BMI's Executive Summary

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New Business Environment Ratings

For 2008, BMI has made wholesale changes to the methodology behind its proprietary Business Environment Rankings for the tourism industry across Asia. Our new rating system divides is divided into distinct areas: limits of potential returns, which evaluates the size and growth potential of every state's tourism industry, and also broader factors that may inhibit its development over the coming years; and risks to potential returns, which evaluates industry risks and threats coming from the state's political and economic backdrop that may impede the realisation of anticipated returns from the sector over our forecast period.

These ratings have been developed to complement BMI's range of country risk ratings and now integrate all of the 16 industries covered by BMI under one methodology.

In these new ratings, Thailand emerges as the best-placed country, scoring 68 points out of a possible 100. The country has recovered well from the tsunami of late 2004 and continues to prioritise the tourism industry as a key source of foreign currency earnings. The lowest-placed countries are Indonesia and Vietnam, which both score 56 points. Indonesia is penalised for the still-high risk of further bombings on the key tourism island of Bali, while Vietnam is still only in the very early stages of establishing a dedicated tourism policy. Indeed, it was only in September 2007 that the nation created its first ever ministry of tourism.

India ranks fifth in our new ratings. The country's ratings are constrained by India's relatively poorlydeveloped tourism infrastructure as well as our concerns over long-term country risk.

Tourism Surges In 2007

The most recent figures released by India's Ministry of Tourism indicate that visitor arrivals have surged in 2007. A total of 3,450,343 tourists visited India in the first nine months of the year, representing a 12.3% increase on 2006, when 3,071,784 tourists arrived in the country. Tourist arrivals were particularly strong in August, growing 18.3% year-on-year, in part due to the holiday season in the western hemisphere.

The higher visitor number has fed through into foreign exchange earnings from tourism, which have yielded INR23,398 crore (US$5,558mn) for the January-September period, an increase of 16.7%. This strong performance indicates that our forecast of 10% growth in visitor arrivals in 2007 may have been a little pessimistic. We have therefore increased our forecast to growth of 12.5% for the year as a whole, representing 4.98mn arrivals.

Tourism Employment To Boom

A recent study assessing the future growth prospects for India's travel and tourism industry has concluded that the industry is among the best positioned in Asia and has the potential to maintain growth at 10% over the next 10 years. The study notes that India's key advantages are its rapidly improving infrastructure, particularly the spread of airline hubs throughout the country, while road and rail links are among the best in South Asia.

The study also notes that the prospects for employment growth in the sector are strong. At present, around 41.8mn people are directly involved in the industry. However, the study expects a further 7mn to join the industry's workforce by 2017. In this regard, the Commonwealth Games to be held in India in 2010 will provide a significant boost to employment.

India-China Year Of Friendship

In August 2007 a 32-member Chinese delegation visited India, with the aim of establishing greater cooperation between the tourism industries of the two countries. This forms part of the ongoing initiative known as the ‘India-China Friendship Through Tourism Year 2007'. India is an increasingly popular destination for Chinese visitors, both in terms of business tourism as well as leisure tourism. The country's proximity to China, as well as its improving infrastructure, has made it a popular destination for small businesses, as well as short-term tourist visits.

Chapter 1 - New This Quarter

Key Forecasts

Air India/Indian Merger Imminent?

Accor Planning Big Indian Expansion

Chapter 2 - Market Overview

Tourism Outlook

Table: India Tourism Industry Historical Data And Forecasts

Table: India Travel Industry Historical Data And Forecasts

Special Focus: Medical Tourism

India Tourism Industry SWOT

Chapter 3 - Forecast Scenario

Table: GDP And Population

Key Risks To Forecast Scenario

Chapter 4 - H5N1 Virus: Still A Key Issue

Tourism Business Environment

Tourism Business Environment Ranking

Table: Asia Travel And Tourism – Business Environment Ranking

Politics – Long-Term Risk

Business Environment

International Tourism Receipts

Visitor Arrival Growth

Investment Environment

Shock Factor

Chapter 5 - Travel

Commercial Airlines

Focus On Low-Cost Carriers

Table: India Airline Industry Domestic Market Share (July 2006)

Special Focus: Rising Jet Fuel Costs

Table: Crude Price Forecasts 2006

Chapter 6 - Hospitality

Hotels

Table: Structure Of Accommodation Market

Table: Selected Indian Hotels – Consolidated Financial Results For 9M FY06

Gambling

Chapter 7 - Company Profiles

Jet Airways

Taj Group

Air India

Chapter 8 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Tourism Industry

Sources

Competitive Landscape for Asia Tourism Reports: Sample of Companies Ranked

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Comparative cross-border analysis assessing business and regulatory factors to rank Asia’s most competitive tourism markets. Indicators used include Political Risk, Business Environment Risk, Forecast International Tourism Receipts, Visitor Arrival Growth, Investment Environment and Shock Factors (taking account of any special factors such as terrorism, natural disasters and disease). Company SWOTs for leading resort, hotel, airline, travel and tourism operators in each market, including competitive intelligence on overall geographic presence, competitive positioning and relationships with international operators; % share of operator markets; % share of international arrivals and departures; % share of busiest domestic routes; main products and services; panregional expansion, merger and acquisition strategies.

Network of Asain Tourism Sources

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BMI's Asian Tourism Reports are based on an extensive network of multilateral organisations, government departments, tourism industry associations, chambers of commerce and company reports. Information sources include: