CHAPTER 4 ANALYSIS AND RESULTS

CHAPTER 4 ANALYSIS AND RESULTS

4. Analysis and Results... 133 4.1. Profile of the sample surveys... 133 4.1.1. Opinion survey of tourists... 133 4.1.2. Survey of attitude of residents... 134 4.1.3. Survey of accommodation providers... 135 4.2. Life Cycle Analysis... 135 4.2.1. Kerala Tourism... 136 4.2.2. Kovalam beach... 158 4.2.3. Thekkady... 168 4.3. Measurement of factors that influence the life cycle... 179 4.2.1. Destination experience... 179 4.2.2. Quality of resources... 180 4.2.3. Attitude of residents... 184 4.2.4. Natural ambience of the site... 190 4.2.5. Urbanisation / Disappearing rural characteristics... 193 4.2.6. Commercial land use / Private sector investment... 195 4.2.7. Transition from tourism... 196 4.2.8. Local participation... 199 4.2.9. Occupancy of tourist accommodation... 200 4.2.10.Historicity... 201 4.2.11.Tourism promotion... 204 132

4. Analysis and Results 4.1. Profile of the sample surveys The primary surveys conducted for this research were mainly to construct the destination experience of the tourists and the attitude of residents of the destinations. A third survey was to supplement the information available for the accommodation sector. The salient features of the samples are presented below. 4.1.1. Opinion survey of tourists The sample size was 530 foreign tourists at Kovalam and 295 at Thekkady. Most of the tourists who were interviewed were from UK, Sweden, Germany, France, Italy, USA and Canada. About one-fifth of the visitors were repeat visitors. 79% of tourists to Kovalam and 89% of tourists to Thekkady were first-timers. The primary reason for the visits to both the destinations was stated as vacation. Mainly friends/relatives, internet searching and tour operators provided the information about the destinations. Goa, Varkala, Kochi, Thailand and Maldives are stated as the competing destinations to Kovalam. Munnar and Kochi are the competing destinations to Thekkady. The main shopping items of tourists were textiles, ornaments and handicrafts. Average duration of tourists at Kovalam was 10.53 days. At Thekkady, the tourists spent on an average 2.89 days. 133

Average daily expenditure of a tourist at Kovalam was Rs. 3237. At Thekkady this was Rs. 2805. 4.1.2. Survey of attitude of residents The sample size of resident households surveyed at Kovalam was 181 and 139 at Thekkady. There were 625 persons in the sample households at Kovalam and 561 persons in the sample surveyed at Thekkady. The average household size was 3.45 at Kovalam and 4.04 at Thekkady. The sex ratio of Kovalam was 806 females for 1000 males. At Thekkady, there were 1011 females for 1000 males in the sample. The worker participation rate at Kovalam was about 40% and the same at Thekkady was 38%. The primary sector engaged 38% of the working force at Kovalam and 43% at Thekkady. Only very few persons in the sample were engaged in the secondary sector. Over 80% of the sample at Kovalam was confident that tourism would be the most important industry in the State. Only 61% of the sample at Thekkady shared this opinion. Kovalam is primarily a tourist destination, whereas, Thekkady is also a spices trading centre. Non-availability of land due to tourism development is a major issue at Thekkady compared to Kovalam. 134

4.1.3. Survey of accommodation providers There were 76 accommodation establishments in the study area at Kovalam and 91 at Thekkady. Majority of the establishments at Thekkady, numbering 50, was home stays. Number of establishments which responded was 50 at Kovalam and 41 at Thekkady (22 hotels and 19 home stays). In 2007, the number of tourist beds available in the contacted establishments was 2087 at Kovalam and 1687 at Thekkady. 20 hotels in Kovalam and 36 hotels and home stays in Thekkady provided the occupancy rates. The occupancy rates of these establishments in the peak tourist season were 87% and 78% during the year 2007 respectively for Kovalam and Thekkady. The employment details were provided by 13 hotels in Kovalam and 27 hotels and home stays in Thekkady. The 13 hotels in Kovalam employed 179 persons and the 27 hotels and home stays in Thekkady employed 506 persons. The general tables generated from the primary surveys are given in Appendix 4.1. Analysis of the primary data, as required for meeting the objectives of the research, is presented at the respective sections of this chapter. The section that follows discusses the findings of the life cycle analysis. This is followed by measurement of factors that influence the life cycle of the selected destinations. 4.2. Life Cycle Analysis As reviewed earlier, the product life cycle concept can describe a product class, a product form or a brand. The product classes have the longest lifecycle whereas the life cycle of a specific brand can change quickly because of reasons like competition 135

(Kotler, Bowen, & Makens, 1999). Tourist arrivals to India depend on the world tourism demand and tourist arrivals to Kerala depend on the tourist arrivals to India. Demand for product forms in Kerala like beaches or backwaters depend on the tourist arrivals to Kerala. The demand for each product form influences the tourist arrivals in specific destinations or brands. In other words, the immediate superset influences the life cycle of the brand or product form. Analysis of life cycle hence cannot be taken up independently of the universe it belongs to. In the present research also, the life cycle analysis of the selected brands Kovalam and Thekkady is preceded by the life cycle analysis of Kerala tourism, which can be termed as the product class in which the selected brands belong. 4.2.1. Kerala Tourism i. Growth of tourism It was during the 7 th five-year plan period that the Government of Kerala took up tourism promotion activities, realising the potential of tourism development in Kerala (Department of Tourism, Government of Kerala, 2002). The Government declared tourism as an industry in 1986 and the industry was greeted with incentives and concessions for making investments and promoting tourism. Today, the State has emerged as one of the most acclaimed tourist destinations in the country. International recognition of Kerala tourism came in various forms. The World Travel and Tourism Council (WTTC) selected Kerala as a Partner State. National Geographic chose Kerala as one of the 50 must see destinations of a life time. Travel and Leisure describes Kerala as one of the 100 great trips for the 21 st Century. Cosmopolitan 136

