How to Measure Corporate’s Contribution to Sustainable Tourism Development

By Dripto Mukhopadhyay

Why sustainable tourism?

Tourism, for long, has been recognized as one of the most lucrative economic activities around the world. India as a country is well recognized as a global tourism hub with inflow of international tourists steadily increasing over the years.  According to the World Travel and Tourism Council (WTTC), tourism in India was a $230 billion industry in 2018, which is about 10.4% of the country’s GDP. Tourism also contributes to 8.1% of total countries employment as mentioned in WTTC’s India country report for 2019.

However, everything is not as rosy as tourism contribution to employment and income suggests. There are nuances that act as severe adverse impact agents unless the sector players and regulators play their respective roles. To note a few:

  1. Severe environmental impacts – Tourism contributes more than 8.5% of the total carbon footprints globally. This is also the highest among all economic sectors.
  2. Exploiting local economy than contributing to its growth – Studies suggest that the income generated from tourism activities in areas gets siphoned off in various means, while local people and resources are exploited in a big way.
  3. Distorts local culture and living – In most of the tourist destinations local cultures are gets distorted to a large extent impacting living of the local population. Also cost of living for local people are impacted dur to tourism activities.

All these along with over crowding etc. are considered as phenomenon that are not only impacting the destination areas physically, economically and environmentally, but also detrimental to the growth of tourism itself. Large number of attractive destinations have already been discarded by a large section of tourists as they are not able to provide the desirous experience to the tourists any further. Off beat destinations are looked for by the tourists who look for exciting tourism experiences.

Solution to this entire gamut of problems are sustainable tourism development. In various parts of the world, sustainable practices have stated long back. However, India is still lagging on this front, especially from implementation perspective. On paper, criteria are laid down for sustainable tourism development. But implementation of the same are not visible to a large extent. Two prime reasons seem responsible for non-implementation at least for those that are at least mentioned by ministries at the centre as well as at the states. Since tourism is in fact combination of activities that are looked after by different departments or ministries, responsibility and accountability are in question. Tourism industry players are also not sure about compliance and its benefits to them. The second important reason is no scientific impact assessment is done on how steps towards sustainable tourism are fulfilling the objectives (in quantitative terms) so that one can understand their contribution towards it.

This situation has created a complete opaque front that no one knows to what extent progress are made towards the goals of sustainable tourism except qualitatively that some steps are taken by certain industry players towards certain particular issue. Therefore, it is an area, especially due to negligence on regulatory front, where no one is clear about what to do and what would be the rewards of doing so. However, everyone knows that it is of utmost importance and it cannot be delayed any further.

Is there a way to measure tourism players’ contribution towards curbing negative impacts?

The answer is yes. In fact, this has a dual benefits. It can be a growth driver for business as well as fulfilling corporate role towards CSR related activities. We are highlighting only those that are relevant to hospitality sector. To understand simply, let’s again think sources of negative impacts.

  • Environment – Hospitality sector can reduce the adverse impact by:
    1. Following best practices regarding landuse related norms that is least harmful to existing ecology
    2. Optimal water usage including waste water recycle etc.
    3. Reduced electricity consumption
    4. Scientific waste management procedure
    5. Encouraging tourists to use less fossil fuel for transportation means
    6. Educating tourists on do’s and don’ts regarding conservation of environment and local ecosystem
  • Contribution to local economy
    1. Local procurement of goods used for various purpose including services to guests
    2. Employing local people for various works on and off campus and also skill upgradation mechanism for them
    3. Promoting local culture and other locally produced products among tourists
  • Conserving local human ecosystem
    1. Educating and encouraging tourists to learn about local people and their culture
    2. Respecting living of locals

While impact of first two points can be measured quantitatively and an economic equivalent value can be estimated, the third point can only be measured basis perception. However, all these measures should contribute to survival of tourism in destinations in future years.

Way to achieve these measurements

This can be done with the help of combination of analysis with data from various sources:

  • Activities undertaken by hospitality sector on any of the above points should come from the sector itself.
  • Activities by the tourists, their preference and their expenditures to be captured by a tourists’ survey
  • Remote sensing data would be used to understand the changes on development front of the location along with changes on physical environment front including climate parameters as well as other environment parameters.

Putting together all these data components would help in a real time impact assessment in quantitative terms and its economic and social value. This includes parameters ranging from carbon footprint reduction to contribution to local economy to conserving local ways of living.

