CU-BSC.TTM-SEM-IV-Tourism policy & Planning-Second Draft

 Government of India allowed 100% Foreign Direct Investment in hotels and tourism industry. Hotels refer to restaurants, beach resorts and other tourist complexes providing accommodation and catering facilities to the tourists.  Several plan schemes were introduced during the eleventh five year plan period to achieve the targets. To accomplish the targets set forth in the 11th FYP the Ministry of tourism implemented the following schemes during 2007-2012. 7.6 KEYWORD  Incredible India-Incredible India is the name of an international tourism campaign maintained by the Government of India since 2002, to promote tourism in India. The \"Incredible India\" title was officially branded and promoted since 2002  AtithiDevoBhava- AtithiDevoBhava is a programme conducted by the Government of India to complement the Incredible India Campaign.  WTTC- World Travel and Tourism Council  Foreign Direct Investment - A foreign direct investment is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control.  PIDDC- Product Infrastructure Development for Destination and Circuits 7.7 LEARNING ACTIVITY 1. Define Incredible India ___________________________________________________________________________ ___________________________________________________________________________ 2. Discuss 11th five year plan ___________________________________________________________________________ ___________________________________________________________________________ 7.8 UNIT END QUESTIONS A. Descriptive Questions 101 Short Questions 1. What is AthithidevoBhava? CU IDOL SELF LEARNING MATERIAL (SLM)

2. Define incredible India? 3. What are the components of AtithiDevobhava? 4. What is visit India 2009? 5. What is foreign Direct Investment? Long Questions 1. Government of India initiated number of measures to promote tourism marketing and the important marketing and promotion. Discuss? 2. Discuss the vision of Visit India 2009? 3. Government of India allowed 100% Foreign Direct Investment in hotels and tourism industry. Explain? 4. During the Eleventh five year plan (2007-2012) there was a distinct shift in the approach of tourism development as compared to previous plans. Explain? 5. What are the schemes introduced during 11th five year plan? B. Multiple Choice Questions 1. WTTC refers to a. World Trade in Tourism council b. World Travel and Transport council c. World Travel and Tourism council d. World Travel and Tourism committee 2. India Campaign was introduced by the Government of India in a. 2003 b. 2002 c. 2000 d. 2006 3. Incredible India campaign was conducted globally to a. Attract tourists to the country b. Send tourist to other country c. Distract tourists d. Make tourist see the world 102 CU IDOL SELF LEARNING MATERIAL (SLM)

4. “Atithi Devo Bhavah” Means a. Guest is god b. guest is a stranger c. Guest is enemy d. Guest is friend. 5. The main vision of Visit India 2009 campaign was to boost the inflow of visitors and tourists after the terror attacks in a. Delhi 2009 b. Coimbatore 2009 c. Hyderabad 2009 d. Mumbai 2009 Answers 1-c, 2-b, 3-a, 4-a, 5-d 7.9REFERENCES References book  Aswathappa, K. (2002). Human Resource Management. New Delhi: Tata McGraw- Hill.  Dessler, G. (2012). Human Resource Management. New Delhi: Prentice-Hall of India.  Rao, V.S.P. (2002). Human Resource Management: Text and cases. New Delhi: Excel Books.  Decenzo, A. & Robbins P Stephen. (2012). Personnel/Human Resource Management. New Delhi: Prentice-Hall of India.  Ivancevich, M John. (2014). Human Resource Management. New Delhi: Tata McGraw-Hill. Textbook references 103 CU IDOL SELF LEARNING MATERIAL (SLM)

 Mamoria, C.B. (2002). Personnel Management. Mumbai: Himalaya Publishing House.  Dipak Kumar Bhattacharyya, Human Resource Management, Excel Books.  French, W.L. (1990), Human Resource Management, 4th ed., Houghton Miffin, Boston.  H.J. Bernardin, Human Resource Management, Tata McGraw Hill, New Delhi, 2004. Website  http://www.slideshare.net/sreenath.s/evolution-of-hrm  www.articlesbase.com/training-articles/evolution-of-human-resource- management- 1294285.html  http://www.oppapers.com/subjects/different-kinds-of-approaches-to-hrm- page1.html 104 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 8: TOURISM POLICY INITIATIVES FOR DEVELOPMENT -II STRUCTURE 8.0 Learning Objectives 8.1 Introduction 8.2 Meaning of Incentives and concessions 8.3 Incentives and concessions for Tourism Projects in India for different states 8.4 Summary 8.5 Keywords 8.6 Learning Activity 8.7 Unit End Questions 8.8 References 8.0LEARNING OBJECTIVES After studying this unit, you will be able to:  Understand the meaning and Concept of funds, Incentives & Concessions  Understand the need for Funding in tourism development  Know about various agencies for funding for tourism Projects  Know about the various concessions given by the government for tourism projects  Aware about various National and International organizations in funding different tourism projects 8.1INTRODUCTION Tourism emerged as an economic term and a known field only after the second five-year plan (1956). Though, Jawaharlal Nehru (First PM OF India) was the first person to recognize it. He powerfully believed that tourism could play an essential role in economic development of India by not only offering chances such as employment, forex, revenue, but in terms of international co-operation, peace and harmony. Since, the introduction of the first five-year plan, large number important steps have been taken to improve tourism till date. From the 105 CU IDOL SELF LEARNING MATERIAL (SLM)

making of Indian Tourism Development Council (ITDC) in 1966; several tourism policies and committees have been formed to develop tourism in India. Whether it was 1982 National Tourism Policy, setting up of tourism committee in 1988, formation of Tourism Finance Corporation in 1989, the national action plan 1992, national strategy to promote tourism in 1996 and a new tourism policy in 1997 & 2002, all to develop the tourism sector. Apart from the central policies, policies have also been implemented at the state levels. Apart from the center& state governments, a large number of other bodies both at national and international level have been supporting funding in tourism. At national level organizations like Tourism Finance Corporation of India, Indian Tourism Development Corporation, ministry of tourism, Ministry of Rural Development and Ministry of Environment and at international level bodies like United Nations World Tourism Organization (UNWTO), United Nations Educational, Scientific and Cultural Organization (UNESCO), Angles investors, The World Bank Group, International Monetary fund (IMF), Asian Development Bank (ADB) are involved in funding activities in Tourism. There are numerous examples where these organizations have given funding to develop a form of tourism and to support sustainable development in tourism. In similar fashion, the Government of India, Ministry of Tourism and the United Nations Development Program (UNDP) in India have been engaged in an edge on Rural Tourism in 2002. The Endogenous Tourism Project-Rural Tourism Scheme (ETP-RTS) covered 36 sites spread geographically all over the country, but these pilot project experiences had much to offer in 106 CU IDOL SELF LEARNING MATERIAL (SLM)

