A study of Indian Tourism Sector and

the impact of other sectors

Group - 1

Members
Name

Student ID

Email ID

Section

Amit Kumar Swain

1301-018

ft13amitkumarswain@imt.ac.in

M V S Srikanth

1301-108

ft13mvsshrikant@imt.ac.in

Sachin Jaiswal

1301-399

ft13sachinjaiswal@imt.ac.in

Saswati Sunayana

1301-196

ft13saswatisunayana@imt.ac.in

Sidheshwar Birajdar

1301-218

ft13sidheshwarbirajdar@imt.ac.in

Sudipta Goswami

1301-420

ft13sudiptagoswami@imt.ac.in

Sulabh Gupta

1301-572

ft13sulabhgupta@imt.ac.in
A

Abstract
Tourism, is not just a leisure activity anymore. Large amount of revenue is generated from this
sector and that adds to the many other potentials of this industry such as employment
generation, improved lifestyle of residents, cross culture communication etc. Tourism in a way,
is related to every other industry, though the connection has not been focussed on in many
research papers. This paper attempts to find a relation between the dependent and independent
variables of tourism industry, handicraft industry, IT industry and hospitality industry. While in
some cases, the hypothesis formed comes out with a clean chit, in some other cases it has
been rejected since the conditions of hypothesis did not come true.

Acknowledgement
As a part of our curriculum, we completed our research on the topic and submitted an account
of our work. During the research, we have utilized the resources of the institute and taken help
from professors, seniors and colleagues. This is an attempt to express our gratitude for all those
acts of cooperation.

Introduction:
Tourism evolved as a sector and created its own space in the market in the last two decades
only. Even though India has always been a place of interest for the visitors, tourism was not one
of the key sectors which were focussed on immediately after independence. In fact, as
acknowledged in National Tourism Policy, 2002, the growth of Indian tourism sector, is
dependent on many other sectors. Also the growth of this sector has direct or indirect impact on
these sectors. (http://www.academia.edu/1855785/TOURISM_IN_INDIA). The campaign
Incredible India gave a new direction to the perception towards tourism. This is evident from
the figures that say tourism and hospitality sector alone accounted for $2468.39 billion in the
period April 2000 - April 2011. Considering the increasing tourist arrival driven by business,
leisure and medical reasons at a compound annual growth rate of 8 percent, the future of this
sector seems a safe bet. Government initiatives to facilitate international air travel with better
connectivity, allow investments from private and foreign sources and develop infrastructure
have added value to the lucrative business models of tourism industry.
(http://www.asa.in/pdfs/surveys-reports/Tourism-in-India.pdf).

Literature Review:
In this section we went through the work of other researchers in the same area. The
methodology used was studied with much care so that we can jot down our thoughts on similar
lines. To start with, Liu and Wall presented a paper on planning tourism employment: a
developing country perspective. This research paper tells us to take a holistic approach for
tourism planning. It says that tourism shouldnt be about planning only for the visitors but
planning for both the visitors and the local residents. So the tourism plans should include
Human Resources development as a major focus area. Also the form of tourism should fit well
with the human resource capabilities of the area else the local people would find it difficult to
participate fully.
Tourism in developed countries a taken as an economic endeavour so it is well planned but it
developing countries it is not taken as a leading economic sector. Also most of the benefits of
the economic proceeds are taken up by the government and the tourism companies rather that
the local residents.
So Liu and Wall proposed a conceptual framework which focuses on using training and
education as tools to facilitate the entry of local residents and job advancements in tourism
sector. Thus tourism should be considered as a social engineering tool to promote
advancement of local residents.
T Asli D.A. Tasci gives us an idea about how much influence different factors have on the image
of a destination as perceived in the minds of tourists. This analysis is based on a large dataset
of Michigan Regional Travel Market Survey. The factors which are considered are based on
both cognitive and affective components. A regression analysis was conducted on all the factors

and finally it was concluded what all factors decide the destination image. The destination image
is considered to be a function of the following selected variables
DI = f (R, G, A, I, S, OTE, V, SS)
Where
DI = Respondents image of the study destination
R = Respondents race
G = Respondents gender
A = Respondents age
I = Respondents total annual household income
S = Respondents state of residence
OTE = Respondents overall travel experience
V = Prior visitation to the study destination
SS = Survey season
Onome Daniel Awaritefes study on Evaluating Tourism Resource Areas in Nigeria for
Development was conducted to find out the distribution of population in 101 identified tourist
destinations in Nigeria. Though there were major tourist attraction places in all the destinations it
was found out the majority of tourism was concentrated in the Lagos and Yankari/Jos/Abuja.
This was because of the easy accessibility and the cultural and natural resources present in
those areas. This study thus establishes the conditions required for destination planning and
marketing approaches required for the other regions.
Moller et al. tried to study the changing travel behaviour of Austrias ageing population and its
impact on tourism. As the average age of population is increasing continuously and this
phenomenon is more visible in the western countries, it is important to consider their
preferences in all the industry. This paper researches on the effect of this aging population on
tourism industry. It tries to find out whether the tourism interest changes according to age. Thus
a research was conducted in Austria with a participant age group of 55+ and their leisure and
travel habits were analysed.
It was found out that they didnt change their travel habits considerably but their preferences
were changed like they now preferred longer stays and travelling off season. Thus it was
concluded that as the travel and leisure behaviour are build up gradually during the life span of
the people they dont get changed completely with age.
Lindroth et al. put attempt to study why creativity was important in the tourism sector also. With
rising creative influence in every sector the tourism sector also needs organisational creativity
along with cultural competence. This is achieved by researching in a town of Porvoo in Finland.
Creative tourism is an extension to normal tourism. It offers visitors with an opportunity to
develop their creative potential by active participation in learning experienceswhich are
characteristic of the holiday destination where they are undertaken (Richards and Raymond,
2000). The needs of the visitors are changing and the completion among destinations are
increasing. It was concluded that the tourism is affected with a wide range of factors like sociophysical environment, logistics, traffic, accessibility marketing, service structure, networking etc.

According to Zehrer and Siller, although motivation is merely one variable explaining travellers
behaviour, it's considered to be one of the most important. Hence, nature-based commercial
enterprise resources as non-market product or destination product have their own economic
value that is often neglected. This paper seeks to look at this issue. This study attempts to
quantify the value and significance of nature and landscape for tourists travel motivation for
vacations. The study was conducted across both the summer and winter seasons. The survey
shows that notably within the summer season Nature/Landscape is that the most significant
theme for summer vacation nowadays and it can be even more in 2020. Therefore, it clearly is
one in all the foremost essential travel motives within the eyes of the consultants. Nature-based
vacation encompasses a robust significance and price for the province, with Nature among the
highest 3 strengths within the Delphi survey.
Travel photos are often symbols reflective inner feelings of the photographers. They additionally
function as records that store travel expertise of the photographers. By content analysing one
hundred forty five travel photos submitted to the New York Times, Pan et al.s paper aims to
explore the relationships among motivations, image dimensions and affective qualities of
places. It was established that image dimension of natural resources like flora and fauna,
wealth of countryside and beaches are often associated with pleasant and arousing
feelings toward a destination. On the other hand, image dimension of culture, history and art is
frequently associated with pleasant quality of an area. These three association rules are
successively frequently coupled to intellectual travel motivation. Photos that induce arousing
and pleasant feelings are typically taken in long shot, at eye-level angle, with stark density
level and with single-person composition.
Sirakaya and Woodside discussed about building-block propositions for making useful theories
of decision making by travellers by a qualitative review of the tourist decision-making literature.
This article describes trends in developing someone destination selection models besides
examining decision-making propositions from the literature, the article covers resolution of
important issues which are needed for creating advances in understanding, describing, and
predicting tourist's decision-making. It tests theories like Advancing consumer decision making
in tourism and tests different consumer decision making theories and critically examines each. It
also examines various travel decision models and states their contributions and limitations.
Croes and Vanegas Sr. put forward their study to examine the econometric estimates so as to
elucidate tourist arrivals to Aruba from the United States, Netherlands and Venezuela. The
study specified a dynamic economics model for modelling short term as well as the long-term
responses. It calculated both linear and log-linear functions, and it applied the BoxCox
statistical procedure to determine the suitable practical form. The inclusion of Venezuela as a
developing country allowed the comparison of the behaviour of tourism demand in
comparatively rich and poor countries. The results showed to how much extent the crosscountry behaviour of demand differs with regard to changes in effective costs and exchange
rates. It was found out that price and exchange rate are considerably more important and
compelling pull conditions for Venezuelan tourists than the American and Dutch tourists. So this
finding reflects the stage of economic development of Venezuela with reference to the other two
countries. For all countries, the foremost result is the importance of the income variable,
followed by the exchange rates and relative prices.This study will assist future formulation of

