Development of Water Sports Facilities Tourism Government of Gujarat
Contents Project Concept 3 Growth Drivers 4 Market Potential 5 Gujarat Competitive Advantage 6 Project Information 10 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Key Players/ Machinery Suppliers - Potential Collaboration Opportunities - Key Considerations Project Financials 16 Approvals & Incentives 18 Key Department Contacts 20 Page 2
Project Concept Water Sports Activities Overview Water sports include all adventure sports or sporting activities that involve water such as skiing, motor rides, water scooters and speedboats. These rides are attaining popularity in India. Some popular water sports activities are discussed below: 1 Speed boating Speed boating is the recreational activity of operating or traveling in a motorboat, speedboat, or powerboat, which is a boat powered by an engine. 2 Water Scooter Water scooter is a recreational watercraft of two categories. The first is a sit down, where the rider drives the watercraft mainly sitting down and typically holds two people. The second is a stand up, where the rider uses the watercraft standing up. 3 Parasailing Parasailing is a recreational activity in which a person is towed behind a boat with specially designed parachute known as parasail. The boat then drives off, carrying the parascender into the air. The parascender has no control over the parachute. 4 Banana Boat Ride Banana boat is an unpowered, inflatable recreational boat meant for towing. Different models usually accommodate three to ten riders sitting on a larger, main tube and resting their feet on two laterally flanking tubes which stabilize the boat. The main tube is often yellow and banana-shaped. 5 Snorkelling Snorkelling is the practice of swimming at the surface of a body of water while equipped with a diving mask, a shaped tube called a snorkel and usually swim fins. 6 Scuba Diving Scuba diving is a mode of underwater diving in which a scuba diver uses a selfcontained underwater breathing apparatus (scuba) to breathe underwater. Page 3
Growth Drivers Potential Market Size Water sports primarily caters to the needs of adventure tourists, as well as other adventure enthusiasts. The target market for this facility are the domestic and foreign adventure tourists and the youth population. The local/weekend tourists can also generate substantial demand. Global India 5 Adventure sports market (in INR billion) 5,340 The global adventure sports market is estimated at nearly INR5,340 billion (US$89 billion), while the Indian market is estimated to be around INR5 billion (US$83 million). There is a significant potential to drive growth and cater to the growing demand for adventure sports in India. Growth Drivers Demographic dividend 66% of the population in India is below 35 years, with the median age of 27 years driving consumption. Adventure sports are a huge attraction among the age group of 15-34 years. 0-14 years, 31% >34 years, 34% 15-34 years, 35% Greater urbanisation By 2020, 35% of the population will reside in urban centres, with nuclear households. Higher incomes would drive growth of adventure sports. The proportion of the working-age population is expected to rise to 46% by 2020, raising the amount of income per household. Rising per capita income Policy support Improved infrastructure India s per capita income at the current market price is estimated to increase at a CAGR of 15% to INR190,000 in 2014-2020E. Moreover, share of discretionary spend is expected to increase from 59% in 10 to 67% in 20. Within discretionary spend, the share of leisure is expected to increase at a CAGR of 6.4%. Campaigns such as Khushboo Gujarat Ki, Incredible India, Athithi Devo Bhava were launched to harness the tourism industry s potential. FDI under the automatic route in tourism and hospitality is allowed up to 100%, subject to applicable regulations and laws. Tourism and hospitality had a cumulative FDI inflows of US$8.45 billion in 15. The GoI has made concerted efforts to improve and upgrade infrastructure facilities at important tourist destinations, thereby, improving accessibility. The 16 Union Budget allocated INR14.8 billion toward infrastructure development for destination and circuits, domestic / overseas promotion and publicity, etc. Page 4