rates Kerala as one of the ten love nests in India. Khaleej Times sees Kerala as one of the six destinations of the millennium. A study by Tata Consultancy Services carried out a situation analysis of Kerala tourism and presented it in the form of a SWOT analysis (TCS, 2000). Though the study was conducted in the year 2000, the strengths identified in the study give an indication of the reasons for the commendable growth that Kerala tourism has achieved. The strengths identified in the study are reproduced below: Excellent nature resources in the forms of backwaters, hill-stations and beaches Kerala is the seat of Ayurveda, a very important constituent of the growing body-mind/ alternative medicine Temperate climate throughout the year A very good reputation both internationally and nationally High compounded annual growth rate of 12% for tourists High level of literacy among residents enabling better interface with tourists It has both tourist destinations and tourism assets that commute to destinations. This offers tourists an opportunity to spend their entire stay on a tourism resource A remarkable feature of the growth of foreign tourists to Kerala is its emergence as an important destination in India, in spite of its location far and outside the traditional Golden Triangle connecting Delhi, Agra and Jaipur. About ten percent of the foreign tourists, coming to India visit Kerala. In the case of domestic tourists, the trend is showing a consistent growth, though not impressive as that of foreign tourist arrivals. But on the other side, the achievement in the growth is to be viewed taking into account the geographic location of Kerala far away from the tourist origins in the country and further discouraged by the pricing of the transport connections. 137

Kerala Tourism is subjected to studies by different agencies besides the Tourism Department of Kerala. The number of tourist arrivals in Kerala has already outnumbered the projected figures given for the year 2010. Kerala Tourism Vision 2025 projected the foreign tourist arrivals at 4.32 lakhs, World Tourism Organization (UNWTO) estimated the figure as 5.1 lakhs and the World Tourism and Travel Council (WTTC) put the figure at 5.06 lakhs, all for the year 2010. The actual tourist arrivals have crossed these estimates in 2007. Number of foreign tourist arrivals to the State was 51816 in 1987. In seven years, this was doubled. It took just another six years to double again and reached the figure of 209933 in 2000. In 2006, the number of tourist arrivals was 428534 and crossed the five lakh mark in 2007. The tourist arrivals from 1987 to 2007 are given in Table 4.1. ii. Seasonal Characteristics Seasonal variation in tourist arrivals is a phenomenon experienced by most of the tourist destinations in India. Kerala tourism considers the six months from October to March as the tourist season, and most of the foreign tourist arrivals are in this period. Challenging this seasonality is always seen as an important strategy for economic rewards by the tourism industry. By looking at the nationality of foreign tourists coming to Kerala, the majority is from Europe and the winter season in the countries in the region coincides with the tourism season of Kerala. Monthly tourist arrivals from 1988 to 2006 are used to compute seasonal indices. Pattern of seasonal indices over the years is changing (Table 4.2). The most ideal situation is when the indices remain the same with the value 100 all through a year. 138

The seasonal index was always the highest in the month of January as far as Kerala tourism is concerned. Similarly, June was the leanest month for tourist arrivals. Quarterly trend in the values of the seasonal indices are presented in Figure 4.1. A reduction in higher index values in the peak season and an increase in lower index values in lean season in a growing tourism market would indicate a trend that would point to the ideal situation referred earlier. The first and fourth quarters of the year constitute the tourist season and the middle two quarters are lean seasons. In the first quarter, index values of February and March are on the rise. All the other four months in the peak season are witnessing a decreasing trend in the index values. The tourist arrivals in all the three months in the second quarter, July and August in the third quarter contribute to an increasing trend in the index values. The change in the pattern of tourist arrivals over the months in a year is turning out as an outcome that could improve the economic sustainability of tourism industry. This could lead to higher occupancy of tourist accommodation in the second and third quarter, more stable employment opportunities, and better management of tourism destinations. Though in terms of index values there is a change slowly emerging in the pattern, in absolute terms, the growth of tourism is still contributed by the increase in tourist arrivals in the peak season. The increase in tourist arrivals for the periods from 1990 to 1995, 1995 to 2000 and from 2000 to 2005 is in Table 4.3. Considering the fact that the investments made in tourist accommodation that increased the number of beds in the last ten years, the tourist arrivals are at par or below the capacity levels even in the peak season. The spread of tourist arrivals over the months could be perhaps the most important contributing factor for the future growth of tourism in the State. 139

Table 4.1: Monthly tourist arrivals in Kerala for the years from 1987 to 2007 Month 1987 1988 1989 1990 1991 1992 1993 January 7881 7781 9696 9139 9341 11037 10819 February 5797 5745 7713 7625 7287 9472 9667 March 4365 3970 5905 6111 5904 6975 8199 April 3325 2157 3257 3719 4243 6097 6696 May 1583 1194 1798 3232 3124 4911 5229 June 1091 857 1401 2502 2532 4873 4814 July 1343 1734 2683 3244 3729 4304 5760 August 3111 3244 3849 4476 4338 7062 7627 September 4391 2132 3200 4286 4906 6829 7189 October 5409 6542 6320 6384 6220 8582 8326 November 6602 8072 8209 6814 7701 9948 9443 December 6918 8655 8921 8607 9984 10545 11440 Total 51816 52083 62952 66139 69309 90635 95209 Month 1994 1995 1996 1997 1998 1999 2000 January 13544 20313 21859 24773 28108 31541 24388 February 10941 17942 20294 20354 23656 25624 23268 March 8232 15938 20149 19134 20546 20816 17499 April 5847 9019 11467 11852 16493 14277 13964 May 4341 6183 6758 8751 11355 10398 12923 June 4875 3894 5490 7643 5755 8040 8306 July 4383 7331 8019 10147 5535 10656 8514 August 5030 11662 12751 11896 10024 14487 17764 September 16598 11524 13767 10003 12385 11806 18222 October 16346 11061 12185 11917 12531 13367 17344 November 5662 13431 20422 19542 19208 19007 22592 December 8769 14674 23694 26415 25994 22154 25149 Total 104568 142972 176855 182427 191590 202173 209933 Month 2001 2002 2003 2004 2005 2006 2007 January 31625 29440 41845 45630 43345 58858 72814 February 30862 29105 36163 43418 41314 56530 66131 March 21957 19246 25261 35006 33479 39584 56151 April 17868 18028 20106 23546 20191 32377 34487 May 10653 10794 12675 14870 14919 20470 21098 June 6571 6610 10820 12734 13239 16209 18262 July 7747 8581 14824 17228 17593 23578 25199 August 13611 14226 19240 27341 24398 28821 35563 September 12391 17808 20253 21103 20064 21888 24708 October 11913 20744 24702 22160 28068 28681 33534 November 19310 26190 32165 38118 42324 44421 55647 December 24322 31792 36567 44392 47565 57117 72214 Total 208830 232564 294621 345546 346499 428534 515808 Source: Tourist Statistics (various years), Department of Tourism, Government of Kerala 140