macroeconomic policies as well as market and pricing strategies in an exceedingly small or

micro-state economy.
Ashworth and Page performed their research on urban tourism that remained a standardized
theme within the expansion of tourism research since the 1980s and several other seminal
papers have reviewed the state of research and its progress towards a bigger recognition. This
Progress in tourism Management review article moves our understanding and knowledge of the
research agendas inside urban tourism by examining the paradoxes associated with such
agendas thereby suggesting to adopt a holistic approach that interconnects with the wider
domain of the social sciences and those of urban studies and the notion of world cities. This
study explains that to study urban tourism you must first embrace its theoretical critiques which
play a significant role in place imagery.
Sirgy et al. tried to find out and examine a theoretical model that links community residents
feelings about tourism impact. These impact may be economic, cultural, social and
environmental. It also tests their satisfaction with particular life domains like community wellbeing, material well-being, health and safety well-being, emotional well-being and overall life
satisfaction. The model also suggests that the strength of these relationships is moderated by
the relative success of tourism development in the community. This model was tested using a
survey of 321 respondents from various communities having different level of tourism
development. The results showed that how the factors considered were all supportive of the
overall model.
Hjalager reviews the various research on the topic of innovation of tourism. The different
categories of innovation are addressed. These include innovation in product, marketing,
managerial, process and institutional. Various other innovations like entrepreneurship, existence
of territorial industry clusters and technology push are also acknowledged. Knowledge is
identified as a key factor for both the occurrence and also the nature of innovations. This study
shows that there is still very limited systematic and empirical evidence about the level of
innovative activities and their influence on the destination and national economies. Therefore it
has been concluded that there should be more quantifiable and qualitative study about the
implications of innovation in tourism.
Qu et al conducted a study on the fact that there were many research establishing the
significance of destination branding in the field of tourism there was no conceptual development
about this fact. Thus this study aims to develop a theoretical model for destination branding and
test it. This study shows that a unique image as a relatively new component of destination brand
associations. The brand associations include the affective, cognitive and unique image
components. It was proposed that the image of any destination is a mediator between its brand
associations and the tourists future plans like their intentions to revisit and recommend. The
results showed that image is influenced mainly by three types of brand
Associations. It was also showed that Image is a critical mediator between brand associations
and tourists future behaviours. And it was fund out that unique image had the second highest
influence on the overall image formation followed by the cognitive evaluations.
The last paper by Thomas et al. was about understanding small firms in tourism observed that
the small firms in tourism have been making impact on the agendas of the policy makers for
quite a while now, but still the academic interest over this issue has not been consistent. This
paper tries to show impact of small firms by reviewing disciplinary studies which have impacted

the present understanding of small firms. It also shows how this knowledge leads to wider
tourism understanding. It was established that there were not sufficient evidence to establish
that the small firms impact tourism in a positive or negative way. Thus this area should be more
researched.