terms of knowledge about the connection between community dynamics and tourism projects. Development of tourism at tourism destinations can have a severe mass impact due to uncontrolled growth and ignorance of the carrying capacity of the place. Though the emphasis must be to attract more tourists at a destination & improve the socioeconomic status of the locals. But at the same time, the emphasis should be also to maintain and conserve the place. Whenever, we want to bring holistic development of tourism at a destination. It is not a simple task. As, you may not be able to bring changes at all places in a destination. There may be some locations or destinations under the jurisdiction of central agencies such as ASI, Port Trusts in India, ITDC etc. and you may not be able to bring total transformation. At times, you may have funding issues or sometimes you may have issues related to other resources. Hence, in order to get rid of all such insufficiencies and to bring active involvement of the Central Agencies. The tourist interest assets owned by Central/State Governments/UT Administrations/Central Agencies which have potential. They can surely be developed through the role of those central agencies and co-ordination with other specialized/ expert agencies. The renovation work could be done by expert/specialized agencies duly approved by Central Agencies like ASI, Port Trust, and ITDC, etc. and under their management. So, then the central ministries such as Railways would play the role as the central Agencies and help in providing financial assistance. In case, the central agency is 107 CU IDOL SELF LEARNING MATERIAL (SLM)

working as an execution agency, the product developed shall be shifted to the concerned authority on achievement of work (Tosum, 2005). 8.2 MEANING OF INCENTIVES AND CONCESSIONS Incentives Incentives are payments or concessions given to stimulate greater output or investment, incentives are paid in order to stimulate larger outputs or investment, government provides a lot of incentives scheme for the development and growth of different industries. Concessions: Concession is a contractual right to carry on a certain kind of business or activity in a region, such as to discover or development of its natural resources. In simple words, concessions are discounts given in form of monetary or non-monetary terms. Concessions are given for the betterment or development of economic conditions of the society in order to improve their quality of life or standard of living. Ministry of Tourism, Government of India is providing a lot of concessions and incentives for the growth of tourism in India, a lot of tourism programme and projects are given incentives and concessions, in order to develop various tourism sites or areas (Payer, 1975). 108 CU IDOL SELF LEARNING MATERIAL (SLM)

8.3INCENTIVES AND CONCESSIONS FOR TOURISM PROJECTS IN INDIA FOR DIFFERENT STATES: All the states Governments in India have also implemented & subsidized multiple number of tourism plans with the aim to improve the tourism potential in their states.  Numerous financial incentives and investor friendly policies are being implemented by the state governments for the development of state tourism infrastructure.  Financial Incentives are given to tourism projects and investor friendly strategies are followed in the various states of India Himachal Pradesh  There is no tax on entertainment units for a period of ten years.  The relaxation of taxes for Home Stay Tourism Units for a period of 10 years in the rural areas. 109 CU IDOL SELF LEARNING MATERIAL (SLM)

 In order to boost private businesspersons for setting up of tourism units, the State is giving incentive of 15 per cent as capital investment subsidy up to a maximum Rs. 50 lakhs.  The new Hotel units opened in the tribal areas are exempt from giving luxury tax for a time period of 10 years (from 1st April, 2012).  Overdue payment of luxury tax by Hotels and tourism Units  Special incentives for satellite towns and Cyber cities will be given with investment of over USD 21.5 million by NRIs and foreign investors 5.2 Punjab  Land would be easily provided on nominal terms for setting up of hotels and restaurants.  Soft loans are given for setting up of new tourism projects and for extension of the old tourism projects Haryana  No charge on electricity for five years for tourism purpose 110 CU IDOL SELF LEARNING MATERIAL (SLM)

 Provisions for personalised (tailor-made) incentives for tourism projects having outlay of INR 0.3 billion.  The tourism projects are given facilities for Land auction and institutional finance. Uttarakhand  100% exemption on entertainment tax for first three years and 30% for the next five years  100% tax exemption on amusement parks and ropeways for five years 5 years  The new projects are given subsidy to the tune of INR 3 million as facility of Capital investment.  The new tourism units will have no tax/rebate for 5 years for payment of the luxury tax.  20% Assistance/Support is given for investment of INR 1million.  Easy land availability on equitable price for tourism on certain terms and condition applied 111 CU IDOL SELF LEARNING MATERIAL (SLM)

Jammu & Kashmir  INR 0.7 million capital subsidy for taxi driver or operators.  The tourism unit project which hasvaluation (costing) of more than INR 250 million, have capital subsidy (aid) up to INR 10 million).  There is subsidy for conversion of travel agencies to the level of 50% in project cost.  The houseboats in Kashmir are given subsides for repair and maintenance.  Grants i.e. subsidy to the tune of INR 0.7 million given on adventure equipment. Rajasthan 112 CU IDOL SELF LEARNING MATERIAL (SLM)

 There is no tax for seven years for the new tourism entities. (50% stamp duty exemption, 100% luxury tax exemption, 50% electrical duty exemption, 50% entertainment duty exemption, 50% conversion charges).  Hotel and motel can avail interest subsidy  Tourist areas have to pay low land conversion charges  Institutional finance is also provided for tourism units Uttar Pradesh 113 CU IDOL SELF LEARNING MATERIAL (SLM)

 A large of benefits given to organisations working in tourism sector such as exemption of five years on luxury and entertainment tax in case of new ropeways, exemption of trade tax for restaurants.  The paying guest houses have exemption for entertainment tax.  No charges on stamp duties  10% subsidy and capital subsidy schemes for Heritage hotels  Facility of institutional (organisational) finance and monetary support to tourism amenities in hilly areas. Kerala 114 CU IDOL SELF LEARNING MATERIAL (SLM)

 Industrial Tariff on electricity charges for the first 5 years for Tourism Projects classified as responsible tourist projects.  Investment Subsidy subject to a maximum ceiling limit of Rs 20 lakhs Gujarat 115 CU IDOL SELF LEARNING MATERIAL (SLM)