Table 4.2: Seasonal Indices for tourist arrivals in Kerala Month 1988 1989 1990 1991 1992 1993 January 196 191 167 173 160 141 February 144 150 138 135 134 124 March 102 113 109 109 96 105 April 56 62 66 78 82 86 May 30 34 58 57 64 67 June 21 27 45 45 63 62 July 41 51 59 66 55 72 August 74 74 81 74 91 94 September 47 61 78 82 87 88 October 140 120 116 102 109 102 November 170 154 124 123 125 117 December 181 164 157 156 133 142 Month 1994 1995 1996 1997 1998 1999 2000 January 179 184 161 166 176 186 154 February 147 157 148 136 151 148 147 March 107 138 146 129 131 119 108 April 70 81 82 81 104 82 84 May 51 55 47 60 72 59 76 June 59 33 37 52 36 46 48 July 52 61 52 68 35 63 48 August 56 95 81 78 62 88 97 September 174 92 88 65 76 73 97 October 164 86 78 76 77 83 91 November 56 104 130 123 120 117 118 December 86 113 149 166 161 136 132 Month 2001 2002 2003 2004 2005 2006 January 170 173 186 164 161 176 February 167 170 158 153 154 167 March 122 111 109 122 126 116 April 102 101 86 82 75 95 May 62 58 53 52 55 60 June 39 34 44 43 48 47 July 46 43 60 58 62 66 August 81 68 76 93 83 79 September 75 83 78 72 66 58 October 72 95 93 76 90 74 November 117 120 121 132 133 115 December 147 143 136 153 148 147 141

Table 4.3: Monthly variation in tourist arrivals 1990 to 1995 1995 to 2000 2000 to 2005 January 2.22 times 1.20 times 1.78 times February 2.35 1.30 1.78 March 2.61 1.10 1.91 April 2.43 1.55 1.45 May 1.91 2.09 1.15 June 1.56 2.13 1.59 July 2.26 1.16 2.07 August 2.61 1.52 1.37 September 2.69 1.58 1.10 October 1.73 1.57 1.62 November 1.97 1.68 1.87 December 1.70 1.71 1.89 iii. Tourist projections With the capacity level still high, Kerala is expected to maintain higher growth in tourist arrivals. The time series data from 1988 to 2006 is used to fit a model with the objective of projecting the tourist arrivals for the coming years. Using a 12-month moving average, the actual arrivals are de-seasonalized before attempting for projections. The best fit obtained is a 4th degree polynomial and the estimated model is as follows: Y = 5174.3373 99.1046 x + 3.8887 x 2 0.0283 x 3 + 7.0108 e -005 x 4 (Standard error = 1356.006, Correlation coefficient = 0.9886), where, Y is the number of foreign tourist arrivals and x is the time variable. Value of x is the serial number of months in a year with the value 1 for January 1988. The scatter plot and the estimated polygon are shown in Figure 4.2. The seasonal indices for the months are applied on the de-seasonalized projection figures obtained from the model and the tourist arrivals for the three years from 2008 are estimated as given in Table 4.4. 142

Table 4.4: Estimated tourist arrivals to Kerala Month\ Year 2008 2009 2010 January 83639 102006 125108 February 80661 98435 120764 March 56948 69539 85337 April 47408 57922 71098 May 30437 37207 45682 June 24238 29645 36404 July 34604 42344 52007 August 42113 51555 63331 September 31437 38502 47302 October 40784 49969 61399 November 64451 78995 97070 December 83777 102719 126233 Total 620497 758838 931735 Growth rate 20.30 22.30 22.78 Globally, the increase in international tourist arrivals is projected to be around 3 to 4% for the year 2008 and anticipates a long-term growth rate of 4.1% a year through 2020 (UNWTO, 2008). Region-wise forecasts for international tourist arrivals are as given below: 2007 Forecast 2008 World 6.1% 3 to 4% Europe 4.2% 3 to 4% Asia and the Pacific 10.2% 8 to 10% Americas 4.7% 1 to 3% Africa 7.9% 6 to 8% Middle east 13.4% 6 to 10% Source: UNWTO World Tourism Barometer, Volume 6, No.1, January 2008 In 2001, the share of tourist arrivals in India was 0.37% which increased every year and reached 0.55% in 2007. Tourist arrivals to India were growing at impressive rates since 2003. The arrivals increased by 26.8% from 2003 to 2004, by 13.3 % from 2004 to 2005, by 13.5% from 2005 to 2006 and by 11.9% from 2006 to 2007 (Ministry of Tourism, Government of India, 2008). If the world tourist arrivals maintain the same 143

rate of growth of 6%, and if the share of tourist arrivals maintain the share of 0.55% recorded in 2007, and if the share of Kerala tourism is maintained at the same rate as in 2007, the projected foreign tourist arrivals would be as given below: 2008 2009 2010 World tourism 952 million 1009 million 1070 million India tourism arrivals 5.6 million 6.2 million 7 million Kerala tourism 0.58 million 0.65 million 0.73 million The above estimates assume maintaining of the present trend and ignore the growth potential. The projected tourist arrivals to Kerala given in Table 4.4 are higher than the estimates given above. Though the international tourist arrivals are slowing down, the decline is minimum in the Asia and Pacific region. The market share of American tourists in Kerala is below 15% and the economic recession, which is highlighted as the reason for the decreased rate of growth, is not likely to make a great impact on Kerala tourism. Like the Olympics held at China in 2008, India is hosting the Commonwealth games in 2010. The game is capable of pulling more European tourists to Kerala since tourists from UK form the biggest group nationality-wise. 144

