Wednesday, December 22, 2010

PEST & Trend analysis of tourism in India

Country Selected: - INDIA

Aim: - Given blog aims to do a PEST analysis and a trend analysis tourism in India. It will include a brief introduction followed by key trends in the Indian tourism market, their respective implications and major take away.

Introduction: - India as a country provides a huge potential for tourism to flourish. One of the oldest cultures of the world and a vibrant economy it has potential for various different kinds of tourism such as heritage cum cultural tourism, medical tourism, business tourism , eco cum adventure tourism, spiritual tourism, etc. The huge potential of India as a tourist hub can be derived the fact that it has a much diversified culture, different kinds of geographical terrains and a very rich cultural heritage. The potential gets an additional boost due to phenomenal growth of Indian economy in the recent years coupled by rise in average household income and investments in infrastructure. Right now also tourism plays a very important role in Indian economy. In the year 2009 valued at 41.73 billion English Pounds it constituted 6% of the Indian gross domestic product. It constitutes 5.8% of the total employment in India and employs 17.4 million individuals. But still the figures are very dismal given the kind of potential Indian tourism has. Though the market penetration of Indian tourism is still very low but can grow by leaps and bounds provided proper strategy is built into operation.

Indian Tourism: Trend Analysis

• In 2007 five million international tourists visited India; this figure is expected to touch ten million in 2010.

• Indian economy very fast in between 2002 and 2007. The average household income grew by 14% there by giving a boost to domestic tourism.

• Total tourist movement had doubled in the last seven years.

• In 2009 the total revenue earned from foreign tourist was approximately 10.5 billion British pounds (6.0 % of total exports). According to travel and tourism competitiveness review this figure is expected to grow to 31.5 billion English pounds in the next ten years.

• According to travel and satellite research (part of World travel & tourism council) the demand of travel and tourism with in India is going to increase by 8.2%. This growth rate is 3rd highest in the whole world.

• Indian hotel industry is adding 90,000 rooms per year.

• Capital Investment in the Indian tourism sector will increase by 8.8% per year. With this rate it can be expected that total investment will be around 59 billion English pounds in the given sector.

• Medical tourism is growing very fast in India. Growing at a Compound annual growth rate (hence forth will be referred as CAGR) of 19% it is expected that by 2012, 1.1 million medical tourists will be visiting India. Growing at a CAGR of 27% the net value of medical tourism will be approximately 1.5 billion English pounds.

• The present value of Indian tourism which is 41.73 billion English pounds is expected to increase by 200% in the next 10 years.

• It is expected that by 2019 there will be 40 million individuals in India employed in the tourism sector. (An increase of approximately 133% )

Internal and External audit of Indian tourism

External audit (uncontrollable factors):-

Macro Factors

Political factors:-

1. India has a stable democratic government. This ensures stability for the tourism industry.

2. The centre has a specific ministry of tourism whose prime purpose is to device plans and strategies for the welfare of Indian tourism industry.

3. India as a nation is divided into various smaller state and every state has its own tourism department. These departments often fight with each other in ensuring higher tourist inflow into their respective states. Though this competitiveness ensures efficiency in the individual states but is detrimental for overall tourism as a whole. Since India is a diverse nation with every state having something to offer along with competition what is really essential is proper coordination between various states.

Economic Factors:-

1. India is among the fastest growing economies of the world. In the last decade its GDP has grown with almost 7% per annum. A higher economic growth ensures rise in annual income hence increase in domestic tourism.

2. A higher economic growth also ensures increase, in investments in the infrastructure, promotional expenditures, construction of newer tourist avenues, beautification of cities and towns etc. These ensure a boost to the tourism industry.

3. High growth results in higher number of business visits.

Socio –Cultural :-

1. India a diverse nation with end numbers of different languages, cultures, traditions, cuisines; make it an ideal destination of cultural tourism. The depth of diversity can be concluded from the fact that India has more than 22 constitutional languages and 1600 dialects.

2. Indian culture has always emphasized on respecting and entertaining their guests very well. The Sanskrit Shloka “ATHITHI DEVO BAHVAH” (guest is god) is the essence of Indian tradition. This warmth and love for their guests has always been appreciated by tourists in general and foreign ones in particular.

3. India has a vibrant and rich history of cultures that can also attract many culture lovers and scholars for further studies and exploration.

4. Due to 200 years of British rule English is an integral part of Indian education system. Most of the people at India can communicate and understand in English. This gives an added advantage to India in comparison to its neighboring counterparts in attracting foreign tourist.


1. At present Information Technology plays a very important role in tour planning and its implementation. Starting from searching the tourists spots to booking hotels and transportation to transferring money every where web based platforms are used. In the Indian context there are plenty of such web based portals such as, etc. India being an IT superpower is capable enough for future development of such avenues in a very cost efficient and technologically superior way.

2. In spite of India being an It superpower the overall home pc penetration is still low at just 26%. This disassociates a very large chunk of domestic users from using such web based portals.

3. For the success of tourism it is essential that a country must be equipped with state of the art transportation facilities. It must have very efficient transportation system that can help in transporting both large volume of people and goods in a very cost effective, fast and comfortable fashion. Thanks to its huge population and late opening up of economy its transportation system still not of international standard.


  1. info provided is very useful but data is old..
    probably pre 26/11 and post 26/11 study of tourism will be more relevant

  2. Thanks Paritosh. Your this report on PEST really helped me to completed my assignment task but you didn't talk about legal aspects. I hope next time you will add something about legal aspects regarding to both tourists and destination. GREAT JOB.....

  3. Thanks Paritosh. Your this report on PEST really helped me to completed my assignment task but you didn't talk about legal aspects. I hope next time you will add something about legal aspects regarding to both tourists and destination. GREAT JOB.....

  4. This comment has been removed by the author.

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