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Tourism Development Initiatives and Challenges of Kerala
Post: #1

Tourism Development Initiatives and Challenges of Kerala
The size and economic significance
of travel and tourism have attracted
the attention of many developed and
developing countries in actively promot-
ing tourism as a way to stimulate their
economies, and in the process, many
have been successful in attracting large
number of international tourists (WTTC,
2003). For developing countries, World
Tourism Organization (WTO, 1998) has
recognized the potential of tourism sec-
tor for the purpose of poverty alleviation
by increased job creation. Consequent;
ly, many developing countries are im-
proving their tourism planning and
development approaches (Hall, 2000;
Elliot, 1997).
One trend projected is the increasing
share of international tourism into
South East Asian region, and India as
a leading destination in this region is
certainly poised to exploit this trend,
which it missed in eighties and nineties
(WTO, 1998). Within India, after mid
nineties, one state that performed re-
markably well in tourism is Kerala.
During this period, the state achieved
growth in tourism higher than the na-
tional average, and has now emerged
as a lead sector of the economy, with
its Impact increasing in terms of
economic growth and employment
The state government views tourism
as one of the few alternatives available
to develop the economy, especially in
the context of limited prospects of the
manufacturing sector, problems in the
agricultural and traditional sectors, and
the uncertainties facing the expatriate
employment in the Gulf (GOK, 2006a).
Tourism Industry In Kerala witnessed
considerable growth during nineties
By Manpj Edward and Moli P Koshy*
and beyond and is expected to grow
further in the future. This growth par-
ticularly occurred in the backdrop of the
opening up of the Indian economy and
the general global trend of increasing
tourism activity seen across the
countries in the Asian region. However,
Dr. Manoj Edward is Lecturer and Dr.
Moli P Koshy is Reader; both are from
School of Management Studies, Cochin
University of Science and Technology,
December /, 2007
^There are many concerns related
to tourism development facing the
state. In the years to come
tourism development needs to be
more controlled than what is
pursued in the last decade. The
need to replace mass tourism with
sustainable tourism will gain
relevance in the case of Kerala
due to its high density of
population, the fragile natural
environment and the socio Cultural
fabric of the state. Tourism growth
without adverse environmental
impact and socio-cultural
consequences should be guiding
the government's agenda.
it is also the concerted efforts of the
government and industry that made
Kerala one of the best performing
tourism states in India.
This paper attempts to study
Kerala's tourism development initiatives
in the area of planning, product
development and quality improvement
and links to the Issues related to
marketing Kerala as a tourism destina-
tion and further, tries to address the fu-
ture perspectives of growth in the light
of some of the problems facing tourism
industry in the state. The paper draws
information from the available literature
and the qualitative data collected by us
through our Interaction with tourism
department officials, tourism industry
players and NGOs involved in the
tourism development initiatives.
Moderate climate, rich art, colorful
festivals, diverse natural and cultural at-
tractions with a physical quality of life
comparable to developed nations are
all causing tourism industry to flourish
In Kerala. Nowhere in India can a
tourist experience such a geographical
diversity within the smallest area pos-
sible. Beaches, backwaters, wildlife
sanctuaries, evergreen forests and
diverse flora and fauna of Kerala are
highlighted effectively in promoting the
destination vigorously in various inter-
national and domestic markets with the
'gods own country' theme.
Tourism sector growth
In the year 2003, the impact of travel
and tourism demand on the state GDP
increased at 12.2% which is higher
lhan the growth figures for India and
for the world (WTTC, 2002). The
broader impacts of travel and tourism
demand on the state economy are es-
timated at 7.7% of state GDP and are
expected to reach 10.2% by 2013.
Along with this growth is seen a cor-
responding increase in the investment
levels in the industry. Total capital in-
vestment in the tourism sector was
1552 crore in 2002 which is 7.8% of
total investments In the State. The in-
vestment is led predominantly by the
private sector and it is expected to reach
75 billion $ by 2013 (WTTC, 2002).
