classification
Committee may inspect a hotel at any time
without previous notice. The Committee may
request that its members be recommended
overnight to inspect the level of services.
12. Any deficiencies/rectification pointed out by the
HRACC must be complied with within the
stipulated time, which has been allotted in
consultation with the hotel representatives during
inspection. Failure to do so will result in rejection
of the application.
13. The Committee may assign a star category
lower but not higher than that applied for.
14. The TSR must be able to convince the
Committee that they are looking sufficient steps
to conserve energy and harvest water, garbage
segregation, and disposal/recycling as per
Pollution Control Board (PCB)norms and
following other Eco-friendly measures.
15. For any change in the star category the
promoters must apply afresh with a fresh
application form and requisite fees for the
category applied for.
16. Any changes in the plans or management of the
hotel should be informed to the HRACC, Govt.
of India, Ministry of Tourism within 30 days
otherwise the classification will stand
withdrawn/terminated.
17. Applicants are requested to go through the
checklist of facilities and services contained in
this document before applying,.
18. Incomplete applications will not be considered.

All cases of classification would be finalised
within three months of the application being
made.
19. The Govt. of India, Department of Tourism
reserves the right to modify the guidelines/
terms and conditions from time to time.
7
Destination Management
A tourist destination is a city, town or other area the

economy of which is dependent to a significant extent on
the revenues accruing from tourism. It may contain one
or more tourist attractions or visitor attractions and
possibly some tourist traps.
Natural attractions draw visitors to see what the
world was like before tourism left previous, traditional
cultures abandoned, as Western influence swept the
world. Popular cities such as Paris, London, Washington,
DC, New York City, Madrid, Sydney, Tokyo, Toronto and
Rome have a large number of tourists each year, making
them a huge tourist destination.
Managing tourism destinations is an important part
of controlling tourisms environmental impacts.
Destination management can include land use planning,
business permits and zoning controls, environmental and
other regulations, business association initiatives, and a
host of other techniques to shape the development and
daily operation of tourism-related activities.
The term destination refers broadly to an area
where tourism is a relatively important activity and
where the economy may be significantly influenced by
tourism revenues. Destination management is
complicated by the fact that a single, recognizable

destination may include several municipalities, provinces,
or other government entities - in island environments it
may be the entire country.
Participating governance structures led by local
authorities, with the involvement of local NGOs,
community and indigenous representatives, academia,
and local chambers of commerce, make up what are
known as Destination Management Organizations
(DMOs). Often DMOs take the form of local tourism
boards, councils, or development organizations. The
network of local tourism businesses (hotels, attractions,
transportation services, service providers such as guides
and equipment rentals, restaurants, etc.) are also a
significant part of a destination.
The needs, expectations and anticipated benefits of
tourism vary greatly from one destination to the next,
and there is certainly no one size fits all approach to
destination management. As local communities living in
regions with tourism potential develop a vision for what
kind of tourism they want to facilitate, a comprehensive
planning framework such as Local Agenda 21 has proved
useful and is being used more and more often. Promoting
sustainable tourism within Local Agenda 21 processes is a
way to strengthen local stewardship of the environment.
TOURIST A TTRACTION
Tourist attraction is a place of interest where tourists
visit. Some examples include historical places,
monuments, zoos, museums and art galleries, botanical
gardens, buildings and structures (e.g., castles, libraries,
former prisons, skyscrapers, bridges), national parks and
forests, theme parks and carnivals, ethnic enclave
communities, historic trains and cultural events.
Destination Management 221
Tourist attractions are also created to capitalise on

unexplained phenomena such as a supposed UFO crash
site near Roswell, New Mexico and the alleged Loch Ness
monster sightings in Scotland. Ghost sightings also make
tourist attractions.
Ethnic communities may become tourist attractions,
such as Chinatowns in the United States and the black
British neighborhood of Brixton in London.
In the US, owners and marketers of attractions
advertise tourist attractions on billboards along the side
of highways and roadways, especially in remote areas.
Tourist attractions often provide free promotional
brochures and flyers in information centres, fast food
restaurants, hotel and motel rooms or lobbies, and rest
areas.
While some tourist attractions provide visitors a
memorable experience for a reasonable admission charge
or even for free, others can have a tendency to be of low
quality and to overprice their goods and services (such as
admission, food, and souvenirs) in order to profit from
tourists excessively. Such places are commonly known as
tourist traps.Many tourist attractions have a higher
concentration of hotels and motels located nearby.
C OMMUNITY AND D ESTINATION B RANDING

The task of creating a community brand that is going to
hit customer hot buttons, stand out from competitors, and
resonate with the values of residents requires vision,
extensive research, strategic thinking, and a lot of
creativity.
The reputations, credibility, and perceptions of
communities are influenced by every encounter with
customers. This philosophy has shaped our proprietary
methods for building easy to implement brand strategies

for communities.
Decades of practice in building destination brands
has shown us the need to go beyond the traditional
positioning statement used for consumer goods to capture
the most relevant and sustainable brand platform, and
present it as a promise to guide the community and its
partners. For instance, the 7A Destination Branding
System is an overall process that guides the brand
building from the inside out. It engages stakeholder
buy-in from the earliest stages and aligns them with the
insights learned from extensive qualitative and
quantitative research. This forges strong positioning that
is steeped in the realities of the citys markets, its
capabilities, its competitors, and importantly the values of
the local community and partners.
The guiding principle of 7A approach is that it takes
local people to breath life into a communitys Destination
Promise and to take responsibility for the brands
ongoing vitality. We create the customized strategies,
designs, educational programs, and tools to ensure that
the brand has a soft landing and is well received,
endorsed, and adopted by key partners and residents.
A rich, relevant, and respected brand will not
emerge in an afternoon. There is no silver bullet or one-
size-fits-all solution that can quickly deliver a winning
brand strategy for a community. Like the great chefs of
Europe, it cannot be rushed. One of the special
considerations is that communities are usually a
compilation of many independent and competing entities
owned and managed by many different organizations
with no single owner, brand custodian, or decision-
making group. We are driven by the fact that sustainable
community brands require an approach that differs
somewhat from branding corporate products and

services.
The 7A Destination Branding System follows a
systematic path to ensure that all stages are given
thorough consideration. Our first objective is to craft the
Destination Promise which will influence all aspects of
the communitys brand. 7A charts over 300 brand audit
questions, and follows cost-effective qualitative and
quantitative research techniques, dozens of interviews,
workshops, experience mapping exercises, and creativity
sessions to identify the ideal competitive advantage,
compelling brand platform, and distinctive visual and
verbal identity elements to inspire marketing
communications.
7A not only leads to stunning marketing materials,
importantly it provides the strategic foundation to elevate
all marketing and brand experiences to levels of
excellence that may otherwise have not been possible.
Simply put, great strategies require great strategic input,
something that the 7A system always delivers. While the
7A Destination Branding System is at the heart of our
approach, we constantly adapt it to suit the particular
situation of each city or region.
Visitor Readiness Reports
At the heart of the destination branding approach is

ensuring that communities delight their customers
throughout the total destination experience. Like your
car, a communitys visitor preparedness is in need of a
tune-up to keep it running exactly as it should in order to
deliver the best results for everyone.
There are often dozens of low cost (and no cost)
solutions that can attract more visitors, hold their interest,
and increase their spending.
A Visitor Readiness Report is great insurance and

a cost effective way for small ambitious communities to
put their best foot forward and fine-tune the performance
of their visitor economy. This report is specifically
designed to meet the needs and resources of volunteer
committees and small destination marketing
organizations.
Tourism Planning
An easy to follow tourism development plan is an

important step for any city, county or region that wants
to realize its tourism potential. Without hesitation, the
clients and colleagues attest to our ability to foster a
collaborative approach between the private and public
sector.
The diversity of stakeholders involved in a citys
tourism economy underscores the need for a
comprehensive master plan that can draw together and
deliver value to everyone.
A Tourism Development Plan generally focuses on
five key destination elements:
Attractors. Create awareness for the destination and
attract customers Infrastructure Provide the logistics
and create a sense of place
Product Development. Increase the accessibility,
understanding and engagement with the destination
to make it more enjoyable for visitors.
Visitor Services. Enhance the visitors experience and
satisfaction
Brand Management and Marketing. Provide clarity,
consistency, and distinctiveness for projecting and
delivering the destination
Organization. The partnerships, networks, business

support and skills that are essential for successful
destination management.
Speaking Engagements
As an author and international destination branding and

marketing expert, Bill Baker has been a popular presenter
at over one hundred seminars, conferences and
workshops. His energizing and thought-provoking
presentations show how cities and regions, can build
distinctive identities, and unlock their market potential.
In recent years, Bill has conducted engaging
presentations in places as diverse as New Delhi, Hong
Kong, Monaco, Rome, and in dozens of places in the
U.S.A. His popularity comes from his ability to demystify
and communicate important and easy to use concepts
relating to destination branding and marketing. It is not
uncommon to hear Ahaas from delegates as they
realize the benefits and solutions arising from the ideas
and tools that he shares with them.
Bill generously delivers the kind of material that
delegates can walk away and start using immediately.
Participants appreciate receiving the checklists, templates,
practical tips, and insights that can only be gleaned from
someone with a lifetime of hands-on experience.
Delegates can anticipate a fast-moving, humorous, and
high-content program that will be customized to suit the
needs of your audience.
IMAGE BUILDING OF DESTINATIONS