 Land Bank Policy to identify and earmark land to be provided for tourism projects.  Different financial benefits (i.e. incentives) are given in 2010-2015 including tax breaks (holidays) such as luxury tax in hotels. Also, there is decrease in VAT charges on F and B (i.e. food & beverage), natural gas and reduction in entertainment tax. Maharashtra 116 CU IDOL SELF LEARNING MATERIAL (SLM)

 Luxury Tax exemption available to new units and also during expansion of new units for a period of 7& 10 years based on location.  Exemption from Entertainment Tax for a specific period (5, 7 or 10 years) based on location and nature of tourism project  Property Tax for Tourism Projects at Residential Tax Rates Madhya Pradesh  Capital Subsidy to new Hotels & Resorts at select tourist destinations.  New Tourism projects exempt from entertainment tax for 10 years.  Caravan buses used for tourist transport purposes are exempt from road tax for a period of 5 years. Karnataka 117 CU IDOL SELF LEARNING MATERIAL (SLM)

 Concession in stamp duties for new tourism projects.  Lower Registration charges for new projects as per the industrial policy.  Investment subsidy between RS 10 lakhs and RS 30 lakhs.  100% exemption of entertainment tax for all newly constructed cinema theatres for 3 years Andhra Pradesh 118 CU IDOL SELF LEARNING MATERIAL (SLM)

 Capital Investment subsidy with a maximum ceiling of Rs. 30 lakhs  Repayment of Stamp Duty and Transfer Fee paid for registration  Compensation of 25% VAT paid in a financial year as a grant to pay VAT in the following year.  25% entertainment tax will be ploughed back for entertainment components in theme parks. Orissa  Capital Investment subsidy for all new projects subject to a maximum ceiling of Rs.40 lakhs. Interest subsidy for all new tourism projects, where the investment is more than Rs. 10 lakhs, subject to a maximum of Rs.1 Crore.  on purchase of land for tourism projects 50% discount on stamp duty is given Compensation of 30% of real net VAT paid subject to a maximum of Rs.10 lakh per annum West Bengal 119 CU IDOL SELF LEARNING MATERIAL (SLM)

 Capital Subsidy for new tourism projects subject to a maximum ceiling of Rs.150 lakhs of subsidy.  Interest Subsidy to the extent of 50% of the annual interest liability, subject to a limit of Rs25 Lakhs per year.  Waiver on electricity duty  On the registration fee paid for tourism projects refund of 50% of stamp duty will be given back 8.4 SUMMARY  In order to start or expand any small or large business there is a need for capital or funds, without capital it is very difficult to start or run a business. Every business 120 CU IDOL SELF LEARNING MATERIAL (SLM)

requires or need capital or funds at the time of initial start and for its day to day operations.  In order to fulfil the demand for capital or funds there are number of organisations both public and private, national or International who are providing financial assistance to both small scale and large-scale industry.  In Tourism business there is a need for capital or funds for the starting or for its operation, and there are different corporations and organisations who are funding tourism project all over the country. For instance, ITDC, TFCI, Ministry of tourism, ministry of environment, Different state tourism boards, Angel investors etc. also there are international organisations who are funding tourism project all across the globe some of them are UNWTO, UNESCO, IMF, ADB etc. Both these national and international organisations play an important role in the development of small and large-scale businesses in Tourism and Travel trade.  The Ministry of tourism (MOT), Government of India (GOI) and various state tourism departments also provide or give different concessions and incentives for starting or running a tourism business in the country with the aim of development of the Tourism industry and the economy as a whole and focus on sustainable side of tourism development which would be beneficial for both socio-economic and environment development and preservation of natural resources of the country And to boost the flow of tourists in the country and make the tourism industry more organised and improve the status of tourism in the country. 8.5 KEYWORD  ITDC – India Tourism Development Corporation  IMF – International Monetary Fund  ADB – Asian Development Bank  ETP- RTS - Endogenous Tourism Project-Rural Tourism Scheme  UNESCO- United Nations Educational, Scientific and Cultural Organization  TFCI – Tourism Finance corporation of India  UNWTO – United Nations World Tourism Organization.  MOT – Ministry of Tourism  GOI – Government of India  ASI- Archaeological Survey of India 121 CU IDOL SELF LEARNING MATERIAL (SLM)

 UNDP - United Nations Development Programme 8.6 LEARNING ACTIVITY 1. Various funding, incentives and concessions in tourism ___________________________________________________________________________ ___________________________________________________________________________ 2. Funding sources in India for tourism development ___________________________________________________________________________ ___________________________________________________________________________ 8.7UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define Tourism funding? 2. What is Incentives in tourism? 3. What is concession? 4. What are the state tourism department for tourism funding? 5. Define TFCI. Long Questions 1. UNESCO plays an important role in funding of different projects in the area of tourism. Explain. 2. Discuss the role of UNWTO in tourism development funding? 3. Elaborate the incentives and concession provided by the government in Himachal Pradesh? 4. What are the taxes and concessions provided by Uttarakhand state tourism? 5. Briefly explains the various concessions provided in Orissa, Jammu Kashmir, and Himachal. B. Multiple Choice Questions 122 1. ITDC was established in a. 1966 b. 1976 CU IDOL SELF LEARNING MATERIAL (SLM)

c. 1987 d. 11988 2. Tourism finance corporation was established in a. 1990 b. 1097 c. 1989 d. 1988 3. IMF refers to a. Indian Monetary fund b. International Monetary fund c. Income Monetary fund d. Inland Money fund 4. ITDC refers to a. India Tourism Development corporation b. International tourism development corporation c. Indonesia tourism development company d. Inland tourism Device Company. 5. World Bank is a major source of funding through out___ a. India b. US c. EU d. World Answers 1-a, 2-c, 3-b, 4-a, 5-d 8.8 REFERENCES  Bhatia A.K., Basics of Tourism Management, Sterling Publishers Pvt Delhi, 2010 123 CU IDOL SELF LEARNING MATERIAL (SLM)