International tourist arrivals to
Kerala had reached 4.28 lakhs, and the
domestic tourist arrivals 62.7 lakhs in
2006 (Table-1.1, about here). This al-
most meets the prediction of World
Travel and Tourism Council (WTTC),
which estimated that with an average
annual arrival growth rate of 18% for
domestic tourists and 12% for interna-
tional tourists Kerala is becoming one
of the fastest growing destinations in
the world (WTTC, 2002).
13Page 2

Table-1 - International and
Domestic Tourists Arrivals
(Source: Dept. of Tourism, Govt, of Kerala,
Tourist Statistics, 1994, 1998, 2002, 2006)
Kerala's- share of international
tourists coming to India has increased"*"
from 5.54 percent in 1994 to 10.26 per-
cent in 2004, making it a leading state
for tourism in the country. Earnings
from tourism is also projected to grow
at a record level of more than 23.5 per-
cent which is very high in comparison
with the earnings growth projected for
India and world average which is 14.3
percent and 6.5 percent respectively.
During this period, tourism receipts
from international tourists also grew
considerably, from 116 crore in 1994 to
1988.40 crore in 2006 (GOK, 2006b).
Tourism is also counted as an im-
portant alternative to address un-
employment which is a major problem
facing the state. Further reasons
making tourism industry attractive for
the state includes, its strong linkages
with other sectors in the state, and its
potential for generating benefits more
widespread throughout the state for a
given level of capital investment com-
pared to other sectors.
A study done shows a strong mul-
tiplier effect for tourism industry in the
state for both output multiplier and
employment multiplier (TCS, 2000).
With regard to employment generation
in the state, Travel and tourism industry
is expected to create 7.5 lakh jobs in
the next 10 years and the broader im-
pact of it on economy can create 1.4
million jobs during this period (WTTC,
Tourism policy and planning
Kerala is one of the earliest states
to announce industry status for tourism
in 1986 and announce various incen-
tives and subsidies to attract invest-
ment. These early efforts were aimed
at creating the investment friendly at-
mosphere for tourism in the state
needed for the industry to grow. This
increased the investment opportunities
for potential investors. Main lending in-
stitutions like KFC ( Kerala Financial
Corpofation),TFCI (Travel. Financial
corporation of India) and KSlDC(Kerala
state industrial development corpora-
tion) played important role in funding
the tourism projects. State also
adopted many proactive measures to
stimulate investment in tourism industry
like a system for fast track clearance
of tourism projects, subsidies, technical
guidance, marketing assistance and
support in availing loans. (GOI, 1998).
The shift in emphasis of tourism
department to a more proactive role of
tourism development and marketing
and promotion of the destination started
since early nineties. The first tourism
policy that came out in 1995 spells out
the major direction for growth in the in-
dustry. Priority areas identified were
infrastructure development, human
resource development for tourism,
marketing and product development
(GOK, 1995).
Thereafter this tourism policy
remained the basis for much of the
states progress 'over the last 10 years
whether in terms of infrastructure,
product development or tourism perfor-
mance (WTTC, 2002). The key role
played by private sector in all these
areas was identified in addition to defin-
ing the role of state as a facilitator
creating the suitable condition for in-
vestment by creating the basic in-
frastructure for tourism to grow.
For the first time the manner of
growth needed was also envisioned in
the first tourism policy, i.e. promoting
destination more as quality destination,
attracting high spending tourists than
going for mass tourism chasing num-
bers. (GOK, 1995). This conscious
strategy of taking the destination Kerala
away from mass tourism to a destina-
tion with a boutique image attracting
tourists of a specific taste required
developing new tourism producta and
new destination regions. Diversifying to
new products was also a part of
strategy bf differentiation especially
when other nearby states and nearby
regions like Srilanka and Maldives offer
same kind of products of superior value.
So in addition to beaches, Kerala as
destination started developing and
promoting varied tourist products like
backwater with house boat attractions
and Ayurveda rejuvenation holidays at-
tractions. The first tourism policy also
highlighted the need for creating
human resources of good quality to
serve the growing needs of the industry
to promote quality tourism.