Market Potential Demand Supply 1 Growing popularity of adventure sports Adventure tourism is one of the most popular segments of tourism industry. It includes a wide range of adventure sports activities. India s adventure tourism industry nearly doubled in size between 2009-2014, driven by a key shift in interest towards adventure sports, primarily from domestic tourists who are looking beyond usual holidays for new experiences. The demand for adventure sports by Indian tourists increased 400% between 2008-2013, indicating a strong domestic market for adventure sports, including water sports. Out of nearly 2 million adventure tourists, international tourists contribute up to 10% or 0.2 million, while the rest 1.8 million are domestic tourists. According to an analysis by industry chamber, PHDCII, adventure tourism is growing at 20% YoY, and is expected to emerge as one of the biggest foreign exchange earners surpassing US$27 billion market size by 2018, provided that key policy initiatives are undertaken by state governments. 2 Increasing monetization opportunities Opportunities to monetize water sports activities are now better than ever. With internet users in India set to grow to 500 million by the end of 2016, the online space and social media is becoming a key source to promote and monetize water sports. Gujarat has a youth population (15-24 years) of around 12 million. This youth population provides a significantly large target market for water sports in Gujarat. Promotions and monetization methods may include offering water sports as weekend getaway packages, partnering with online travel and coupon portals to offer deals on water sport activities, striking corporate tie-ups, as well as partnering with foreign tourism boards. 3 Rise in water sports training institutes India is seeing a rise in water sports training institutes across states. Most recently, two new water sports institutes are being established. In December 2015, Haryana Govt. announced the establishment of Adventure Sports Academy that would be set up on 5 acres of land at Morni in Panchkula district, and will offer adventure sports training, including aero sports, ground sports, and water sports. In January 2016, Gujarat Govt. started the Water Sports Academy at Narmada Park to impart water sports training on sailing, water skiing and wind surfing, knee boarding, wake boarding, fly boarding, jet ski and speed boat. Page 5
Gujarat - Competitive Advantage Mapping Gujarat Tourism Archeological and Heritage Tourism Variety of historical forts, palaces, dargahs, temples Cultural Tourism Handicrafts such as bandhani, patolas, kutchi Fairs and festivals like navratri, makarsankranti Business Tourism High presence of Indian and global companies Adventure Tourism 18 SEZs operational Longest shoreline of 1,600 km - beaches, forests, hills, Science City, theme parks, Gujarat zoos, lakes Proactive Government and aggressive marketing Untapped tourism opportunity Strategic location Unique blend of pilgrimage, adventure, hill station, beaches, Wild Life Tourism heritage and desert Rarest and large number Religious Tourism Home to multitude devotional centres and temples like Dwarka, Dakor, Ambaji, Somnath of flora and fauna Four national parks and 21 sanctuaries Key Initiatives to Promote Gujarat Tourism by the Government The Gujarat government granted industry status to tourism and unveiled a new tourism policy in 2015, providing incentives to boost the sector. Investment in Gujarat s tourism sector is expected to grow five-fold from INR54 billion (US$0.8 billion) to INR269 billion (US$4 billion) during 2014 2025. Eight tourism hubs have been created for the convenience of tourists visiting Gujarat. These are in Ahmedabad metro, Ahmedabad (north Gujarat); Surat (south Gujarat), Vadodara (central Gujarat), Rajkot, Junagadh and Jamnagar (Saurashtra) and Bhuj (Kutch). Gujarat Infrastructure Development Board has prepared concession agreement model under PPP for the development of tourism sector projects in Gujarat The state government has implemented Panchavati Yojana, with the objective of providing facilities for recreation in villages and encouraging environment friendly activities to develop natural sites with tourism potential. Emerging areas in Gujarat s tourism industry are spiritual tourism, heritage tourism, cultural tourism, event based tourism, water and adventure sports, nature tourism, cruises, theme parks, convention centres for meetings and conferences. Page 6
Gujarat - Competitive Advantage Gujarat stands at an excellent business opportunity for domestic and international tourists Domestic Tourists (in lakhs) International Tourists (in lakhs) CAGR: 14.1% 1,233 CAGR: 13.2% 22 194 376 637 4 7 12 11 16 20E 25E 11 16 20E 25E Source: Tourist Flow Information System- Annual Report 2015-16 The total flow of tourist is expected to record an increase over the years This is attributed to the growing prominence of the state as a major business hub. Total contribution to GDP Total Investment (USD billion) Employment (in million) CAGR: 5.76% 5.0% CAGR: 11.0% 4.00 CAGR: 15.63% 3.00 2.7% 0.81 0.95 2014 2025P 2014 2025P Source: Tourism Policy for state of Gujarat(2015-20) 2014 2025P Tourism in India accounts for 7.5% of the GDP and is the third largest foreign exchange earner for the country. Gujarat is expected to contribute 5% to the total GDP by 2025. The business is expanding both in terms of turnover and boundaries and therefore contributions total investments by Gujarat are expected to increase. Today worldwide, one in eleven jobs may be ascribed to the tourism industry. Gujarat is expected to generate 3 million jobs by 2025. Page 7