 Bhatia A.K., the Business of Tourism: Concepts and Strategies, Sterling Publishers Pvt Delhi, 2010.  http://cooperation.unwto.org  http://www.angelfire.com/ks/andriotis  http://www.ukessays.com  http://www.usbr.gov/lc/yuma/environmental_docs/Coachella/coachellachap3.pdf  https://www.monroecollege.edu/uploadedFiles/_Site_Assets/PDF/Natioanl%2 0and%20Regional%20Tourism.pdf  Inskeep Edward, Tourism Planning: An Integrated and Sustainable Development, John Wiley & Sons Inc Publications, New York.  Kumar MisraSuddhendu Narayan and SadualSapan, Basics of Tourism Management, Excel Books.  Prasad VV Vara, Travel & Tourism Management, Sundari VBT Publications 124 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 9: RESOURCES OF FUNDING STRUCTURE 9.0 Learning Objectives 9.1 Introduction 9.2 Sources of Funding 9.3 Organizational structure of TFCI 9.3.1 Objectives of TFCI 9.3.2 Operations of TFCI 9.3.3Role of TFCI 9.4Case study on ITFC 9.5Summary 9.6Keywords 9.7Learning Activity 9.8Unit End Questions 9.9References 9.0LEARNING OBJECTIVES After studying this unit, you will be able to:  explain the process of transformation of travel of past into tourism of today;  discuss various types and related purposes of tourism;  explain the variety and value of tourist resources of India;  explain the causes and factors responsible for the growth of tourism;  analyse the area development through the promotion of tourism 9.1INTRODUCTION Funding 125 CU IDOL SELF LEARNING MATERIAL (SLM)

 Funding refers to providing or lending financial assistance or resources to finance a need, program or project. In general funding means when a particular firm fills the need of cash of other firm or organisation from its internal reserves.  Funding also means lending grants of authority to an agency, department or a unit to incur their monetary obligations and to pay for them  Funding in simple words is giving or facilitating fiscal or financial aid to other agency or firm for starting a new business or incurring the day to day expenses of the business. Funding also supports other business to expand its current operations and upsurge their market reach.  Funding is the act of contributing financial resources, mostly in the form of money, or other values such as effort or time, to finance a need, program, and project, generally by a private institute or government.  This word is used when a firm uses its internal assets to accomplish its prerequisite for cash, while the term funding is used when the firm gains capital from external sources. 9.2 SOURCES OF FUNDING Sources of Funding There are numerous numbers of national and International organizations funding tourism projects in the country. Some of them are: Ministry of Tourism, Government of India: Ministry of tourism is one of the major organizations, which is funding a large number of tourism projects throughout the country. Projects like development of tourism infrastructure for instance, development of airports, railways, hotel and restaurants, eco- tourism projects, rural tourism projects etc. 126 CU IDOL SELF LEARNING MATERIAL (SLM)

Various State tourism departments: Different state tourism department are also playing a crucial role in funding tourism projects in their states. The focus is to develop tourism projects like adventure tourism spots, rural tourism sites, ecotourism sites, development of places of importance. For instance, religious sites in the state, development of health and Yoga tourism and state tourism department also give financial assistance to tour operators, travel agents, hotels and homestays etc. Tourism Finance Corporation of India is also source of funding in the tourism sector: TFCI is one of the major organization funding tourism projects in India. TFCI normally considers financial assistance to projects with capital cost of at least RS 20 crore, but for providing financial assistance to heritage hotels, restaurants, food courts, pubs, tour operators, travel agents, transport sector, health spa /centres, recreational facilities and renovation / up gradation/expansion, lower project cost could be considered depending on the nature of the project, past track & credit record. Indian Tourism Development Corporation (ITDC) Is also source of funding in the tourism sector: ITDC also funds various tourism projects throughout the country, the focus is on development of the hotels and other hospitality related units? ITDC aims to fulfill the increasing demand for accommodation and maintain the world class standards. 127 CU IDOL SELF LEARNING MATERIAL (SLM)

United Nations World Tourism Organization (UNWTO): It is a very important organization in the world, which is funding a lot of tourism project across the globe, keeping in mind sustainable development, UNWTO focuses for the development of tourism and maintain world class standard in the development process. United Nations Educational, Scientific and Cultural Organization (UNESCO) also funds tourism projects:  UNESCO plays an important role in funding of different projects in the area of tourism. The preservation and safeguard of World Heritage sites wouldn’t be possible without the monetary resources to encounter World Heritage needs. 128 CU IDOL SELF LEARNING MATERIAL (SLM)

 Sources of revenue include the World Heritage Fund, which obtains most of its income from compulsory contributions from countries (States Parties) and from voluntary contributions.  Other sources of revenue comprise of profits pumped out of from auctions of World Heritage publications, or funds-in-trust that are donated by countries for particular work. Angles investors also funds tourism projects: Angle investors are very important private organization funding tourism projects. He is a rich or affluent person/institution who gives capital for a business start-up, for convertible debt or ownership equity. This segment of investors is growing up through online equity and invests their capital or their guidance to their portfolio companies. Angle investors put up their money or capital in minor start-ups or entrepreneurs. They may give one-time investment to move the business and encourage the company in their hard times. He is also known as informal investor, angel funder, business angel, seed investor or private investor. The World Bank Group: The World Bank is a major source of funding for various projects throughout the world. It also funds various tourism projects across the globe. World Bank works on all major areas of development and provides financial products and technical assistance. It focuses majorly on development of rural areas and improving the quality of lives of people of different communities. International Monetary fund (IMF): 129 CU IDOL SELF LEARNING MATERIAL (SLM)

IMF is an international organization with members of 189 countries, functioning to raise global monetary cooperation, secure financial stability, facilitate international trade, encourage high employment and sustainable economic growth, and elevate poverty around the world. IMF also is a major source of funding for various tourism projects in India and Internationally. It also gives financial assistance for tourism projects like rural and eco- tourism areas development. Ministry of Rural Development and Ministry of Environment: 130 CU IDOL SELF LEARNING MATERIAL (SLM)

