April 15, 2019 ☼ The Intersection ☼ economics
Public policy should invest in creating new destinations to prevent old ones from being destroyed.
This is from The Intersection column that appears every other Monday in Mint.
There is a company in Gujarat that is pioneering election tourism in India. It currently offers foreign tourists 15 packages, with names as delightful as “Hustings in Himachal”, “Republic of Rajasthan”, “Grassroot Democracy of Kerala” and so on.
The couple of thousand tourists who have signed up to witness political rallies and follow campaign trails constitute a curious footnote to India’s multi-billion dollar election economy, but the enterprise is still a promising sign as far as the tourism industry is concerned.
We seem to be realizing that, more than old structures and natural beauty, tourism is about selling experiences. Indeed, if India is to ever close the immense gap between tourism potential and performance, it is vital that politicians and policymakers in state governments focus on creating high-quality experiences, rather than merely collecting entrance fees at monuments built by their olden-day predecessors.
Tourism ministries in New Delhi and in several states are tracking the right targets. Last year, India accounted for a mere 1.2% of the world’s international tourist arrivals and received just 2.1% of the global revenue. So there’s a long way to go.
Yet the focus on higher tourist arrivals, greater revenues and more tourism-related jobs ignores some real problems related to sustainability, equity and the social impact of tourism. Rising incomes, affordable air travel, hotel and room booking apps, and social media have continued to fuel domestic demand. Supply, in terms of new locations and experiences, however, is lagging.
In fact, we are getting “overtouristed” before reaching our tourism potential.
A term coined just a few years ago by Rafat Ali, CEO of Skift, a travel intelligence startup, “overtourism” refers to a situation when the negative consequences of tourism, such as overcrowding, environmental damage, crime and the pricing out of locals, overwhelm the benefits. From Iceland to Thailand, there has been a growing backlash against tourists from the local population. Not xenophobia, but “tourism-phobia”.
Anyone who has visited any tourist attraction in India can attest to how ravaged the places are. Not merely famous ones, but even wayside locations that offer a scenic view are usually packed with noisy vehicles, tasteless signboards, piles of garbage and, quite often, badly behaved groups of young men.
Vivek Menezes, one of Goa’s most thoughtful and articulate voices, identifies the classic symptoms of overtourism when he describes how ahead of the tourist season, “unshakeable dread furrows collective brows (of locals) at the thought that roads and beaches will soon become jammed with countless hordes”, as “huge numbers of tour-bus passengers… cook on the roadside, use the fields as toilets, and often sleep in their vehicles.”
Now, basic economic reasoning suggests pricing and price discrimination would be an efficient way to address overcrowding. Essentially, raise prices and taxes to such levels that only the desired number of tourists turn up. This is the approach that Bhutan and the Maldives have taken. It would be terrible if India were to employ such inequitous policies and exclude everyone but the rich from their own country.
Think, for example, how much you would charge for entry into the Mysore Zoo. If you were to price it at financially-sustainable levels, say ₹1,000, you’d exclude hundreds of thousands of domestic tourists. At ₹50, it’s accessible to a lot more people, but, I suspect, far below the marginal cost per visitor. The cash-strapped state government has to cover the shortfall, but subsidizing zoo visitors is unlikely to be on its list of priorities.
At least you can charge people who enter the zoo. If you are the Goa government, you can’t possibly charge people who enter your state.
We need ways to balance sustainable tourism with socio-economic imperatives. Whatever you do to manage the numbers, the problem of undesirable behaviour remains to be addressed.
As Menezes suggests, one way is to sensitize visitors. A combination of mandatory tourist education and strict law enforcement might perhaps work. The state government could require all tour bus operators, arriving rail and air passengers, hotels and resorts to conduct a short statutory briefing. Yes, people might treat it perfunctorily (like safety briefings on airlines), but it can nudge travellers to behave with greater respect and responsibility.
Ultimately, the answer to overtourism is more tourism. If there are more destinations that people could go to, then demand would spread out,thus relieving overcrowded locations of pressure and making behavioural changes easier to achieve.
While India needs a massive expansion of destinations and infrastructure, this is easier said than done. If a new spot is promoted ahead of adequate infrastructure and behavioural norms, it is bound to be ravaged before development. On the other hand, developing a place too early might leave you with a white elephant if demand does not pick up.
There are many more The Intersection columns here
Given the economic imperative to create large numbers of automation-agnostic employment opportunities, public policy should err on the side of investing in creating new destinations.
PS: It appears that the rather prosaically named “Domestic Affairs of Uttar Pradesh”, which takes you from Lucknow to Varanasi, is the most popular tour package.
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