Tourism Vision 2020
Despite setting the direction for
growth in the tourism industry, the first
tourism policy was not comprehensive
and lacked in providing a detailed ac-
tion plan for the destination to grow.
The government came out with a new
policy document titled "Vision 2020" ¡n
2000 which was more comprehensive
and stressed the sustainability con-
cerns along with the tourism growth.
Among others, it reflected on the
growing concern for environmental con-
servation, heritage and culture protec-
tion, lack of basic infrastructure
Table-2 ” Kerala's share of foreign tourists to India
% Share
(Source: Department of Tourism, Government of Kerala, Tourist Statistics, 1994,
December 1, 2007Page 3

surrounding major destinations, and the
need for proper quality assurance sys-
tems and legislations to regulate and
bring quality in tourism. It also stressed
on the integrated development of in-
frastructure with special tourism zones
based on master plans so that the pris-
tine quality of the environment is
preserved for making Kerala an up
market high quality destination.
The new policy aims to make tourism
Kerala's core competency sector and
gives special emphasis on enhancing
the employment potential of the sector
for alleviating poverty thereby making
tourism the most important sector for
the socio-economic development and
environment protection of the state.
Apart from reiterating the role of the.
Government as a facilitator for the
growth of tourism industry, it has also
identified the need for the state to come
up with regulations for directing the
growth of tourism in the right direction.
Destination Marketing
One area the state performed well
is promotion and marketing of the des-
tination. This is achieved through
focused marketing efforts during the
last 10 years. There were also efforts
at branding the destination along with
the focused promotional strategies
around the theme 'gods own country'.
In a way this has resulted in creating
a boutique image for the destination in
the various generating markets. These
efforts helped to differentiate the des-
tination from the other states of India.
In this process, Kerala as a tourist des-
tination has evolved into a brand of its
own. Kerala is listed among the top 100
brands of the country, by the globally
renowned super brands ltd. This brand
equity held by the destination can be
effectively exploited in the years to
come and can give the destination a
head start over other states of India.
Another high impact marketing initia-
tive was the launch of Kerala Travel
mart (KTM) in 2000 which is now
India's premier international travel mart
which gets overwhelming response
from the trade. KTM 2002 saw the par-
ticipation of trade from new markets like
USA, Denmark, Greece, Ireland and
Sweden. With these efforts, destination
Kerala has started getting noticed in the
December I 2007
global tourisms map even as a stand
alone destination. This is also reflected
in release of Kerala exclusive guide
book from widely referred travel guide
called lonely planet. Wide acclaim from
reputed travel magazines like National
geographic, Condi Nast traveller and
high profile endorsement of destination
by celebrities helped greatly to create
a favorable image for destination in
many of the generating markets.
Promotional initiatives also relied on
media like web and direct marketing
route. A highly interactive website, road
shows in selected international and
domestic markets, high quality bro-
chures and CDs as promo materials
were some of the additional promotion-
al initiatives which reflect the strategic
approach to marketing the state under-
took. These promotional efforts com-
bined with the participation in the
international travel fairs in key markets
created a synergistic effect in attracting
both the international and domestic
tourists to the state.
Private sector participation in all plat-
forms ” whether in policy making,
promotion and product development
was a distinctive feature of tourism
development pursued in Kerala. In fact
KTM, the mega marketing event of the
state for tourism, is the initiative of the
private sector, conducted in partnership
with the government, demonstrates the
active involvement of private sector in
the tourism planning and development
Clearly, the many levels of coopera-
tion and partnerships developed be-
tween the government and various
other stakeholders formed the basis for
many tourism development efforts:
public-private sector joint venture for in-
frastructure development; joint market-
ing efforts with other southern states;
committees for coordination between
departments, enabling investment
climate and tourism related facilities
and services improvement; and district
tourism promotion councils for
decentralization of tourism development.