What value does this add to industry players

For long years the tourism industry requesting the Government of India for the fiscal benefits including tax rebate and relaxations. Some of those are mentioned below:
– Weighted deduction of 200% in line with Research & Development sectors in India for expenditure incurred towards marketing and promotional activities of the country as inbound tourism destination.
– Lower withholding of tax and interest paid to foreign banks or financial institutions for loan taken in tourism sector.
– Deduction in respect of profit and gains from taxable income for business of hotels, convention centres and other tourism specific infrastructure.
– Foreign exchange earning linked deduction on profits for Income Tax computation.
– Exemption on Tax on room tariff to be increased.
– Service Tax to be exempted for unit to be set up within special tourism zones.
The argument behind such requests is incidence of high taxations on tourism sector and its impact in making Indian tourism industry products less competitive in world market. Studies like the present one can be best possible way to ask regulators to reward for actions taken for curbing negative impacts of tourism and for encouraging positive impacts. This would enable the sector to argue that the sector is not only making profit, but also extending significant benefits to environment and local economy and culture. Especially, suggesting the extent of benefits in terms of economic value enables to convey non-tangible benefits in a tangible manner which provides more purchasing power in for any fiscal benefit from government.

Also, developing local skills and promoting local cultures and crafts can also be part of CSR activities of the sector players. This is yet to happen in the country, while in many countries have already taken this path to concreate sustainable tourism within the scope of corporate social responsibility. It can serve dual purpose of promoting sustainable tourism and look for relevant benefits from the Government as well as fulfilling CSR mandates.

Apart from being benefited at Governmental front, the proposed survey would facilitate understanding tourists’ sentiments and their demand/desires in a more concrete manner and allow the sector towards strategy making to tap the right target consumers with right promotional campaigns. In both ways, this would be a growth driver for business while impacting the tourism activities in a positive manner.

Usage of Nighttime Lights from Satellite Images

ACRA uses remote sensing methodologies extensively for research as well as for consumer demographic data product development at extreme granular level. The following picture is an example to show how nightlights are distributed over geographic space using Andaman & Nicobar Island data on Nightlights.nightlights A&M

Ranking and Indexation: Concerns on Reality Check

By Dripto Mukhopadhyay

Yesterday I read a nice and enlightening article on “ranking” by my ex-colleague and friend Dr. Sanjib Pohit (Article link – https://www.dailypioneer.com/2019/columnists/it—s-not-just-about-the-ranking.html). Sanjib’s article is very timely as well as relevant from methodology practice point of view, especially in India’s context. In recent years ranking exercise has become extremely common in every domain of activities. Rankings are applied to announce awards for various state governments, departments, different initiatives and what not.

I have worked on more than 60/70 studies that involved certain indexation and ranking based on certain purpose-based parameters. This involved studies for Government departments to top end media. Ranges from ranking banks to cities to states to districts to specific locations or initiatives for awards like “Safaigiri” where the Prime Minister gives award to stakeholders. Also these studies span from IT domain to entrepreneurship.

Why I found Sanjib’s article relevant is because of the fact that in many cases I see that neither the researcher nor other stakeholders are well aware of how to address the problem and implications of the methodology. That is the reason I thought of extending Sanjib’s though a bit further and address a few other issues that he did not touch upon in the mentioned article.

Before going into good bad ugly, lets understand why a ranking exercise is important from academic as well as from action point of view. As we do understand and have experienced in our day to day life directly or indirectly, ranking is done to compare more than one entity from any particular reference purpose. That purpose can vary from comparing students appeared in an examination to understand quality of services hotels of a destination to ranking states on how they are performing in terms of income generation. In fact, the purposes can be numerous since human activities have expanded many folds and ranking helps us to understand relative positions among entities to compare.

Here I introduce the concept of relative position. This is extremely critical to understand rest of the argument I am going to put forward. In view of ranking what to be done and how to be done depends completely on how we want to view this relative position. Keeping in mind that the only constant in the world is “change”, this becomes even more important. Any ranking exercise, from professional perspective, should be actionable. This means unless we are able to use the ranking exercise meaningfully for a specific productive purpose, the entire effort is pointless.

It may not always be true that we require a benchmark while working on any ranking exercise. In fact, a benchmark should be used prior to ranking exercise to filter out irrelevant entities from purpose point of view. But, if the purpose is defined precisely and with complete clarity, we may overcome the need for filtering the irrelevant outlier. However, need for Apple to Apple comparison is no denying.