The destination management can be defined as a system
of managerial skills and activities used for coordinated
planning and organizing of tourism for a particular
destination. In other words, in the process of strategic

planning for regional development representatives should
be involved not only from the public sphere, but also
businessmen, non-profit sector and civic initiatives.
Primarily in tourism the cooperation of public and
private sectors is especially important, because the
satisfaction of a client in tourism influences the entire
complex of services and if one of the services doesnt
function properly or doesnt function at all, then it
projects negative impressions on other service providers,
even if their services are of high quality. That concludes,
that a well functioning cooperation of a public and
private sector contributes to forming of positive image of
a region, which then significantly influences the
decisionmaking of potential customer in destination
selection.
In relation to this we can often see a term
marketing of local government, which might be for
many people somewhat unusual term. Nevertheless, its
nothing else but attracting investors to a region,
attracting tourists, communicating with public and
promotion of a region. These are the main objectives of
the local government representatives. Marketing of a
region (place or area) is thus marketing of local
authorities.
A destination can be considered as a product of
tourism, which is a combination of many partial products
(services), components. Under a product destination, we
understand everything, that a town offers its residents,
visitors, businesses and potential investors, and what
contributes to satisfying their individual or common
needs. Some entities are then both parts of the product
and its consumers.
Jane kova and Vastikova define destination as a

symbiosis of impact of material resources (such as
recreation area, infrastructure) and non-material resources
(climate, personalities - such as guides etc.). The level of
the product interrelates directly with its image, its
quality, and quantity. The image of local authorities and
the image of individual services provided in the
destination put the finishing touches to summary image
of a destination. The image of a place, a region or a town
is not only an important part of the product, but first of
all it can play an important role in destination promotion.
Each tourist destination should strive for creation of
a specific image. An image of a place or a destination is
rather a complex variable. It is influenced both by
internal and external environment that is formed by a
number of factors. It stems from the history of a town or
a region, as much as from its present.
An image of a place is also interconnected with its
positioning in individual market segments, because for
each of these segments the destination presents its
different image. Very clearly define positioning Ries and
Trout, who say that positioning is not what you do with
a product, but what you do with perception or the mind
of the potential customers. The image of a country may,
but doesnt necessarily need to conform to its reality.
Often an image comes across the same way as a clich. It
underlines certain characteristics of a country while it
leaves out different ones. Despite the fact, or maybe
because of that has an image such importance and many
times it influences peoples behavior and attitudes.
A majority of researches of places image from the
point of view of tourism take account of the acquired
image, most of all the characteristics of how the people
perceive the particular places and how they react to these
perceptions, and whether this acquired image influences

their present, existing concepts and their behavior as
customer of tourism products. When creating an image of
a place, the municipalities or organizations involved must
start with their own ideas and expectations about the
place, town, destination, from its history and local
conditions. The important factors are:
Size of the location
Natural and tourism conditions
Economic activities
Regional and international importance of the location
Relations among the communities
Marketing activities of the town and municipalities
Relations among local municipalities and interest
groups
Local politics.
When planning and building image, Ashworth and
Goodall use these three basic types of research sources:
1. Geographic research: analyzes the natural, cultural and
economic specifics of a destination (e.g. cultural
traditions, customs). Exploiting the local traditions can
intensify the feeling of pride of the locals for their
place (area, region), which helps to better acceptance
of and life together with tourists.
2. Marketing research: the goal is to find a competitive
advantage of the analyzed destination. We presume
that the individual destinations are substitutes for each
other and our effort is to convince the potential clients
to select our particular destination as their recreation
resort. Marketing theory describes this technique also
as branding. The goal is simple and quick
identification of a particular destination by
introduction of a specific name, logo and other

symbols contributing to differentiation from other
competing destinations.
3. Sociological research: it is based on differences among
people in various communities. The foundation for
properly built image is in its authenticity and
specification, which provides the place with
competitive advantage. People should perceive the
destination as something unique.
An important term in this subject is also so called as
Corporate Identity. It is the summary image of a
destination (generally applies also to any organization or
institution). It is represented by shared values, opinions,
and attitudes of each sector (commercial, public and non-
profit) in a destination, which differentiate the
destination. On the outside, the destination is represented
both by tangible elements (corporate design, name, logo,
symbols, etc.), and intangible elements, such as the
shared values, that contribute to the corporate culture.
The four advantages of using the image of a country:
1. Building a countrys identity: By analyzing the image
of a country, we can reveal the important unique
selling proposition of a country. If the countrys image
proves to have positive influence on the perception
of the country and its products, then it is in interest
of the export policy to support the image and
systematically develop it. This position is described
as USP-strategy. This strat-egy provides numerous
advantages - first of all, it promises success with use
of just a bit of resources.
2. Cost-saving effect: The majority of the businesses are
small or middle size, and when entering the
international market, they are not well known or not
known at all. Raising awareness and building a high
level of knowledge about them is very costly from the

financial point of view.
3. Image transfer strategy: If there are any strengths
associated with a country, where it is reasonable to
take advantage of them and use them as a support
also for other services and products of that particular
country that are not so well known.
4. Increased efficiency of advertising: Based on emotionally
charged elements of promotion supporting exports, the
efficiency of marketing communication can be
increased. It leads to higher sensitivity to advertising
and positive image transfer. An important factor of
building an image is establishment of the brand of a
destination. It is clear that a country (a destination)
with strong, positive and generally accepted
associations lead to trust, quality and integrity, which
provide the producers or services provider with a
competitive advantage.
Smart country representatives base their brands and their
reputation and their attitudes exactly the same way as
smart companies do. Globalization and harmonization
effects of European integration contribute to the pressure
on countries to create, manage and increase the value of
their brand. The countries are aware that most of them
provide similar products: area, infrastructure, educated
citizens and very often also almost identical government
system. To stand out in a crowd, it is necessary to really
work on building your own brand. It is a difficult and
longterm task, which can, however, significantly
influence foreign investment decision-making and a
market capitalization of the country. The countries need
to search for a market niche and get involved in
competitive struggle with marketing of other countries
with the goal to satisfy customers and first of all to create
a loyalty to their brand. In reality, a brand is ethically

neutral term - it is simply a name representing perceived
values related to the reputation of a product or a
company.
When building and maintaining the image of tourist
destination these following factors are important:
1. The research of current attitude and awareness about
the country. An important and basic condition of
success is knowledge and availability of information.
Knowing, how the country is perceived, is very
important information.
2. Be active. When creating and sustaining an image, we
cannot wait for someone to come to us. It is necessary
to take the initiative and let the others know about
us. Then you can control the extent and form of
provided information. That gives more possibilities to
better prepare for various problematic topics.
3. Clearly define image you aspire to have. In order to
work on image and influence its characteristics, it is
necessary to have clear idea of how it should be like,
what we aspire to. Otherwise it could happen that
media or someone else would define, who we are and
where we fit. It is important to realize that an image
has certain time stability and, therefore, it requires
longer time period to change the image.
4. Stress benefits and the uniqueness.
5. Define the audience. Just as in marketing plan of a
product, the marketing plan of a country needs to
define certain target segments that we want to
address. Targeting the message can save costs and
increase efficiency.
6. Create and use marketing plan. Marketing a country
is a very complex thing. It is necessary to create
mutual cooperation among individual participating

entities in order to reach consistency and efficiency.
Marketing plan should include these basic elements:
analysis of current situation, objectives, strategies and
methods, how to reach the stated objectives, time
schedule and budget.
7. Create and maintain a steady flow of information. If
we want to create or change perceptions, it is
impossible just to wait for something to happen. It is
up to our own initiative to provide enough press
releases, promotion materials, advertisements, surveys.
8. Be specific in your information. If we want to
differentiate from other countries, we have to clearly
exhibit, why we deserve the support and interest. We
should offer the best or at least an original idea.
9. Dont exaggerate. The right solution is not boasting
and promises you cannot fulfill, the goals can be
reached, when the communication and presentation
will be direct, confident and honest. The goal is to
gain goodwill and respect.
10. Be patient. Image can hardly change over a short
period of time. Creating and maintaining an image is
not a question of few years, but rather decades of a
consistent work.
11. The first rule of effective public relations is to be good.
When creating the marketing plan to support an image
of a country, it is necessary to stay realistic. A skilled
PR person can tell something good about anything.
But you cannot look good unless you are good. Using
PR to hide problems is unfruitful, expensive and can
lead to embarrassing situations. A guarantee of high
quality of production, providing services, respectful
treatment, quality of legal system then lead to
achievement of the requested results.
12. Using celebrities as spokespeople can bring both

positive and negative effect. Celebrities usually attract
more attention faster, they can help to win, by
association, goodwill of their fans. The effect can also
be opposite - the celebritys private life can hurt the
image of the country even more. So the choice of such
a personality has to be very sensitive, if we want to
achieve our objectives.
13. Image Marketing overlaps practice and budget areas.
The brands, logos and symbols representing the
country is necessary to apply to as many different
fields as possible (promotion materials, catalogues,
web sites, headed papers, etc.), so their knowledge is
as high as possible, otherwise they dont fulfill their
purpose.
14. Image is based on emotions. Promotion and other
marketing activities can help to influence, how people
will perceive our country. Making a list of benefits
and unique features of what we represent can help
us to better affect emotions and feelings, which stay
after our campaign is over.
M ANAGING H EALTH AND S ANITATION C ONDITIONS