Ministry of rural development is also a major source for funds for the development of tourism projects like rural tourism areas and even ministry of environment also gives financial assistance for development of rural sites and environment protection like protection of national parks and biodiversity reserves for tourism. Ministries of environment have been conducting various environment protection program and projects and fund these projects. Asian Development Bank (ADB): The Asian Development Bank (ADB) is a local development bank founded on 19 December 1966, which is headquartered in the Ortigascentre situated in Mandaluyong, Metro Manila, Philippines. Asian development bank also preserves 31 field offices throughout the world to 131 CU IDOL SELF LEARNING MATERIAL (SLM)

encourage social and economic development in Asia. Asian development bank also offers funding and financial assistance for tourism projects in India and across Asia (Miller & Twining-Ward, 2005). Tourism Finance Corporation of India was set up a specialized all India Financial Institution to financing/funding requirements of the Tourism and Hotel industry. It was sponsored by IFCI along with other financing institutions and banks which are notified as Public Financial Institutions under Section 4-A of the Companies Act 1956 and have Financing Participation scheme of all India financial institutions. Tourism Finance Corporation of India was incorporated as a public limited company under the Company Act, 1956 on 27th January 1989. The operational activities were started on 1st February 1989. It was set up as a specialized cell to cater to the needs of Tourism and Hotel Industry. It was expected to ensure priority in funding tourism and tourism-related projects. TFCI has to undouble made a dent in the tourism sector. It has been showing better performance since its inception in 1989. The investment of TFCI has grown appreciably over the year from Rs. 265 crores to Rs. 6,978 crores in 2001-02. TFCI is a commercial venture and hence it cannot afford to finance those tourism and hotel project which do not ensure recovery of interest and the principal amount of loan in time. It will help TFCI in generating some surplus which is so essential for further expansion of its activities. 132 CU IDOL SELF LEARNING MATERIAL (SLM)

9.3 ORGANIZATIONAL STRUCTURE OF TFCI Generally, the organizational structure serves three basic functions. These include: (i) It intends to produce output to achieve the business objectives. (ii) It minimizes the influence of individual variation on the organization. (iii) It helps in performing activities, decisions and other relationships in a systematic manner. The organizational structure of TFCI is consisting of the board of directors, managing directors and other professional staff at middle and lower levels. Theoretically, the board of directors is a supreme organ of the management of TFCI. However, in practice, the managing director wields the real power because of directors almost delegates its powers to the managing directors (M.D). TFCI organizational structure The main function of the board is to formulate the policies and strategies while M.D is responsible for the execution and implementation of these policies and strategies. He directs co-ordinates and controls day to day functioning of TFCI. 9.3.1 Objectives of TFCI According to Memorandum and articles of associations, the main objectives of TFCI are: 1. To commence and carry on the business of assisting industrial, commercial, professional and trading enterprises – corporate bodies, partnership firms, trust, individuals or other concern whosoever constituted and engaged or to be engaged in setting up and development of tourism, hotel, and tourism-related activities. 2. To commence and carry on the business of lending or granting by way of loans or advances in rupees and/or foreign currency or in any other form money with or without interest or with or without security for the purpose of assisting enterprises in India. 3. To commence and carry on the business of facilitating, through the grant of loans and other financial, technical and professional assistance, the acquisition, maintenance, modification, construction, reconstruction, refurbishing and renovation of tourism and travel related activities. 133 CU IDOL SELF LEARNING MATERIAL (SLM)

4. To commence and carry on the activities of coordinating and formulating guidelines and policies relating to the financing of all such projects in the tourism and tourism- related activities, facilities and services. 5. To commence and carry on the development and promotional functions with regard to tourism and tourism-related activities. 6. To commence and carry on the business of merchant banking and other allied activities. 7. To commence and carry on the business as assessors, designers, draftsman, estimators, surveyors and other materials. 8. To commence and carry on or be interested in the business of buying, selling, distributing, leasing, exporting and importing of furniture, machinery, equipment, and other material. 9. To carry on business as share brokers and agents of insurance for all kinds and for all of the risks. 10. To carry on the business of agents for the central or state government or any other international or national institution or organization in the transaction of any business concerned with tourism and tourism-related activities, facilities and services. 9.3.2 Operations of TFCI TFCI provides all forms of financial assistance to enterprises for setting and developing travel and travel related activities, facilities and services. It also coordinates and formulates policies and strategies related to the financing of tourism projects. Since its inception, the company has been playing a catalytic role in providing all forms of financial assistance for new, expansion, diversification and modernization project in the tourism industry and related activities. The major functions of TFCI are following as:  Rupee loans  Underwriting of public issue of share/debenture and direct subscription on such securities.  Guarantee for deferred payments and credits raised in India and/ or abroad.  Equipment finance and equipment leasing.  Assistance under supplier’s credit.  Merchant Banking and Advisory services. 134 CU IDOL SELF LEARNING MATERIAL (SLM)

TFCI is operating on similar lines as other all India Financial Institutions. It provides financial assistance for the project in the tourism industry on its own and in consortium with other all India Financial Institutions, namely IFCI, IDBI, and ICICI. The tourism projects financed by TFCI include inter alia Hotel restaurants, Holiday Resorts, Amusement Parks and Sports, Safari Park Ropeways, Convention Halls, Transport, Travel, and Tour operating agency, Air Taxi Services, Tourist Emporia, Sports facilities etc. TFCI is financing non-conventional and small projects which were not eligible for institutional finance earlier but are heaving great importance from tour point of view. Hence, TFCI is playing a developmental role for promote of tourism within the overall policies of the Government of India. The present product lines of TFCI consist following main areas: (a) Project Financing (b) Financial Services (c) Investment TFCI Direct Assistance Under direct assistance TFCI provides:  Loans  Underwriting and direct subscription to the share and debentures  Equipment financing and leasing  Guarantees  Technical Development Fund Indirect Assistance TFCI provides a significant share in the total assistance to tourism enterprises indirectly through other financial institutions like SFCs, SIDCs, and commercial banks. These are:  Refinancing of the Industrial loan  Bill Finance  Seed Capital Assistance 135 CU IDOL SELF LEARNING MATERIAL (SLM)