Figure 4.1: Pattern of changes in seasonal indices with respect to foreign tourist arrival in Kerala 145

S = 1356.00599216 r = 0.98858774 42355 35355 Number of tourists 14353 21354 28354 7352 352 0 42 84 125 167 209 251 Year 1988 to Year 2006 Figure 4.2: The scatter plot of de-seasonalised tourist arrivals and the polynomial curve showing the foreign tourist arrival pattern in Kerala iv. Identification of life cycle stage The shape of the curve and the projected figures for the years up to 2010 indicate that Kerala tourism is on its growth path. The real take off seems to have taken place in the year end of 2001. The beginning of the introduction stage is before 1987 and not included in the above analysis. Characteristics of sales, cost, profit, customers, market and competition show differently in the life cycle stages of a product as presented in the Review of literature. These characteristics are discussed below with respect to Kerala tourism. Sales: There will be low sales in the Introduction stage and this will be rapidly rising in the Growth stage (Kotler, Keller, Koshy, & Jha, 2007). Sales will be peak in the Maturity stage and will decline in the Decline stage. In the case of tourism, sales 146

could be represented by the foreign exchange revenue or the number of tourist arrivals. In the present analysis, sale is represented by the number of tourist arrivals. Tourist arrivals are maintaining double digit growth rate for the years since 2002, except for 2005, as can be seen below. Low growth was recorded for the ten years between 1988 and 2001, revealing the characteristics of the introduction stage of the life cycle. Year Growth rate (%) 1988 0.52 1989 20.87 1990 5.06 1991 4.79 1992 30.77 1993 5.05 1994 9.83 1995 36.73 1996 23.7 1997 3.15 1998 5.02 1999 5.52 2000 3.84 2001-0.53 2002 11.37 2003 26.68 2004 17.28 2005 0.28 2006 23.68 2007 20.37 Costs per tourist: The costs to be considered include the operating costs and overhead costs in a typical commercial establishment. In the context here, the relevance is more for the cost incurred by the Government, since Kerala tourism is taken as a product and the management of the product is by the Government. Expenses of tourism by Government fall into two broad heads plan expenditure and non plan expenditure. Non-plan expenditure is for meeting the establishment costs of Department of 147

Tourism and can be considered as operation expenses. Plan expenditure includes capital expenditure. For budgeting convenience, investment in infrastructure, which is of capital investment in nature, is included under revenue expense. For analysis purpose, this is separated. Most of these investments are in long term assets like buildings, roads, and other civil construction works. Economic life of these assets is longer. Kerala Tourism Development Corporation (KTDC), the Government owned company, accounts 5 to 10% value of such assets in its annual financial statements. Assuming the same, 10% of the investment in infrastructure and capital is added to the non-plan expenses to reflect the cost of such investments from the subsequent year onwards. The expenses are compiled for the years from 1992-93 to 2006-07 from the Administrative Reports of Department of Tourism, Government of Kerala. These are converted to constant prices using Consumer Price Index with base year 1982 as 100. The number of foreign and domestic tourist arrivals is recalculated for the financial year periods from April to March. Costs per tourist computed thus are presented in Table 4.5. As per the pattern, the operating expenses have come down and more or less stabilized since 2000. Per customer cost is usually high in the introductory stage of a product life cycle, but comes down in the growth stage and will be lowest in the later stages. In the case of Kerala tourism also, the operating cost shows a declining trend as can be seen in Figure 4.3: Pattern of changes in expenditure per tourist. Though it is difficult to identify the life cycle stage from the figures and graph, the pattern clearly is moving towards the growth stage of the life cycle. 148

Table 4.5: Index values showing changes in pattern of expenses per tourist Operating expense Capital expense 1992-93 100 100 1993-94 122 113 1994-95 50 88 1995-96 33 75 1996-97 22 125 1997-98 28 175 1998-99 28 113 1999-00 33 113 2000-01 33 113 2001-02 33 113 2002-03 22 175 2003-04 39 150 2004-05 39 163 2005-06 39 213 2006-07 39 163 250 (Index value for 1992 93 taken as 100) 200 150 100 50 0 Operating expense Capital expense Figure 4.3: Pattern of changes in expenditure per tourist Profits: The general characteristics of the life cycle in terms of profit is that it would be negative in the introduction stage, but rises in the growth stage and will have the highest profit level in the maturity stage. In the case of Kerala tourism, the earnings in 149

foreign exchange is taken as the variable representing profit. The actual profit includes the earnings from domestic tourists as well as the cost incurred by the private sector. Since intention here is only to get a trend in the accrual of profit, the net foreign exchange earnings in the view point of the government is taken. Foreign exchange earnings less the government expenditures are given in Table 4.6. The figures are brought to a common base using the Consumer Price Index with 1982 as base year. It can be seen that the net earnings were positive from the first year taken into account for the analysis here. The net earnings is increasing as can be seen in the Figure 4.4: Net earnings at constant prices, which is characteristic of the growth stage of a product life cycle. Table 4.6: Foreign exchange earnings for the years from 1992-93 to 2006-07 (Rupees in crores) Total earnings* (Current prices) Net earnings (Current prices) Net earnings (Constant prices) 1992-93 59.75 55.08 22.95 1993-94 105.72 99.09 38.41 1994-95 116.11 111.39 39.22 1995-96 158.76 151.28 48.33 1996-97 196.38 189.15 55.31 1997-98 273.2 264.44 72.25 1998-99 302.08 290.89 70.26 1999-00 416.07 402.96 94.15 2000-01 525.3 510.63 115.01 2001-02 535 519.18 112.13 2002-03 705.67 693.81 143.94 2003-04 983.37 962.3 192.46 2004-05 1266.77 1245.09 239.44 2005-06 1552.31 1526.66 281.67 2006-07 1988.4 1961.9 338.84 *Source: Tourist Statistics (various years, Department of Tourism, Government of Kerala 150