Objective of our study:

The objective of this study remains to study various factors affecting tourist footfall and revenue
generation of Indian tourism sector. We intend to come up with a model function that can
establish relationship between independent and dependent factors of tourism sector and some
other sectors such as IT sector, hospitality sector and handicraft industry. We chose four
different areas that touch the lives of Indians from a diverse range of age group, income range
and job profile.

Scope of study:
Our study focuses on tourism sector and its importance for the overall growth of Indian economy
and how it affects other industries. Previously there have been studies on demand function
models with the help of which we can determine the effect of independent factors such as
income, price, transportation cost, foreign exchange rate etc. As mentioned in the literature
survey we have gone through research papers on the econometric study in other countries.
These models helps optimizing the revenue of tourism industry with the help of the independent
factors. However, according to our best knowledge, this interdependence of sectors has not
been studied properly and we see some scope of research here.
We put forward a hypothesis that there are independent factors in other sectors which have
direct or indirect impact on tourism. In this report we have tried to determine the effect of these
independent factors on the growth of tourism industry in terms of revenue generated and tourist
arrival. The results can be used to justify an attempt to tap the yet unexplored areas of this
sector.

Hypothesis formulation:
The hypothesis of this research makes a claim that change in number of tourist footfall can be
expected with change in percentage penetration of IT industry and number of approved hotels in
India. So if we define the actual number of tourist footfall and the expected number of
footfall , where = a+ b , the form of hypothesis can be given as
:
:

Methodology:

Starting with handicraft sector, we studied a survey given by ministry of tourism and culture on
the expense of foreign tourists on handicrafts. 58 percent of tourists were male, age of 70
percent of the tourists was in the range of 25 to 44 years, about 36 percent tourists were
business executives, 10 percent were students and 27 percent were from service industry. Also
43 percent of the tourists come in the more than average income category and 32 percent in
average income category thus making a perfect bias free sample space. The expenditure
pattern of the tourists was studied. The total and per capita expenditure on handicrafts were
estimated separately. The handicraft items were grouped under 12 major heads. The impact of
various factors such as age group, income range, city of stay and number of days of stay was
studied separately.
Coming to IT sector, we observed that various issues tourists used to face are being addressed
by latest innovations in information technology. With the increase in number of internet users
the number of tourist arrival in India also shows a positive trend. We analysed the data available
and came up with a hypothesis that the percentage penetration of internet can be described as
an independent factor affecting the growth of tourism industry.
Finally, we took hospitality industry into consideration. We studied the trend of foreign tourist
arrival in India, the occupancy rate of hotels by foreign and domestic tourists and tried to find a
connection between the number of approved hotels in India and tourist footfall, number of
approved hotels being the independent variable.

Data Collection:
Number of Foreign Tourist Visits in India
(1997 to 2012)
(In Million)
No. of Foreign

Percentage

Tourist Visits

(%) Change
over the

Year

Previous Year

1997

5.5

9.3

1998

5.54

0.7

1999

5.83

5.3

2000

5.89

1.1

2001

5.44

-7.8

2002

5.16

-5.1

2003

6.71

30.1

2004

8.36

24.6

2005

9.95

19

2006

11.75

18.1

2007

13.26

12.8

2008

14.38

8.5

2009
2010
2011
2012

5.17
5.78
63.09#
66.48#

-2.2
11.8
9.2
5.4

Note: #: In Lakh.
Source: Ministry of Tourism, Govt. of India.