 Bridge Financing 9.3.3 Roles of TFCI The TFCI has been endeavoring to take such steps which are considered vital in preparing the base of the tourism industry in the country. TFCI has been playing an increasingly important role. These are following as:  To provide assistance to the project located in identified backward and hill areas of the country.  It plays a vital role in achieving the growth targets set for the travel and tourism industry.  It plays a pivotal role in motivating private investors to put their fund in travel related projects.  TFCI helps in attracting more and more investment into the non-conventional segments of tourism industry such as adventure tourist resorts, ropeways, human resource training, institutes, ferries, and air taxis and other tourism promotional facilities.  To suggest a measure, TFCI should forecast the financial requirements of the travel and tourism sector.  To maintain good coordination among enterprises and other financial institutions. Travel and Tourism infrastructure requires an extensive investment of both public and private sectors to finance the preliminary planning, development stages, and fixed assets. Due to the huge investments, travel and tourism industry are also known as the ‘capital-intensive industry’. ITFC plays an important role in the promotion and development of tourism in India. 9.4 CASE STUDY ON ITFC It has undoubtedly been a challenging year for businesses across various sectors, especially with recent partial lockdowns. Tourism and Hospitality business was also hit adversely due to this. However, despite the challenges, Tourism Finance Corporation of India (TFCI), a premier institution catering to the financing needs of hospitality industry demonstrated resilient performance during the previous Financial Year. It reported a PAT of Rs. 81 crores in FY21 with a loan book at Rs 1977 crores. 136 CU IDOL SELF LEARNING MATERIAL (SLM)

TFCI was able to show a growth in AUM, stable earnings and asset quality, primarily on account of its prudent selection of assets, stringent monitoring and recovery mechanisms and appropriate structuring. With a CAR of 39.87%, the company is well capitalized to grow its books exponentially in future. The company was also able to maintain its NIM to 5.31% even during these trying times. TFCI has focused on building its books by leveraging the opportunities presented in the MSME segment. As on March 31, 2021, 84% of its AUM was in MSME segment. Various supports and thrust given by Government of India (GOI) to this segment of economy, has helped TFCI maintain growth in its loan book. Further, though the initial period of FY21 witnessed complete lockdown, with virtually no mobility, the latter half witnessed travel and tourism demand picking up substantially. It led to the rise in demand for the domestic tourism industry which also resulted in improved occupancy rates for the hotel with certain segments of the industry running in almost full capacities. Most of TFCI’s assisted entities also saw ARRs and Occupancies improving considerably during October 2020 to February 2021. However, an unprecedented surge in Covid-19 cases in the ongoing second wave has slowed down the economic growth trajectory and will have some impact in Q1 FY22. However, one positive indicator is that, in comparison to last year, the present lockdowns are lesser stringent and more business friendly. As MrAnirban Chakraborty, Managing Director, TFCI has to say: “One positive indicator is that, in comparison to last year's calamity, the recent dip in mobility has not been as sharp as seen during the lockdown in March 2020 and we expect that the travel and tourism sector will show recovery and return to normalcy with a bang on the back of a pickup in consumption, as the vaccination rate improves and the local restrictions start to ease out in the coming quarters” Certain measures by the GOI viz., broadening the inoculation drive for 18+ aged populations, extension of the scope of ECLGS for the Travel & Tourism Sector, liquidity measures for NBFCs and last-mile lenders, shall yield positive results over the next few quarters. Though the second wave slowed down the recovery rate, we are already witnessing reopening in various pockets of the country. With large scale vaccinations, it is expected that business-as- usual is not going to be a distant dream. 137 CU IDOL SELF LEARNING MATERIAL (SLM)

9.5SUMMARY  Funding refers to providing or lending financial assistance or resources to finance a need, program or project. In general funding means when a particular firm fills the need of cash of other firm or organisation from its internal reserves.  Ministry of tourism is one of the major organizations, which is funding a large number of tourism projects throughout the country. Projects like development of tourism infrastructure for instance, development of airports, railways, hotel and restaurants, eco- tourism projects, rural tourism projects etc  UNESCO plays an important role in funding of different projects in the area of tourism. The preservation and safeguard of World Heritage sites wouldn’t be possible without the monetary resources to encounter World Heritage needs.  Angle investors are very important private organization funding tourism projects. He is a rich or affluent person/institution who gives capital for a business start-up, for convertible debt or ownership equity. This segment of investors is growing up through online equity and invests their capital or their guidance to their portfolio companies.  The World Bank is a major source of funding for various projects throughout the world. It also funds various tourism projects across the globe. World Bank works on all major areas of development and provides financial products and technical assistance. It focuses majorly on development of rural areas and improving the quality of lives of people of different communities.  IMF is an international organization with members of 189 countries, functioning to raise global monetary cooperation, secure financial stability, facilitate international trade, encourage high employment and sustainable economic growth, and elevate poverty around the world.  Tourism Finance Corporation of India was incorporated as a public limited company under the Company Act, 1956 on 27th January 1989. The operational activities were started on 1st February 1989. It was set up as a specialized cell to cater to the needs of Tourism and Hotel Industry. It was expected to ensure priority in funding tourism and tourism-related projects. 138 CU IDOL SELF LEARNING MATERIAL (SLM)

9.6 KEYWORD  IFCI – Indian finance corporation of India  IDBI - Industrial Development Bank of India  ICICI- Industrial Credit and Investment Corporation of India  SFCs - State Finance Corporations  SIDCs - State Industrial Development Corporations  MSME - Micro, Small and Medium Enterprise 9.7 LEARNING ACTIVITY 1. Define Funding ___________________________________________________________________________ ___________________________________________________________________________ 2. State the objectives of TFCI ___________________________________________________________________________ ___________________________________________________________________________ 9.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Define Funding? Explain the main purpose of funding? 2. List the various sources of funding 3. What is the role of World Bank group in tourism project development? 4. Briefly explain the role of IMF. 5. Explain the role of ITDC in tourism development? Long Questions 1. Ministry of tourism is one of the major organizations, which is funding a large number of tourism projects. Justify? 2. Explain the role of UNESCO in funding projects in the area of tourism? 3. Which is the bank which provides funds for rural tourism? 4. Describe the organisation structure of TFCI? 5. Explain the operations of TFCI? 139 CU IDOL SELF LEARNING MATERIAL (SLM)

B. Multiple Choice Questions 140 1. Funding refers to ________assistance. a. Lending b. not providing c. securing d. agency 2. TFCI refers to a. Tourism Finance corporation of India b. Travel finance corporation of India c. Transport finance corporation international d. Travel fund company in India 3. An ITDC fund focuses on……… a. Infrastructural development b. Development of hotels c. Development on logistics d. Developments on airports 4. UNWTO funds focuses on a. Development on logistics b. Developments on airports c. Developments on world class standards d. Developments on hotels 5. World Bank group funds focuses on a. Development on logistics b. Developments on airports c. Infrastructural development d. Development of rural areas. CU IDOL SELF LEARNING MATERIAL (SLM)