400 (Base year 1982) 350 Rupees in Crores 300 250 200 150 100 50 0 Figure 4.4: Net earnings at constant prices Customers: The customers of the product are the tourists. Innovators visit the destination in the introduction stage and early adopters in the growth stage (Kotler, Keller, Koshy, & Jha, 2007). Lack of information does not permit classification of tourists into innovators and early adopters. However, studies conducted in earlier occasions have categorized the tourists based on the frequency of visits to Kerala. According to a survey conducted on behalf of Department of Tourism in 2006, 58.5% of the foreign tourists were visiting Kerala for the first time and 29.9% visited Kerala twice (Department of Tourism, Government of Kerala, 2007). Thus the first timers are dominating the share which can be taken as an indication of the introduction or growth stages. Higher share of repeat visitors is an indication of the maturity stage of a destination. According to another study, majority of the international visitors to Kerala fall in the age group 21 35 years (TRKL, 2001). Market: Most of the tourists to Kerala were from Europe in all these years. In the second place was Asia and Pacific. Except from Sri Lanka, tourist arrivals from all 151

other countries in this market were increasing. USA is the other prominent market for Kerala tourism. The share of markets is given in Table 4.7. As shown in Figure 4.5, the indices of growth in tourist arrivals from all these markets were on the rise. It cannot be said that the markets have shown signs of consolidation and the trend seen is growth. As per the Butler s (1980) model, characteristics of the market are more comparable with the development stage of life cycle. Table 4.7: Market share of world tourism markets in Kerala tourism Year Europe Asia and Pacific Americas Africa Middle East Total 1995 63 23 10 1 4 100 1996 55 32 11 0 2 100 1997 56 30 12 0 3 100 1998 57 29 11 0 3 100 1999 58 29 10 0 4 100 2000 52 30 14 1 4 100 2001 58 25 13 1 3 100 2002 55 24 16 1 4 100 2003 58 21 12 1 8 100 2004 60 21 12 1 6 100 2005 57 23 12 2 7 100 2006 58 20 13 2 7 100 900 800 700 600 500 400 300 200 100 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Europe Asia and Pacific Americas Africa Middle East Figure 4.5: Indices of growth in tourist arrivals from world tourism markets 152

Competitors: Kerala figures in the top 10 States in India that attracts maximum number of foreign tourists. The share of Kerala and the other nine states are given in Table 4.8. Among the ten states, Andhra Pradesh, Karnataka, West Bengal, Delhi and Rajasthan have managed to show an increasing trend in the market share from 2001 to 2006. Though marginal, Kerala is among the other five states that experienced a declining trend in the market share. The upward and downward trends can be seen in Figure 4.6 and Figure 4.7. Two states in south India Karnataka and Andhra Pradesh are the competing States in South India which have made a dent in the market share of Kerala. At the same time, Rajasthan continues to be the State that attracts maximum number of foreign tourists and the State has strengthened its position between 2001 and 2007. Goa is Kerala s primary competitor as per a study and 15% of international visitors and 11% of domestic visitors consider Goa as an alternative destination (TRKL, 2001). But in the number of foreign tourist arrivals, Goa ranks below Kerala. 153

Table 4.8: Top 10 States in India with maximum foreign tourist arrivals Percentage of foreign tourist arrivals 2001 2002 2003 2004 2005 2006 2007 1. Andhra Pradesh State arrivals to gross state arrivals 1.24 4.08 7.14 5.99 5.63 5.7 5.85 State arrivals to country arrivals 2.65 8.82 17.58 14.49 14.29 15.06 15.15 2. Goa State arrivals to gross state arrivals 4.78 5.27 4.68 4.34 3.39 3.24 3.02 State arrivals to country arrivals 10.25 11.39 11.53 10.51 8.59 8.55 7.82 3. Karnataka State arrivals to gross state arrivals 2.59 1.15 3.72 6.34 5.48 4.3 4.06 State arrivals to country arrivals 5.55 2.5 9.17 15.34 13.91 11.37 10.52 4. Kerala State arrivals to gross state arrivals 3.84 4.51 4.39 4.13 3.48 3.65 3.92 State arrivals to country arrivals 8.23 9.75 10.81 9.99 8.84 9.64 10.15 5. Maharashtra State arrivals to gross state arrivals 16.84 14.91 14.69 14.57 14.57 14.57 14.58 State arrivals to country arrivals 36.08 32.25 36.19 35.24 37 38.5 37.77 6. Rajasthan State arrivals to gross state arrivals 11.19 8.31 9.36 11.62 11.37 10.39 10.64 State arrivals to country arrivals 23.97 17.97 23.06 28.11 28.87 27.44 27.57 7. Tamil Nadu State arrivals to gross state arrivals 14.22 15.6 13.42 12.66 11.85 11.23 12.93 State arrivals to country arrivals 30.47 33.75 33.07 30.6 30.1 29.67 33.52 8. Uttar Pradesh State arrivals to gross state arrivals 14.62 13.77 12.28 12.41 11.81 11.31 11.34 State arrivals to country arrivals 31.33 29.78 30.26 30 29.97 29.88 29.38 9. West Bengal State arrivals to gross state arrivals 5.23 10.26 10.5 9.28 9 8.5 8.77 State arrivals to country arrivals 11.2 22.2 25.88 22.44 22.86 22.44 22.72 10. Delhi State arrivals to gross state arrivals 15.27 10.53 10.33 10.04 15.2 16.81 15.33 State arrivals to country arrivals 32.72 22.77 25.45 24.28 38.58 44.41 39.73 154

Figure 4.6: States that have managed to increase the market share Figure 4.7: States that experience a decrease in the market share In the Butler s (1980) model, the introduction and growth stages are represented by the four stages exploration, involvement, development and consolidation. Number of visitors is limited during the exploration stage, but increases as the life cycle moves to involvement, development and consolidation stages. Formation of Department of Tourism and recognition of tourism as an industry are indicators of the 155

involvement of Government and the people in developing tourism in Kerala. Investments happen in the developing stage. From the part of the Government, investment in infrastructure projects is showing an increasing trend. Most of the private sector investment in a tourism destination is for developing tourist accommodation. The number of beds made available to tourists for the years from 1992-93 to 2006-07 are also given in Table 4.9. There will be intensive marketing efforts in the developing stage as per the Butler s model. The marketing expense of the Government calculated on per-foreign-tourist basis is also shown in Table 4.9. As per the three indicators given in Table 4.9, the life cycle of Kerala tourism falls in the development / consolidation stage. As identified by Cooper and Jackson (1989), there is no single measure that could be used to identify the current stage of life cycle of a product. However, the characteristics examined above, help to identify the current stage of life cycle of Kerala tourism as the Growth stage. In terms of the stages identified by Butler (1980), Kerala Tourism is in the development stage as can also be seen in Table 4.10, using the indicators identified by Getz (1990) in the case of Niagara Falls: 156