Product development
From the first tourism policy onwards
there was an emphasis on developing
new product or new destination every
year. This is part of tourism strategy to
develop an image of up market high
quality destination for Kerala to attract
high spending discerning travelers who
seek unique experiences from the des-
tination. Increasing the appeal for ayur-
veda rejuvenation holidays and
heritage attractions in the international
and domestic markets and expanding
variety in accommodation provision of
boutique resorts and heritage hotels
etc. are some of the landmarks in suc-
cessful product development efforts in
the tourism industry.
It is this aspect of destination, Na-
tional geographic reported, regarding
the resort architecture as one of the
best in the country blending culture and
ethos of the land. Initiatives taken by
government for converting old buildings
of traditional Kerala architecture (tradi-
tional nalukettus and tharavadus) to
heritage type accommodation proper-
ties will add further to this image.
Human Resource Development
Human resource development is a
critical input to a successful tourism
system. This aspect is also envisaged
from the first tourism policy onwards in
the state (GOK, 1995). The two key in-
stitutions under the government, in the
forefront of training personnel for
tourism industry are Kerala Institute of
Tourism and Travel studies (Kl ITS) and
Institute of Hotel Management and
Catering Technology (IHMCT). In addi-
tion, last five years saw a number of
private institutions being set up for
providing the human resources to the
growing needs of the industry.
These institutions, apart from offer-
ing standard courses in the areas of
travel and tourism, also offers short
term job oriented course like certificate
course in air fare ticketing, and travel
agency management, masseur certifi-
cate course, certificate course in front
office management etc. These institu-
tions also offers training programmes
for staff of KTDC and department of
tourism officials for developing basic
skills as part of improving quality of ser-
vices offered to the industry and
Public awareness campaigns or-
ganized by tourist clubs at various
75Page 4

schools and colleges through District
tourism promotion council (DTPC) are
another initiative to equip the host
population receptive to tourism. In ad-
ditions to this, there are also training
programmes conducted for cab drivers,
customs immigration officers, with
whom tourists come into contact. As
guides and interpreters are also an in-
tegral part of tourists' experience, there
are also strict certification schemes for
becoming authorised guides.
Growth problems
Despite impressive growth during the
last decade, its potential to grow in the
years to come has also brought in
many problems that can hamper the
growth in the industry. There is a con-
cern about problems due to uncon-
trolled growth of tourism. This concern
is more clearly articulated in the latest
tourism policy (GOK, 2000) which em-
phasizes various aspects related to
environment friendly-sustainable
tourism to be promoted in the state.
Cultural impact
Uncontrolled growth in tourism can
also adversely affect the culture fabric
of the host community. No- doubt,
tourism has played a major role in
reviving the culture in the state. Some
of the traditional art forms with the
patronage of tourists and tourism agen-
cies are getting revived. Annual events
in the state like tourism week celebra-
tion and tourism festivals can also sus-
tain many cultural forms. Many
traditional buildings which were
neglected or discarded, with the inter-
est shown by the tourism industry are
being identified and put to use. Hand-
icrafts industry and the artisan skills are
also preserved due to tourism. Still, the
negative impact due to tourism growth
on the culture and traditional art forms
are also concerns increasingly raised.
Environmental impact
In terms of environmental impact,
some of the popular tourist destinations
in Kerala have started to experience
the strains of uncontrolled develop-
ment. For example, the Kovalam
beach, despite its potential to be
developed into one of the best beach
resorts in this region, witnessed sharp
decline in tourists' arrival during
nineties. One of the main reasons for
this was the haphazard manner in
which facilities came up in that place,
destroying the natural beauty of the
beach. Similar experience may come
to Kumarakom, the leading backwater
destination in the state, where the main
attractions like Vembanad and wet land
ecosystems are threatened due to un-
controlled rise of tourism facilities in
and around.