Gujarat - Competitive Advantage Initiatives Gujarat Tourism Policy 2015-2020 Grant of Industry status to Tourism sector First state to have accorded Industry status to Tourism sector. Development ofwayside amenities PPP in Tourism Planning to develop wayside amenities at an interval of about 75 kms. on selected major arterial roads to be progressively extended to other major trunk roads. The implementation of PPP projects in coordination with GIDB and as per the Government Resolution dated 2 nd March 2015 for tourism projects, which would be applicable to both Greenfield and Brownfield projects. Promotion of Make in India and Digital India Special incentives for adopting ICT and emphasis on promoting ICT-enabled technologies through mobile applications, social networking, big data analytics, blogs and virtual tourism. Participation in GoI schemes Emphasis on active participation in GoI schemes like Swadesh Darshan, PRASAD, HRIDAY, AMRUT, LRGP and other schemes. Active collaboration with the Central Government Tourism development needs multi-departmental coordination. The State Government plans to actively collaborate with MoT, MoUD, MoC, MoEF, ASI and other GoI Ministries / Organizations. Excellence awards Annual Tourism Awards would be instituted for recognition of excellence in tourism products and services as well as for contribution to the growth of tourism in the State. Tourist Police Institution of Tourist Police to suitably assist, facilitate and guide the Tourists as also to safeguard their interests. Page 8
Gujarat - Competitive Advantage Water Sports Destinations in Gujarat Gujarat is geographically well-located for water sport activities with a long coastline (1660 kilometres) and a multitude of beaches. The state offers a wide range of beautiful beaches and offers good potential for water sports. These beaches are the finest in India and attract a huge number of tourists every year. The pristine waters, soft sands and rich flora and fauna are their main attractions. Gujarat Tourism is actively looking to develop water sports activities in the state for the tourists, on the lines of those offered in Goa. Popular beaches in Gujarat Page 9
Project Information Development of Water Sports Facilities in Gujarat Project brief The Government of Gujarat is seeking investments to develop water sports facilities at select beaches in Gujarat, Water Sports activities like parasailing, yachting, motor boating and water skiing should be suitably developed in collaboration with national and international operators. Water Sports activities will be duly supported for ancillary infrastructure development and marketing support by the Government. Infrastructure works like development of pathway, illumination, renovation of fishery jetty, tourist reception centre, food court and cafeteria, change room with cloak room, parking, landscape, beach furniture and site development have been proposed for development of the project. Project size Support crowd capacity of around 300 500 people/day. Target market The target market for the Water sports activities are the domestic and foreign tourist. The major subsections are foreigners, NRG/NRI, upper class domestic tourists and week end tourists from nearby areas. Due to large number of local/weekend tourist, this demand is generally found to be high during weekends, festivals and public holidays. Potential Destinations Kutch Mandvi Dwarka Shivrajpur Surat Dandi Valsad Valsad Tithal Umbergaon Tourist flow* Page 10
Project Information Potential Destinations Mandvi beach Mandvi beach is located about 288 kms away from the city of Ahmedabad, close to the Gulf of Kutch s northern coast. Considered to be one of the beautiful beaches in Gujarat, this beach offers a perfect place for enjoying swimming and a leisurely beach walk. Destination-wise Tourist flow Historical and projections (in 000s) 64.2 99.7 136.9 211.1 362.7 2009 2012 2016 2020E 2025E Shivrajpur beach Located at a distance of nearly 10 km from Dwarka, Shivrajpur Beach makes an ideal holiday destination for travellers with its picturesque view, blue water and fine white sands. 