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Domestic Tourism in India (2014–15)

Evidence from NSSO

Ajay Sharma (ajays@iimidr.ac.in) and Karthikeya Naraparaju (karthikeyan@iimidr.ac.in) teach economics at the Indian Institute of Management, Indore.

What is the intensity and level of domestic tourism in rural and urban India? What are the key reasons for households’ domestic tourism trips? What can we understand from domestic tourism patterns in India? Using National Sample Survey Office data on domestic tourism (2014–15), some of these questions are answered.

 

The authors are thankful to S Chandrasekhar and Siddhartha K Rastogi for helpful discussion and feedback on this article.

Domestic tourism is one of the major engines of economic growth and development for many regions and states of India. Not only does it contribute to income generation (6.77% of gross domestic product or GDP) but also is the source of large-scale employment (43.8 million [mn] or 8.2%) in both formal and informal activities (NCAER 2012: 136–37).1 Domestic tourism can also act as one of the channels to reduce interregional inequality through the spending pattern and multiplier effect generated across regions. For example, low income and growth regions can get the spillover effect of high-growth regions through development of domestic tourism. Further, with the growing economy and increasing income and spending of Indians, domestic tourism is considered a booming activity2 with the potential to create large-scale employment opportunities,3 and contribute to regional development.

In this article, we look at domestic tourism using the national-level sample survey on domestic tourism conducted by National Sample Survey Office (NSSO) in 2014–15. Domestic tourism is analysed in terms of number of tourists, number of households undertaking domestic tourism activities, number of trips that contributed to domestic tourism, and average tourism expenditure in India. The main objective of this article is to highlight the spatial nature of domestic tourism from the perspective of households, their main reasons for tourism in rural and urban areas, and their expenditure patterns. Additionally, we also highlight how this survey can be used by academics, researchers, and policymakers to understand not only domestic tourism but also other aspects of regional development through the lens of tourism.

The NSSO survey on domestic tourism conducted in 2014–15 covered 1,39,688 households (79,497 rural and 60,191 urban). In this survey (2014–15), tourism is defined using the concept of trip which can be classified into three types based on the duration, that is, same day, overnight, and more than 180 days. The reference period used for capturing such trips was either last 30 days or 365 days. The purpose of the trip can be holidaying, leisure and recreation, health and medical, shopping (hereafter, this set will be referred to as HLHS) (for 365-day recall period); or business, social, pilgrimage and religious activities, education and training, and others (hereafter, this set will be BSPE) (for 30-day recall period). Two different recall periods are considered based on the nature/reason and likely incidence of that trip. Trips which are more likely to be repeated have a 30-day recall period and for other trips the recall period is 365 days. A trip for these purposes is considered tourism if the person travels beyond usual environment (denoted by the regular and frequently visited geographical region). A same-day trip is defined by duration being less than 12 hours without crossing the midnight between two days. An overnight trip is defined as one where the duration is more than 12 hours and less than 180 days with at least one night spent on the trip, that is, including 12 midnight to 5 am. Lastly, a long duration trip is defined as being 180 days or more but less than 365 days. In these trips, any movement related to employment and migration purpose is ignored. For our analysis, we will focus only on overnight trips with recall periods of 30 days and 365 days for reasons of space and to keep the discussion focused.

Comparability with 2008–09 Data

Though the current survey covered similar indicators of domestic tourism as in the previous round (65th round from July 2008 to June 2009), some changes have been made in the subject coverage and in related concepts and definitions between the two rounds that renders them largely incomparable.4 The key differences are as follows. First, unlike the current round, the definition of overnight stay in the previous round included stay spread across at least two calendar days, wholly or partly. Second, in the 65th round, all the trip details of individuals or households were collected with the reference period of last 30 days, as opposed to the current round which has information for two different reference periods based on the nature of the trip (that is, HLHS versus BSPE). Given these two key departures from the previous round, the NSSO suggests that the results cannot generally be compared.

Nevertheless, we provide a snapshot of distribution of overnight trips in the previous round. In 2008–09, among HLHS-related trips, 67% (76% in rural and 40% in urban areas) were health-related trips; holiday and recreation trips accounted for 29% (rural was 20%; urban was 40%). On the other hand, among the BSPE-related trips, social activity-related trips accounted for 82% (rural was 83%; urban was 78%) followed by religious and pilgrimage trips, which accounted for only 11% (rural was 10%; urban was 14%).

In the latest round, there has not been a perceptible change from 2008–09 in the distribution of overnight trips by leading purpose within HLHS and BSPE categories. In particular, the share of holiday and leisure activity in HLHS has slightly increased to 34% (rural was 23%; urban was 57%). On the other hand the share of health trips has gone down to 65% (rural was 76%; urban was 42%). Among BSPE activities, social trips have increased to 86% (rural was 87%; urban was 83%) and religious and pilgrimage trips have gone down to 8% (rural was 8%; urban was 10%).