As tourism continues to grow, becoming an important
input to the economics of most of the countries of the
Americas, so grow concerns for and attention to tourism-
related aspects of infrastructure, safety, security, health,
and environmental conservation. The relation between
health and tourism has long been recognized, not only as
a significant driving force for travel but also in terms of
the potential health risks stemming from contacts by
visitors, with the environment and the host population.
When, in 1963, the United Nations Conference on
Travel and Tourism defined tourism, health was
recognized as a major reason for travel. Health issues

related to travel and tourism have promoted strong
working links between the World Health Organization
(WHO) and WTO. Regional WHO Offices, such as the
Pan American Health Organization (PAHO), are also
building strong links with regional organizations and
mechanisms, such as the Caribbean Tourism Organization
(CTO) and the Inter-American Travel Congress (IATC).
Note should also be taken of the important collaboration
between the Organization of American States (OAS) and
PAHO in the area of tourism, including aspects of
environmental health in the context of sustainable
tourism development.
WHO has affirmed its leadership by establishing
criteria and guidelines for drinking and for recreational
water quality; for airplane catering and for publishing
such classic texts as Guide to Sanitation in Tourist
Establishments and Guide to Health and Salubrity in
Air Transport. This, together with the vaccination
certification requirements, attest to the great importance
WHO gives to the link between health, travel and
tourism. Regional publications such as The Hygienic
Handling of Food and Environmental Health and
Sustainable Tourism Development in the Caribbean
further WHOs leadership role in this area.
In 1992, PAHO and the International Institute of
Tourism Studies of the George Washington University,
published the results of a bibliographic research of
annotated English referenceson health and tourism
interaction available on electronic data bases. The
interesting aspect of this research is that, although 147
references were identified, in certain areas the
bibliography is limited. One possible explanation of this
fact is that almost all documents were written by authors
from developed countries, catering to information needs

of potential tourists from these countries.
People travel for a variety of reasons: business,
congresses, cultural enrichment, ecological explorations,
family reunions and to visit with friends; but the most
ancient and most frequent reason to engage in tourism is
health.
The 1983 World Tourism Meeting stated that the
right to rest, a natural consequence of the right to work,
must be affirmed as a fundamental right in terms of
human happiness. In this context, tourism serves to
fulfill the basic human need to recover mental and
physical well-being.
When the right for vacations was achieved by
employees, it was defined as leisure time aimed at
recovering capacity to work, thus meant to be spent in
quality environment proper for the recovery of physical
and mental strength. This need for recovery of working
capacity is even more true now-a-days as demonstrated
by the growing trend by employees to request more
frequent yet shorter vacations rather than one long
annual vacation.
The growing popularity of vacationing at spas and
thermal baths is another indication of how health and
tourism are related, constituting what has been named
therapeutic travel.This form of travel accounts for the
popularity of thousands of such places around the world.
Many of these places associate leisure time with
professional care for weight loss, physical fitness,
rehabilitation and stress reduction. Many of them
incorporate programs for treatment of drug and alcohol
addiction.
Cuba presents an interesting form of therapeutic
tourism by offering highly qualified medical services to
patients from other countries at costs considerably lower

than those at their place of origin. Many times these
medical services come as part of a tourist package and
special housing arrangements are available for this
purpose.
HEALTH IMPACTS OF TOURISM
Impacts on Visitors
There are plenty of publications available in developed

countries describing health hazards to tourists planning
to travel to countries and places with developing
economics. Although normally very general in their
contents, and many times based on perceptions or
projections rather than concrete facts, these publications
respond to most of the concerns potential travelers have.
A recent version of the book published in Canada under
the title Dont Drink the Water describes a long list of
potential risks and suggests ways and means to avoid
exposure to these risks.
Tourists can feel the health impacts very early in
their journey, at the onset of jet lag or sea-sickness.
Although they pose no major health risks, these two
problems can cause considerable distress, mainly in
elderly people and those with pre-existing health
conditions.
Most attention is normally placed on the occurrence
of diarrheas caused by parasites, bacteria or virus. Most
of the travelers are not exposed to these microorganisms
in their environment of origin, making them prime
victims in some of the tourist places. Mainly associated
with the consumption of contaminated food or water,
such diarrheas rarely require intensive or extensive
medical care. Escherichia coli, shigella and salmonella are
among the most frequent agents of diarrheas in tourists.

These microorganisms are also present in swimming
pools and costal waters where they are sometimes related
to gastrointestinal, respiratory and skin infections.
The consumption of contaminated seafood has been
shown to be associated with the occurrence of Hepatitis
A, since shellfish and, very specifically the bivalves,
concentrate the microorganisms, exposing consumers to
high doses of infectious agents. In some instances, the
consumption of seafood, specifically carnivorous fish, has
been linked to Ciguatera, which is an intoxication of
tourists due to the presence of high concentrations of
Cigua-toxins produced by the algae.
Outbreaks of Legionnaires disease have gained
significant visibility in recent years. A respiratory disease
caused by a bacteria called Legionella pneumophila
associated with the water and the air conditioning
systems in hotels and other closed environments.
There are many more potential biological health
risks to which unprotected non-immune tourists may be
exposed. Some of the more frequently identified agents
are entamoeba, vibrio cholerae, giardia, helminths and the
virus which cause gastroenteropathies. All of these are
associated with the consumption of unsanitary food and
water.
Another group of health risks to which travelers are
often exposed are those transmitted by vectors like
mosquitos, ticks, lice, fleas and mites. Malaria, dengue,
yellow fever and lyme disease are among the vector-
transmitted diseases sometimes diagnosed among
tourists.
Most of the above health problems can be
adequately controlled through the application of well-
known procedures for food handling and environmental
sanitation. As a general statement, it could be said that a

clean environment is a seal of quality for tourists, since it
indicates the concern local authorities have with
environmental health matters. It is legitimate to say that
the environment is a major determining factor for
tourists health and that an adequately maintained
environment not only attracts tourists, but it is also a very
effective measure to protect their health. Investment in
the environment is, therefore, cost-effective input to
tourism.
The appearance of the virus responsible for the
human immunodeficiency (HIV) and the epidemic of
acquired immunodeficiency syndrome (AIDS) brought
about a very special chapter in the health aspects of
traveling and tourism. Sexually transmitted diseases, on
the rise in the world, require an urgent change in
behavior vis-a-vis occasional sexual contacts which are
greatly responsible for the spread of HIV and the
continuous growth in the number of AIDS cases.
From the above, it is evident that responsibility for
tourist health lies not only with local authorities but also
with prospective tourists who must have a proactive
position on this issue. Since tourism-related diseases are
not equally distributed in all places, it is very important
to seek as much information about the travel destination
as possible. This attitude will provide an adequate basis
for observing immunization requirements and
recommendations. While yellow fever is the only disease
for which some countries require presentation of an
International Certificate of Immunization, there are
several additional vaccines available to tourists. Among
the frequently recommended ones for travelers are the
vaccines for Typhoid, Hepatitis B, poliomyelitis and
rabies.
In conclusion, it should be said that while

recognizing the potential health risks involved in
traveling and tourism, there are plenty of ways to reduce
or eliminate such risks. This requires a concerted effort by
local authorities and by potential travelers. Health
education and health promotion, including environmental
health, are fundamental to bringing about appropriate
attitudes and behavior. Environmental sanitation and
preventive medical measures should always be employed
by authorities and by travelers.
Impacts on Hosts
The bibliographic search by the International Institute of