847 1,436 2009 2012 2,267 2016 3,978 2020E 8,034 2025E Dandi beach Located very close to the Dandi village is the beautiful Dandi beach. It is a huge beach and is known for its historic significance. The historic Salt March was led by Mahatma Gandhi in the year 1930 at this place. The natural beauty of the place attracts huge amount of tourists. 681 2009 1,411 2012 2,166 2016 4,197 2020E 9,593 2025E Tithal beach Located in Valsad, Tithal Beach attracts local and international tourists. Unlike the other white or golden beaches of Gujarat, black sand is the main attraction point of this beach. Apart from making a perfect weekend gateway for travellers, this place is also home to two famous temples. 61.7 92.1 106.8 146.1 216.2 2009 2012 2016 2020E 2025E Umbergaon beach Page 11 Umbergaon is a village located in the Valsad district of Gujarat state near to the border of Maharashtra state. The serene beach attracts many tourists from both Maharashtra and Gujarat for its calmness and peacefulness. 206 259 668 2009 2012 2016 * For Shivrajpur, Dandi and Umbergaon, nearest major tourist destination s tourist flow is being provided. 1,309 2020E 3,034 2025E
Project Information Basic Safety and Monitoring Requirements for Water Sports The development of the project facilities shall be in accordance with safety and standards for rides 2003-04 formulated by Indian Association of Amusement Parks and Industries (IAAPI) along with BIS (Indian Standards). The applicable standards are IS 15475 Amusement Parks Rides Safety Standards. For internationally manufactured equipment, TUV certification must be followed. On the operational front, Developer is required to obtain ISO 9001 (Quality) and OHSAS 18001 (Safety) certification to ensure the quality and safety of daily operations of the project. For water based adventure activities the operator must ensure compliance to Basic Minimum Standards for Adventure Tourism Related Activities issued by Ministry of Tourism. Water sports specifically have to comply with the Safety Norms for Watersports by National Institute of Watersports, Ministry of Tourism, Government of India. The selected water sports operators / agency/ individual will have to take insurance of the passengers to the extent of INR0.5 million per passenger. No permanent structure will be allowed on the beach. The selected water sports operators / agency/ individual shall promptly submit verified statements, reports, accounts, documents and any other particulars as required by the authority from time to time. Guidelines on Water Sports All leaders or guides must possess a valid certificate or license from a recognized institution or association. All leaders and guides must be good swimmers and should be well trained in water rescue techniques, first-aid & CPR (Cardio pulmonary resuscitation). A rescue craft should always be in sight/in radio contact of persons engaged in water sports. For river sports, a minimum of two rafts or a raft and one/two safety/rescue kayaks is a must). All equipment should be inspected by an authorised person or the manufacturer once every season or six months, whichever is less. A log book should be maintained for each craft, which should be a record of usage, inspection, repairs and modifications. All craft which are away from the base of operations should carry a first-aid kit, emergency equipment and repair kit. They should, where appropriate, carry navigational equipment. All craft should display of the list of minimum equipment and accessories as recommended by the manufacturer. The capacity rating of the craft should be prominently displayed so as to be visible to the users along with a warning of potential hazards. The age limit for water sports should be prominently displayed in all literature and also base of operations. Life jackets must be on at all times while in the sea. A liability waiver should be signed by the client prior to the trip. This should clearly mention the inherent risks involved in the sport. Page 12
Project Information Project Components Equipment for Water Sports The following equipment from reputed firms are recommended for each water sports facility: Sr. Equipment Numbers Numbers 1 Water scooters 6 2 Speed Boat 2 3 Banana Boat 2 4 Water Ski 3 5 Pedal surf 8 6 Parasail 1 7 Ski Boards 4 8 Life jackets 30 9 Lifeboats 2 Leading players and possible collaboration opportunities Rae Sport Praga Marine Litmus Marine International Yamaha Motor Corp. Boat Craft India Mahindra Ocean Blue Marine P Ltd Key Water Sports Training Facilities in India 1. National Institute of Water Sports, Panjim, Goa 2. Regional Water Sports Centre, Pong Dam, Himachal Pradesh 3. Indian Institute of Scuba Diving and Aquatic Sports (IISDA), Tarkarli, Maharashtra 4. Water Sports Centre, Bilaspur, Himachal Pradesh Page 13