Number of foreign tourist visits

16
14
12
10
8
6
4
2
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

From the above graph, it can be seen that the number of foreign tourist visits to India remained
almost constant during the period of 1997 to 2001. The number of foreign tourist visits started to
grow consistently from 2002 onward till 2008 after which there was a sharp dip in the number of
foreign tourist arrivals to India. This dip could be justified by the onset of recession period in
2009.
Foreign Exchange Earnings from Tourism in India
(1991 to 2012)
Rs. in

In US$

Year

Crore

Change

Million

Change

1991

43180

1861

1992

59510

37.8

2126

14.2

1993

66110

11.1

2124

-0.1

1994

71290

7.8

2272

1995

84300

18.2

2583

13.7

1996

10046

19.2

2832

9.6

1997

10511

4.6

2889

1998

12150

15.6

2948

1999

12951

6.6

3009

2.1

2000

15626

20.7

3460

15

2001

15083

-3.5

3198

-7.6

2002

15064

-0.1

3103

-3

2003

20729

37.6

4463

43.8

2004

27944

34.8

6170

38.2

2005

33123

18.5

7493

21.4

2006

39025

17.8

8634

15.2

2007

44360

13.7

10729

24.3

2008$

50730

14.4

11747

9.5

2009$

54960

8.3

11394

-3

2010

64889

18.1

14193

24.6

2011

77591

19.6

16564

16.7

2012

94487

21.8

17.74^

7.1

Note: $: Advance Estimates.

^: In US$ Billion.
Source: Ministry of Tourism Govt. of India.

Rs. in Crore
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0

Rs. in Crore

From the above graph it can be seen that the foreign exchange earnings from tourism in India
has grown substantially over the years. As we have seen above that over the years the foreign
tourist visits have grown substantially and hence has grown the foreign exchange earnings from
tourism in India.
For handcraft industry, data was collected taking all the diversified factors that can affect
tourism revenue into consideration which included profile of tourists such as gender, age,
profession, income group and country of origin, number of days of stay in India, currency used
and city of departure into consideration. The expenditure pattern of the tourists was studied
taking daily per capita expenditure and total expenditure into account separately.
Percentage penetration of IT industry was studied year wise. Also, we focussed our attention on
online travel agencies. The trend of share of tourism sector B2C e commerce space was
observed. We also tried to find give a picture of the distribution of online travel sales in India
across bus travel, air travel, railways, hotel booking and hotel deals.
Data for hospitality was taken from indiastats.com. We concentrated on number of hotels in
India and the bookings. Information regarding average number of days of stay, share of
domestic tourists and foreign tourists and distribution across 5 star, 4 star, 3 star, 2 star, 1 star
and heritage hotels were also collected.

Data analysis:
For the analysis of data related to hospitality sector, we studied two parameters such as the
number of approved hotels in India and the percentage share of foreign tourists in the hotel
bookings. The data was taken for the period 2002-08.

Regression Statistics
Multiple R

0.343570657

R Square

0.118040796

Adjusted R Square

-0.058351045

Standard Error

263.2293459

Observations

Coefficients

Standard
Error

t Stat

Pvalue

Lower Upper Lower Upper

95%
95%
95.0
95.0
%
%

Intercept

1855.03338

328.581479
4

5.6455
81

0.002
42

1010.
388

2699.
679

1010.
388

2699.
679

X Variable

-25.77596181 31.5092496
4

0.8180
4

0.450
542

106.7
73

55.22
114

106.7
73

55.22
114

The simple linear regression analysis with number of approved hotels as input parameter (x)
and tourist footfall as the input parameter (y) year wise gave the t stat value 5.64 and R square
value 0.118. As the t stat value exceeds critical t value 2.306 with 8 df, our null hypothesis
doesnt get rejected. Some unknown but non-zero value of b exists and there definitely lies

some correlation between the independent and dependent parameter. Also, from the R square
value it can be inferred that 11.8 percent of tourist footfall can be explained by number of
approved hotels in India.