Growth constraints
Besides environmental impact con-
cerns, other problems such as lack of
adequate basic infrastructure in and
around various destinations, poor
quality of connecting roads, and ir-
regular supply of water and electricity
supply continue to limit the potential
growth of tourism in the state. Further
higher level of taxes and access
problems to state continue to cripple
the tourism growth in the state. These
are the areas now the state has to
focus its attention as part of tourism
Another problem is the inadequate
government funding or allocation for the
tourism sector. Despite the immense
potential that tourism can bring to the
socio economic development to the
state. Just 1% of total government ex-
penditure goes to tourism development
which is very low, and state has to at
least increase the share of its budget
to 3 to 4 % in the next 5 years to realize
the true potential of growth tourism can
provide to the state. There is obviously
a strong case for the state to increase
spending in this sector considering the
employment potential of travel and
tourism sector which can generate 20
lakhs jobs by 2012 if the growth is pur-
sued in the right manner (WTTC, 2002).
In summary, the following are some
of the main tourism development initia-
tives taken by Kerala which enabled it
to become one of the leading states in
tourism in the country:
* Focused marketing efforts within a
limited budget, developed in active
partnership with private sector, leading
international travel firms and agencies.*
Eariy lead in formulating comprehen-
sive tourism policy, guiding and sotting
long term vision and goals for the
tourism sector growth. * Successful dif-
ferentiation of the destination using effec-
tive positioning strategy, and
benchrharking the performance with the
neighboring leading international destina-
tions, in the process, developed a distinct
image as a stand alone destination from
India and the rest of the states.
* Developed an array of tourism
products of world class appeal mostly
based on resources available locally;
added to it, the socio-economic context
of Kerala defined by the high level of
social development and the contrasting
industrial backwardness turned out to
be a perfect setting for promoting
Kerala as an unspoiled destination with
exotic characteristics.
However, there are many concerns
related to tourism development facing
the state. In the years to come tourism
development needs to be more control-
led than what is pursued in the last
decade. The need to replace mass
tourism with sustainable tourism will
gain relevance in the case of Kerala
due to its high density of population,
the fragile natural environment and the
socio cultural fabric of the state.
Tourism growth without adverse
environmental impact and socio-cul-
tural consequences should be guiding
the government's agenda. This re-
quires conducting carrying capacity as-
sessments for important tourism
regions in the state and pursuing
growth accordingly, in addition, various
tourism projects will have to clear
through strict environmental impact as-
sessments. Ensuring quality of tourism
products and services will also become
crucial, especially when state is trying
to project an up market image for the
destination attracting discernible and
high spending visitors.
Elliot, J (1997) Tourism, Politics and Public'sec-
tor Management, Routledge, London, New York.
GOI (Govt, of India 1998) Seminaron Invest-
ment Opportunities in Tourism Sector in Kerala.
Govt, of India Tourist Office, Kochi, p. 15.
GOK (Government of Kerala 2002) Tourist
statistics of Kerala, Dept. of Tourism, Govt of
Kerala. GOK (Government of Kerala 1995)
Tourism policy of Kerala, Department of
Tourism, Govt, of Kerala. GOK (Government
of Kerala 2000) Tourism policy: Vision 2020,
Department of Tourism, Government of Kerala.
GOK (Govt, of Kerala 2006a) Economic
Review, State Planning Board. Kerala. GOK
(Govt, of Kerala 2006b) Tourist statistics of
Kerala, Dept. of Tourism, Govt, of Kerala.
Hall, CM (2000) Tourism Planning: policies,
processes and Relationships, prentice Hall,
TCS (Tata Consultancy Services, 2000)
Economic Benefits of Tourism Sector in Kerala.
A Study by TATA Consultancy Services.
WTTC (World Travel and Tourism Council,
2002) The Travel and Tourism Satellite Account
for Kerala: Impact of Travel and Tourism on
the Jobs and the Economy.
WTTC (World Travel and Tourism Council
2003) Executive Summary, The 2003 Travel
and Tourism Economic Research.
WTO (World Travel Organization 1998)
Tourism 2020 Vision Executive summary,
WTO, Madrid. ?
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