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Inbound Tourism to India Affected Badly due to Rape Incidences?

The Answer is NO
By Dripto Mukhopadhyay Last week, suddenly I saw an article in one of the newspapers of a European country on Indian tourism. The article cited a report by Assocham Social Development Foundation (ASDF). The news indicated that foreign tourist inflow into India has gone down by 25% in the last three months of the year in the wake of rape incidents. It struck me at that point itself since it is quite an unlikely proposition for anyone who has done some work on Foreign Tourists Arrivals (FTA) in India and its driving forces. By now, I have seen this news in several Indian newspapers also citing the same source ASDF. Being a researcher with keen interests in tourism development, especially in India, I was quite perplexed and could not really grasp the situation which is beyond all theoretical construct of tourism demand. The reason being terrorist attacks, rapes, incidences of other law and order problems have their impacts on tourism, but to a much lesser extent. Is it believable that suddenly the demand function of tourism has changed drastically to make such an adverse impact of some rape incidences that has been highlighted because of media attention?
This has prompted me to go through the actual data of FTA published by Ministry of Tourism, Government of India. This is the most authentic data since it is reported by the immigration department. One major concern for tourism activities is the ongoing recession throughout the globe. In many countries it is evident explicitly, and, for some countries though not stated explicitly, the undercurrent is felt significantly through some primary macro-economic indicators. However, though the impact of recession cannot be felt as it was during parts of 2008 and 2009, it will play a crucial role undoubtedly on inbound tourism to India. The question is to what extent. Is it that the growth will be lower than expected otherwise? Or, the actual FTA will go down and will reflect a negative growth? According to the cited report the actual FTA has gone down by 25% during last 3 month, which factually reflects that 1/4th of the total foreign tourists are refusing to visit India due to rape incidences. If this happened in reality, the Indian economy and employment related to tourism sector would be drastically affected. Now let us see and try to understand the actual scenario. The following graph provides FTA in India since January 2009 till February 2013, which is the latest available data. The trend at a glance looks like 4 Ws of different size!!! And, after the completion of the 4 th W there is a small downward slope. This is a puzzling yet the authentic and realistic trend that we have seen in case of inbound tourism in India. What is the simplest possible implication or inference of this trend? The answer is Indian inbound tourism scenario follows exactly the same pattern over the years with some changes in magnitude. And, the implication of this is that seasonality plays a crucial role in inbound tourism to India. This seasonality is not a stray incidence or exclusively experienced only for these three years. in one of my earlier blogs in this blog space itself I have shown that seasonality plays a crucial role since long back.

Fig 1: Foreign Tourist Arrivals - January 2009 to February 2013

800 Foreign Tourists Arrivals (in '000) 700 600 500 400 300 200 100 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

To make this point more comprehensive, I have given month-wise FTA for the years from 2009 till 2013 (upto February). This figure allows us to make the comparison and to understand increase or decrease in FTA more visibly. With this graph, we interpret the W with further clear perceptive. The puzzle in question that whether FTA has gone down during last 3 months because of the rape incidences as reported by the ASDF report or for some other reason. Even more important question is whether FTA has gone down at all?

Fig 2:Month-wise Foreign Tourists Arrival - 2009 to 2013 (Till February)

800 750 Foreign Tourist Arrivals (in '000) 700 650 600 550 500 450 400 350 300 2009 2010 2011 2012 2013

The graph indicates that two troughs are visible clearly, the months of May and September. For all years highest FTA has been registered in December. Down turn starts January onwards, reaches the trough in May. A small revival is marked by a crest during July, though to a much lesser magnitude than December. After reaching another trough during August/September, it starts picking up and culminates to the peak during December. This is the story noticed throughout. Quite a few reasons can be attributed to this striking trend which includes the weather conditions in different destination states also. A through research on this will be able to throw light on this, which is beyond the scope of this particular article. Now we come to the question that is it real that FTA has gone down to the extent of 25% during last 3 months? The undoubted answer is NO. As visible through the diagram, in none of the months FTA is lower than the respective month of the previous year. The numbers presented in Table 1 depicts that in every corresponding month FTA was at higher level compared to previous year. The decline in growth rates after December is in consonance with the previous diagrams we have seen. However, the growth rates during December 2012 to January 2013 and during January 2013 to February 2013 at 2.64% and 1.62% are much lower compared to 9.15% and 6.53% of the respective time durations of previous year. But, these changes are nowhere near 25% as suggested in ASDF report. And, more importantly, the reasons could be several ones including volatility in global economic situation. Table 1: Month to Month Comparison for Last 3 Months Month Dec-11 Jan-12 Feb-12 FTA 715 681 677 Month Dec-12 Jan-13 Feb-13 FTA 750 699 688 Growth in FTA Month to Month 4.84 2.64 1.62

Source: Computed based on Ministry of Tourism data. To have a more close and comprehensive view, I have presented cumulative FTA for different scenarios as given in Table 2. Since the latest data available is till February 2013, March 2013 FTA has been extrapolated using trend of the previous year. As seen from Table 2, none of the growth rates corroborates the claim by the ASDF survey findings. Table 2: Cumulative Comparison for 3 Months Period Sept 201 to Nov 2012 Dec 2012 to Feb 2013 Nov 2012 to Dec 2012 Jan 2013 to Feb 2013 Oct 2012 to Dec 2012 Jan 2013 to March 2013 Total FTA during the period 1681000 2137000 1440000 1387000 2016000 2020098 Growth in FTA during 2 periods (in %) 27.13 -3.68 0.20

Source: Computed based on Ministry of Tourism data.

Note: FTA for March 2013 is extrapolated using figure using growth rate in FTA during corresponding period of 2012. Therefore, one can conclude with conviction that FTA has not gone down significantly at all, at least to the extent claimed and reported by ASDF survey and by several newspapers. So, why did it happen that way as reported by the above? Following could be the likely causes: Gross error in survey data itself or reporting during the survey Improper sample designing that resulted in large amount of survey error Mis-calculation of multipliers resulted in faulty estimation of FTA The analysis ignored completely the seasonality that exists in inbound tourism scenario in India.

A cautious and in-depth research is required while depicting causal relationships between FTA with its driving forces. Otherwise, a wrong impression given to tourists and other stakeholders within the country as well as in other countries might lead to erroneous demonstration effect out of panic amongst the stakeholders and foreign tourists.