Tourism Studies in 1992 identified among the 147
citations collected, 36 dealing with the impact of tourism
on the health of residents. Most of these documents and
publications were written in the last 10 years, indicating a
new trend in looking at the health impacts of tourism on
host countries. Sexually transmitted diseases and
environmental degradation brought about by tourism
seem to be among the main concerns within this context.
Some of the texts also deal with aspects of drug addiction
and the import of cultural values from other countries.
Nevertheless the positive impacts are also identified and
discussed. Beneficial changes including earning foreign
currencies, development of labor markets and the
improvement of local infrastructures, such as the
provision of health and environmental services, are also
recognized.
There is little doubt that promiscuous behavior has
contributed significantly to the import and spread of
AIDS and other sexually transmitted diseases. Initially
strongly linked to homosexuality, in the last 10 years the
transmission has been more and more through
heterosexual contacts. Some tourists tend to have

behaviors more relaxed than those they have at home.
This is one of the major reasons for alcohol overuse, use
of drugs, promiscuous sexual behavior, and neglect of
protective habits.
Most of these problems must be dealt with through
health promotion methodologies and strategies. This
should be accepted by promoters of tourism and by host
authorities. Tourist health promotion ought to become an
integral component of tourism promotion. Although there
are several successful cases in this regard, it is far from
becoming a standard procedure. It is also urgent that
health professionals become advocates and agents for the
promotion of tourists health.
In the Americas Region, there is a very special
situation related to the potential health impacts on host
communities. A very strong region-wide campaign for
the eradication of immuno-preventable diseases has
produced important results. Since September 1994, the
American region has been declared free of the
transmission of the wild virus causing poliomyelitis. In
other regions of the world, this exceptional result has yet
not been achieved. This poses a potential possibility of re-
introducing the disease in this region. Health authorities
are maintaining strong monitoring mechanisms in all
countries of the region.
Along the same line, after a strong vaccination
campaign, the Caribbean region has not reported any case
of measles. This probably means that these countries are
very close to eradicate this disease. A similar effort is
now being carried out by all Latin American countries.
Here also is a risk that measles could be re-introduced
from a country in which measles is still prevalent.
Tourism is no longer seen as a privilege and a

luxury. It is perceived as a very basic right in order to
recover mental and physical well-being, thus re-
establishing the capacity for an active life. Although
driven by the desire to recover health, tourism is not free
from health risks itself. It can impact not only the health
of tourists but also the health of host communities.
Nevertheless, most of these risks can be avoided or
considerably reduced by means of environmental health,
health promotion and disease prevention.
Home and host authorities, tourism promoters and
health professionals all have important responsibilities in
making tourism what it is supposed to be: a life-enriching
experience with quality time spent in a quality
environment recovering health and building memories
forever. It must be health-oriented and diseases should be
kept as far as possible from it.
QUALITY M ANAGEMENT OF TOURISM DESTINATIONS

Quality in tourism has many dimensions. Through
quality management, efforts are being made to take
account of the growing importance of individual aspects
of quality.
Quality is gaining in importance in all areas of
modern life. In tourism too, guests require products
where they are sure of getting top-quality, value-for-
money services. The further reasons for systematic quality
management in tourism are widely documented: growing
competition, lack of willingness to provide a service,
growing loss of individuality by standardization of
products, adverse price-performance ration etc.
To satisfy more demanding and fast-changing
customer wishes, various tools on Total Quality
Management (TQM) lines have been developed,

whereby:
Total stands for the inclusion of all areas of the
business and all staff: principle of staff briefing
Quality stands for the consistent gearing of all
activities to the quality requirements of internal and
external customers/guests: principle of guest-led
action
Management stands for the responsibility and
initiative of the top management as regards systematic
quality development and assurance: principle of
management responsibility
TQM also involves the principle of process orientation,
thus emphasizing that each product or service is the
result of a process, with each step being linked to the one
before and after it. The quality of the individual processes
makes for the quality of the whole, and in time, quality
standards are raised by means of the permanent cycle of
planning implementation reviewing correction.
Total Quality Management comprises three aspects:
Quality target, ie. the self-set high standard of service
to satisfy the wishes of particular guest segments and
of staff
Quality development, ie. active cultivation of this
standard of service and its constant improvement
Quality assurance, ie. the conscious monitoring of the
standard of service as well as reactions if anomalies
gradually creep in.
From a guests point of view, tourism services are always
the product of a whole package of individual services.
Like a chain, these services are all linked: advance
information from a Tourist Centre, the train journey to
the destination, stay in vacation hotel, eating in a

restaurant, mountain-railway excursions and lastly the
trip home. Each individual service leaves its mark on and
influences the holiday experience.
Also at the level of the individual hotel, a guest
experiences the whole service package as a chain in
which one service is linked to the next: information,
arrival, check-in, moving into the room, eating in the
restaurant, check-out. These service chains which are
specific to guests provide an aid for systematic checking
of a hotels services and processes, showing where
practical quality improvements can be made and
promoting the introduction of appropriate measures.
Providing services and direct contact with guests are
exacting tasks because each guest has his specific
expectations, needs and opinions. However tactful staff
may be, the odd mistake or misunderstanding is virtually
unavoidable.
Such occurrences are described as critical
incidents; these are defects of varying degrees in a
service chain which result in failure to satisfy guest
expectations and hence trigger dissatisfaction.
Guests tend to remember critical incidents and do
not hesitate to talk about them. Research has shown that
it takes seven positive points to compensate for just one
guest-care slip up.
Managers would do well to put themselves in the
guests place on a regular basis, taking their remarks and
reactions seriously, communicating with them direct and
systematically reviewing individual sequences and
processes for critical incidents. Service chains are a useful
tool for tracking down potential critical incidents and
deriving good service from them in the shape of in-
house quality standards.
To imporve destination quality four instruments for

promoting in-house quality of servicemust be
systematically implemented. These are:
1. Service chains: service chains should be checked for
potential critical incidents in respect of key guest
groups. Good service should be set out in the form
of quality standards and the necessary measures
derived from them
2. Quality profile: the operational fields of crucial
importance for quality of service should be reviewed
for quality awareness (by way of a cross check). Six
quality aspects can be chosen from the ten listed
below:
knowledge of guest expectations
further training of staff
care of aids and facilities
taking account of special wishes
knowledge of guest satisfaction
knowledge of staff satisfaction
attentive guest service
putting mistakes right
teamwork
cooperation with associated hotels
3. Complaints: a questionnaire must be used to check how
complaints are dealt with so that appropriate measures
can be derived from them.
4. Action Plan: The measures with the highest priority
formulated in the service chains, quality profile and
complaints instruments are combined in an Action
Plan for the year ahead.
Quality coaches who fit the prescribed qualification

profile are taught how to handle the instruments and
prepared for implementing a quality management system
in their own hotel. Guidelines, transparencies, a video,
floppy disk and help desks are available to simplify this
demanding task.
8
Guests and Their Well-being
Good guest service is about creating a sense of well being

in the guestsa feeling that their needs are being met,
that their business is valued, that they matter to us. It is
difficult to define the personal service concept as it
cannot be weighed or measured. Good service will mean
different things to different people and the challenge for
people working in the hotel and tourism industry is to
anticipate and meet as far as possible the needs of all the
guests.
There are two main types of service - material and
personal. The term material service relates to the
quality, quantity, price and timing of food, drink,
physical comfort, information and working methods. This
could mean:
An appetizing lunch special in the coffee shop
Spotlessly clean toilet facilities in the hotel
The wide range of souvenirs available in the hotel gift
shop
The hotel information pack provided in each guestroom
Material service is generally something concrete and
visible that the guest can easily identify. It would not be
possible to provide good personal service without the
Guests and Their Well-being 247
back up of good material service. Yet often the guest is

unmoved by the material service no matter how good a
standard it is, and it often has, at best, only a neutral
effect on him. Guests are more likely to comment on
material service when it is below standard than to praise
it. What clean toilets! is less likely to be heard than
loud complaints if the toilets are dirty.
Because material service is easier to define and
analyze, most companies give priority to this in terms of
investment and advertising aspects of their business. Yet
research shows that it is the level of personal service that
is most often the deciding factor in guests choice and
that where the material service falls below par, it may
well be forgiven if the guest is treated with warmth and
kindness.
Personal service is about creating a sense of well
being in the guests - making them feel welcome and
valued while at the same time ensuring that their needs
are looked after. Personal service is not tangible therefore
it is difficult to measure, as it is largely more emotional
that rational and is very subjective. While you may not be
able to actually see personal service, you will notice if it is
not there. The key to success in the hotel business is to
provide a high standard of both material and personal
service - every hotel supplies its guests with food, drink
and accommodation but if your hotel is also providing a
high level of personal service then you will have the
competitive edge. That is the reason you and the job you
do are so important to the business - you are the key -to
providing a high level of personal service.
Good service means giving guests a little more than
they expect. Excellent service is enjoying giving people a
little more than they expect. Often as guests, the point of
contact makes no impact - it is neutral, neither good nor
bad. However if we are ignored, treated rudely or

cheated, we are left with negative feelings of anger and
frustration. We may never do business with that
company again. At other times the attention we receive as
guests seems special. The service-giver is friendly, warm,
and attentive and is prepared to go to trouble on our
behalf. This scenario leaves us with positive feelings of
appreciation and pleasure that encourage us to do repeat
business with the company in question. Guest loyalty
means good business.
There are three parties involved in guest care and
they are:
1. the guest
2. the company
3. you
All three parties can feel the benefits of good and
effective guest care - there is something in it for everyone
and not just the guest. These benefits may be identified as
follows:
For the guest:
pleasant experience
attractive, welcoming surroundings
helpful, interested staff
finding what they want
being cared for and treated as an individual
respect and recognition
For the company
satisfied guests
guest loyalty and goodwill
increased sales and profit
good word of mouth publicity

staying ahead of the competition
meeting guests needs for better service
repeat business as satisfied guests will return again
and again
greater job satisfaction for staff
For you
guests being pleasant to you
the pleasure of seeing the guest satisfied
the satisfaction of doing a good job and using your
skills and knowledge
knowing you have done your best
the satisfaction of being pleasant to people and giving
them what they want
more happiness, less stress
PROVIDING A QUALITY SERVICE