Project Information Estimated Manpower The following equipment from reputed firms are recommended for each water sports facility: Sr. Resource Numbers 1 Manager 2 2 Trainers 5 nos. one per each sport (one trainer may specialize in multiple aro sports as well) 10 3 Other Staff (10 nos. (5 residential and 5 nonresidential) cook, cleaner, other helpers) 10 Total 22 Key considerations Gujarat would become the state which would uphold, host and develop various eco, adventure sports and water sports initiatives It is said to become one of the major tourists attractions and place Gujarat is on the global map with Adventure and Sports Tourism with Proactive Governance promoting the growth of the Sector The site could be enjoyed for surfing, jet skiing, kayaking or swimming, where the beaches of Gujarat would serve as the perfect location for different water activities Integrated development of Tourism infrastructure facilities is also being materialized Page 14
Project Information Infrastructure Availability - Logistics & Connectivity Rail Road Mandvi Dwarka Surat Valsad Mandvi does not have a railway station of its own. However, Bhuj is the nearest railway station about 56 km away. Several trains run from this station connecting it to other parts of the country Mandvi is well connected by road with other major cities of Gujarat, including Ahmedabad, Rajkot, Jamnagar, and Porbandar via National Highway 8 and 8A Dwarka is a station on the Ahmedabad-Okha railway line, with trains connecting it to Jamnagar (137 km), Rajkot (217 km) and Ahmedabad (471 km) Dwarka is on the state highway from Jamnagar to Dwarka. Direct buses are available from Jamnagar and Ahmedabad Surat is well connected with Valsad, Vapi and Mumbai towards its south and with Bharuch, Vadodara and Ahmedabad in the north Surat is well connected to various locations through national and state highways. NH 8 connects Surat with Mumbai (307 km) Valsad is has a major railway station where almost all the major trains stops Valsad is located on National Highway connecting Surat to Mumbai. Valsad is 200 km from Mumbai and 100 km from Surat Air Port There is no airport in Mandvi and the nearest airport is Bhuj Airport which is 62 km away from Mandvi Mandvi is a port city in the Western India in the Kutch, Gujarat region. Nearest airport is Jamnagar (137 km) Surat has a domestic airport which is well connected to different metros. It has daily flights to Delhi, Jaipur, and Ahmedabad Magdalla & Hazira Ports in Surat have good rail and road connectivity. Magdalla port is 2 Km away from the state highway and 15 Km away from NH-8 Nearest airport is Surat which is well connected to different metros with daily flights to Delhi, Jaipur, and Ahmedabad. Nearest seaport is located at Surat- Hazira; and two new ports are proposed at Nargol and at Vansi Borsi * For Shivrajpur, Dandi, Tithal and Umbergaon, nearest major city s connectivity is provided. Shivrajpur Dwarka, Dandi Surat, Tithal and Umbergaon Valsad. Page 15
Project Financials Estimated Project Costs The Gujarat government is seeking private operators that will carry out water sports activities at the above mentioned locations. Project investment will be through PPP model, with the government being responsible for developing supporting facilities. The investment for this size of the project would be approx. INR30 million. Considering 5 locations, the total investment in this sector works to be approx. INR 150 million. Cost parameters Total cost (INR million) Land & site development 0.90 Boats / equipment 27.00 Office equipment 0.10 Furniture & fixtures 0.10 Preliminary & pre-operative expenses 0.90 Provision for contingencies 1.00 Total capital cost of project 30.00 Page 16
Project Financials Project Structure & Implementation Model The project shall be developed through a PPP model on BOT basis (Build, Operate and Transfer). The selected developer is required to provide infrastructure like Boats / Boating equipment of different capacities, thereafter, operate and manage the infrastructure and boats., while the ancillary infrastructure at the beach will be developed by the government. Following is a schematic diagram showing possible development model through PPP: Government selects the private player through competitive bidding process and enters into an agreement to form a Special Purpose Vehicle (SPV) Tourism Corporation of Gujarat Limited / Local Municipal Corporation Private investor (project developer) SPV The developer will create suitable facilities at the site mentioned considering site specific environmental and relevant factors on Design, Engineer, Procure, Construct, Operate, Maintain and Transfer concession format Project consultant The consultant undertakes techno-economic feasibility study and master plan preparation; assists with bid process management and partner selection process; and acts as a project management consultant during the implementation period until one year of commercial operations Page 17