Answers 1-a, 2-a, 3-b, 4-c, 5-d 9.9REFERENCES  NathDharPrem, Development of Tourism and Travel Industry: An Indian Perspective, Kanishka Publications, New Delhi.  Problems encountered by tourists by MadhaviChockalingam, A. Auroubindo Ganesh  Sinha R.K., Tourism Strategies, Planning and Development, Common Wealth Publishers.  Tourism Destination Planning by University of Hawai’i, Manoa.  Tourism Management 20 (1999) 183— 185 by DimitriosBuhalis.  Tourism Planning by Ramakrishna Kongalla, Assistant Professor at Assistant Professor, IITTM, Gwalior.  Tourism Planning by Ramakrishna Kongalla, Assistant Professor at Assistant Professor, IITTM, Gwalior 141 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 10: PLANNING FOR TOURISM DESTINATIONS -I STRUCTURE 10.0 Learning Objectives 10.1 Introduction 10.2 What is a Destination? 10.3 Elements of Tourism Destinations 10.4 Destination Planning 10.5 Importance of Tourism Destination Planning 10.6 Summary 10.7 Keywords 10.8 Learning Activity 10.9 Unit End Questions 10.10 References 10.0LEARNING OBJECTIVES After studying this unit, you will be able to:  To facilitate the assessment of the tourism potential of a destination  To prepare tourism development plan as well as marketing techniques;  To familiarize with the destination branding practices; and  To introduce advanced analysis and research in the field of destination development. 142 CU IDOL SELF LEARNING MATERIAL (SLM)

10.1INTRODUCTION When we think of tourism, we think primarily of people who are visiting a particular place for sightseeing, visiting friends and relatives, taking a vacation, and having a good time. They may spend their leisure Notes 4 time engaging in various sports, sunbathing, talking, and singing, taking rides, touring, reading, or simply enjoying the environment. If we consider the subject further, we may include in our definition of tourism people who are participating in a convention, a business conference, or some other kind of business or professional activity, as well as those who are taking a study tour under an expert guide or doing some kind of scientific research or study. These visitors use all forms of transportation, from hiking in a wilderness park to flying in a jet to an exciting city. Whether people travel by one of these means or by car, motor-coach, camper, train, taxi, motorbike, or bicycle, they are taking a trip and thus are engaging in tourism. 143 CU IDOL SELF LEARNING MATERIAL (SLM)

This lesson will discuss tourism planning approaches to achieve the goals and objectives of tourism development for a destination. For the purposes of discussion, a tourism destination can mean an entire country, a region, an island, a resort area, or a single project. The tourism plan is generally a formal document to guide both public sector and private sector development activities. Destination planning includes many different forms of planning such as economic development planning, land use planning, infrastructure planning, and social services planning and involves many groups with different perspectives including governments, private investors and developers, and local communities. 10.2 WHAT IS DESTINATION? One of the most frequently used words in tourism is ‘destination’, but it is used very differently by different authors. In the literature ‘destinations’ seem to be described as images, as narratives. ‘Destinations’ seem to be described through their content of attractions, facilities and services. At ‘destinations’ interactions may take place: between the tourists and the businesses, mutually in the tourist industry, and between the single establishment and the tourist organizations and the authorities. Burkart and Medlik’s (1974) defined the destination as ‘the geographical unit visited by a tourist may be a self-containedcentre, a village or a town or a city, a district or a region, an island, a country or a continent. Notes 6 This geographical unit may be described as the tourist destination….The tourist destination, however defined geographically, provides a convenient focus for the examination of the tourist movement and of its manifold impact and significance. How important any geographical unit is as a tourist destination, or how it is potentially, is determined by three prime factors: attractions, accessibility and amenities which may be termed the tourist qualities of a destination. Mill and Morrison (1992) deal with the destination as a part of the tourism system. Their definition says: At a destination there is a mix of interdependent elements. The elements are interdependent, because in order to produce a satisfying vacation experience, all elements must be present. The destination is composed of: Attractions – Facilities – Infrastructure – Transportation – Hospitality. Jensen, Hansen and Metz’ (1993) definition is very close to that we have learned earlier: The definition of a tourist destination is a geographical area, which contains landscape and cultural characteristics and which as in the position to offer a tourism product, which means a broad wave of facilities in transport – accommodation – food and at least one outstanding activity or experience. 144 CU IDOL SELF LEARNING MATERIAL (SLM)

What is Tourism Destination? What is Tourism Destination? A tourism destination is a physical space in which a tourist spends at least one overnight. It includes tourism products such as support services and attractions and tourist resources within one day’s return travel time. It has physical and administrative boundaries defining its management, and images and perceptions defining its market competitiveness. Local destinations incorporate various stakeholders often including a host community and can nest and network to form larger destinations. Destinations could be on any scale, from a whole country (e.g., India), a region (such as South India) or island (Andaman), to a village, town or city, or a self-contained centre (MGM Park, Chennai). 10.3 ELEMENTS OF TOURISM DESTINATIONS Elements of Tourism Destination Tourism destination is constituted by the following six elements. There are briefly discussed in the line of depicted figure. 145 CU IDOL SELF LEARNING MATERIAL (SLM)

Elements of Tourism Destination Attractions Accessibility Image and Character Price Amenities Human Resource Attractions: These are often the focus of visitor attention and may provide the initial motivation for the tourist to visit the destination. These can be categorized as natural (e.g. beaches, mountains, parks, weather), built (e.g. iconic buildings such as the Eiffel tower, heritage monuments, religious buildings, conference and sports facilities), or cultural (e.g. museums, theatres, art galleries, cultural events). They could be in the public realm such as a nature park, cultural or historical sites or could be community attractions and services such as culture, heritage or lifestyle. Other, less tangible factors, such as uniqueness and emotional or experiential triggers are also attracting tourists to destinations. Amenities: These are the wide range of services and facilities which support the visitors’ stay and include basic infrastructure such as utilities, public transport, and roads as well as direct 146 CU IDOL SELF LEARNING MATERIAL (SLM)