Table 4.9: Investment in infrastructure Year Infrastructure investment by Government (Rupees per foreign tourist at Constant prices) Number of tourist beds Marketing expense by Government (Rupees per foreign tourist at Constant prices) 1992-93 22.78 35.81 1993-94 27.42 4208 39.21 1994-95 50.62 47.49 1995-96 91.00 42.25 1996-97 83.55 40.88 1997-98 92.01 51.71 1998-99 87.95 38.57 1999-00 99.31 7162 55.55 2000-01 93.71 8440 55.69 2001-02 104.08 9279 74.78 2002-03 320.23 10875 80.4 2003-04 204.33 9804 76.09 2004-05 234.27 13275 67.95 2005-06 253.97 15497 69.31 2006-07 222.56 16148 40.54 Table 4.10: Matching of indicators in the development stage Sl No. Indicator Reflection on Kerala tourism currently 1 Rapid growth in visits Growth of tourist arrivals is high Growth 2 Visitors outnumber Getz (1990) included this as an Growth residents indicator for a destination. In the case of Kerala tourism, even at the most popular destinations in the state, visitors do not outnumber residents. 3 Well-defined market area As it stands today, a well defined Growth market has emerged with Europe in the lead. But the market share of Europe is being replaced by other markets 4 Heavy advertising Marketing by Government forms 10 to 15% of the budgeted expenditure. Growth 5 External investment leads to loss of local control Because of the laws and regulations, investors are controlled by Government. Growth stage that matches the situation No conclusion 157

4.2.2. Kovalam beach i. Growth of tourism Till the seventies, Kovalam was just a fishing village and a hippy idyll (Lonely Planet, 2000). The beautiful beach line at Kovalam in the shape of four crescents got the attention of visitors in the 1930s. The Vizhinjam Light House and the Kovalam Palace were the only monumental buildings in Kovalam (Committee on Scientific Study of Kovalam, 2002). It was in 1966 that Government of India took the initiative to develop Kovalam as a major beach resort in South India. Private entrepreneurs also have started showing interest in developing Kovalam along with ITDC. And today, Kovalam is one of the most sought after destinations for tourists who visit Kerala. Till the end of the eighties, nearly two-thirds of the foreign tourists who visited Kerala were attracted to Kovalam. There were ups and downs in the tourism demand at Kovalam since then. By the turn of this century, the share of Kovalam declined to about one-sixth and it showed some improvement in 2006 and 2007, and as per the latest figures available, the share of Kovalam stands above 20%. The monthly tourist arrivals for the years from 1988 to 2007 are given in Table 4.11. In 2007, the number of tourist arrivals at Kovalam crossed the one lakh mark. ii. Seasonal characteristics January was the month with the maximum tourist arrivals for most of the years and the lean months were June and July. The seasonal indices however showed fluctuations over the years and cannot be treated as following constant indices. The seasonal indices for Kovalam for the months from 1988 to 2006 are given in Table 4.12. 158

Quarterly trend in the values of seasonal indices are presented in Figure 4.8.December in the fourth quarter and all the six months in the first and second quarters show an upward trend in the values of seasonal indices. The peak months in Kovalam are the five months from November to March. The trend is that the peakness of November is flattening. The changes in the seasonal indices mentioned above are results of analysis of a longer period and by considering the tourist arrivals in all the individual years. This analysis may not reflect the short term variations that get noticed. Monthly variation in tourist arrivals at Kovalam is given in Table 4.13. Since 1995, monthly tourist arrivals have been increasing for the five months from November to February. But between 2000 and 2005, tourist arrivals in March have increased more than two times. In contrast with the performance of tourism for the State as a whole, Kovalam has ups and downs in monthly tourist arrivals from time to time. 159

Table 4.11: Monthly tourist arrivals at Kovalam Month 1988 1989 1990 1991 1992 1993 January 5662 6285 5620 5416 5580 5096 February 4181 5000 4689 4225 4788 4554 March 2889 3828 3758 3423 3526 3862 April 1570 2111 2287 2460 3082 3154 May 869 1166 1988 1811 2483 2463 June 624 908 1539 1468 2463 2268 July 1262 1739 1995 2162 2176 2713 August 2361 2495 2753 2515 3570 3593 September 1551 2074 2636 2845 3452 3387 October 4761 4097 3926 3607 4338 3922 November 5874 5321 4190 4465 5029 4448 December 6298 5783 5293 5789 5331 5389 Total 37902 40807 40674 40186 45818 44849 Month 1994 1995 1996 1997 1998 1999 2000 January 3650 4990 4432 6044 6247 6449 5124 February 2949 4408 3930 5053 5083 5112 5418 March 2219 3915 4824 5206 5165 5123 2589 April 1576 2216 2704 2139 2974 3809 3248 May 1170 1519 660 1539 2508 3477 4156 June 1314 957 432 1215 1936 2656 1798 July 1181 1801 1038 1067 2185 3303 1647 August 1356 2865 2295 1734 2641 3547 3654 September 4474 2831 2305 1587 2338 3089 3649 October 4406 2717 3470 2201 2821 3441 2978 November 1526 3299 5367 5500 5117 4733 4986 December 2363 3605 5817 6099 5640 5180 5193 Total 28184 35123 37274 39384 44655 49919 44440 Month 2001 2002 2003 2004 2005 2006 2007 January 4589 3920 7237 6831 7198 11465 17511 February 4451 3177 6952 6034 6048 10266 15680 March 3135 2839 3796 5137 5239 7757 11848 April 2745 2305 2209 2837 2927 5014 7659 May 2456 1667 1545 1486 2316 3646 5570 June 1126 1265 1704 1193 2022 2815 4299 July 789 697 2432 2047 2528 3270 4995 August 1457 1558 2565 2951 3444 4611 7043 September 1142 1289 2074 2295 2517 3587 5480 October 1254 1618 2089 3170 5210 5137 7846 November 2441 3815 4161 5367 7315 8894 13585 December 4115 6209 6002 6726 9504 12536 19147 Total 29700 30359 42766 46074 56268 78998 120663 Monthly distribution for 2006 and 2007 are estimates 160

