Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Long Tail of Indian Tourism

 

One of the earliest campaigns of the Modi government elected in 2014 was the Incredible India campaign. It was an attempt to draw tourists from across the world into exploring different facets of India. The facets are not merely historical monuments but would extend to wildlife sanctuaries, national parks, beaches, old temples, historical places, snow clad mountains, trekking routes, mountain drives, river rafting, island exploration, cultural exploration, sartorial tourism, to just sample a few. It again was not merely about few landmarks but drawing across the country from the snow clad mountains of Kashmir, Ladakh, Himachal Pradesh to Uttarakhand to the hill stations in the Himalayas to the Nilgiris, from the beaches of West Coast to the distant beaches of the East Coast to just sample a few. The campaign was of course a moderate success, yet its success could be measured only in the long run. The shift in consumer preferences take quite a bit of time. what added to the woes was the current pandemic crisis induced by the pandemic caused by the Chinese virus. Given the low cost medical destination, India might well encourage with some vaccine tourism in the months ahead.

 

Tourism in India no doubt would be a great export earner given the diversity of offerings available. Furthermore, the spill overs are tremendous. Yet, the tourism, is more centred towards what is termed as the golden triangle. The golden triangle comprises of the cities of Delhi, Agra and Jaipur. Most of the tourists who land up in India travel to these three cities. There is of course a natural reason for the same. Most tourists who would land in India would arrive in Delhi. Having done a sightseeing of Delhi, they would obviously go to Agra. Like or not, Agra is something that has captured the mind space of the tourists coming across the country. The next destination would obviously be Jaipur which would perhaps include a trip to Ranathambor or Sariska for tiger watching. To any tourist, there is a tradeoff. The trade-off is in terms of the time to be spent in India given the vacation leave available. Within the given time, they have to sample India. The best way would be to compress into getting a taste of different features that India presents on the anvil. The golden triangle is something best suited for the same. Thus without doubt, the golden triangle becomes the best seller and in a way forms the Pareto’s principle in Indian tourism.

 

Yet India is far beyond the golden triangle. Without doubt, there is tourist attraction towards Goa partly driven by the beaches and in the earlier days, the drugs and nudism on beaches. There is of course some interest in Kerala drawn by its image of God’s own country. Bangalore or Mumbai attract business tourism thanks to economic activity underway there and thus the spillover would be some sightseeing across nearby places. In the 1960s and 1970s there was of course considerable interest in Rishikesh driven by the growing Western interest in spiritualism. There is of course some tourist attraction in Darjeeling or Kashmir or Himachal Pradesh thanks to the mountains and the hill stations. Yet while these are significant, still there is considerable potential for the industry.

 

What India misses perhaps is the exploitation of the Long Tail if one might call it in the context of the tourism industry. While few tourist destinations would attract around 80% of the tourists predicating on the Pareto law, there exists a significant tourist attraction that can cater to the niches. This is exactly what India needs to explore. This could be its festivals for instance. The celebration of Diwali in Ayodhya or Dev Deepawali in Varanasi, the Kumbh Melas across the four centres or the Holi at Vrindavan or the Puja pandals of Bengal or Garba nights of Gujarat or the Ganesh mandaps of Maharashtra and Northern part of Karnataka or the Pongal celebrations in Tamil Nadu or the Dushera of Mysore or Chattisgarh or the Bihu of Assam or the Baisakhi of Punjab, India offers a huge potential for tourists to enjoy. This might not be appealing to the purists who might feel the loss of religion in the process of secularising festivals but some trade-offs are inevitable if one has to draw attention to the Hindu culture and religion among the tourists beyond the spiritual offerings that attracted the tourist to Rishikesh once upon a time.

 

If this is not sufficient there are enough folk games and sports that keep happening from Jallikattu in Tamil Nadu or Kambala in Karnataka to folk lore in Punjab or Assam. There are numerous cultural festivals that keep happening from Hampi Utsav to their corresponding ones across other parts of the country. The temples of Khajuraho or Konark would be great as would be the caves of Ajanta or Ellora. In fact, Taj Mahal achieves its fame for its ability to market itself than anything to do with the monument itself. There numerous beaches away from Goa or Kerala with a long tail of hill stations in itself ranging from Madikeri to Panchmari. India is of course a very vast country with each region have its own unique sets of heterogenous celebrations. While the Incredible India was some kind of mother brand, there would have to be numerous subsets of child brands. Each state or perhaps each region in a state would have to brand itself and seek to position as a destination for some occasion or the other. Each tourist would come in a certain season and these seasons would differ for each individual. The positioning would have to be for those tourists coming in that season. There would be very few spots which might attract all season tourists but what would be of interest to create occasions which would attract tourists for the specific season. The long tail of tourism would bring about significant revenues in cumulative terms .it would not be an instance wherein the golden triangle would lose its patronage. What would happen is its share in total tourism revenue directly or indirectly would reduce and cede space to others. This is what should be the future for Indian tourism industry.

 

 

Comments

Popular posts from this blog

Decision Making as Output and Bounded Rationality

The Chicken-Egg Conundrum of Economics

A Note on Supply-Demand Dynamics