Dont confuse the idea of offering a perfect service with
the idea of having the perfect product. It is possible to
deliver a really good service to guests in a hotel or guest
house that has no star rating and it is also possible to
deliver a poor quality service in a five star hotel! You are
the central and key element in the delivery of quality -
you are in the driving seat - you have a very important
role to play.
Providing a quality service means:
offering a high quality experience to every guest every
time
maintain with high standards and repeat them every
time
developing systems and making them work every time

developing routines for tasks that have to be done
again and again so that completing them becomes a
habit and nothing gets left out. Even when things go
wrong you can still offer the guest a quality service
by sorting out the problem promptly, efficiently and
courteously.
Working in the hotel business means coming in contact
with a wide cross-section of the public. In your job you
will have to learn to recognize. Who your different types
of guests are and the service that they will both expect
and require - meeting their different needs to the highest
possible standard is guest-care in action. Some of the
obvious ones are:
the business and conference guests. They will expect
and demand an efficient professional service to act as
a backup to their activities. Their priorities might be
punctuality, availability of high standard secretarial
services, privacy and unobtrusive service.
The holidaymaker or tourist. They may be more
interested in the hotels leisure facilities, friendly
service and value for money.
It is your job to identify these individual needs and to
ensure the service you provide matches if not exceeds the
guests expectations.
The less obvious type of guest is those who may
have special needs, requiring understanding and sensitive
handling, such as:
The elderly
Children
Disabled guests
Visitors from different cultural backgrounds.
The elderly. Older guests may have mobility problems

and may tire easily. Some people in their eighties are very
active, others are not. Your common sense should tell you
if they need special help. Elderly visitors should be
treated with respect and patience.
Children. Families comprise a major segment of the
holiday market, yet many staff appear to tolerate children
under sufferance. Parents and children will appreciate
staff who facilitate and welcome families. For instance,
involving children in the commentary when
accompanying guests to their room - We have a lovely
pool for children in the commentary when accompanying
guests to their room - We have a lovely pool for children
and lots of toys in our playroom, offering to heat a
babys bottle, assisting parents carry small children and
so on..these are the extra bits of service that you and
your hotel will be remembered for.
With children, it is possible that they may drift away
from their parents and get lost in the hotel. This can be a
very frightening experience for them, try to reassure lost
children while following the hotel procedures for dealing
with this situation.
Disabled visitors. Disabled visitors can easily be
handicapped not by their disability but by staff attitudes
towards them. Try to treat them as you would any other
visitor, while making allowances for their disability.
Guests with restricted hearing may not be able to benefit
from your announcements. During a conversation, they
may be trying to lip read so it is important that you face
them and speak very clearly. If necessary write down the
information for that you face them and speak very
clearly. If necessary write down the information for them.
Similarly blind or partially sighted people may require
special assistance.
Overseas visitors. It helps to understand and respect

some of the basic cultural differences between various
nationalities so as to avoid offending visitors unwillingly.
For instance, recognizing religious dietary restrictions and
codes of behaviour will help you in your understanding
of guests needs.
Caring, being professionally concerned and noticing
things is one of the secrets of success in the hospitality
industry. If you care about others, you take trouble to see
that they are comfortable and have everything they need.
Caring is both the way you do things and the reason why
you do them.
Dos and Donots
Keep this checklist with you as a constant reminder to

think and act guest care when doing your job.
Do
Think guest
Anticipate his requirements.
Act without being asked.
Try to meet his needs.
Do more than is asked for.
Do so willingly.
Enjoy dong.
A job well.
Be conscious of those needing special assistance.
Give a little bit extra.
Get it right every time.
Dont
Begrudge helping other.

Wait to be asked.
Hesitate - act immediately.
Forget - the guest is important to you.
SECURITY OF GUEST
Security of guest and his property is of great concern for
the hotel. In India very few cases (hardly any) have been
filed in the civil court asking for compensation for alleged
security deficiencies whereas in the hundreds of cases of
negligence of law suits for large sums (thousands of
dollars) are filed. A hotel would always prefer to have an
outof-court settlement to not only avoid money and time
wastage but also to keep itself from controversy and save
its reputation. At any reasonable cost, the hotel
management would want the complaint withdrawn.
Room Break-Ins Security
By far the most common security problems are in guest

rooms (mostly with the traditional, metal locking
systems). Next comes the parking area. As per Ray Ellis
Jr., the director of Risk Management for AHMA, there is
75-80% drop in Room Break-Ins cases in America after
the electronic card key system has been installed.
Sometime even the traditional cards keys themselves are
easy to copy.
It is important to keep pace with technology and the
management should have foresight while choosing a
system that is compatible with future trends of
technology or enhancement. Appoint a systems manager
to provide the band aid support to your systems. The
supervision staff would be trained to change their

supervisory techniques and vision. Proper training to
staff should be given before installing the system. The
hotel can reduce electricity consumption through the key
card operated energy saving system, which could
distinguish between a guest and a maid.
Bomb Threat Security
Set up security nets with bags and body searches for

guests who are not known to the staff. Banqueting suites
should be security checked and locked after use; it way
all nonpublic areas should be treated. All cluttered items
should be removed as they interfere in security checks.
Freestanding deep ashtrays are suspicious objects. Toilets
should be checked. Staff entrances should be secured at
night. Goods received and bags should be checked and
kept tidy. If we get a scare or an alert we should not ask
people to evacuate the building as we could be sending
them into a danger area. Warn them to stay away from
windows and leave them slightly open. Heavy curtains
should be closed. If a bomb threat is received the
telephonist must note carefully what exactly is said, what
time the call is received, the sex, and accent of the caller
and background noise if any.
After the alert the G.M. should stay put in lobby
where he can be reached immediately. The duties and
responsibilities of staff during such emergencies should
be defined. Work closely with police to keep updated on
sensitive events in the area. Bring in sniffer dogs before a
big conference commences. Chambermaids and
housekeeper should be trained to keep security checks in
room; particularly if they notice that the carpet has been
moved, they must report immediately.
safety and security measures
Following are some of the safety and security measures:

1. Use of resident card (identity card).
2. Key control system should be employed. Bellboy
errand card.
3. Maintain record of master key used by staff.
4. Housekeepers occupancy report to me bade regularly,
proper procedure of checking keys in rack should be
followed.
5. Double lock system, magic eye and a door chain
system to be used.
6. Proper left luggage system to be followed.
7. Safety lockers for guest valuables should be provided.
8. Modern and efficient fir fighting systems should be
used.
9. Smoke detectors to be installed.
10. Proper regular maintenance of equipment, appliances
and building should be done.
11. Close circuit camera at parking and other strategic
areas in the hotel.
12. Fire escape route must be designed.
13. Frequent patrolling b y the security staff must be
made.
14. Security frisking if needed.
15. Heavy drapes to be drawn during night on windows
and exposed glass panels.
16. Computer and data processing security (safeguarding
of computer information, so that it does not reach the
competitors and protection against virus in the
programme.)
17. Avoid use of hotel name and room number on keys

(use code words on the fobs). Preferably use of
computerized room keys or magnetic keys.
18. Employ a house detective.
Types of Security
With regards to hotels the security can be classified under

following three aspects:
1. Physical aspects
2. Security of persons(guest and staff)
3. Security of systems
The Physical aspect security can further be divided into
two parts: (i) internal, and (ii) external.
Internal security
against theft(close circuit camera and burglars
alarms).
fire security(smoke detectors, fire alarm, water
sprinklers, fire extinguishers).
Proper lighting of corridors, fire escape, basement
and other areas).
Safeguarding assets (proper inventory, regular
physical checks, e tc.)
Keeping track of unwanted guests.
External Security
Proper lighting of boundary and outside of the
building.
Proper fencing of the building.
Fencing of pool area to avoid accidents in night.
Planting of shrubbery can also help in restricting
perimeter access of properly.
Avoid poisonous and thorny bushes and barbed

wire.
Manning of service gates to restrict entry.
Fixing of closed circuit T.V. cameras.
Security aspects of persons can further be subdivided into
two parts: (i) staff and (ii) guests.
1. Staff. A fourteen points effective programme for this
is suggested as follows:
(i) Effective recruitment and selection: References
checked, properly screened etc.
(j) Identification of staff: Issue identity badges and use
distinct uniform for easy identification.
(k) Key control: Maid should carry the key in her
possession and issuance and return should be
properly recorded.
(l) Red tag system: Proper system for hotel property
being taken out.
(m) Training: Proper training to employees to note
unusual things, safety drills.
(n) Adherence to management policy of security: An
employee disregarding policy should not be
confirmed.
(o) Trash handling: Trash should be checked to see if
employees are smuggling out things out of hotel
with trash.
(p) Employees parking: Proper checking of employees
vehicles at the time of going off duty. If possible
it should be away from the main parking.
(q) Locker inspection: From time to time surprise
checking of staff lockers.
(r) Inventory records of linen, stores and other