Approvals and Incentives Approvals Required Adventure Sports should have the requisite infrastructure, equipment and trained staff, along with appropriate safety-and-rescue set-up, that will provide tourists with an opportunity to undertake permissible adventure activities. All requisite permissions from various Competent Authorities as also a comprehensive insurance cover will have to be obtained beforehand. Establishing an water sports facility would require approvals from following government authorities: Registration as commercial establishment with the required state/district authority Adventure Tour Operator (ATO) registration with the Department of Tourism Local body clearances Clearance from Gujarat Maritime Board No objection certificate from Gujarat Pollution Control Board Any other approvals from Central or State Government or Local bodies or Statutory Authorities Incentives for Water Sports Activities Central Government: The Central Financial Assistance is being extended to various State Governments/ Union Territory Administrations for development of adventure tourism destinations. State Government: Adventure Sports (which includes water sports) has been classified as Tourism Unit under the New Tourism Policy. Following are some of the capital subsidy incentives on Tourism Units: Capital Subsidy to the Eligible Tourism Units Eligible Capital Investment (excluding land cost) Admissible subsidy Maximum limit Investment upto INR500 million 15% INR75 million Investment above INR500 million 15% INR100 million Tented accommodation (with minimum investment of INR2 million) Equipment worth INR10 million and above for adventure & water sports 20% INR1.5 million 10% INR5 million Page 18
Approvals and Incentives Additional Capital Subsidy of 5% for New Tourism Units Within the Corporation limits of Gandhinagar and falling within the radius of 20 kms. Owned and managed by women entrepreneurs (with minimum equity participation of 51% in the entity) SC/ST categories to an additional 5% subsidy over and above the Admissible Subsidy. Interest subsidy to the eligible tourism units @5% of the loan amount with maximum amount of INR2.5 million per annum for a period of five years in Municipal Corporation areas for eligible tourism units @7% of the loan amount with maximum amount of INR3.0 million per annum for a period of five years in the areas other than mentioned above. Other Exemptions Luxury Tax - 5 years from the date of commencement of commercial operation Entertainment Tax - 5 years from the date of commencement of commercial operation Electricity Duty - 5 years from the date of commencement of commercial operation for New Tourism Units only. 100% reimbursement of stamp duty and registration fee on sale/lease/transfer of land for the first transaction only. Special Package for Mega Tourism Units The State Government shall duly promote and facilitate Mega Tourism Projects that have a large multiplier effect on the economy, leading to employment generation and inclusive growth in the State. Any type of Mega Tourism Units like theme parks, amusement parks, water parks, etc. meeting the qualifying criteria of Mega Tourism Units will be eligible. Following incentives would be offered to eligible Mega Tourism Units: 100% reimbursement of stamp duty and registration fee on sale/lease/transfer of land for the first transaction only. Reimbursement of stamp duty and registration fee would be done after the commencement of commercial operations. Capital subsidy of 15% of eligible capital investment (excluding the cost of the land) subject to a ceiling of INR200 million. Exemption from luxury and entertainment tax for a period of seven years from the date of commencement of commercial operations. Exemption in electricity duty would be for a period of five years from the date of commencement of commercial operations. Mega tourism units shall not be entitled to any interest subsidy. Page 19
Tourism Corporation of Gujarat Limited http://www.gujarattourism.com/ Department of Tourism, Gujarat http://www.gujarattourism.com/ Industries and Mines Department, Gujarat www.imd-gujarat.gov.in/ indextb - Industrial Extension Bureau www.indextb.com This project profile is based on preliminary study to facilitate prospective entrepreneurs to assess a prima facie scope. It is, however, advisable to get a detailed feasibility study prepared before taking a final investment decision. Tourism Corporation of Gujarat Ltd, H. K. House, Opp: Bata Showroom, Ashram Road, Ahmedabad, Tel: +79 26578044/46/26589172 Fax: +79 26582183 E-mail: tibahd@gujarattourism.com