Regression Statistics
Multiple R

0.494305353

R Square

0.244337782

Adjusted R Square

0.093205338

Standard Error

2.476131526

Observations

Coefficients

Standard
Error

t Stat Pvalue

Lower
95%

Upper
95%

Lower
95.0%

Upper
95.0%

Intercept

20.240

3.090882

6.54
8

0.001
244

12.29
478

28.18
551

12.29
478

28.1855
107

X Variable

0.376

0.296399

1.27
15

0.259
485

0.385
05

1.138
791

0.385
05

1.13879
122

Similar results were delivered when percentage share of hotel booking was taken as input
parameter (x) rest all conditions remaining the same. The t stat value and R square value were
found to be 0.244 and 6.548 respectively. Again it can be interpreted that since the t value
exceeds 2.306, we can assume safely that our hypothesis holds true and doesnt get rejected.
Also, it can be said that 24.4 percent of tourist footfall can be explained by the percentage share
of foreign tourists. This can be attributed to the initiatives being taken to improve the experience
of foreign tourists by Government and other institutions in India.
Regression Statistics
Multiple R

0.767723888

R Square

0.589399969

Adjusted R Square

0.486749961

Standard Error

0.786643797

Observations

Coefficients

Standa t Stat
rd
Error

Pvalue

Lower
95%

Upper
95%

Lower
95.0%

Upper
95.0%

Intercept

0.64819403

1.1056
45

0.5862
59

0.5891
89

2.4215
7

3.7179
56

2.4215
7

3.7179
56

X Variable 1

0.275608549

0.1150
18

2.3962
14

0.0746
62

0.0437
3

0.5949
51

0.0437
3

0.5949
51

However, as we observed the regression analysis of tourism industry taking percentage

penetration of internet in the country as input variable (x) and tourist footfall as input variable (y)
the t stats value observed is 0.586 i.e. less than 2.306. Hence the hypothesis doesnt hold true
here. One of the probable explanation for this could be that the internet penetration in our
country in that period was perhaps had more to do with social networking, online shopping and
other areas instead. (Indolia and Chauhan, 2012)
To dig deeper into this, we also collected information regarding the share of online travel sales
in B2C ecommerce space. The share changed from 78 percent in 2009, 78 percent in 2010, 76
percent in 2011, and 73 percent in 2012 to 71 percent in 2013. However, to study such recent
information required many other recent information that was found to be beyond the scope of
this project.
For handicraft industry, we set out null hypothesis (H0) that the amount spend by different
groups of people according to Age, Sex , Profession, Income are equal.
And our Alternative hypothesis (H1) is that these are unequal.
From this analysis it was established that the main factors which differentiate the spending
patterns are Age, Income and Profession. While grouping in terms of sex didnt have any
significant difference in the amount spent on handicrafts for the foreign tourists.
The data have been analysed using Microsoft excel. The main facts have been attached in this
document below.

Though we have tested our hypothesis there might be some errors as the data was taken in
2001-02 but still it was a large scale survey containing 12250 participants and thus we assume
that it will be comprehensible for our analysis.

Analysis of Tourism expenditure variance according to sex.

SUMMARY
Groups

Count

Male

10

Female

10

Sum

7145

5105

Average

Variance

714.5

403856.94444444
4

510.5

197824.72222222
2

ANOVA
Source of
Variation SS

df

MS

Between
Groups
208080

208080

0.69166142672 0.41649687373 4.41387341917

3434
2558
057

Within
Groups

5415135

18

300840.8
33333333

Total

5623215

19

P-value

F crit

Thus by performing a single factor Anova over the distribution of tourists according their sex and
their spending on handicrafts we find that the amount spent by different groups of people
according to sex are not significantly different as the calculated F with 95% confidence interval
is lesser that the F critical value. Also the P value is greater that our threshold level of 0.05.

So the spending patterns of tourists grouped in terms of sex are not different.

Analysis of Tourism expenditure variance according to Profession.