Table 4.12: Seasonal indices for tourist arrivals in Kovalam Month 1988 1989 1990 1991 1992 1993 January 183 182 163 166 152 126 February 136 144 135 129 129 112 March 94 109 107 105 93 95 April 51 60 65 75 80 78 May 29 34 57 56 64 62 June 21 27 45 45 63 57 July 42 52 59 65 56 69 August 76 75 82 75 93 95 September 34 49 80 84 90 93 October 148 124 119 106 112 113 November 180 159 127 129 130 133 December 192 170 161 164 138 165 Month 1994 1995 1996 1997 1998 1999 2000 January 143 174 155 181 176 156 134 February 122 149 140 152 140 121 144 March 94 133 175 159 140 120 68 April 65 79 98 67 79 88 86 May 50 54 23 49 67 80 110 June 62 33 14 38 52 61 47 July 57 61 32 34 59 78 44 August 63 98 69 54 71 84 99 September 196 96 68 50 63 75 99 October 186 90 102 68 75 87 81 November 64 110 157 167 134 119 139 December 98 123 167 181 145 131 149 Month 2001 2002 2003 2004 2005 2006 January 148 184 215 187 184 200 February 150 149 199 166 153 177 March 112 133 107 140 132 131 April 104 107 61 76 72 84 May 100 75 42 39 55 61 June 48 53 47 31 46 45 July 35 27 67 52 54 50 August 67 54 72 74 68 66 September 54 42 58 58 47 49 October 60 52 57 80 95 67 November 119 123 112 133 130 113 December 203 200 163 164 166 157 161

Figure 4.8: Pattern of changes in seasonal indices with respect to foreign tourist arrivals in Kovalam 162

Table 4.13: Monthly variation in tourist arrivals at Kovalam Variation in number of times Variation in absolute numbers 1990 to 1995 1995 to 2000 2000 to 2005 1990 to 1995 1995 to 2000 2000 to 2005 January 0.89 1.03 1.4-630 134 2074 February 0.94 1.23 1.12-281 1010 630 March 1.04 0.66 2.02 157-1326 2650 April 0.97 1.47 0.9-71 1032-321 May 0.76 2.74 0.56-469 2637-1840 June 0.62 1.88 1.12-582 841 224 July 0.9 0.91 1.53-194 -154 881 August 1.04 1.28 0.94 112 789-210 September 1.07 1.29 0.69 195 818-1132 October 0.69 1.1 1.75-1209 261 2232 November 0.79 1.51 1.47-891 1687 2329 December 0.68 1.44 1.83-1688 1588 4311 iii. Tourist projections for Kovalam The increase in tourist arrivals in 2007 has greatly influenced in finding the best fit for a curve to represent the trend at Kovalam. If this latest figure is excluded, the best fit is a Sinusoidal curve with ups and downs. As can be seen in Figure 4.9, the scatter plot of monthly tourist arrivals break the up and down characteristics by around 2005 and instead of coming down as in the case of a Sinusoidal fit, the actual arrivals have gone up. It could be gathered from the field that new investments are taking place for developing properties by the private sector. The speculations and the activities favour the present change in the trend of tourist arrivals to continue. The best fit obtained for Kovalam is also a 4 th degree polynomial and the estimated model is as follows: Y = 3634.8925 37.604904 x + 0.9643561 x 2 0.0082654521 x 3 + 2.2203759 e -005 x 4 (Standard error = 559.3619710, Correlation coefficient = 0.8243363), where Y is the number of foreign tourist arrivals at Kovalam and x is the time variable. Value of x is the serial number of months in a year with the value 1 for January 1988. The seasonal 163

indices for the months in 2006 are applied on the de-seasonalized projection figures obtained from the model and the tourist arrivals for the three years from 2008 are estimated as given in Table 4.14. Any decrease in tourist arrivals in 2008 will make the model unfit. Because of the volatile behaviour of tourist arrivals experienced hitherto, it is necessary to update the model using the latest arrival figures. According to the figures arrived at here, Kovalam is poised for a moderate growth of tourist arrivals in 2008 and a growth above 30% in 2009 and 2010. Table 4.14: Estimated tourist arrivals to Kovalam Month 2008 2009 2010 January 19578 25934 34146 February 17739 23491 30908 March 13442 17794 23395 April 8824 11677 15341 May 6561 8678 11391 June 4955 6551 8592 July 5636 7448 9761 August 7616 10058 13172 September 5788 7641 9996 October 8102 10688 13972 November 13986 18439 24085 December 19890 26206 34199 Total 132117 174605 228958 Growth rate 9.49 32.16 31.13 164

8581 S = 559.36197100 r = 0.82433635 7389 Tourist arrivals 3814 5006 6198 2623 1431 1 13 25 37 49 61 73 85 97 109 121 133 145 157 169 181 193 205 217 229 241 Months starting from Jan 1988 Figure 4.9: Scatter plot of de-seasonalised tourist arrivals and the polynomial curve showing the foreign tourist arrival pattern at Kovalam iv. Identification of life cycle As it can be seen from the scatter plots made for Kovalam, the life cycle goes through periods of decline before being rejuvenated and achieve new growth. A similar pattern is identified by Groucutt, Leadley and Forsyth (2004). Reasons for the rejuvenation according to the authors could be due to an improved product formulation or modification or new packaging. The growth which started in 2001 after a decline is continuing in the case of Kovalam. In order to arrive at a conclusion on the stage of the life cycle of Kovalam, various characterisitcs that appear in the life cycle are explored below, as it was done for Kerala tourism. Sales: The tourist arrivals was at its peak in 2007. The growth in tourist arrivals from 2004 to 2005, 2005 to 2006 and 2007 were remarkable with growth rates at 22.13%, 40.4% and 52.74%. But for these growths in the recent years, tourist arrival figures at 165