items.
(s) Bring in experts (snoops): Hire an outsider, bring
him as an employee to check and report about
the culprit staffs.
(t) Security consciousness: Guest should be told to be
careful about his property.
(u) Enlist employees: Employees should be asked to
report about suspected persons - guests with
scanty\ baggage etc.
(v) Set example: Management should follow these
rules and should encourage employees to
follow the same.
2. Guests
Take care about scanty baggage guest.
A guest suspected of taking away hotel property
should be charged on the bill. Not many guests
will protest if told they are being charged for
souvenirs.
Rooms should not be opened for guests coming
and saying that they have left their keys inside
unless their identity is established Guest Room
Security: Guest rooms are critical areas of hotel
security programme. Personal belongings of guest
may be stolen, guest may be subjected to criminal
assault, etc. Room furnishing such as curtains and
supplies may be stolen.
Provide wide-angle door viewer, dead bolt locks,
night torch and chains on doors.
Employee should b e instructed not to divulge
information about guests to outsiders. While
giving room key card from the guest in case of
doubt. Any suspicious person roaming in corridor

must be immediately reported. Housekeeping staff
should ensure never to leave keys lying exposed
on unattended carts in corridors.
3. Security aspect of systems in hotel is equally important
to physical and persons security.
Record all losses and missing items immediately.
Inventory control should be proper.
Auditing should be done on regular basis.
Proper system for cash receipts and disbursements
should be made.
The term systems mean the operations of the hotel e.g.
all the equipment used for operation, procedures laid
down for operations and policies to be followed. The
objective of such security is to safeguard the assets of the
hotel. Systems, procedures and the policies followed
properly shall safeguard the assets and shall increase the
life span of equipment as well as avoid any breakdown
maintenance.
This would mean the following:
(i) Fix duties and assign responsibility: Fix duties of the staff
so that people do their duties and dont interfere with
others work. This will help in pinpointing
responsibility in case of theft, losses due to negligence
and any other similar eventuality. Make people
responsible for what they are doing and for equipment
they are handling.
(ii) Make surprise checks.
(iii) Bonding of employees: People who have access to liquid
assets should be bonded so that in case of any theft
etc. the concerned person may be caught.
(iv) Hiring of an independent agency for checking of your

systems of security.
Security points for women travelers
Security is a concern for all hotel guests, but women

travelers can especially appreciate certain features, such
as:
Mirrored walls of the guest room floor elevators so
that you can see who is walking behind you.
Well-lit public area such as lobby bars.
Key cards for guest room doors instead of metal door
keys that could be duplicated.
Valet parking to eliminate the need to enter a parking
garage by women.
If a woman traveler is not assigned a guest room on
the special executive floor, hotels often will, upon
request, upgrade her accommodations to that floor
without and increase in room rate. This floor is staffed
almost 24 hours a day with a concierge.
If possible, hotels will honor requests for rooms close
to the elevator.
Safety and Fire Precautions
The staff should provide plenty of ashtrays and

pleasantly request all visitors to use them if they smoke.
cigarettes left smouldering on the edges of tables or
window - sills are a fire hazard. The staff should not
empty ash trays into a waste paper basket without
ensuring that all cigarettes are thoroughly extinguished
and wastepaper baskets should not be placed too near to
an electric fire or other heating appliance. All personnel
should know fire precautions. The receptionist and other
staff should be aware of the positions of all the fire

extinguishers an should know the drill for evacuating the
premises in case of fire. The staff must also know how to
prevent the rapid spread of the fire by closing windows
and doors and unplugging all the electrical appliances.
He should, personally, escort visitors to safety if possible.
In a hotel, however, it would not be possible for the
receptionist to make himself responsible for the visitors.
The current fire precautions, however, ensure that fire
escapes are provided and fire doors installed.
Electrical cables, switches and plugs must be
carefully maintained and not left to fall into disrepair.
Plugs must be earthed and no sockets should be
overloaded, electric machines such as duplicators should
have a fail-safe switch and electric fires must be
guarded. The Socket should be switched off and the plug
removed when equipment is not in use.
The receptionist may contribute tremendously to
make the organization to safer place to work by own
vigilance and by warning the management of potential
danger spots.
It is the duty of the employer to consult
representatives of the employees with a view to enable
him and his employees to co-operate effectively in
promoting and developing the health and safety at work
of the employees and in making sure that the measures
are effective.
Every employee has a duty while at work:
1. to take reasonable care for the health and safety of
himself - and of other persons who may be affected
by his acts or omissions at work.
2. as regards any duty or requirement imposed by his
employer or any other person or under any of the
relevant statutory provisions to cooperate with him

so far as is necessary to enable that duty or
requirement to be performed or complied with.
In other words, it is the employers duty to provide and
maintain a safe environment in which employees may
work. It is the duty of the employees to take reasonable
safety precautions and to co-operate with the
management in making the organizations premises a
safer and healthier place to work.
An accident book should be kept in every
organization and the receptionist should record all details
of accident, which have occurred to employees whilst
they were engaged in carrying out their normal daily
duties.
The book must be kept at such place as to be readily
accessible at all reasonable times to any injured employee
and any person bona fide. Particulars of an accident may
be entered herein either by the injured person himself or
by someone acting on his behalf.
The accident book when filled up should be
preserved for a period of three years after the date of the
last entry.
Every employer is required to take reasonable steps
to investigate the circumstances of every accident
recorded herein and, if there appears to him to be any
discrepancy between the circumstances found by him and
the entry made, he is required to record the circumstances
so found.
Protecting Guests From Terrorist threats
This has been dealt with in a previous module, and

includes bomb threats. There is little, if anything, a front
office manager and his staff may do if there is some kind
of assassination attempt for instance. However, bomb

threats are received by someone at the front line - a
telephonist or a front office clerk - and a procedure must
be in place to ensure that all the information that can be
taken about the nature of the threat is in fact recorded.
Threats to privacy
It is the duty of front office to protect the privacy of its

guests -even and perhaps especially if they are in the
public eye. It is very tempting to tell ones friends all
about a well-know person who might be staying at your
hotel, but you will have no control over the information
passed over from your friends to their own friends. In no
time at all, the guest may be pestered by fans, autograph
hunters, paparazzi and reporters.
However, it is not only the privacy of well-known
guests that must be respected. Every one of the guests is
entitled to his or her own privacy and steps must be
taken to ensure that information about the guests is not
divulged to outsiders. Giving room numbers to
individuals other than the persons being accommodated
in those rooms is unethical and should be avoided at all
costs. There is a tendency amongst representatives locally
to divulge room numbers to taxi drivers, restaurants etc.
It may prove difficult to ascertain whether the breach of
confidentiality is the responsibility of the hotel or not, but
guests have every right to hold the hotelier accountable.
Threats to guests property
Although the hoteliers liability is limited, it is in the

interests of the hotel to ensure the safety of its guests and
their property - if anything to protect the reputation of
the hotel.
If the hotel is in an unsafe area, or in an area roamed

by unscrupulous characters, guests should be made
aware of this -especially if they intend to venture out of
the hotel at night. In India, hotels should be especially
aware of the problems caused by prostitution.
Prostitution is not per se illegal but a hotel would be
acting illegally if it were to knowingly encourage or allow
prostitution within its premises. It is not for us to make a
general characterisation of prostitutes, but some
prostitutes may well be thieves and since hotel guests
will often negate their involvement with a prostitute they
may accuse hotel staff of pilfering their property rather
than admit to the fact that they hosted a girl in their
room.
Unfortunately, we must also face the fact that there
are instances where guests are robbed by staff. There may
be a social divide between staff and guests, which may
lead the former to pilfer money or valuable items from a
guest (although this is by no means the only reason why
guests may be robbed by staff). If the hotel has a policy of
randomly checking staffs property before they leave the
hotel, this may act as a deterrent and waive the hotels
liability should this arise.
Confidence tricksters or conmen may also find
themselves into a hotel. There is very little a hotel can do
if a confidence trickster makes his way into a guests
life. These type of people often settle their own room
accounts and are simply guests from a hotel point of
view. However, when the identity of a conman is known
the hotel is ethically bound to blacklist him and refuse
him accommodation in the hotel.
Guests themselves may also threaten each others
enjoyment. If a traveller turns up in a drunken state
asking for a room a hotel is entitled to refuse him on the
grounds that he is not a fit state to be received. This is

true even if he already has a booking, as he has broken
one of the implied conditions of the contract.
Similarly if the guest misbehaves throughout his stay
the hotel is not obliged to let him stay. When guests
complain about being kept awake by a noisy couple or a
drunkard next door, it is not good enough to tell a guest
that nothing can be done about that. One must employ
considerable tact in dealing with such situations.
Protecting Guest from Theft
It is unfortunate even the wealthiest of guests may have a