services for the visitor, ‘Destination’, includes accommodation, visitor information, recreations facilities, guides, operators and catering and shopping facilities. Accessibility: The destination should be accessible to a large population base via road, air passenger services, and rail or cruise ships. Visitors should also be able to travel with relative ease within the destination. Visa requirements, ports of entry, and specific entry conditions should be considered as part of the accessibility of the destination. Image: A unique character or image is crucial in attracting visitors to the destination. It is not sufficient to have a good range of attractions and amenities if potential visitors are not aware of this. Various means can be used to promote the destinations image (e.g. marketing and branding, travel media, marketing). The image of the destination includes uniqueness, sights, scenes, environmental quality, safety, service levels, and the friendliness of people. Human Resources: Tourism is labour intensive and interaction with local communities is an important aspect of the tourism experience. A well-trained tourism workforce and citizens who are equipped and aware of the benefits and responsibilities associated with tourism growth are indispensable elements of tourism destination delivery and need to be managed in accordance with the destination strategy. Price: Pricing is an important aspect of the destination’s competition with other destinations. Price factors relate to the cost of transport to and from the destination as well as the cost on the ground of accommodation, attractions, and food and tour services. A tourist’s decision may also be based on other economic features such as currency exchange. 10.4 WHAT IS PLANNING? Planning is mental activity, which involves desk work to decide or answer the questions what, how, when, where and who. It is all about setting and meeting objectives and preparing future course of action. Tourism Destination Planning Tourism provides a major economic development opportunity for many countries and a means of improving the livelihoods of its residents. Both the public and private sectors involved in tourism depend on planning to achieve sustainable tourism development that respects the local community, creates appropriate employment, maintains the natural environment, and delivers a quality visitor experience. However, many tourism destinations have pursued development without proper planning and without considering the many impacts such development will bring to the community. The Tourism Planning Process 147 CU IDOL SELF LEARNING MATERIAL (SLM)

Levels of Tourism Planning: Tourism planning is implemented at different levels from the general level which may apply to an entire country or region down to the local level which may apply to detail planning for specific resort. What is important to emphasize is the tourism planning and development must be integrated among all levels to take into account different levels of concern and to avoid duplication of efforts and policies. Each level involves different considerations as follows: International level - Tourism planning at the international level involves more than one country and includes areas such as international transportation services, joint tourism marketing, regional tourism polices and standards, cooperation between sectors of member countries, and other cooperative concerns. National level - Tourism planning at the national level is concerned with national tourism policy, structure planning, transportation networks within the country, major tourism attractions, national level facility and service standards, investment policy, tourism education and training, and marketing of tourism. Regional level – Tourism planning at the regional level generally is done by provinces, states, or prefectures involving regional policy and infrastructure planning, regional access and transportation network, and other related functions at the regional level. Local or community level- Tourism planning at the local level involves sub-regions, cities, towns, villages, resorts, rural areas and some tourist attractions. This level of planning may focus on tourism area plans, land use planning for resorts, and planning for other tourism facilities and attractions. Site planning level - Site planning refers to planning for specific location of buildings and structures, recreational facilities, conservation and landscape areas and other facilities carried out for specific development sites such as tourism resorts and may also involve the design of buildings, structures, landscaping and engineering design based on the site plan. 10.5 IMPORTANCE OF TOURISM DESTINATION PLANNING Tourism planning is primarily economic development planning that is directed towards tourism-related objectives which differ between the public sector and the private sector. In the public sector, most planning is done by different levels of government. Public sector tourism planning includes consideration of economic and social factors, land use policies and 148 CU IDOL SELF LEARNING MATERIAL (SLM)

zoning controls, environmental concerns, infrastructure development, employment concerns, and the provision of public services. Private sector tourism planning is usually concerned with investment objectives involving various aspects of product development, building and design, financial feasibility, marketing, management and operations. Tourism planning is important because it provides a common vision, direction and commitment for tourism which are the result of participation of many representatives. The process of tourism planning includes: ➢➢ Assessing the possible impacts of development and the resource problems which will be faced ➢➢ Analyzing the competitive status of a destination and its ability to respond to changes in the travel market ➢➢ Providing a level of stability and predictability in the progress of the overall development of tourism in a given area. Tourism Master Plan for Destination Many tourism destinations have an overall or general plan that includes all aspects of the tourism development process. This is often referred to as the tourism master plan and sometimes called the comprehensive master plan. A master plan for a destination will vary by project depending on the type of destination being developed, its current level of development, and the theory or style of planning being used. Elements of a master plan usually include economic development, human resources, environmental impacts and social and cultural impacts. Master plans are designed to cover a certain time frame or period such as a five year plan or a ten-year plan. Elements of a Tourism Destination Plan Tourism destination plans generally include the following elements: Tourism Demand Analysis - Demand analysis examines the existing and intended visitor markets for the destination. It involves a market analysis that examines the likely tourist arrivals and characteristics and the travel patterns and trends of the markets. Demand analysis is essential in understanding the competitiveness of the destination with other tourism destinations with similar attractions. 149 CU IDOL SELF LEARNING MATERIAL (SLM)

Tourism Supply Analysis - Supply analysis examines the destination itself including its attractions, accommodations, and facilities. The analysis should include transportation, infrastructure, human resources, and other factors which have a direct or significant impact on the quality of the visitor experience. In the assessment of a new development for a previously undeveloped area, site selection is an important element and the analysis will examine various locations or sites for proposed hotels and commercial buildings. In the case of self-contained resort destinations where planning is for integrated resort development, consideration must be given to a number of factors including: Relationship of the site to tourist attractions  Desirability of climate  Attractiveness of physical environment  Availability of land for development  Access to tourism gateways and regional attractions  Adequate transportation and utilities infrastructure  Attitudes of the resident population to the development  Availability of a local work force and sufficient housing ➢Tourism Impact Analysis - Two of the most important impacts in a tourism plan are the environmental impacts and the social cultural (socio-cultural) impacts of development. While tourism generally is considered environmentally friendly, sustainable tourism development places a high priority on preservation of the environment including land use, water quality, natural scenery, and waste disposal. An important goal of tourism planning should be to protect the natural setting and avoid exploitation of the natural resources. Many analyses include a study of the carrying capacity of a destination which defines the environmental and physical limits and ability of the destination to accommodate a given level of visitors with the least destruction to the natural resources. Social cultural impacts concern the pressures and changes that tourism might bring to the resident population in a particular destination. 150 CU IDOL SELF LEARNING MATERIAL (SLM)