SUMMARY
Groups

Count Sum

Average

Variance

Service

10

1136

113.6

10946.7111111111

Business

10

4118

411.8

126439.733333333

Industry

10

4720

472

177662.222222222

Agriculture

10

1724

172.4

27821.1555555556

Students

10

432

43.2

2090.17777777778

Others

10

124

12.4

118.488888888889

ANOVA
Source
Variation
Between
Groups

of
SS

df

MS

P-value

F crit

1867424.3333
3333
5

373484.8 6.49391159 0.0000855361 2.3860698615

66666667 447654
41734
7422

Within
Groups

3105706.4

57513.08
14814815

Total

4973130.7333
3333
59

54

Thus by performing a single factor Anova over the distribution of tourists according their
professions and their spending on handicrafts we find that the amount spent by different groups
of people according to professions are different as the calculated F with 95% confidence interval
is much larger and the F critical value. Also the P value is less that our threshold level of 0.05.
So the spending patterns of tourists grouped in terms of their profession are significantly
different.
Analysis of Tourism expenditure variance according to Age.
SUMMARY
Groups

<25

25-34

35-44

45-54

55-64

65 & above

Count

10

10

10

10

10

10

Sum

1137

4115

4721

1722

432

123

Average

Variance

113.7

12875.566666666
7

411.5

130372.27777777
8

472.1

196605.21111111
1

172.2

22892.622222222
2

43.2

1242.8444444444
4

12.3

91.566666666666
7

ANOVA
Source
Variation

of
SS

df

MS

P-value

F crit

1867045.533333
33
5

6.15374
373409.106 1191498 0.0001396540 2.3860698615
666666
51
45435
7422

Within
Groups

3276720.8

60680.0148
148148

Total

5143766.333333
33
59

Between
Groups

54

Between
Groups

1741277.666666
66
9

2.84314
193475.296 3875712 0.0087659804 2.0733511634
296296
58
0622
7462

Within
Groups

3402488.666666
67
50

68049.7733
333333

Total

5143766.333333
33
59

Thus by performing a single factor Anova over the distribution of tourists according to their age
and their spending on handicrafts we find that the amount spent by different groups of people
according to age are different as the calculated F with 95% confidence interval is much larger
and the F critical value. Also the P value is less that our threshold level of 0.05. So the spending
patterns of tourists grouped in terms of their profession are significantly different.

Analysis of Tourism expenditure variance according to Income.

SUMMARY
Groups

Count

Below Average

10

Average
More
Average

Sum

1137

10

4113

Average

Variance

113.7

8792.6777777777
8

411.3

169592.23333333
3

472

186750.66666666
7

than
10

4720

High

10

1721

172.1

21704.766666666
7

Very High

10

431

43.1

1248.1

ANOVA
Source
Variation
Between
Groups

of
SS

df

1424696.
32
4

Within Groups 3492796 45

Total

MS

P-value

F crit

356174 4.5888261438 0.00341434431 2.57873918431

.08
687
2874
156
77617.
688888
8889

4917492.
32
49

Thus by performing a single factor Anova over the distribution of tourists according their income
level and their spending on handicrafts we find that the amount spent by different groups of
people according to income are different as the calculated F with 95% confidence interval is

much larger and the F critical value. Also the P value is less that our threshold level of 0.05.So
the spending patterns of tourists grouped in terms of their profession are significantly different.
We also tried to find out the cumulative effect of three variables such as fraction of foreign
tourists in the total number of hotel bookings in India, number of hotel rooms and penetration of
IT in percentage on tourist footfall. The result we obtained in multiple regression analysis is
given below.
Regression Statistics
Multiple R
0.935184
R Square
0.874569
Adjusted R
Square
0.686423
Standard Error
1712767
Observations
6

Coefficients
Intercept
X Variable
1
X Variable
2
X Variable
3

11053274

Standard
Error

t Stat

P-value

9594925 1.151992 0.368436

112.3738 103.4206

1.08657 0.390742

0.269719 0.082195 3.281436 0.081656

-554285 274130.4

-2.02197 0.180546

Lower 95%

Upper
95%

Lower
95.0%

Upper 95.0%
30230357.11 52336906
-3E+07 52336905.85
332.6092231 557.3567 332.609 557.356745
0.083939258 0.623377 0.08394 0.623376561
1733772.606 625203.1 1733773 625203.0572