propensity to pilfer a hotels property if the opportunity
arises. This normally happens at check out when a guest
leaves the hotel with a variety of items - virtually
anything that is not securely fastened down: soap, towels,
mats, sheets, blankets, coathangers, lamps, trouser
presses, electrick kettles, TV sets and even plumbing
fixtures! Some hotels ask housekeepers to check rooms for
pilfering as soon as a client leaves the room to check out.
This is not however always practical. Again considerable
tact has to be employed when dealing with such
situations and there are no fast rules to follow. There are
instances where a hotel will simply have to write off
stolen items rather than insist on ensuring that no items
have been stolen.
There a number of guests who leave without paying.
These guests can generally be divided into three groups:
1. The accidentals. These are guests who simply forget
to pay, often their extras bills. Most of these guests
do not intend to leave the hotel without paying - they
simply believe their account is being settled by
someone else. When contacted these guests pay their
bill immediately and are highly embarrassed. The

hotel should deal with them courteously.
2. Opportunists. These guests check in with the intention
of paying their bill on departure, but when they realise
that they can get away with not paying their bill (or
simply a transaction that should have found itself on
their bill - eg. last minute breakfast or minibar
consumption) they make a run for it!
3. Premeditators. These are guests who, from the start,
have the intention of leaving the hotel without paying.
Some of these guests go into considerable lengths in
order to avoid paying. These guests generally stay for
short periods and will move to other hotels as soon
as payment is demanded. When hotels network
between themselves they are in a position to warn
each other of such guests. Experienced room staff can
often detect premeditated walkouts because generally
they do not unpack their belongings to facilitate a
quick run. If the hotel staff communicate effectively it
may be possible for a hotel to operate like an
intelligencegathering machine, with the doubtful guest
being reported on all his activities whilst the security
manager determines whether or not he or she is a
bona fide guest.
Protecting from Immorality
An immoral contract, under our law, is void. This will

mean that if you knowingly allow a guest to take a room
with the purpose of using it for prostitution, you will not
be able to enforce the contract because it based on an
illicit purpose. A contract must be based on a lawful
considerationif it is not, then it may not be enforced in
a court of law.
It is in the interest of a hotel to discourage

prostitution, not only because it has a reputation to
protect but also because prostitution may bring about a
number of difficulties. Similarly a hotel must ensure that
other illegal practices, such as illegal gambling, are not
conducted on its premsises.
H ANDLING C OMPLAINTS
People on holiday, traveling on business or celebrating a
special occasion have high expectations of everything
going well. When something does go wrong, they will
often confront the first staff member they can find. The
complaint will often be unrelated to you personally or to
your job, but they will still expect you to solve the
problem. Knowing how to respond to a complaint and
how to resolve the problem will be of great importance to
you in your job as a receptionist.
There are many reasons why guests complain.
Situations, which might lead to a complaint from a guest,
are:
Where a member of staff has where the guest
- failed to do something properly - has been kept waiting
- misunderstood the guest - expects something which is not
usually provided
- forgotten to do something - feels that he is not getting value
for money
- forgotten to pass on a message
- Equipment or supplies are broken,
damaged or missing.
Sometimes the complaint arises simply because the guest

has had a bad day and what normally would have been
a minor hiccup now becomes a major tragedy. You may
be more sympathetic to some complaints than to others,
but all complaints must be treated as genuine and

handled according to company policy. This will go a long
way to ensure that guests will return again and again.
In many ways you should consider a genuine
complaint as an opportunity and turn it around to your
advantage. Remember, guests dont always complain
when they have reason to. Unspoken dissatisfaction is the
most damaging to any business, whereas a complaint
allows you the opportunity to remedy the situation and
to regain the guests goodwill.
Most complaints are genuine and should be
regarded as a very important source of information about
the quality of your service or product.
While many complaints are received in hotels about
efficiency and the product itself, a high proportion
concern staff and the way they treat guests. Therefore
proper handling of a complaint can make a very
favorable impression.
Complaints Procedure
Feelings of anger and upset can cause guests to react

differently as they complain. Some appear aggressive and
loud, others are timid and there are others who calmly
insist on their rights. Staffs have to cope with the moods
as well as the facts of the complaint. Showing empathy -
that you appreciate how the guest feels - will make things
easier. It is important to avoid arguing with guests who
complain - they are already angry and upset. It is
important to avoid justifying or making excuses from
your own or the companys viewpoint - guests are not
interested in excuses, they want results.
While all complaints are different and will need a
different approach, the following listening techniques in
six steps offers a guideline for dealing with them.
1. Lend an ear to the guests problems. The first thing he

wants to do is get it off his chest. Pay concerned
attention to his story. If he is really angry, let him
blow his top. Avoid interrupting and never show
annoyance, resentment or fear.
2. Identify the important points. While you are listening,
sort out the important facts of the situation. Keep an
open mind. If necessary, ask clarifying questions,
without appearing to crossexamine the guest or doubt
his judgment.
3. Sympathize. Im sorry, is the least that can be said
in the circumstances. Show that you are concerned and
regret the problem or the inconvenience caused. But
dont keep on apologizing or be too willing to admit
your hotel is at fault.
4. Thank the guest. Thank the guest for bringing the
matter to your attention and show that the trouble he
is taking in making the complaint is appreciated by
you.
5. Explain what can be done. Make sure the guest
understands what you and the company can and will
do about the complaint.
6. Now act quickly. Whatever is to be done by yourself
or anyone else, ensure that it is done quickly and
efficiently.
Always try and put yourself in the guests shoes when
dealing with a complaint. Ask yourself how you would
like to be treated in the same circumstances.
Guests have rights, the most basic of which is the
right to expect good service. They also have other rights,
which have a basis in law. You should always familiarize
yourself with the hotel policy as they will reflect the
relevant laws in your country.
Dealing with Difficult Guests
All guests are important, no matter what the reason is

that makes them demanding. You will find that most
guests are reasonable - however you need to be able to
deal with the unreasonable. Turn the difficult guests
strength against them. The following tips may help to
you, should you find yourself faced with a difficult
guest:
Type Technique
Argumentative Do not argue back
Disbelieving Keep to the facts, not opinions
Expert Give the facts and let the guest express
his views
Indecisive Show range of alternatives
Nervous Establish confidence, do not rush
Pompous Allow guests to maintain dignity
Short-tempered Tact, patience and firm response
Silent Use questioning technique
Talkative Listen with tact and patience and give
a firm response
Two people Respond to both, but concentrate on
the leader
As a receptionist there is a lot you can do to satisfy a

difficult or awkward guest. Avoid the temptation to act in
the same way as the guest. Try to see the situation as a
challenge to your skills, and use these tips to help you
deal with guests as real people - just like you, rather than
viewing them as tiresome problems.
Recording Complaints
Both compliments and complaints are a comment from

guests on the service, which they have received and are
also an opportunity, to improve service. Compliments,
which are passed on to staff, are a useful means of
increasing motivation and of raising standards

throughout the business. Praise for a job well done is
always very satisfying so accept compliments from guests
graciously and be sure that they are passed on to staff
members concerned and that your manager or supervisor
is made aware of the positive feedback. Keeping a record
of special compliments and displaying thank-you letters
and complimentary guest comment cards can give staff a
welcome morale boost.
You should know the policy and procedures in your
hotel for both handling and reporting complaints. If you
remember, complaints should be regarded as an
opportunity - not just an opportunity to make amends to
the guest but also to get to the source of the problem to
ensure it does not happen again. It is therefore essential
that the relevant information is filtered back to the
appropriate person or department so as the hotel can
safeguard against the same problem occurring again and
again. You should record all complaints according to the
hotel policy and make sure your supervisor knows about
it. The best way to deal with a complaint is to prevent it
from occurring.
GUEST CARE AND ETIQUUETTES

The first time you meet some one presents an opportunity
that will never come your way again the chance to make
a good first impression. Even more informal is Hi; a
friendly greeting for people who already know one
another which should not be used in answer to a formal
introduction. A verbal greeting should be accompanied
by direct eye contact which indicates that you are actually
paying attention to the person you are acknowledging.
Verbal greetings may be accompanied by a handshake,
especially during as introduction or when two
acquaintances meet one another in passing.
Formal Greeting
Hello is the universal form of greeting and it is

acceptable in any situation except after a very formal
introduction. Even comparative strangers say hello in
passing and it is the friendly response to first name
introduction.
Greeting in Public
A nod and a smile are all that are necessary when casual
acquaintances pass by chance. It is safer to nod to
someone whose face is familiar than to run the risk of
seeming to ignore an acquaintance. Often what is
perceived, as rudeness is absentmindedness. Absorbed in
their own thoughts, people do not hear the voice or see
the motions made by someone trying to greet them. It is
important to make allowances for absent mindedness or
poor eyesight before believing that you have actually
been snubbed.
In places of worship, or during a performance in a
theatre, people should only no and smile. It is thoughtless
to engage in conversation until the service or
performance is over. It does not serve you well to ignore
everyone in the building or the floor when en route to
your office, no matter how important or how busy you
are. There is no need to stop and chat at every desk along
the way. You can be friendly, but purposeful on your
way to work. Keep in mind that most people are sensitive
and an unintentional snub when you ignore someone
because you are in a hurry or preoccupied is more often
assumed to be intentional.
Addressing of Guests
Introductions are required on many occasions; and

especially when two strangers meet. It is inexcusably

rude of the one who knows the other two to chat with
one and leave the other unacknowledged and left out-
standing by as if they did not exist. Te three basic rules
are
(a) A man is always introduced to a woman. Mrs. Barret,
I d like you to meet Dr. Farnham.
(b) A young person is always introduced to an older
person.
(c) A less important person is always introduced to a
more important person.
To help introductions develop into a few minutes of
cordial conversation, the one making the introduction can
provide additional information for the two persons.
Introductions were viewed as the vital step in
establishing a proper communication channel between
two individuals.
In addition to the rule that younger people do not
address significantly older people by their first name
unless asked by the older person to do so, there are other
persons for whom first names may not be used except by
specific request:
A superior in ones business, unless it is requested to
do so.
Person of higher rank (a governor, a diplomat, for
example) Professional persons offering you their services,
such as doctors and lawyers, who are not personal
friends. In turn, these professionals should not use your
first name unless you request them to.
When you are talking with someone whose name
you are struggling to remember and a friend joins you
and looks inquiringly from you to the nameless person,
there is nothing you can do but introduce your friend to
the stranger by saying to the latter Oh, havent you met