Household-level Characteristics

In 2014–15, around 62.3 mn (36.6%) of rural households and 29.8 mn (35.7%) of urban households reported at least one tourism trip in the last 365 days for HLHS activities or in the last 30 days for BSPE activities. A further disaggregation reveals that the proportion of households with at least one trip for HLHS (in last 365 days) is 18.7% and 18.5% for rural and urban areas; while the corresponding numbers for BSPE activities (in the last 30 days) is 21.2% and 19.9% (Table 1). Also there are 7.9 mn (5.7 mn in rural and 2.2 mn in urban areas) households which have taken both types of tourism trips in 2014–15.

 

A closer look at Table 1 reveals that with the increase in usual monthly per capita expenditure (UMPCE), there is an increase in the incidence of tourism among both rural and urban households, irrespective of type of overnight trips (that is, in the last 365 days or 30 days). Also the difference in the proportion of households making trips for HLHS activities is larger between the bottom and top quintiles as compared to trips for BSPE activities. One plausible reason can be that the trips made for HLHS activities are most costly and also have the traits of luxury consumption5 which remains sensitive to level of income (and increases with it); while BSPE-related trips involve lower cost and is not luxury consumption. This argument is supported by the average expenditure per trip incurred by the households on these two types of trips. The average expenditure incurred on trips for HLHS activities is around 10 times higher than BSPE-related trips in rural areas and corresponding number in urban areas is approximately seven times. Also, within a particular type of trip, the level of expenditure between top and bottom quintiles is around twice for both types of trips in rural areas. In urban areas, average expenditure for HLHS (BSPE) activities in top quintile is twice (thrice) that of the bottom quintile.

The survey estimates do not reveal much variation in the incidence of domestic tourism across social groups and religion categories, except that Muslim households in urban areas have a lower level of domestic tourism. In rural areas, the incidence of tourism is higher among households with major source of income from non-agricultural activities, whereas lowest among casual labour and other households. In contrast, in urban areas, household with self-employment and other activities have significantly higher incidence of tourism than wage/salary and casual labour households. Households with members employed in high skilled occupation have higher incidence of domestic trips (both HLHS and BSPE type) being made than households with low-skilled workers. A statewise calculation of proportion of households taking trips for tourism reveals that among the major states, Himachal Pradesh, Jammu and Kashmir, Rajasthan and Odisha top the list whereas Assam, Chhattisgarh and Gujarat remain at the bottom. The share of tourist households is highest in Uttar Pradesh (attributable to the large population), Maharashtra, West Bengal, Tamil Nadu, Bihar and Rajasthan (total account for 50% of tourist households).

Overnight Trip-wise Analysis

For trip-wise analysis, we first focus on more frequent trips for BSPE activities with reference period of last 30 days. In 2014–15, around 58.4 mn (40 mn in rural and 18.4 mn in urban areas) such trips were made in India. Around 86% of these trips were related to social purpose, followed by 8% for religious and pilgrimage reasons. The main destination for these trips was same district (56%) or other districts (34%) of same state. Outside the state visit only accounted for 9% of trips. A statewise distribution reveals Uttar Pradesh, Maharashtra, West Bengal, Andhra Pradesh, Tamil Nadu, and Karnataka account for half of such trips. Given that these are populous states, it is not surprising that they account for a large share of health-related trips. North-eastern states account for only 2.5% of all overnight trips as well as health-related trips. Information on intra-state and interstate trips could give us further insights about the spatial disparities in health infrastructure, but it is beyond the scope of this article.

Coming to less frequent trips, in 2014–15, 56.3 mn trips were made by Indian households for HLHS activities in the last 365 days, of which 37.7 mn originated from rural and 18.6 mn from urban areas. In rural areas, 76% of trips were made for health and medical purposes and 23% for holiday and recreation activities; whereas in urban areas, 57% of trips happened for holiday and recreation, and 42% for health and medical purposes. Shopping activity accounts for 1% of trips in both rural and urban areas.

Coming to the overnight trips for holiday purpose that account for 19.1 mn trips, we observe that half of these originated from Maharashtra, Uttar Pradesh, West Bengal, Tamil Nadu and Odisha. Looking at destination of these trips, we find that two-thirds of these trips were intra-state (24% within district and 42% inter-district) and rest one-third to other states.

