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Tourism numbers on the move


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GRADUAL APPROACH
INDIA'S GROWTH
Recent GDP rates

1998-99: 6.5 percent
1999-00: 6.1 percent
2000-01: 4.4 percent
2001-02: 5.8 percent
2002-03: 4.0 percent
2003-04: 8.2 percent
2004-05: 6.4 percent (F)
India's financial year ends March 31

Source: Morgan Stanley
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India
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MUMBAI, India (CNN) -- Overseas visitors to India this year should top 3 million as the nation's "Incredible India" promotion campaign delivers annual growth of 15 to 20 percent.

But that is still below its potential, industry observers say, given the range of attractions the country has to offer.

After setbacks in 2002 when travel warnings removed India as a potential destination for many European, Asian and North American visitors, the tourism industry is recovering strongly.

India has always been value for money. In the words of tourism minister Renuka Chowdhury, India now needs to be promoted as a "safe destination" -- notwithstanding that Britain still has a travel warning in place for some parts of the country, such as Kashmir.

Just as importantly, domestic tourism is on the rise as consumers' discretionary spending power increases.

Two hundred million Indians are expected to make domestic journeys this year -- ranging from pilgrimages to family reunions and corporate incentive travel -- and about 5.5 million will fly out of the country.

While the 2004 numbers are looking strong, the challenge for India's tourism industry is to get repeat business.

Mumbai-based hotel executive Rohit Khosla told CNN that India should aim to get overseas visitors to make four or five trips, spending 50 to 60 days in the country.

He said the north, east, south and western regions of India could easily make for a memorable 10-14 day trip.

Along with traditional drawcards such as New Delhi, Agra and the Taj Mahal, places such as Rajasthan, Khajurahao, Goa, the Konkan coast and Kerala were all "magnificent destinations."

"We are good at getting people to visit India once," he said. "But we have got to capture them with that first experience, to make them want to come back another four or five times."

He cited Japanese and Chinese visitors who were interested in Buddhism-related religious tours as a new sector worth targeting.

Khosla said India was also emerging as a family medical destination that was more affordable than the Middle East and was an alternative to the United States or Europe.

Khosla, recently returned from running a Taj hotel in Yemen, said the Indian hospitality business has seen tremendous growth in capacity, particularly in big cities such as Mumbai.

He said more than 1,500 five-star hotel rooms had been added to the city in the last three years, and demand was still growing. This was putting pressure on the availability of skilled workers in the industry.

More domestic air travel opportunities, the liberalization of food and wine imports -- leading to a surge in high-quality restaurants outside of five-star hotels -- and the growing spending power of Indian middle class consumers had changed the tourism market scenario, Khosla said.

That view is confirmed by consumer market watcher Russell Farmery, managing director of ACNielsen in Mumbai.

"Leisure spending is up. There is a lot of internal tourism and the advent of low-cost carriers is pushing that along," he said.

On the international front, India is expecting visitors from new or returning sources.

Numbers from Australia and New Zealand, for example, are expected to pick up after Australian flag carrier Qantas revived direct air services between Sydney and Mumbai at the start of this month.

Qantas had cancelled the service after the September 11, 2001 terror attacks in the United States led to a downturn in global air travel.


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