Kovalam was fluctuating from about 30000 tourists to 50000 tourists a year. The first sign of breaking this upper limit was seen in 2005 and in 2007 it hit an all time high and crossed the one lakh mark. This can be interpreted as the rejuvenation stage as described by Butler (1980). The forecasts also indicate maintaining of higher growth rates, but less than that recorded in 2006 and 2007. Year Growth rate (%) 1989 7.66 1990-0.33 1991-1.2 1992 14.01 1993-2.11 1994-37.16 1995 24.62 1996 6.12 1997 5.66 1998 13.38 1999 11.79 2000-10.98 2001-33.17 2002 2.22 2003 40.87 2004 7.74 2005 22.13 2006 40.4 2007 52.74 Customers and market: In true reflection of the pattern for India as well as for Kerala, Kovalam also attracts maximum number of tourists from Europe, dominated by UK nationals (Table 4.15).The Asia and Pacific, and America markets were showing signs of consolidation with 15 to 20% of the total market share till 2003. Tourists from Asia and Pacific markets were more or less steady with about 50000 arrivals a year. The arrivals from this market stood at 75000 in 2007. Tourists from American region was steady at around 35000 mark a year till 2006. In 2007, the arrivals from America crossed 50000. Kovalam crossed the one lakh mark greatly because of the increased 166

tourist inflow from Europe, especially UK and France. The increased arrivals from Europe was about 50000 tourists in 2007 alone. Table 4.15: Market share of world tourism markets at Kovalam (%) Year Europe Asia and Pacific America Africa Middle East Total 1996 68 24 7 0 1 100 1997 65 27 7 0 1 100 1998 62 26 9 0 2 100 1999 60 26 11 0 3 100 2000 41 41 16 0 1 100 2001 55 26 18 0 1 100 2002 71 11 17 1 1 100 2003 71 15 11 1 2 100 2004 76 12 11 1 1 100 2005 76 12 9 1 2 100 2006 75 11 10 1 4 100 2007 83 6 7 1 3 100 Competitors: The six destinations Kochi, Kovalam, Thekkady, Munnar, Alappuzha and Kumarakam account for about two-third of the foreign tourist arrivals in the State. In terms of number of tourists, these can be termed as the competing destinations within the State. Among these, Kochi, Kovalam and Alappuzha have coastal line. But both Kochi and Alappuzha are known for their backwaters. As such, for the class of a destination like Kovalam, there exists no competition from the other five in the top six destinations. The primary survey conducted at Kovalam reveals the name of Varkala as a competing upcoming destination for Kovalam. There are other destinations being developed within the State in the north. Thus, though Kovalam is to compete with destinations of other types, few of the new destinations offer attractions similar to that of Kovalam. The foreign tourist arrivals at the competing destinations inside Kerala are given in Table 4.16. 167

Table 4.16: Number of foreign tourists in the competing tourist destinations in Kerala Sl Tourist site 2000 2001 2002 2003 2004 2005 2006 2007 No 1 Kochi city 51726 65406 83626 94445 106427 105665 119310 125853 2 Kovalam 44,440 29700 30359 42766 46074 56268 78999 120663 3 Thekkady 21543 17258 16386 22747 28884 27061 31930 30038 4 Munnar 7679 6944 8900 11414 11654 9037 5 Alappuzha 12013 12871 17261 26157 38024 30274 36407 31503 6 Kumarakom 8477 9099 16820 16608 21097 18410 Total 129722 125235 163788 202158 245129 247290 299397 335504 All Kerala 209933 208830 232564 294621 345546 346499 428534 515808 Share in State 61.79 59.97 70.43 68.62 70.94 71.37 69.87 65.04 total (%) Source: Tourist Statistics (various years), Department of Tourism, Government of Kerala 4.2.3. Thekkady i. Growth of tourism Thekkady is popular as a hill resort among tourists and is the location of the Periyar National Park. A s a natural wildlife sanctuary, Thekkady has a history dating back to the year 1934. It is home to herds of elephants, sambar, tigers, gaur, lion-tailed Macaques and Nilgiri Langurs. The Periyar wild life sanctuary is spread across 777 sq. km area, of which 360 sq.km is thick evergreen forest (Department of Tourism, 2006). This sanctuary was declared as a Tiger Reserve in 1978. The park is also often called by the name Thekkady. Thekkady is famous for natural spices like black pepper, cardamom, cinnamon and clove. The splendid artificial lake formed by the Mullaperiyar Dam across the Periyar River the Periyar reservoir - adds to the charm of the park, and the area of this lake is 26 sq.km (District Tourism Promotion Council Idukki, 2007). Thekkady is located around Periyar reservoir. The dam gets the name because of its location in the confluence of Mullayar and Periyar rivers. 168

Besides the natural attractions, history also has played its part in the evolution of Thekkady as a tourist destination. The Mullaperiyar dam was conceived by the British during the colonial rule to divert the waters of the west-flowing Periyar river eastwards. The dam was built by the British Army Engineering Corps. The first dam was washed away by floods, and a second masonry dam was constructed in 1895. The historical events that followed after the construction of the dam in 1895 are as follows: 1899 1933 1934 1950 1978 1982 1991 1996 2001 The Periyar Lake Reserve formed SCH Robinson made the first game warden Nellikkampetty Game Sanctuary formed Periyar was declared a wild life sanctuary Periyar was declared a Tiger Reserve The core area of the park notified as a National Park Thekkady brought under "Project Elephant" India eco-development project launched Reorganisation of the area - Periyar East and Periyar West Though efforts are made to protect the wild life and shield them from human interference, there are instances of struggles against illegal encroachments by the tiger and elephant poachers, and cultivators of cannabis. Tourist entry to the Periyar National Park is restricted to the northern corner adjacent to the Periyar Lake. The core zone of the park is not accessible to tourists. Out of a total area of 430 sq. km termed as the buffer zone, only 55 sq.km area is kept apart for tourism. The famous Sabarimala temple is located in the buffer zone. This temple is visited by more than 4 million pilgrims in a year. 169