Janet Caldwell? Hope fully, the stranger will be tactful
and understanding enough to announce his own name. If
he doesnt the solution then is to frankly admit you do
not remember the name and ask them to complete the
introduction themselves.
Strangers sitting next to each other at the table
should introduce themselves. Whether they exchange
names or not, people who find themselves seated
together at any table must accept the obligation of
talking. To sit side by side without talking is a great
discourtesy to your hostess, as well as to devote all your
time to the person sitting on one side of you and ignore
the guest on the other side.
When someone is introducing a stranger to a
number of people and consistently says the wrong name,
the person being introduced should correct the host as
soon as he realizes that it is not only a slip of tongue. He
should not do so with annoyance but make light of it. All
he need say is Just so you can find me in the phone
book, Im Bob Lord and not Jim Lord.
A handshake can create a feeling of immediate
friendliness or of instant irritation between two strangers.
No one likes a Boneless hand that feels like one is
grasping an empty glove, nor does one appreciate a vice
like grasp that cuts rings into ones flesh and temporarily
paralyses every finger.
The proper handshake is brief, but there should be
firmness and warmth in the clasp. It should always be
accompanied by a direct look into the eyes of the person
whose hand one is grasping. When a men is introduced
to woman it is in her place to offer her hand or not, as
she chooses, but if he were to extend his hand she must
give him hers as nothing could be ruder than ignore
spontaneous friendliness.
When you meet someone whose right arm or hand is

missing or is deformed, extend your right hand even
though he or she cannot shake hands in the normal way.
The handicapped person will appreciate that you made
no unnatural gesture to accommodate his or her
disability. He or she will respond by offering his or her
left hand, or by saying, Please forgive me if I dont
shake hands, but I am glad to meet you.
DEALING WITH GUEST ENQUIRIES

The type of enquiry you can expect to get on reception
usually falls into three categories:
1. Reservation. To deal with enquiries about reservations
either over the telephone or in person, the receptionist
must have on hand up-to-the-minute information of
room status, the advance reservation chart, and the
hotel directory and room rates/tariffs.
2. Information for the guest. Guests have come to expect
reception staff to have all sorts of information at their
fingertips. Enquiries can range from the cost of
sending a postcard to Europe, to car rental facilities,
to information on places of interest in the locality.
3. Information regarding guests. Enquiries about guests
should be handled with caution and discretion. All
guests are entitled to a measure of privacy and
protection and any person requesting information
about a guest, for example, the name and room
number of a resident, should be referred to a
supervisor or manager.
Every effort should be made to assist the guest with his
enquiry. To do so promptly and accurately will require
you having access to a range of information directories.
details of what is happening from day-to-day

throughout the hotel
the hotel facilities and services
the locality - geographic location
the locality - places of interest
local services, e.g. transport, places of worship, airline
offices, etc.
entertainment - restaurants, theatre, etc
additionally, foreign visitors may request information
on local customs, cultural issues and language.
So while it may not be possible for the receptionist to have
the answers to all questions, it is important to know where
to get the answer and how.
You should have:
a list of all the facilities and services in the hotel, with
details such as opening times
a list of names of members of staff, their job titles and
telephone extensions
a good idea of what goes on in the locality so that
you can inform guests looking for details of church
services, entertainment and so on
good reference sources to hand, such as local papers
(for entertainment, shopping), telephone and trade
directories, relevant street maps and so on
timetables of local transport services
tourist guide book of the region
Having the information on hand is of no use unless you
know how to use the reference material you have. Make
sure you find out how to use the reference books in the
hotel to get the information you need - know how to use
the index system, read timetables and interpret the postal
tariffs.
Many requests or enquiries are received which do not

involve information, the guest wishes to have, for example,
extra towels.
Requests for assistance of this kind could be received
by telephone or in person. The basic principles of dealing
with a general enquiry remain the same with the inclusion
of two important steps:
1. Record or log the requests in the reception log box.
Note the room number, request details, time request
were received, action taken, e.g. reported to
housekeeping, your initials. If any follow-up action is
taken this should be recorded in a similar way.
2. Notify the appropriate department, e.g. house-keeping
if the request is for extra towels, maintenance if the
air-conditioner is not working and so on.
You should always try and deal with a guest enquiry
yourself as it is very annoying for the guest if he has to
ask several different staff members the same question.
However there will be times when you cannot answer the
enquiry and will have to direct the guest elsewhere. You
should know what type of enquiries it is better not to try
to answer but to pass on to the appropriate person.
Some examples of these may include:
What special discounts can be given to a group
booking - refer to the front office manager or another
senior manager
Whether the hotel can accommodate a wedding on a
particular day- refer to the banqueting manager
Can the receptionist book an airline seat - refer to the
local travel agent
The important points to remember when referring
enquiries elsewhere are:
Know who it should be referred to

Explain to the guest why be you are referring it
Do so promptly
You should be aware of enquiry situations, which could
be regarded as emergencies, requiring an immediate and
urgent response, for example, and a request for medical
attention.
Each hotel will have its own procedure for dealing
with these situations and you should familiarize yourself
with the practice in your hotel. Very often the principle
will remain the same:
Ascertain the facts
Repeat and confirm the essential details
Action immediately - it is usual in emergency
situations to contact the supervisor or manager
immediately
Record the incident in the reception log book In cases
of emergency the essential points to remember are:
Remember that the most important part of the enquiry
process is communication. Effective communication -
with guest, colleagues and interdepartmental is essential
to ensure a high level of guest service and guest
satisfaction.

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First Edition, 2009

ISBN 978 93 80075 45 7

All rights reserved.

1. Atithi Devo Bhavah

2. India: An Incredible Tourist Spot

3. Atithi Devo Bhavah Campaign

4. Indian Tourism and Hospitality Facilitation

5. Role of India in International Tourism

6. Opportunities and Challenges

9. Guests and their Well-Being

India is amongst the most widely

India is one of the worlds oldest living civilisations and

and employment generation has now been well

STATUS OF INDIAN TOURISM INDUSTRY

private sector. Public sector institutions such as the

Indian industry internationally competitive. Foreign

sustainable growth in tourism. In 1992, a National Action

Yoga, ayurveda and natural health resorts also attract

TOURISM AND ECONOMIC GROWTH

accomplishment during the Ninth Five Year Plan. The

POTENTIALS OF TOURISM INDUSTRY

catering, entertainment, recreation and other travel-

NEW INITIATIVES IN TOURISM SECTOR

hotel tariffs, deficiencies in infrastructure such as airports,

Harness the direct and multiplier effects of tourism

implementing agencies such as CPWD, HUDCO, ASI,

The Ministry of Health & Family Welfare and the

Conference and convention tourism

Conference and convention tourism is another segment

Golf tourism and cruise tourism are other new products

India, a region with the worlds greatest bio-diversity

tourism, which has been recognised as a priority tourism

worlds average growth rate of 3.2 per cent during this

The tourist arrivals during January-June, 2005 also

respectively in dollar terms. The first three months of

The government has decided to open three new

importance and economic benefits of tourism. The main

Atithi Devo Bhavah is a pioneer initiative by Ministry of

with this campaign, we are trying to re-install in the

INSPIRATION BEHIND THE PROGRAMME

SEVEN POINT ATITHI DEVO BHAVAH PROGRAMME

Samvedan Sheelta or Sesitisation

Here we will sensitise the various sections of the tourism

Prashikshan or Training and Induction

This involves explaining to them the needs and

This is motivation to participate in this programme

Pramani Karan or Certification

Certification to ensure standards shall be done at an

Feedback shall be obtained from tourists about the

Samanya Bodh or General Awareness

The mass media communication campaign will be

about the necessity and the benefits of the Atithi Devo

The Atithi Devo Bhavah programme is a movement we

CHARTER OF ATITHI DEVO BHAVAH TRAINING PROGRAMME

Hygiene and Cleanliness

Hygiene and Cleanliness shall cover the areas of product

Conduct and Behavior

The person concerned for e.g. the taxi driver / hotel