Compiling the results, the equation obtained from regression analysis is as follows,
Where
refers to number of approved hotel rooms in India,
refers to percentage of IT
penetration in India and
refers to percentage of foreign tourists in hotels.
With an adjusted R square value of 0.686423, it can be safely inferred that there exist some
effects of the above mentioned three factors on the total tourist footfall.

Findings:
From the analysis performed, we gathered that hospitality industry has a positive impact on
tourism sector. The total number of hotels and the quality of service do matter to attract more
number of tourist to Indian tourist destinations. The penetration of IT however does not follow
the pattern for which we tried to come up with some probable explanation.
The handicrafts industry in India is one of the major sectors in India which provides direct and
indirect employment to about 76 lakh persons as per data from Export Promotion Council for
Handicrafts (EPCH) in 2001-02 shows. It valued the total export of handicrafts from India in
2001-02 as Rs. 6769.5 crores. Moreover this sector is of keen interest as it requires relatively
low capital investment and draws a steady source of foreign exchange.

Thus a survey was done by the National Productivity Council (NPC) to find out how much the
foreign tourists spend in India and the main products purchased by the tourists. From this
survey it was found out that the total expenditure on handicrafts by all the foreign tourists has
been pegged at Rs. 2985.154 crores in 2001. This roughly calculates to about 44% of the total
estimated export value of handicraft items in India in 2001-02 comparing data of EPCH.
According to Tourist Statistics provided by Department of Tourism in 2001, India had earned
foreign exchange of Rs. 14344 crores from the tourism sector alone. Thus the foreign tourists
expenditures on handicrafts in India formed about 21% of their total spending in India.
Thus it can be understood from the data of Export promotion Council of Handicrafts that the
foreign tourism sector is highly influences the handicrafts industry of India.

Managerial Implications:
There are many factors that motivate tourism in India like the nature and landscapes, the
adventurous Himalayas, deserts in Rajasthan, beaches of Goa, lush green forests in Odisha
and Kerala. There are also factors like rich cultural heritage also attracts the tourists. The variety
in language, climate, traditions and religion has continually been a matter of curiosity for the
tourists. Also Indias handloom and handicraft products have been major attraction. Therefore
the foreign tourists generally purchase generously.
And if special attention is given to improving the condition of the tourist attraction points and
accessibility of these spots, it can work wonders to increase the revenue of tourism industry.

Conclusion:
Hereby we conclude our report stating that hospitality sector and handicraft sector have at least
some impact on the growth of Indian tourism sector. This is a sector that not only puts a brand
image of our country on the world map, but also generates revenue and creates employment. If
well taken care of, this has the potential to give a big push to Indian economy. Though the
impact of IT sector was not that evident in this report, the future of tourism industry sure will
benefit the IT industry and vice versa. Government initiatives, campaigns such as incredible
India bring in a lot of publicity to the tourist places, which in turn works for the maintenance of
the spot as well.

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http://www.academia.edu/1855785/TOURISM_IN_INDIA
http://www.asa.in/pdfs/surveys-reports/Tourism-in-India.pdf
http://tourism.gov.in/writereaddata/Uploaded/Guideline/020920110558156.pdf
dkc.engo.in/files/.../ICT-and-Tourism-Challenges-and-Opportunities.pdf
http://www.saarj.com/images/download/ACAD,OCT.2011%20COMPLETE%20%
20PDF/ACADEMICIA%20%20MAY%202012,%20PAPERS%20PDF/ACADEMIC
IA%20MAY%202012,%20PAPERS,%20PDF/5.15,%20Umakant%20Indolia.pdf
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