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While Number of Tourists to India is increasing steadily, Government Tourism Hotels are losing money

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Successive Governments at the Center have made efforts to promote India as a tourist destination internationally. Even within India, states are competing with each other to promote their state as the ultimate tourist destination. The importance of tourism is evident from the fact that government of India estimates show that Tourism accounts for about 11.5% of the total employment in the country as on 2011-12 (direct & indirect).

These campaigns by the central & state governments seem to have had an impact. The number of foreign as well as domestic tourists has been steadily increasing. Tourism numbers are released every year under three different heads.

Foreign Tourist Arrivals (FTA): This is counted at the national level and is based on the number of disembarkations.

Foreign Tourist Visits (FTV): This is the number of foreign tourists visiting a State/UT. These numbers are counted at the state level. FTV is always greater than FTA since one foreign tourist might visit more than one state.

Domestic Tourist Visits (DTV): This is the number of domestic tourists visiting a particular State/UT.

The All India Picture
According to the figures available with the Ministry of Tourism, Government of India for the years 2011 to 2013, the number of tourist visits has been steadily increasing. DTV have been increasing continuously while FTV saw a decline in 2012 and bounced back in 2013. While there were a total of 864 million DTV in 2011 followed by 1045 million in 2012 and 1145 million in 2013. There were 19 million FTV in 2011 followed by 18 million in 2012 and then close to 20 million in 2013. The total DTV increased by 32% between 2011 & 2013 while FTV increased by about 2.3% during the same period. The increase in total tourist visits during this period was also 32%.

Year201120122013
DTV86453271810450475361145280443
FTV194971261826307419951026
Total88402984410633106101165231469

 

Number of Domestic Tourist Visits in India

Number of Foreign Tourist Visits in India

Number of Total Tourist Visits in India

What about the Government run hotels?

The India Tourism Development Corporation (ITDC) Ltd. runs fifteen hotels in the country. In 2011-12, these hotels realized a profit of 947 lakh rupees. The very next year (2012-13), the profits turned into losses with the overall loss at 617 lakh rupees. The losses continued in 2013-14 with the overall losses at 510 lakh rupees. The hotels in New Delhi, Patna, Bhopal, Itanagar & Guwahati are making profits while the others are making a loss.

 

YearNet Profit / Loss (Before Tax) (in Rs Lakh)
2011-12946.76
2012-13-617.04
2013-14-509.97

 

ITDC Hotels (Net Profit-Loss)

The Government believes the following to be the reasons for such losses

  • Spurt in availability of overall room supply position as compared to demand.
  • High wage cost.
  • Weakening of global economy contributing to a room supply vs demand ‘mismatch’.
  • Reducing average room recovery due to high competition.

Tourist Visits Vs ITDC Hotels performance

While the tourist visits have grown year on year, the ITDC hotels are losing money. In fact, the ITDC hotels have lost the most amount when the number of tourist visits have grown the highest.

Tourist Visits vs ITDC Hotels Performance

We will look at individual states & their performance in the subsequent articles.

Data Sources
Answer to Unstarred Question Number 4801, Ministry of Tourism answered on 22-12-2014.
Answer to Unstarred Question Number 621, Ministry of Tourism answered on 15-07-2014.
Featured Image: http://www.pib.nic.in/

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