Now, its time that we think of how to go for a ranking and why indexation is used for this. Indexation helps in bringing information or data in a more understandable platform within a comparable scale. Its easier to comprehend and to interpretable and actionable. Indexation can be done in many ways. It can be with the help of a single variable or including multiple relevant variables. In general, unless in a very unique situation, no unobserved phenomenon can be captured truly and realistically with a single variable. That’s the reason, most of the time ranking through indexation involves multiple variable.

When multiple variables come into picture, to arrive at a composite index, the most important question is to whether to involve any weighting scheme or not. This depends on the problem in hand and its nature. Based on this it is decided whether to go for a statistical model like factor analysis or the similar one or to go for a non-model based indexation. Many a times arbitrary weights are used basis perception of the researcher. The robustness of indexation depends immensely on choice of variables, method used for indexation and also researchers understanding of the model.

In most of the cases if the indexation methodology chose right variables and right method, it automatically takes care of irrelevancy of entities that are not fir into a particular scheme of problem. Here comes the relevance of “relative position” concept. One can use two ways to create distinctions among entities. One is through ranking, which is more of a crude way. The reason being even for an insignificant different between entities, their positions can be significantly different. This does not serve the purpose realistically.

Therefore, more realistic and actionable way is to categorise entities based on certain principles, be it statistical or simple difference in values. with Most of the cases a static scenario is used. More precisely, entities are compared for a specific time point and their relation position through ranking or categorisation. This is to me a half-cooked meal. The entities should be compared to other entities in one time point, but also should be seen how it has changed compared to itself in past years. Very few studies do this, but this can play critical role in actionable decision making.

To sum up, ranking and usage of indexation methodology can and should play important role in decision making at any front. However, the impact expected out of such action completely depends on methodological robustness used for such purpose. Though apparently it looks simple, but the applicability and actionability can die down completely unless some key concerns are taken care of.

Inclusive Growth in India – A Perspective

By Dripto Mukhopadhyay

India is an independent country for more than 70 years. The country’s economic performance in recent years had been phenomenal whether we compare it with its own historical economic performance or with other countries. For instance, during the period 2010 to 2016 the annual average real GDP growth in India was about 6.7% in comparison to that of the global economy at only 2.7%. However, when we are one of the fastest growing nation in the world, did this growth touch entire population of the country? In other words, did all sections of population benefitted and participated during this income growth of the country? The answer is no. we are still struggling to reach the benefit of this growth to more than one-third of Indian population, as per conservative measure……………………………………………………………….

TO READ THE FULL ARTICLE PLS CLICK THE LINK BELOW

Inclusive growth in India_120219

TURNING WASTE INTO ENERGY – CASE STUDY OF UTTARAKHAND CITIES

Uttarakhand was carved out of Uttar Pradesh on 9th November 2000. Major portion of Uttar Pradesh (especially western part) became Uttarakhand. Uttarakhand is also known as the “Land of Lord” or “Dev Bhumi”. Uttarakhand is one of the most beautiful places which attracts people from India as well as from Foreign. Due to high rate of tourist activities the government decided to maintain its beauty as natural as possible and therefore, government formed the Municipal Solid Waste (Management and Handling) Rules in 2000. There were many projects launched by the government to manage the solid waste in major cities of Uttarakhand which includes Dehradun, Rishikesh, Haridwar, Tehri, Haldwani, and Nainital and as of now these ventures are in different phases of culmination.

Please click the link below to read/download the complete paper.

TURNING WASTE INTO ENERGY – CASE STUDY OF UTTARAKHAND CITIES 

Electric Vehicles in India – Current Scenario

Electric Vehicles in India – Current Scenario

By Satyam Saxena[1]

This is the era when every individual is concerned about the pace of climate change. One of the prime reasons is emission of harmful gases due to human activities. Another big challenge is depletion of natural resources. Countries like India, who are highly dependent on imports oil and oil products for production process and consumption, are looking for alternative sources of energy. India is the third largest importer of crude oil in the world which shows oil dependency on their economic activity.Petrol and diesel are the major refined crude oil products which are supplied by the oil industries to the ultimate consumers for running vehicles. Among various sectors that depend on diesel, transportation sector is the largest in terms of consumption of diesel/ petrol. Continue reading Electric Vehicles in India – Current Scenario