RURAL TOURISM FOR DEVELOPMENT:STRATEGY & PROCESS MANAGEMENT

Why Rural Tourism• Sustainable Livelihood • Poverty Alleviation• Uplift of Rural Artists• Uplift of Rural Artisans• Empowerment of Women• Improvement in Urban and Rural Infrastructure• Better Image, Quality of Life and Attitude of People• Revival of Traditional Crafts • Heritage Conservation• Conservation of Natural Resources

RURAL TOURISM a Potential Development Driver

Significant multiplier effect on the economy

Every dollar spent by a tourist changes hands 13

times

Every hotel room generates direct employment

to 3 and indirect employment to 8 persons

Rural TOURISM a Potential Development Driver

FAMINE-PROOFING

Reducing absolute dependence on agriculture:

Revival of traditional arts & crafts, building art, etc.

Providing ready marketing opportunities for rural

artisans

Employment generation during entire year

About half a million of artisans employed in Handicraft

sector in only one State of Rajasthan

Handicraft Exports from one of the States, Rajasthan:

1991-92 Rs. 2800 mn.

2000-01 Rs.43,000 mn.

2004-03 Rs. 100,000 mn.

RURAL TOURISM a Potential Development Driver

TOURISM creates:

a. Jobs in situ-wild life sanctuaries, historical places,

beaches, mountains etc. Does not result in migration

b. Creates a large number of semi-skilled jobs for local

population

c. Contributes to overall economic development of areas that

would otherwise be deprived

TOURISM a Potential Development Driver

EMPLOYMENT

Every Rs.1 million ($25,000) invested creates…

Tourism (directly) 47.5 Jobs

Tourism (indirectly) 89 Jobs

(sub-sector of hotels and restaurants, transportation etc.)

Agriculture 44.6 Jobs

Manufacturing 12.6 Jobs

TOURISM India: Case Study

TOURISM THIRD-LARGEST NET FOREX EARNER (2001-02)

Gem & Jewelry US$ 7.40 Bn.

Readymade Garments US$ 5.50 Bn.

Tourism US$ 3.30 Bn.

COMPARATIVE FOREX INFLOW (2000-01)

FDI $ 2.4 bn

Tourism $ 2.9 bn

*2001-02 & 2003-03 figures are not used due to the effect of Sept 11 2001

RURAL TOURISM India: Case Study

Image/Visibility

Infrastructure

Tourism enabled services

Heritage conservation and management

Tourism friendly environment (non-intrusive,

facilitating, safe and secure…)

Tourism products

Deepening tourist experience (repeat visits/longer

stay)

RURAL TOURISM DEVELOPMENT: Pre-requisites

Integrated

Tourist, the focal point

Circuit development involves creating a circular route to be

taken by tourists

Based on features of tourist interest throughout the circuit

route

Driven by infrastructure development

FDI can play a major role in inducting capital, technology,

managerial skills and marketing

Tourism Circuit Approach

Foreign Direct Investment (FDI):

Augments investible resources

Improves technological standards

Improves efficiency of the domestic industry

Increases competitiveness

Introduces ‘latest’ technology

Improves allocative efficiency

Introduces higher level of technical or ‘X’ efficiency

Results in diffusion of technology and knowledge to local firms

Leads to labor turnover or ‘reverse engineering’

Results in income ‘multiplying’ effect

POSITIVE ROLE OF FDI IN RURAL TOURISM DEVELOPMENT

Could result in cutting into the market of local firms (reduce

productivity)

Could result in ‘financial leakages’

Repatriation of profits

Direct channeling of tourists’ expenditure to the home country

Remittances by expatriate workers

Imports on account of weak host country supply chain

In international tourism, cross-border anti-competitive practices

may adversely affect smaller tourism service suppliers from

developing and least developed countries particularly vulnerable

to anti-competitive policies

Employment opportunities may not increase for local population

because of absence of skilled manpower

OBVERSE SIDE OF THE COIN

Policy/Regulatory Framework

Facilitating InstitutionsDecision-support structure

Facilitating organizations

HRD institutions

Infrastructure:Physical

Social

Investment Products (Opportunities)

Public Private Partnership mode

INVESTMENT PRE-REQUISITES

INITIATIVE: Policy/Regulatory Framework Tourism Development Mission/Tourism Policy

Mission for Tourism Development

Efforts to raise tourist arrivals Aggressive domestic and

international marketing Organizing international

tourism events Awareness about and

professional management of heritage and raising resources for it

Ensuring hassle-free and pleasant stay of tourists

Tourism promotion through Internet

Encourage Public Private Partnerships

Rural tourism for generating employment in rural areas

Eco-tourism

Tourism Policy Comprehensive Tourism Master

Plan Promoting Private sector

investment Enhancing quality and

diversifying tourism products Development of tourism

infrastructure Aggressive marketing &

publicity Tourism as ‘Industry’ Tourism Trade Regulation Act –

to prevent possible exploitation of tourists

HRD for Tourism Sector Upgrading Tourism Support

Services Improved Connectivity Preservation of historical and

cultural heritage and promoting Heritage Tourism

Promoting Adventure, Wildlife, Eco-Tourism (as applicable)

INITIATIVE: Policy/Regulatory Framework Tourism (Facilitation) Law

OBJECTIVES

To make the country/region “Tourist Friendly”:

Security for tourist, i.e. Not to be mobbed by

beggars, touts, taxi drivers etc.

Not to be cheated-cost / quality

Accessible/reliable Information

Good amenities & reliable services

Cleanliness & hygiene

Heritage conservation

PROVISIONS Definitions Regulatory Anti-begging Special attention to tourists by

Police Voluntary Adoption of law Bench-marking Certification Third Party Inspections Penalties Exit Clause Heritage Declaring building/area/township

protected heritage Construction to be strictly

regulated

Single Window Clearance System

A. Investment Proposals

B. Visa applications

C. Concessions to commercially use state assets

D. Licenses to operate tourism related activities

(recurring)

INITIATIVE: InstitutionsDecision-support Structures

Tourism Advisory Council

Top political and bureaucratic executives

Membership to include tourism trade and industry

representatives, experts…

To deliberates upon policy initiatives, demands of the

industry, problems with the government institutions,

development plans

Tourism Regulatory Authority

Accreditation

Benchmarking services

Grievance redress

Adjudication

INITIATIVE: InstitutionsDecision-support Structures

Institute of Crafts for the handicrafts sector

Design input

Professional degree/diploma in craft & design-techno-design

managers

Facilitating marketing and marketing linkage intervention

Technology intervention and product and process

standardization

Capacity building at artisan level

Documentation and resource centre

IPR issues related to the handicrafts sector

Entrepreneurship Management Institutes

Entrepreneurship development for SMEs

Tourism specific entrepreneurship programmers for tourism

enabled services

INITIATIVE: InstitutionsHuman Resource Development (In Local Language)

Institutes of Hotel Management

HRD in hospitality industry

Managerial level courses

Language skills

Food Crafts Institutes

Shop floor level skill development courses

Language skills

Centre for Heritage Management

Capacity building amongst officials in the local governments,

town planners, urban and civic bodies, government

functionaries about heritage conservation and management

issues

INITIATIVE: InstitutionsHuman Resource Development (In Local Language)

INITIATIVE: Infrastructure

Public Private P-P Partnership

Highways, Airports,

Urban Infrastructure

, Power

Hotels, Travel Agencies, Tour

Operators, Dealers,

Handicraft Stores

BOT Roads, Airports,Resorts, Heritage Properties, Circuit development, Web-

portals

INVESTMENT

Several key sectors like water supply, sewerage, roads, capacity

building and public awareness, and heritage conservation can be

covered - assistance from multilateral and bilateral funding

agencies

Separate budgetary provisions for tourism related activities in

Forest, PWD and other related departments

Public finance and assistance from organizations such as the

UNESCO and the World Monument Watch for restoration of

heritage monuments

TOURISM Infrastructure (Illustrative)

Civil Aviation (Airports)

Roads Up-gradation Project

Urban Infrastructure

Public facilities

Information Kiosks

INITIATIVE: Infrastructure

Public Finance

OUTPUT CONTENT

I Detailed Feasibility Report

To assess the feasibility and to recommend a suitable institutional and financial plan for the project

II Risk Management Plan

To assess the major areas of vulnerability underlying the assumptions, forecast cash flows and profitability of the project

To assist in the development of suitable strategies to limiting such effects

To ensure the equitable sharing and allocation of project risk

To reflect the differing perspectives of the consortium, contractors, Government, lender, etc, on the project and to assess the balancing of interests achieved

III Environment and Social Assessment Report

To assess the environment and social impact of the project and to incorporate appropriate mitigation measures

IV Contractual framework Documentation

To develop the contractual framework of the project and to provide the draft agreements to be entered into by the principal stakeholders to the project, such as Government, Operators, Lenders, etc.

V Procurement To provide a blue print to achieving technical close for the project, including selection and award of the contract to successful bidders.

PPP: Project Development Process

Rural Tourism is the main driver of economic growth/employment

generation in more than 80 countries

It has the potential of addressing issues such as rural poverty,

empowerment of women, strengthening the economic status of the

rural artisans, earning forex etc.

It is necessary to create the right environment to attract FDI by

establishing progressive legal-institutional framework and facilitating

organizations

Circuit development approach yields fastest results

HR is the key

Presenting bankable projects to the investors not only increases the

possibility of attracting forex but also establishes benchmarks for the

future

CONCLUSIONS

Baramati

Andra

Village in Kochi

Janapada Loka Ganjam, Srirangapattna

Ganjam, Srirangapattna

Rural Sports Panjab

Sravanabelagula, Hassan

Belur , Hassan

Turuvekere Mysore Dasara

Thank You