Health and Medical Purpose

Of the two main reasons for infrequent overnight tourism trips, health- and medical-related reasons raise some important concerns, especially in rural areas. Total number of trips for health reasons were 36.6 mn (28.7 mn in rural and 7.9 mn in urban areas) in 2014–15. Some key questions that can be raised in this context are: why so many health-related trips? What sort of health concerns forces a person or household to make a trip? What is the destination for such trips? What is the average cost of such trips? Given the lack of space, we briefly try to answer these questions, leaving comprehensive analysis for further studies.

The first two questions cannot be answered directly using this survey, but we can speculate on the possible reasons using available information. There is a relationship between UMPCE quintile and incidence of overnight trips for health reasons in rural areas. One explanation can be that with the increase in expenditure (proxy for income), households are able to afford these health-related expenditure and therefore are making these trips. Another reason can be to seek better health facilities with increased income. In both the cases, it can be the (lack of) availability and quality of health facilities that induce individuals to move for health-related purposes. Another possible reason can be that households get medical expenditure reimbursement and therefore seek the best medical services available. Interestingly, the survey reveals that incidence of reimbursed expenditure (4.5%) is higher in health trips as compared to holiday trips (2.2%). But this does not explain all of it.

To identify the health concerns leading to domestic trip, we look at duration of trip, with the assumption that higher duration indicates severe health problems. In our survey, for both rural and urban areas, average duration of trip for health reasons is two days, which is less than for holiday-related trips, indicating that it seems to be a story of demand–supply mismatch along with spatial quality differences. Further looking at the destination, we find that 92% of total trips for health reasons happen within state boundaries. Around 63% of trips have destination in the same district whereas 29% are inter-district trips within the same state. It indicates towards within district disparities in health facilities and need for their improvement. A statewise distribution indicates that Uttar Pradesh, Maharashtra, West Bengal, Tamil Nadu, Bihar, Kerala and Rajasthan account for around 60% of such trips.

Coming to the expenditure on health-related trips, we find that average expenditure per trip was ₹13,654 in rural and ₹21,437 in urban areas. A quintile-wise distribution reveals that average expenditure per trip monotonically increases with average spending in lowest quintile (0–20) being ₹9,176 (₹13,402) and in highest quintile is ₹18,707 (₹38,406) in rural (urban) areas. This spending on health trips is around five (two) times that of holiday trips in rural (urban) areas. Item-wise analysis shows that in health trips, 80% of expenditure is made on medicines and related items, whereas in holiday trips, transport, food and shopping (around 80%) are the key components.

This detailed information about the health-related trips in this survey can help academics, policymakers as well as local administration to better understand the gap in health delivery facilities; out-of-pocket (OOP) expenditure on health and related activities to understand the burden of such trips on poor and vulnerable households.

Conclusions

From the frequency and average expenditure point of view, health- and medical-related trips dominate the mobility of households, followed by holiday- and recreation-related trips.

Both types of trips are important to understand and explore for distinct reasons. While health-related trips raise concern about health delivery in our country and its impact on households’ OOP expenditure as well as regional disparities in health service availability; holiday trips highlight the positive impact tourism can have on regional economies in terms of employment and livelihood opportunities. Another key difference between health and holiday trips is that major part of expenditure in health trips is directed towards medical and medicine bills whereas holiday trips contribute to local economy through expenditure on food, transport and shopping activities. Further, one-third of holiday trips are interstate trips providing a larger spatial spillover effect. Given this, there is a need for detailed regional analysis of overnight trips for holiday purpose and measuring its impact on formal and informal sides of local economy.

Notes

1 All the numbers correspond to 2009–10.

2 As per the projections by the Ministry of Tourism (Government of India), domestic tourism was projected to grow by 12% as compared to international tourism to India by 4.4%. Further, though there have been fluctuations in foreign tourists arrival, domestic tourism has had a consistent upward-moving trend over the last decade (GoI 2015).

3 “In terms of number of jobs per ₹1 crore of gross output, it is 25 jobs in tourism services against 19 in industry. Within the industry, the tourism goods producing industries have 22 jobs per ₹1 crore of output against 18 for other industrial goods” (NCAER 2012: 117).

4 For a detailed discussion on these issues, refer to GoI (2017: section 1.6, pp 4–5).

5 One exception to this can be health- and medical-related trips. We will discuss this in detail later on.

References

GoI (2015): Indian Tourism Statistics 2015, Ministry of Tourism, Market Research Division, New Delhi.

— (2017): Domestic Tourism in India, Report No 580(72/21.1/1), National Sample Survey Office, New Delhi.

NCAER (2012): Second Tourism Satellite Account for India 2009–10, National Council of Applied Economic Research, study commissioned by Ministry of Tourism, Government of India, New Delhi.

Updated On : 2nd Jan, 2018

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